485BPOS 1 d485bpos.txt MLI USA SERIES S AND SERIES S-L SHARE OPTION POST-EFFECTIVE AMENDMENT NO. 3 As filed with the Securities and Exchange Commission on April 22, 2009 File Nos. 333-137369 811-03365 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. [] Post-Effective Amendment No. 3 [x] and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 329 [x] (Check Appropriate Box or Boxes) MetLife Investors USA Separate Account A (Exact Name of Registrant) MetLife Investors USA Insurance Company 5 Park Plaza, Suite 1900 Irvine, California 92614 (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code (800) 989-3752 (Name and Address of Agent for Service) Richard C. Pearson Vice President MetLife Investors USA Insurance Company c/o 5 Park Plaza, Suite 1900 Irvine, CA 92614 (949) 223-5680 COPIES TO: W. Thomas Conner Sutherland Asbill & Brennan LLP 1275 Pennsylvania Avenue, NW Washington, DC 20004-2415 (202) 383-0590 (Approximate Date of Proposed Public Offering) It is proposed that this filing will become effective (check appropriate box): [] immediately upon filing pursuant to paragraph (b) of Rule 485. [x] on May 1, 2009 pursuant to paragraph (b) of Rule 485. [] 60 days after filing pursuant to paragraph (a)(1) of Rule 485. [] on (date) pursuant to paragraph (a)(1) of Rule 485. If appropriate, check the following box: [] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Registered: Individual Variable Annuity Contracts THE VARIABLE ANNUITY CONTRACT ISSUED BY METLIFE INVESTORS USA INSURANCE COMPANY AND METLIFE INVESTORS USA SEPARATE ACCOUNT A SERIES S SERIES S - L SHARE OPTION MAY 1, 2009 This prospectus describes the flexible premium deferred variable annuity contract offered by MetLife Investors USA Insurance Company (MetLife Investors USA or we or us). The contract is offered for individuals and some tax qualified and non-tax qualified retirement plans. The annuity contract has 12 investment choices. You can put your money in any of these investment portfolios. MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM (CLASS B): MetLife Defensive Strategy Portfolio MetLife Moderate Strategy Portfolio MetLife Balanced Strategy Portfolio MetLife Growth Strategy Portfolio MetLife Aggressive Strategy Portfolio MET INVESTORS SERIES TRUST - AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS (CLASS C): American Funds Moderate Allocation Portfolio American Funds Balanced Allocation Portfolio American Funds Growth Allocation Portfolio MET INVESTORS SERIES TRUST - FRANKLIN TEMPLETON ASSET ALLOCATION PORTFOLIO (CLASS B): Met/Franklin Templeton Founding Strategy Portfolio MET INVESTORS SERIES TRUST - SSGA ETF PORTFOLIOS (CLASS B): SSgA Growth and Income ETF Portfolio SSgA Growth ETF Portfolio METROPOLITAN SERIES FUND, INC. (CLASS B): BlackRock Money Market Portfolio Please read this prospectus before investing and keep it on file for future reference. It contains important information about the MetLife Investors USA Variable Annuity Contract. To learn more about the MetLife Investors USA Variable Annuity Contract, you can obtain a copy of the Statement of Additional Information (SAI) dated May 1, 2009. The SAI has been filed with the Securities and Exchange Commission (SEC) and is legally a part of the prospectus. The SEC maintains a Web site (http://www.sec.gov) that contains the SAI, material incorporated by reference, and other information regarding companies that file electronically with the SEC. The Table of Contents of the SAI is on Page 65 of this prospectus. For a free copy of the SAI, call us at (800) 343-8496, visit our website at WWW.METLIFEINVESTORS.COM, or write to us at: 5 Park Plaza, Suite 1900, Irvine, CA 92614. The contracts: o are not bank deposits o are not FDIC insured o are not insured by any federal government agency o are not guaranteed by any bank or credit union o may be subject to loss of principal THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. May 1, 2009 1 TABLE OF CONTENTS PAGE PAGE INDEX OF SPECIAL TERMS.................. 4 HIGHLIGHTS.............................. 5 FEE TABLES AND EXAMPLES................. 7 1. THE ANNUITY CONTRACT................. 15 Market Timing...................... 15 2. PURCHASE............................. 16 Purchase Payments.................. 16 Termination for Low Account Value 16 . Allocation of Purchase Payments.... 16 Investment Allocation Restrictions for Certain Riders........................... 17 Free Look.......................... 17 Accumulation Units................. 17 Account Value...................... 18 Replacement of Contracts........... 18 3. INVESTMENT OPTIONS................... 19 Transfers.......................... 20 Dollar Cost Averaging Program...... 23 Automatic Rebalancing Program...... 23 Description of the MetLife Asset Allocation Program.......................... 24 Description of the American Funds Asset Allocation Portfolios....................... 24 Description of the Met/Franklin Templeton Founding Strategy Portfolio...... 25 Description of the SSgA ETF 25 Portfolios . Voting Rights...................... 25 Substitution of Investment Options 25 . 4. EXPENSES............................. 26 Product Charges.................... 26 Account Fee........................ 26 Guaranteed Minimum Income Benefit - Rider Charge........... 27 Guaranteed Withdrawal Benefit - 27 Rider Charge . Withdrawal Charge.................. 28 Reduction or Elimination of the Withdrawal Charge........................... 29 Premium and Other Taxes............ 30 Transfer Fee....................... 30 Income Taxes....................... 30 Investment Portfolio Expenses...... 30 5. ANNUITY PAYMENTS (THE INCOME PHASE)................. 30 Annuity Date....................... 30
Annuity Payments................... 30 Annuity Options.................... 31 Variable Annuity Payments.......... 32 Fixed Annuity Payments............. 33 6. ACCESS TO YOUR MONEY................. 33 Systematic Withdrawal Program...... 34 Suspension of Payments or 34 Transfers . 7. LIVING BENEFITS...................... 34 Overview of Living Benefit Riders 34 . Guaranteed Income Benefits......... 35 Description of GMIB Plus II........ 36 Description of GMIB Plus I......... 41 Guaranteed Withdrawal Benefits..... 42 Description of the Lifetime Withdrawal Guarantee II............................... 43 Description of the Lifetime Withdrawal Guarantee I................................ 48 8. PERFORMANCE.......................... 51 9. DEATH BENEFIT........................ 51 Upon Your Death.................... 51 Standard Death Benefit (Principal 51 Protection) . Optional Death Benefit - Enhanced 52 Death Benefit General Death Benefit Provisions... 54 Spousal Continuation............... 55 Death of the Annuitant............. 55 Controlled Payout.................. 55 10. FEDERAL INCOME TAX STATUS........... 55 Taxation of Non-Qualified 56 Contracts . Taxation of Qualified Contracts.... 58 Puerto Rico Tax Considerations..... 61 Tax Benefits Related to the Assets of the Separate Account.......................... 61 Possible Tax Law Changes........... 61 11. OTHER INFORMATION................... 61 MetLife Investors USA.............. 61 The Separate Account............... 62 Distributor........................ 62 Selling Firms...................... 62 Requests and Elections............. 63 Ownership.......................... 64 Legal Proceedings.................. 65 Financial Statements............... 65
2 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION.................. 65 APPENDIX A.............................. A-1 Condensed Financial Information.... A-1 APPENDIX B.............................. B-1 Participating Investment B-1 Portfolios . APPENDIX C.............................. C-1 Guaranteed Minimum Income Benefit C-1 Examples . APPENDIX D.............................. D-1 Guaranteed Withdrawal Benefit D-1 Examples . APPENDIX E.............................. E-1 Death Benefit Examples............. E-1
3 INDEX OF SPECIAL TERMS Because of the complex nature of the contract, we have used certain words or terms in this prospectus which may need an explanation. We have identified the following as some of these words or terms. The page that is indicated here is where we believe you will find the best explanation for the word or term. These words and terms are in italics on the indicated page. PAGE Account Value............................................................ 18 Accumulation Phase....................................................... 15 Accumulation Unit........................................................ 18 Annual Benefit Payment................................................... 44 Annuitant................................................................ 65 Annuity Date............................................................. 30 Annuity Options.......................................................... 31 Annuity Payments......................................................... 30 Annuity Units............................................................ 31 Beneficiary.............................................................. 64 Business Day............................................................. 16 Death Benefit Base....................................................... 52 Good Order............................................................... 64 Income Base.............................................................. 37 Income Phase............................................................. 15 Investment Portfolios.................................................... 19 Joint Owners............................................................. 64 Owner.................................................................... 64 Purchase Payment......................................................... 16 Remaining Guaranteed Withdrawal Amount................................... 43 Separate Account......................................................... 62 Total Guaranteed Withdrawal Amount....................................... 43 4 HIGHLIGHTS The variable annuity contract that we are offering is a contract between you, the owner, and us, the insurance company, where you agree to make at least one purchase payment to us and we agree to make a series of annuity payments at a later date. The contract has a maximum issue age and you should consult with your registered representative. The contract provides a means for investing on a tax-deferred basis in the investment portfolios. The contract is intended for retirement savings or other long-term investment purposes. When you purchase the contract, you can choose an optional death benefit and fixed and variable income options. You can also select a guaranteed minimum income benefit (GMIB) or guaranteed withdrawal benefit (GWB). The contract allows you to select one of two different charge structures, referred to as a class, based on your specific situation. Each class imposes different withdrawal charges and mortality and expense charges. Depending on your expectations and preferences, you can choose the class that best meets your needs. Prior to issuance, you must select either: o Series S, which imposes a withdrawal charge on withdrawals equal to a maximum of 7% of each purchase payment, reducing annually over seven years, and a mortality and expense charge that is lower for the first four years than the mortality and expense charge of Series S - L Share Option; or o Series S - L Share Option, which imposes a withdrawal charge on withdrawals equal to a maximum of 7% of each purchase payment, reducing annually over four years, and a mortality and expense charge that is higher for the first four years than the mortality and expense charge of Series S. If you elect the Series S - L Share Option, assuming you only submit the initial purchase payment, you may make a complete withdrawal from your contract in the fifth contract year (i.e., the contract year starting on the day after your fourth contract anniversary) without paying a withdrawal charge, whereas you would need to wait until the eight contract year (i.e., the contract year starting on the day after your seventh contract anniversary) under Series S to make a complete withdrawal without a withdrawal charge. This feature will give you earlier access to contract value without paying a withdrawal charge if you elect the Series S - L Share Option. However, the Series S - L Share Option has a higher mortality and expense charge for the first four contract years. Assuming an initial purchase payment only and no subsequent purchase payments, the combination of the mortality and expense charge and the applicable withdrawal charge associated with Series S - L Share Option may exceed the corresponding combined expenses associated with Series S in all contract years except the fifth contract year. Further, the combined expenses of Series S - L Share Option may exceed the combined expenses associated with Series S even during the fifth contract year, depending on your actual investment return. If, however, you make subsequent purchase payments after your initial purchase payment, depending on the timing of those payments and your actual investment return, there may be contract years when the combined expenses of Series S - L Share Option are lower than the combined expenses of Series S. You should carefully consider which of the two classes is appropriate for you. The contract, like all deferred annuity contracts, has two phases: the accumulation phase and the income phase. During the accumulation phase, earnings accumulate on a tax-deferred basis and are taxed as income when you make a withdrawal. If you make a withdrawal during the accumulation phase, we may assess a withdrawal charge of up to 7%. The income phase occurs when you or a designated payee begin receiving regular annuity payments from your contract. You and the annuitant (the person on whose life we base annuity payments) do not have to be the same, unless you purchase a tax qualified contract or elect a GMIB (see "Living Benefits - Guaranteed Income Benefits"). You can have annuity payments made on a variable basis, a fixed basis, or a combination of both. If you choose variable annuity payments, the amount of the variable annuity payments will depend upon the investment performance of the investment portfolio(s) you select for the income phase. If you choose fixed annuity payments, the amount of each payment will not change during the income phase. TAX DEFERRAL AND QUALIFIED PLANS. The contracts are offered for individuals and some tax qualified and non-tax qualified retirement plans. For any tax qualified account (e.g., an IRA), the tax deferred accrual feature is provided by the tax qualified retirement plan. Therefore, there 5 should be reasons other than tax deferral for acquiring the contract within a qualified plan. (See "Federal Income Tax Status.") STATE VARIATIONS. Contracts issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus because of state law variations. These differences include, among other things, free look rights, age issuance limitations, transfer rights and limitations, the right to reject purchase payments, the right to assess transfer fees, requirements for unisex annuity rates, the general availability of certain riders, and the availability of certain features of riders. However, please note that the maximum fees and charges for all features and benefits are set forth in the fee table in this prospectus. This prospectus describes all the material features of the contract. If you would like to review a copy of the contract and any endorsements, contact our Annuity Service Center. FREE LOOK. You may cancel the contract within 10 days after receiving it (or whatever period is required in your state). If you mail your cancellation request, the request must be postmarked by the appropriate day; if you deliver your cancellation request by hand, it must be received by us by the appropriate day. Unless otherwise required by state law, you will receive whatever your contract is worth on the day that we receive your cancellation request and we will not deduct a withdrawal charge. The amount you receive may be more or less than your payment depending upon the performance of the investment portfolios. You bear the risk of any decline in account value. We do not refund any charges or deductions assessed during the free look period. We will return your payment if required by law. TAX PENALTY. The earnings in your contract are not taxed until you take money out of your contract. If you take money out of a non-qualified contract during the accumulation phase, for tax purposes any earnings are deemed to come out first. If you are younger than 59 1/2 when you take money out, you may be charged a 10% federal tax penalty on those earnings. Payments during the income phase are considered partly a return of your original investment until your investment is returned. NON-NATURAL PERSONS AS OWNERS. If the owner of a non-qualified annuity contract is not a natural person (e.g., a corporation, partnership or certain trusts), gains under the contract are generally not eligible for tax deferral. The owner of this contract can be a natural person, a trust established for the exclusive benefit of a natural person, a charitable remainder trust or other trust arrangement (if approved by us). The owner of this contract can also be a beneficiary of a deceased person's contract that is an Individual Retirement Account or non-qualified deferred annuity. A contract generally may have two owners (both of whom must be individuals). The contract is not available to corporations or other business organizations, except to the extent an employer is the purchaser of a SEP or SIMPLE IRA contract. Subject to state approval, certain retirement plans qualified under the Internal Revenue Code may purchase the contract. INQUIRIES. If you need more information, please contact our Annuity Service Center at: MetLife Investors Distribution Company P.O. Box 10366 Des Moines, Iowa 50306-0366 (800) 343-8496 ELECTRONIC DELIVERY. As an owner you may elect to receive electronic delivery of current prospectuses related to this contract, prospectuses and annual and semi-annual reports for the investment portfolios and other contract related documents. Contact us at WWW.METLIFEINVESTORS.COM for more information and to enroll. 6 FEE TABLES AND EXAMPLES THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING, AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT, SURRENDER THE CONTRACT, OR TRANSFER ACCOUNT VALUE BETWEEN INVESTMENT OPTIONS. STATE PREMIUM TAXES OF 0% TO 3.5% MAY ALSO BE DEDUCTED. -------------------------------------------------------------------------------- OWNER TRANSACTION EXPENSES TABLE WITHDRAWAL CHARGE (Note 1) 7% (as a percentage of purchase payments) TRANSFER FEE (Note 2) $0 (First 12 per year) $25 (Thereafter)
-------------------------------------------------------------------------------- Note 1. If an amount withdrawn is determined to include the withdrawal of prior purchase payments, a withdrawal charge may be assessed. Withdrawal charges are calculated in accordance with the following. (See "Expenses - Withdrawal Charge.") SERIES S
Number of Complete Years from Withdrawal Charge Receipt of Purchase Payment (% of Purchase Payment) ------------------------------ ------------------------ 0 7 1 6 2 6 3 5 4 4 5 3 6 2 7 and thereafter 0
SERIES S - L SHARE OPTION
Number of Complete Years from Withdrawal Charge Receipt of Purchase Payment (% of Purchase Payment) ------------------------------ ------------------------ 0 7 1 6 2 6 3 5 4 and thereafter 0
Note 2. There is no charge for the first 12 transfers in a contract year; thereafter the fee is $25 per transfer. MetLife Investors USA is currently waiving the transfer fee, but reserves the right to charge the fee in the future. 7 THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING INVESTMENT PORTFOLIO FEES AND EXPENSES. -------------------------------------------------------------------------------- ACCOUNT FEE (Note 1) $30
SEPARATE ACCOUNT ANNUAL EXPENSES (referred to as Separate Account Product Charges) (as a percentage of average account value in the Separate Account) SERIES S ---------------------------------------- Mortality and Expense Charge 0.90% Administration Charge 0.25% ---- Total Separate Account Annual Expenses 1.15% SERIES S - L SHARE OPTION ---------------------------------------- Mortality and Expense Charge 1.60% Administration Charge 0.25% ---- Total Separate Account Annual Expenses 1.85% (Note 2)
-------------------------------------------------------------------------------- Note 1. The Account Fee is charged on the last day of each contract year if the account value is less than $50,000. Different policies apply during the income phase of the contract. (See "Expenses.") Note 2. For Series S - L Share Option, the Mortality and Expense Charge is 1.60% for the first four contract years and declines to 0.90% for the fifth contract year and thereafter. For the fifth contract year and thereafter, Total Separate Account Annual Expenses are 1.15%. 8 ADDITIONAL OPTIONAL RIDER CHARGES* GUARANTEED MINIMUM INCOME BENEFIT RIDER CHARGES GMIB Plus II Prior to Optional Step-Up 1.00% of the Income Base (Note 1) GMIB Plus I Prior to Optional Reset 0.80% of the Income Base (Note 1) GMIB Plus II and I Upon Optional 1.50% of the Income Base (Note 1) Step-Up/Reset (maximum**) LIFETIME WITHDRAWAL GUARANTEE RIDER CHARGES Lifetime Withdrawal Guarantee II 1.25% of the Total Guaranteed Withdrawal Amount (Single Life Version) Prior to Automatic Annual (Note 2) Step-Up Lifetime Withdrawal Guarantee II 1.60% of the Total Guaranteed Withdrawal Amount (Single Life Version) Upon Automatic Annual Step-Up (Note 2) (maximum**) Lifetime Withdrawal Guarantee II 1.50% of the Total Guaranteed Withdrawal Amount (Joint Life Version) Prior to Automatic Annual (Note 2) Step-Up Lifetime Withdrawal Guarantee II 1.80% of the Total Guaranteed Withdrawal Amount (Joint Life Version) Upon Automatic Annual Step-Up (Note 2) (maximum**) Lifetime Withdrawal Guarantee I 0.50% of the Total Guaranteed Withdrawal Amount (Single Life Version) Prior to Automatic Annual (Note 2) Step-Up Lifetime Withdrawal Guarantee I 0.95% of the Total Guaranteed Withdrawal Amount (Single Life Version) Upon Automatic Annual Step-Up (Note 2) (maximum**) Lifetime Withdrawal Guarantee I 0.70% of the Total Guaranteed Withdrawal Amount (Joint Life Version) Prior to Automatic Annual (Note 2) Step-Up Lifetime Withdrawal Guarantee I 1.40% of the Total Guaranteed Withdrawal Amount (Joint Life Version) Upon Automatic Annual Step-Up (Note 2) (maximum**)
*You may elect one living benefit rider at a time. The GMIB Plus II rider is the only living benefit rider that the Enhanced Death Benefit rider may be elected with. Certain rider charges for contracts issued before May 4, 2009 are different. Certain charges and expenses may not apply during the income phase of the contract. (See "Expenses.") **Certain rider charges may increase upon an Optional Step-Up or Optional Reset, but they will not exceed the maximum charges listed in this table. If, at the time your contract was issued, the current rider charge was equal to the maximum rider charge, that rider charge will not increase upon an Optional Step-Up or Optional Reset. (See "Expenses.") Note 1. On the issue date, the Income Base is equal to your initial purchase payment. The Income Base is adjusted for subsequent purchase payments and withdrawals. See "Living Benefits - Guaranteed Income Benefits" for a definition of the term Income Base. Note 2. The Total Guaranteed Withdrawal Amount is initially set at an amount equal to your initial purchase payment. The Total Guaranteed Withdrawal Amount may increase with additional purchase payments. See "Living Benefits - Guaranteed Withdrawal Benefits" for a definition of the term Total Guaranteed Withdrawal Amount. 9 ENHANCED DEATH BENEFIT RIDER CHARGES Enhanced Death Benefit Rider Charge 0.75% of the Death Benefit Base (Note 3) Prior to Optional Step-Up (issue age 69 or younger) Enhanced Death Benefit Rider Charge 0.95% of the Death Benefit Base (Note 3) Prior to Optional Step-Up (issue age 70-75) Enhanced Death Benefit Rider Charge 1.50% of the Death Benefit Base (Note 3) Upon Optional Step-Up (maximum**)
**Certain rider charges may increase upon an Optional Step-Up or Optional Reset, but they will not exceed the maximum charges listed in this table. If, at the time your contract was issued, the current rider charge was equal to the maximum rider charge, that rider charge will not increase upon an Optional Step-Up or Optional Reset. (See "Expenses.") Note 3. The Death Benefit Base is initially set at an amount equal to your initial purchase payment. The Death Benefit Base is adjusted for additional purchase payments and withdrawals. See "Death Benefit - Enhanced Death Benefit" for a definition of the term Death Benefit Base. -------------------------------------------------------------------------------- THE NEXT TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE INVESTMENT PORTFOLIOS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. CERTAIN INVESTMENT PORTFOLIOS MAY IMPOSE A REDEMPTION FEE IN THE FUTURE. MORE DETAIL CONCERNING EACH INVESTMENT PORTFOLIO'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUSES FOR THE INVESTMENT PORTFOLIOS AND IN THE FOLLOWING TABLES. Minimum Maximum ---- ---- Total Annual Portfolio Expenses 0.59% 1.27% (expenses that are deducted from investment portfolio assets, including management fees, 12b-1/service fees, and other expenses)*
-------------------------------------------------------------------------------- *The total annual portfolio expenses of the Asset Allocation Portfolios include the fees and expenses of the underlying portfolios (Acquired Fund Fees and Expenses). FOR INFORMATION CONCERNING COMPENSATION PAID FOR THE SALE OF THE CONTRACTS, SEE "OTHER INFORMATION - DISTRIBUTOR." 10 INVESTMENT PORTFOLIO EXPENSES (as a percentage of the average daily net assets of an investment portfolio) The following table is a summary. For more complete information on investment portfolio fees and expenses, please refer to the prospectus for each investment portfolio.
ACQUIRED TOTAL CONTRACTUAL NET TOTAL FUND ANNUAL EXPENSE ANNUAL MANAGEMENT 12B-1/SERVICE OTHER FEES AND PORTFOLIO SUBSIDY PORTFOLIO FEES FEES EXPENSES EXPENSES EXPENSES OR DEFERRAL EXPENSES ------------ --------------- ---------- ---------- ----------- ------------- ---------- MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM MetLife Defensive Strategy Portfolio(1) 0.08% 0.25% 0.02% 0.60% 0.95% 0.00% 0.95% MetLife Moderate Strategy Portfolio(1) 0.07% 0.25% 0.00% 0.63% 0.95% 0.00% 0.95% MetLife Balanced Strategy Portfolio(1) 0.06% 0.25% 0.00% 0.67% 0.98% 0.00% 0.98% MetLife Growth Strategy Portfolio(1) 0.06% 0.25% 0.00% 0.71% 1.02% 0.00% 1.02% MetLife Aggressive Strategy 0.09% 0.25% 0.01% 0.74% 1.09% 0.00% 1.09% Portfolio(1) MET INVESTORS SERIES TRUST - AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS American Funds Moderate Allocation 0.10% 0.55% 0.05% 0.42% 1.12% 0.05% 1.07% Portfolio(2) American Funds Balanced Allocation 0.10% 0.55% 0.05% 0.40% 1.10% 0.05% 1.05% Portfolio(2) American Funds Growth Allocation 0.10% 0.55% 0.05% 0.38% 1.08% 0.05% 1.03% Portfolio(2) MET INVESTORS SERIES TRUST - FRANKLIN TEMPLETON ASSET ALLOCATION PORTFOLIO Met/Franklin Templeton Founding 0.05% 0.25% 0.08% 0.89% 1.27% 0.08% 1.19% Strategy Portfolio(3) MET INVESTORS SERIES TRUST - SSGA ETF PORTFOLIOS SSgA Growth and Income ETF 0.33% 0.25% 0.08% 0.20% 0.86% 0.03% 0.83% Portfolio(4)(5)(6) SSgA Growth ETF Portfolio(4)(5)(7) 0.33% 0.25% 0.08% 0.21% 0.87% 0.03% 0.84%
ACQUIRED TOTAL CONTRACTUAL NET TOTAL FUND ANNUAL EXPENSE ANNUAL MANAGEMENT 12B-1/SERVICE OTHER FEES AND PORTFOLIO SUBSIDY PORTFOLIO FEES FEES EXPENSES EXPENSES EXPENSES OR DEFERRAL EXPENSES ------------ --------------- ---------- ---------- ----------- ------------- ---------- METROPOLITAN SERIES FUND, INC. BlackRock Money Market Portfolio(8) 0.32% 0.25% 0.02% 0.00% 0.59% 0.01% 0.58%
The Net Total Annual Portfolio Expenses have been restated to reflect contractual arrangements in effect as of May 1, 2009, under which investment advisers or managers of investment portfolios have agreed to waive and/or pay expenses of the portfolios. Each of these arrangements is in effect until at least April 30, 2010 (excluding optional extensions). Net Total Annual Portfolio Expenses have not been restated to reflect expense reductions that certain investment portfolios achieved as a result of directed brokerage arrangements. The investment portfolios provided the information on their expenses, and we have not independently verified the information. Unless otherwise indicated the information provided is for the year ended December 31, 2008. (1) The Portfolio is a "fund of funds" that invests substantially all of its assets in other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. 11 (2) The Portfolio is a "fund of funds" that invests substantially all of its assets in portfolios of the American Funds Insurance Series (Reg. TM). Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. (3) The Portfolio is a "fund of funds" that invests equally in three other portfolios of the Met Investors Series Trust: the Met/Franklin Income Portfolio, the Met/Franklin Mutual Shares Portfolio and the Met/Templeton Growth Portfolio. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. (4) The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("underlying ETFs"). As an investor in an underlying ETF or other investment company, the Portfolio will bear its pro rata portion of the operating expenses of the underlying ETF or other investment company, including the management fee. (5) The Management Fee has been restated to reflect an amended management fee agreement as if the fees had been in effect during the previous fiscal year. (6) Other Expenses include 0.03% of deferred expense reimbursement from a prior period. (7) Other Expenses include 0.02% of deferred expense reimbursement from a prior period. (8) Other Expenses include Treasury Guarantee Program expenses of 0.012% incurred for the period September 19, 2008 through December 31, 2008. 12 EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE CONTRACT OWNER TRANSACTION EXPENSES, CONTRACT FEES, SEPARATE ACCOUNT ANNUAL EXPENSES, AND INVESTMENT PORTFOLIO FEES AND EXPENSES. THE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND ASSUME: (A) MAXIMUM AND (B) MINIMUM FEES AND EXPENSES OF ANY OF THE INVESTMENT PORTFOLIOS (BEFORE SUBSIDY AND/OR DEFERRAL). IN THE EXAMPLES BELOW, THE TOTAL ANNUAL PORTFOLIO EXPENSES (INCLUDING ACQUIRED FUND FEES AND EXPENSES) OF 1.27% FOR THE MET/FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO ARE USED AS THE MAXIMUM INVESTMENT PORTFOLIO FEES AND EXPENSES. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS, YOUR COSTS WOULD BE: SERIES S CHART 1. Chart 1 assumes you select the Enhanced Death Benefit (assuming the maximum 1.50% charge applies in all contract years) and the Guaranteed Minimum Income Benefit Plus II (GMIB Plus II) rider (assuming the maximum 1.50% charge applies in all contract years), which is the most expensive way to purchase the contract. (1) IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ------------ ------------ ------------ ------------ maximum (a)$1,263 (a)$2,270 (a)$3,317 (a)$6,303 minimum (b)$1,194 (b)$2,071 (b)$2,995 (b)$5,718
(2) IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU ANNUITIZE AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ---------- ------------ ------------ ------------ maximum (a)$563 (a)$1,730 (a)$2,957 (a)$6,303 minimum (b)$494 (b)$1,531 (b)$2,635 (b)$5,718
CHART 2. Chart 2 assumes that you do not select the optional death benefit, a GMIB Plus rider or a Lifetime Withdrawal Guarantee rider, which is the least expensive way to purchase the contract. (1) IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ---------- ------------ ------------ ------------ maximum (a)$948 (a)$1,301 (a)$1,661 (a)$2,769 minimum (b)$879 (b)$1,095 (b)$1,315 (b)$2,072
(2) IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU ANNUITIZE AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ---------- --------- ------------ ------------ maximum (a)$248 (a)$761 (a)$1,301 (a)$2,769 minimum (b)$179 (b)$555 (b)$955 (b)$2,072
13 SERIES S - L SHARE OPTION CHART 1. Chart 1 assumes you select the Enhanced Death Benefit (assuming the maximum 1.50% charge applies in all contract years) and the GMIB Plus II rider (assuming the maximum 1.50% charge applies in all contract years), which is the most expensive way to purchase the contract. (1) IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ------------ ------------ ------------ ------------ maximum (a)$1,333 (a)$2,472 (a)$3,638 (a)$6,860 minimum (b)$1,265 (b)$2,277 (b)$3,328 (b)$6,322
(2) IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU ANNUITIZE AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ---------- ------------ ------------ ------------ maximum (a)$633 (a)$1,932 (a)$3,278 (a)$6,860 minimum (b)$565 (b)$1,737 (b)$2,968 (b)$6,322
CHART 2. Chart 2 assumes that you do not select the optional death benefit, a GMIB Plus rider or a Lifetime Withdrawal Guarantee rider, which is the least expensive way to purchase the contract. (1) IF YOU SURRENDER YOUR CONTRACT AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ------------ ------------ ------------ ------------ maximum (a)$1,018 (a)$1,510 (a)$2,004 (a)$3,438 minimum (b)$950 (b)$1,308 (b)$1,672 (b)$2,792
(2) IF YOU DO NOT SURRENDER YOUR CONTRACT OR IF YOU ANNUITIZE AT THE END OF THE APPLICABLE TIME PERIOD:
Time Periods 1 year 3 years 5 years 10 years ---------- --------- ------------ ------------ maximum (a)$318 (a)$970 (a)$1,644 (a)$3,438 minimum (b)$250 (b)$768 (b)$1,312 (b)$2,792
The Examples should not be considered a representation of past or future expenses or annual rates of return of any investment portfolio. Actual expenses and annual rates of return may be more or less than those assumed for the purpose of the Examples. Condensed financial information containing the accumulation unit value history appears in Appendix A of this prospectus as well as in the SAI. 14 1. THE ANNUITY CONTRACT This prospectus describes the Variable Annuity Contract offered by us. The variable annuity contract is a contract between you as the owner, and us, the insurance company, where we promise to pay an income to you, in the form of annuity payments, beginning on a designated date that you select. Until you decide to begin receiving annuity payments, your annuity is in the ACCUMULATION PHASE. Once you begin receiving annuity payments, your contract switches to the INCOME PHASE. The contract benefits from tax deferral. Tax deferral means that you are not taxed on earnings or appreciation on the assets in your contract until you take money out of your contract. For any tax qualified account (e.g. an IRA), the tax deferred accrual feature is provided by the tax qualified retirement plan. Therefore, there should be reasons other than tax deferral for acquiring the contract within a qualified plan. (See "Federal Income Tax Status.") The contract is called a variable annuity because you can choose among the investment portfolios and, depending upon market conditions, you can make or lose money in any of these portfolios. The amount of money you are able to accumulate in your contract during the accumulation phase depends upon the investment performance of the investment portfolio(s) you select. The amount of the annuity payments you receive during the income phase from the variable annuity portion of the contract also depends, in part, upon the investment performance of the investment portfolio(s) you select for the income phase. We do not guarantee the investment performance of the variable annuity portion. You bear the full investment risk for all amounts allocated to the variable annuity portion. However, there are certain optional features that provide guarantees that can reduce your investment risk (see "Living Benefits"). If you select a fixed annuity payment option during the income phase, payments are made from our general account assets. Our general account consists of all assets owned by us other than those in the Separate Account and our other separate accounts. We have sole discretion over the investment of assets in the general account. The amount of the annuity payments you receive during the income phase from a fixed annuity payment option of the contract will remain level for the entire income phase. (Please see "Annuity Payments (The Income Phase)" for more information.) As owner of the contract, you exercise all interests and rights under the contract. You can change the owner at any time, subject to our underwriting rules (a change of ownership may terminate certain optional riders). The contract may be owned generally by joint owners (limited to two natural persons). We provide more information on this under "Other Information - Ownership." Because the contract proceeds must be distributed within the time periods required by the federal Internal Revenue Code, the right of a spouse to continue the contract, and all contract provisions relating to spousal continuation (see "Death Benefit - Spousal Continuation"), are available only to a person who is defined as a "spouse" under the federal Defense of Marriage Act, or any other applicable federal law. Therefore, under current federal law, a purchaser who has or is contemplating a civil union or same sex marriage should note that the rights of a spouse under the spousal continuation provisions of this contract will not be available to such partner or same sex marriage spouse. Accordingly, a purchaser who has or is contemplating a civil union or same sex marriage should note that such partner/spouse would not be able to receive continued payments after the death of the contract owner under the Joint Life version of the Lifetime Withdrawal Guarantee (see "Living Benefits - Guaranteed Withdrawal Benefits"). MARKET TIMING We have policies and procedures that attempt to detect transfer activity that may adversely affect other owners or investment portfolio shareholders in situations where there is potential for pricing inefficiencies or that involve certain other types of disruptive trading activity (I.E., market timing). We employ various means to try to detect such transfer activity, such as periodically examining the frequency and size of transfers into and out of particular investment portfolios made by owners within given periods of time and/or investigating transfer activity identified by the investment portfolios on a case-by-case basis. We may revise these policies and procedures in our sole discretion at any time without prior notice. 15 Our market timing policies and procedures are discussed in more detail in "Investment Options - Transfers - Market Timing." 2. PURCHASE The maximum issue age for the contract and certain of its riders may be reduced in connection with the offer of the contract through certain broker dealers ("selling firms"). In addition, certain riders may not be available through certain selling firms. You should discuss this with your registered representative. PURCHASE PAYMENTS A PURCHASE PAYMENT is the money you give us to invest in the contract. The initial purchase payment is due on the date the contract is issued. Subject to the minimum and maximum payment requirements (see below), you may make additional purchase payments. o The minimum initial purchase payment we will accept is: $5,000 for Series S when the contract is purchased as a non-qualified contract; or $10,000 for Series S - L Share Option when the contract is purchased as a non- qualified contract. o If you are purchasing the contract as part of an IRA (Individual Retirement Annuity) or other qualified plan, the minimum initial purchase payment we will accept is $2,000 for Series S and $10,000 for Series S - L Share Option. o If you want to make an initial purchase payment of $1 million or more, or an additional purchase payment that would cause your total purchase payments to exceed $1 million, you will need our prior approval. o You can make additional purchase payments of $500 or more to either type of contract (qualified and non-qualified) unless you have elected an electronic funds transfer program approved by us, in which case the minimum additional purchase payment is $100 per month. o We will accept a different amount if required by federal tax law. o We reserve the right to refuse purchase payments made via a personal check in excess of $100,000. Purchase payments over $100,000 may be accepted in other forms, including, but not limited to, EFT/wire transfers, certified checks, corporate checks, and checks written on financial institutions. The form in which we receive a purchase payment may determine how soon subsequent disbursement requests may be fulfilled. (See "Access to Your Money.") o We will not accept purchase payments made with cash, money orders, or travelers checks. We reserve the right to reject any application or purchase payment and to limit future purchase payments. TERMINATION FOR LOW ACCOUNT VALUE We may terminate your contract by paying you the account value in one sum if, prior to the annuity date, you do not make purchase payments for two consecutive contract years, the total amount of purchase payments made, less any partial withdrawals, is less than $2,000 or any lower amount required by federal tax laws, and the account value on or after the end of such two year period is less than $2,000. Accordingly, no contract will be terminated due solely to negative investment performance. Federal tax law may impose additional restrictions on our right to cancel your Traditional IRA, Roth IRA, SEP, SIMPLE IRA or other Qualified Contract. ALLOCATION OF PURCHASE PAYMENTS When you purchase a contract, we will allocate your purchase payment to the investment portfolios you have selected. Each allocation must be at least $500 and must be in whole numbers. Once we receive your purchase payment and the necessary information (or a designee receives a payment and the necessary information in accordance with the designee's administrative procedures), we will issue your contract and allocate your first purchase payment within 2 business days. A BUSINESS DAY is each day that the New York Stock Exchange is open for business. A business day closes at the close of normal trading on the New York Stock Exchange, usually 4:00 p.m. Eastern Time. If you do not give us all of the information we need, we will contact you to get it before we make any allocation. If for some reason we are unable to complete this process within 5 business days, we will either send back your money or get your permission to keep it until we get all of the necessary information. (See "Other Information - Requests and Elections.") If you choose the Enhanced Death Benefit, a Guaranteed Minimum Income Benefit Plus rider, or a Lifetime Withdrawal Guarantee rider, until the rider terminates, we 16 will require you to allocate your purchase payments and account value as described below under "Investment Allocation Restrictions for Certain Riders." If you make additional purchase payments, we will allocate them in the same way as your first purchase payment unless you tell us otherwise. However, if you make an additional purchase payment and you have a Dollar Cost Averaging (DCA) program in effect, we will allocate your additional payments to the investment portfolios selected under the DCA program unless you tell us otherwise. (See "Investment Options-Dollar Cost Averaging Program.") You may change your allocation instructions at any time by notifying us in writing, by calling us or by Internet. If there are joint owners, unless we are instructed to the contrary, we will accept allocation instructions from either joint owner. INVESTMENT ALLOCATION RESTRICTIONS FOR CERTAIN RIDERS If you elect the GMIB Plus II, the Lifetime Withdrawal Guarantee II, or the Enhanced Death Benefit, you must allocate 100% of your purchase payments or account value among: o the MetLife Defensive Strategy Portfolio o the MetLife Moderate Strategy Portfolio o the MetLife Balanced Strategy Portfolio o the American Funds Moderate Allocation Portfolio o the American Funds Balanced Allocation Portfolio o the SSgA Growth and Income ETF Portfolio+ and/or o the BlackRock Money Market Portfolio. + This portfolio is not available for investment prior to May 4, 2009. For contracts issued based on applications received before the close of the New York Stock Exchange on May 1, 2009, the following investment portfolios are also available under the GMIB Plus II, the Lifetime Withdrawal Guarantee II, and the Enhanced Death Benefit: the MetLife Growth Strategy Portfolio, the American Funds Growth Allocation Portfolio, and the Met/Franklin Templeton Founding Strategy Portfolio. If you elect the GMIB Plus I or the Lifetime Withdrawal Guarantee I, you must allocate 100% of your purchase payments or account value among: o the MetLife Defensive Strategy Portfolio o the MetLife Moderate Strategy Portfolio o the MetLife Balanced Strategy Portfolio o the MetLife Growth Strategy Portfolio o the American Funds Moderate Allocation Portfolio o the American Funds Balanced Allocation Portfolio o the American Funds Growth Allocation Portfolio o the Met/Franklin Templeton Founding Strategy Portfolio o the SSgA Growth and Income ETF Portfolio+ o the SSgA Growth ETF Portfolio+ and/or o the BlackRock Money Market Portfolio. + These portfolios are not available for investment prior to May 4, 2009. Your purchase payments and transfer requests must be allocated in accordance with the above limitations. We will reject any purchase payments or transfer requests that do not comply with the above limitations. FREE LOOK If you change your mind about owning this contract, you can cancel it within 10 days after receiving it (or the period required in your state). We ask that you submit your request to cancel in writing, signed by you, to our Annuity Service Center. When you cancel the contract within this "free look" period, we will not assess a withdrawal charge. Unless otherwise required by state law, you will receive back whatever your contract is worth on the day we receive your request. This may be more or less than your payment depending upon the performance of the portfolios you allocated your purchase payment to during the free look period. This means that you bear the risk of any decline in the value of your contract during the free look period. We do not refund any charges or deductions assessed during the free look period. In certain states, we are required to give you back your purchase payment if you decide to cancel your contract during the free look period. ACCUMULATION UNITS The portion of your account value allocated to the Separate Account will go up or down depending upon the investment performance of the investment portfolio(s) you choose. In order to keep track of this portion of your account value, we use a unit of measure we call an 17 ACCUMULATION UNIT. (An accumulation unit works like a share of a mutual fund.) Every business day we determine the value of an accumulation unit for each of the investment portfolios by multiplying the accumulation unit value for the immediately preceding business day by a factor for the current business day. The factor is determined by: 1) dividing the net asset value per share of the investment portfolio at the end of the current business day, plus any dividend or capital gains per share declared on behalf of the investment portfolio as of that day, by the net asset value per share of the investment portfolio for the previous business day, and 2) multiplying it by one minus the Separate Account product charges for each day since the last business day and any charges for taxes. The value of an accumulation unit may go up or down from day to day. When you make a purchase payment, we credit your contract with accumulation units. The number of accumulation units credited is determined by dividing the amount of the purchase payment allocated to an investment portfolio by the value of the accumulation unit for that investment portfolio. We calculate the value of an accumulation unit for each investment portfolio after the New York Stock Exchange closes each day (generally 4:00 p.m. Eastern Time) and then credit your contract. EXAMPLE: On Monday we receive an additional purchase payment of $5,000 from you before 4:00 p.m. Eastern Time. You have told us you want this to go to the MetLife Balanced Strategy Portfolio. When the New York Stock Exchange closes on that Monday, we determine that the value of an accumulation unit for the MetLife Balanced Strategy Portfolio is $12.50. We then divide $5,000 by $12.50 and credit your contract on Monday night with 400 accumulation units for the MetLife Balanced Strategy Portfolio. ACCOUNT VALUE ACCOUNT VALUE is equal to the sum of your interests in the investment portfolios. Your interest in each investment portfolio is determined by multiplying the number of accumulation units for that portfolio by the value of the accumulation unit. REPLACEMENT OF CONTRACTS EXCHANGE PROGRAMS. From time to time we may offer programs under which certain fixed or variable annuity contracts previously issued by us or one of our affiliates may be exchanged for the contracts offered by this prospectus. You should carefully consider whether an exchange is appropriate for you by comparing the death benefits, living benefits, and other guarantees provided by the contract you currently own to the benefits and guarantees that would be provided by the new contract offered by this prospectus. Then, you should compare the fees and charges (for example, the death benefit charges, the living benefit charges, and the mortality and expense charge) of your current contract to the fees and charges of the new contract, which may be higher than your current contract. The programs we offer will be made available on terms and conditions determined by us, and any such programs will comply with applicable law. We believe the exchanges will be tax free for federal income tax purposes; however, you should consult your tax adviser before making any such exchange. OTHER EXCHANGES. Generally you can exchange one variable annuity contract for another in a tax-free exchange under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both annuities carefully. If you exchange another annuity for the one described in this prospectus, unless the exchange occurs under one of our exchange programs as described above, you might have to pay a surrender charge on your old annuity, and there will be a new surrender charge period for this contract. Other charges may be higher (or lower) and the benefits may be different. Also, because we will not issue the contract until we have received the initial premium from your existing insurance company, the issuance of the contract may be delayed. Generally, it is not advisable to purchase a contract as a replacement for an existing variable annuity contract. Before you exchange another annuity for our contract, ask your registered representative whether the exchange would be advantageous, given the contract features, benefits and charges. 18 3. INVESTMENT OPTIONS The contract offers 12 INVESTMENT PORTFOLIOS, which are listed below. Additional investment portfolios may be available in the future. YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY. COPIES OF THESE PROSPECTUSES WILL ACCOMPANY OR PRECEDE THE DELIVERY OF YOUR CONTRACT. YOU CAN OBTAIN COPIES OF THE FUND PROSPECTUSES BY CALLING OR WRITING TO US AT: METLIFE INVESTORS USA INSURANCE COMPANY, ANNUITY SERVICE CENTER, P.O. BOX 10366, DES MOINES, IOWA 50306-0366, (800) 343-8496. YOU CAN ALSO OBTAIN INFORMATION ABOUT THE FUNDS (INCLUDING A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION) BY ACCESSING THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP:// WWW.SEC.GOV. CERTAIN INVESTMENT PORTFOLIOS DESCRIBED IN THE FUND PROSPECTUSES MAY NOT BE AVAILABLE WITH YOUR CONTRACT. APPENDIX B CONTAINS A SUMMARY OF ADVISERS, SUBADVISERS, AND INVESTMENT OBJECTIVES FOR EACH INVESTMENT PORTFOLIO. The investment objectives and policies of certain of the investment portfolios may be similar to the investment objectives and policies of other mutual funds that certain of the portfolios' investment advisers manage. Although the objectives and policies may be similar, the investment results of the investment portfolios may be higher or lower than the results of such other mutual funds. The investment advisers cannot guarantee, and make no representation, that the investment results of similar funds will be comparable even though the funds may have the same investment advisers. Shares of the investment portfolios may be offered to insurance company separate accounts of both variable annuity and variable life insurance contracts and to qualified plans. Due to differences in tax treatment and other considerations, the interests of various owners participating in, and the interests of qualified plans investing in the investment portfolios may conflict. The investment portfolios will monitor events in order to identify the existence of any material irreconcilable conflicts and determine what action, if any, should be taken in response to any such conflict. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE INVESTMENT PORTFOLIOS. We do not receive compensation from any of the advisers or subadvisers of any of the investment portfolios of the Met Investors Series Trust or the Metropolitan Series Fund, Inc. (or their affiliates) for administrative or other services relating to the portfolios, excluding 12b-1 fees (see below). However, 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 investment portfolios. We will benefit accordingly from assets allocated to the investment portfolios to the extent they result in profits to the adviser. (See "Fee Tables and Examples - Investment Portfolio Expenses" for information on the management fees paid by the investment portfolios and the Statement of Additional Information for the investment portfolios for information on the management fees paid by the advisers to the subadvisers.) Additionally, an investment adviser or subadviser of an investment portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the contracts and may pay us and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or subadviser (or its affiliate) with increased access to persons involved in the distribution of the contracts. Each of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. has adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. Each investment portfolio's 12b-1 Plan is described in more detail in the investment portfolio's prospectus. (See "Fee Tables and Examples - Investment Portfolio Expenses" and "Other Information - Distributor.") Any payments we receive pursuant to those 12b-1 Plans are paid to us or our distributor. Payments under an investment portfolio's 12b-1 Plan decrease the investment portfolio's investment return. We select the investment portfolios offered through this contract 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 investment portfolio's adviser or subadviser is one of our affiliates or whether the investment portfolio, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates. In this regard, the profit distributions we receive from our affiliated 19 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 to 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 investment portfolios periodically and may remove an investment portfolio or limit its availability to new purchase payments and/or transfers of account value if we determine that the investment portfolio no longer meets one or more of the selection criteria, and/or if the investment portfolio has not attracted significant allocations from owners. In some cases, we have included investment portfolios based on recommendations made by selling firms. These selling firms may receive payments from the investment portfolios they recommend and may benefit accordingly from the allocation of account value to such investment portfolios. WE DO NOT PROVIDE ANY INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR INVESTMENT PORTFOLIO. YOU BEAR THE RISK OF ANY DECLINE IN THE ACCOUNT VALUE OF YOUR CONTRACT RESULTING FROM THE PERFORMANCE OF THE INVESTMENT PORTFOLIOS YOU HAVE CHOSEN. MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM (CLASS B) Met Investors Series Trust is a mutual fund with multiple portfolios. MetLife Advisers, LLC (MetLife Advisers), an affiliate of MetLife Investors USA, is the investment manager of Met Investors Series Trust. (Met Investors Advisory, LLC, the former investment manager of Met Investors Series Trust, merged into MetLife Advisers on May 1, 2009.) The following Class B portfolios are available under the contract: MetLife Defensive Strategy Portfolio MetLife Moderate Strategy Portfolio MetLife Balanced Strategy Portfolio MetLife Growth Strategy Portfolio MetLife Aggressive Strategy Portfolio MET INVESTORS SERIES TRUST - AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS (CLASS C) In addition to the portfolios listed above under Met Investors Series Trust, the following Class C portfolios are also available under the contract: American Funds Moderate Allocation Portfolio American Funds Balanced Allocation Portfolio American Funds Growth Allocation Portfolio MET INVESTORS SERIES TRUST - FRANKLIN TEMPLETON ASSET ALLOCATION PORTFOLIOS (CLASS B) In addition to the portfolios listed above under Met Investors Series Trust, the following Class B portfolio is also available under the contract: Met/Franklin Templeton Founding Strategy Portfolio MET INVESTORS SERIES TRUST - SSGA ETF PORTFOLIOS (CLASS B) In addition to the portfolios listed above under Met Investors Series Trust, the following Class B portfolios are also available under the contract: SSgA Growth and Income ETF Portfolio+ SSgA Growth ETF Portfolio+ + These portfolios are not available for investment prior to May 4, 2009. METROPOLITAN SERIES FUND, INC. (CLASS B) Metropolitan Series Fund, Inc. is a mutual fund with multiple portfolios, one of which is available under this contract. MetLife Advisers is the investment adviser to the portfolio. MetLife Advisers has engaged a subadviser to provide investment advice for the portfolio. (See Appendix B for the name of the subadviser.) The following Class B portfolio is available under the contract: BlackRock Money Market Portfolio TRANSFERS GENERAL. You can transfer a portion of your account value among the investment portfolios. The contract provides that you can make a maximum of 12 transfers every year and that each transfer is made without charge. We measure a year from the anniversary of the day we issued your contract. We currently allow unlimited transfers but reserve the right to limit this in the future. We may also limit transfers in circumstances of market timing or other transfers we determine are or would be to the disadvantage of other contract owners. (See "Investment Options - Transfers - Market Timing.") We are not currently charging a transfer fee, but we reserve the right to charge such a fee in the future. If such a charge were to be imposed, it would be $25 for each transfer over 12 in a year. The transfer fee will be deducted from the investment portfolio from which the transfer is made. However, if the entire interest in an account is being transferred, the 20 transfer fee will be deducted from the amount which is transferred. You can make a transfer to or from any investment portfolio, subject to the limitations below. All transfers made on the same business day will be treated as one transfer. Transfers received before the close of trading on the New York Stock Exchange will take effect as of the end of the business day. The following apply to any transfer: o Your request for transfer must clearly state which investment portfolio(s) are involved in the transfer. o Your request for transfer must clearly state how much the transfer is for. o The minimum amount you can transfer is $500 from an investment portfolio, or your entire interest in the investment portfolio, if less (this does not apply to pre-scheduled transfer programs). o If you have elected to add the Enhanced Death Benefit, GMIB Plus I, GMIB Plus II, Lifetime Withdrawal Guarantee I or Lifetime Withdrawal Guarantee II rider to your contract, you may only make transfers between certain investment portfolios. Please refer to the section "Purchase-Investment Allocation Restrictions for Certain Riders." During the accumulation phase, to the extent permitted by applicable law, during times of drastic economic or market conditions, we may suspend the transfer privilege temporarily without notice and treat transfer requests based on their separate components (a redemption order with simultaneous request for purchase of another investment portfolio). In such a case, the redemption order would be processed at the source investment portfolio's next determined accumulation unit value. However, the purchase of the new investment portfolio would be effective at the next determined accumulation unit value for the new investment portfolio only after we receive the proceeds from the source investment portfolio, or we otherwise receive cash on behalf of the source investment portfolio. During the income phase, you cannot make transfers from a fixed annuity payment option to the investment portfolios. You can, however, make transfers during the income phase from the investment portfolios to a fixed annuity payment option and among the investment portfolios. TRANSFERS BY TELEPHONE OR OTHER MEANS. You may elect to make transfers by telephone, Internet or other means acceptable to us. To elect this option, you must first provide us with a notice or agreement in a form that we may require. If you own the contract with a joint owner, unless we are instructed otherwise, we will accept instructions from either you or the other owner. (See "Other Information - Requests and Elections.") All transfers made on the same day will be treated as one transfer. A transfer will be made as of the end of the business day when we receive a notice containing all the required information necessary to process the request. We will consider telephone and Internet requests received after 4:00 p.m. Eastern Time to be received the following business day. PRE-SCHEDULED TRANSFER PROGRAM. There are certain programs that involve transfers that are pre-scheduled. When a transfer is made as a result of such a program, we do not count the transfer in determining the applicability of any transfer fee and certain minimums do not apply. The current pre-scheduled transfers are made in conjunction with the following: Dollar Cost Averaging and Automatic Rebalancing Programs. MARKET TIMING. Frequent requests from contract owners to transfer account value may dilute the value of an investment portfolio's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the portfolio and the reflection of that change in the portfolio's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers may also increase brokerage and administrative costs of the underlying investment portfolios and may disrupt portfolio management strategy, requiring a portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the investment portfolios, which may in turn adversely affect contract owners and other persons who may have an interest in the contracts (E.G., annuitants and beneficiaries). 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. We do not believe that such situations may be presented in the portfolios that are available under this contract. However, if we determine in our sole discretion there is potential for arbitrage trading 21 in the portfolios available under this contract, we may commence monitoring such portfolio(s) (the "Monitored Portfolios"). We would 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. In addition to monitoring transfer activity in certain investment portfolios, we rely on the underlying investment portfolios to bring any potential disruptive trading activity they identify to our attention for investigation on a case-by-case basis. We will also investigate any other harmful transfer activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. Our policies and procedures may result in transfer restrictions being applied to deter market timing. Currently, if we were to detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, or other transfer activity that we believe may be harmful to other owners or other persons who have an interest in the contracts, we would require all future transfer requests to or from any Monitored Portfolios or other identified investment portfolios under that contract to be submitted with an original signature. Transfers made under a Dollar Cost Averaging Program, a rebalancing program or, if applicable, any asset allocation program described in this prospectus are not treated as transfers when we evaluate trading patterns for market timing. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those investment 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 owners to avoid such detection. Our ability to restrict such transfer activity also may be limited by provisions of the contract. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect owners and other persons with interests in the contracts. We do not accommodate market timing in any investment portfolios and there are no arrangements in place to permit any contract owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The investment portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares, and we reserve the right to enforce these policies and procedures. For example, investment 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 investment portfolios describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual authority or the operational capacity to apply the frequent trading policies and procedures of the investment portfolios, we have entered into a written agreement, as required by SEC regulation, with each investment portfolio or its principal underwriter that obligates us to provide to the investment portfolio promptly upon request certain information about the trading activity of individual contract owners, and to execute instructions from the investment portfolio to restrict or prohibit further purchases or transfers by specific contract owners who violate the frequent trading policies established by the investment portfolio. In addition, contract owners and other persons with interests in the contracts should be aware that the purchase and redemption orders received by the investment portfolios generally are "omnibus" orders from intermediaries, such as retirement plans or separate accounts funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and/or individual retirement plan participants. The omnibus nature of these orders may limit the investment portfolios in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the investment portfolios (and thus contract owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the investment portfolios. If an investment portfolio believes that an omnibus order reflects one or more transfer requests from contract owners engaged in disruptive trading activity, the investment portfolio may reject the entire omnibus order. 22 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 investment portfolios, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single contract owner). You should read the investment portfolio prospectuses for more details. DOLLAR COST AVERAGING PROGRAM We offer a dollar cost averaging (DCA) program as described below. By allocating amounts on a regular schedule as opposed to allocating the total amount at one particular time, you may be less susceptible to the impact of market fluctuations. The dollar cost averaging program is available only during the accumulation phase. We reserve the right to modify, terminate or suspend the dollar cost averaging program. There is no additional charge for participating in the dollar cost averaging program. If you participate in the dollar cost averaging program, the transfers made under the program are not taken into account in determining any transfer fee. We may, from time to time, offer other dollar cost averaging programs which have terms different from those described in this prospectus. This program allows you to systematically transfer a set amount each month from a money market investment portfolio to any of the other available investment portfolio(s) you select. These transfers are made on a date you select or, if you do not select a date, on the date that a purchase payment or account value is allocated to the dollar cost averaging program. You can make subsequent purchase payments while you have an active DCA program in effect, provided, however, that no amount will be allocated to the DCA program without your express direction. (See "Purchase - Allocation of Purchase Payments.") If you make such an addition to your existing DCA program, the DCA transfer amount will not be increased; however, the number of months over which transfers are made is increased, unless otherwise elected in writing. You can terminate the program at any time, at which point transfers under the program will stop. This program is not available if you have selected the GMIB Plus I rider, the GMIB Plus II rider, the Lifetime Withdrawal Guarantee II rider, or the Enhanced Death Benefit rider. AUTOMATIC REBALANCING PROGRAM Once your money has been allocated to the investment portfolios, the performance of each portfolio may cause your allocation to shift. You can direct us to automatically rebalance your contract to return to your original percentage allocations by selecting our Automatic Rebalancing Program. You can tell us whether to rebalance monthly, quarterly, semi-annually or annually. An automatic rebalancing program is intended to transfer account value from those portfolios that have increased in value to those that have declined or not increased as much in value. Over time, this method of investing may help you "buy low and sell high," although there can be no assurance that this objective will be achieved. Automatic rebalancing does not guarantee profits, nor does it assure that you will not have losses. We will measure the rebalancing periods from the anniversary of the date we issued your contract. If a dollar cost averaging program is in effect, rebalancing allocations will be based on your current DCA allocations. If you are not participating in a dollar cost averaging program, we will make allocations based upon your current purchase payment allocations, unless you tell us otherwise. The Automatic Rebalancing Program is available only during the accumulation phase. There is no additional charge for participating in the Automatic Rebalancing Program. If you participate in the Automatic Rebalancing Program, the transfers made under the program are not taken into account in determining any transfer fee. EXAMPLE: Assume that you want your initial purchase payment split between 2 investment portfolios. You want 50% to be in the MetLife Moderate Strategy Portfolio and 50% to be in the MetLife Balanced Strategy Portfolio. Over the next 2 1/2 months the MetLife Balanced Strategy Portfolio outperforms the MetLife Moderate Strategy Portfolio. At the end of the first quarter, the MetLife Balanced Strategy Portfolio now represents 60% of your holdings because of its increase in value. If you have chosen to have your holdings rebalanced quarterly, on the first day of the next quarter, we will sell some of your units in the MetLife Balanced Strategy Portfolio to bring its value back to 50% and use the money to buy more 23 units in the MetLife Moderate Strategy Portfolio to increase those holdings to 50%. DESCRIPTION OF THE METLIFE ASSET ALLOCATION PROGRAM The MetLife Asset Allocation Program consists of the following five MetLife asset allocation portfolios (Class B), each of which is a portfolio of the Met Investors Series Trust. MetLife Advisers, LLC (MetLife Advisers), an affiliate of ours, is the investment manager of the MetLife asset allocation portfolios. METLIFE ASSET ALLOCATION PROGRAM PORTFOLIOS ------------------------------------------- MetLife Defensive Strategy Portfolio MetLife Moderate Strategy Portfolio MetLife Balanced Strategy Portfolio MetLife Growth Strategy Portfolio MetLife Aggressive Strategy Portfolio Each portfolio is well diversified and was designed on established principles of asset allocation and risk tolerance. Each portfolio will invest substantially all of its assets in the Class A shares of other investment portfolios of the Met Investors Series Trust or of the Metropolitan Series Fund, Inc., which invest either in equity securities, fixed income securities or cash equivalent money market securities, as applicable. Each portfolio has a target allocation among the three types of asset classes (equity, fixed income and cash/money market). MetLife Advisers establishes specific target investment percentages for the asset classes and the various components of each asset category and then selects the underlying investment portfolios in which a portfolio invests based on, among other things, the underlying investment portfolios' investment objectives and policies, MetLife Advisers' investment process, its outlook for the economy, interest rates, financial markets and historical performance of each underlying investment portfolio and/or asset class. At least annually, MetLife Advisers will evaluate each portfolio's target allocation between equity and fixed income securities, including the allocation among sub-classes of these asset classes, based on the portfolio's risk profile. At the same time, MetLife Advisers will also consider whether to make changes to each portfolio's underlying investment portfolio target. (See the fund prospectus for a description of each portfolio's target allocation.) MetLife Advisers has hired an independent consultant to provide research and consulting services with respect to the periodic asset allocation targets for each of the portfolios and to investment in the underlying investment portfolios, which may assist MetLife Advisers in determining the underlying investment portfolios that may be available for investment and with the selection of and allocation of each portfolio's investments among the underlying investment portfolios. MetLife Advisers is responsible for paying the consulting fees. DESCRIPTION OF THE AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS The following three American Funds Asset Allocation Portfolios (Class C) are each a portfolio of the Met Investors Series Trust. MetLife Advisers is the investment manager of the American Funds Asset Allocation Portfolios. AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS ------------------------------------------ American Funds Moderate Allocation Portfolio American Funds Balanced Allocation Portfolio American Funds Growth Allocation Portfolio Each portfolio was designed on established principles of asset allocation and risk tolerance. Each portfolio will invest substantially all of its assets in the Class 1 shares of certain funds of American Funds Insurance Series (Reg. TM) that invest either in equity securities, fixed income securities or cash equivalent money market securities, as applicable. Each portfolio has a target allocation among the three primary asset classes (equity, fixed income and cash/money market). MetLife Advisers establishes specific target investment percentages for the asset classes and the various components of each asset category and then selects the underlying investment portfolios in which a portfolio invests based on, among other things, the underlying investment portfolios' investment objectives, policies, investment process and portfolio analytical and management personnel. Periodically, MetLife Advisers will evaluate each portfolio's allocation among equity, fixed income and cash, inclusive of the exposure to various investment styles and asset sectors, relative to each portfolio's risk profile. At the same time, MetLife Advisers will also consider whether to make changes with respect to the underlying investment portfolios, such as selecting one or more new underlying investment portfolios. (See the fund prospectus for a description of each portfolio's target allocation.) 24 DESCRIPTION OF THE MET/FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO The Met/Franklin Templeton Founding Strategy Portfolio invests on a fixed percentage basis in a combination of Met Investors Series Trust portfolios sub-advised by Franklin Templeton, which, in turn, invest primarily in U.S. and foreign equity securities and, to a lesser extent, fixed-income and money market securities. The Met/Franklin Templeton Founding Strategy Portfolio's assets are allocated on an equal basis (33 1/3%) among the Class A shares of the Met/Franklin Income Portfolio, Met/Franklin Mutual Shares Portfolio and Met/Templeton Growth Portfolio. MetLife Advisers is the investment manager of the Met/Franklin Templeton Founding Strategy Portfolio. MetLife Advisers will periodically rebalance the portfolio's holdings as deemed necessary to bring the asset allocation of the portfolio back into alignment with its fixed percentage allocations. (See the fund prospectus for more information about the portfolio and the underlying investment portfolios in which it invests.) DESCRIPTION OF THE SSGA ETF PORTFOLIOS The SSgA Growth and Income ETF Portfolio (Class B) and the SSgA Growth ETF Portfolio (Class B) are each a portfolio of the Met Investors Series Trust. MetLife Advisers is the investment manager of the SSgA ETF Portfolios. Each portfolio was designed on established principles of asset allocation. Each portfolio will primarily invest its assets in other investment companies known as exchange-traded funds ("underlying ETFs"). Each underlying ETF invests primarily in equity securities or in fixed income securities, as applicable, typically in an effort to replicate the performance of a market index. Each of the SSgA ETF Portfolios has a different allocation among various asset classes (including large-, mid- and small-capitalization domestic equity, foreign, fixed income, high yield, real estate investment trusts and cash/money market). SSgA Funds Management, Inc. (SSgA Funds Management), the portfolios' sub-adviser, establishes specific investment percentages for the asset classes and then selects the underlying ETFs in which a portfolio invests based on, among other things, the historical performance of each ETF and/or asset class, future risk/ return expectations, and SSgA Funds Management's outlook for the economy, interest rates and financial markets. These allocations reflect varying degrees of potential investment risk and reward. The allocation between equity and fixed income ETFs reflects greater or lesser emphasis on growth of capital and pursuing current income. SSgA Funds Management will regularly review each portfolio's asset allocation among equities, fixed income and cash/cash equivalents including the investment allocations within such asset classes and may make changes in the allocation as the market and economic outlook changes. SSgA Funds Management may add new underlying ETFs or replace existing underlying ETFs at its discretion. (See the fund prospectus for more information about each of the SSgA ETF Portfolios and the underlying ETFs.) VOTING RIGHTS We are the legal owner of the investment portfolio shares. However, we believe that when an investment portfolio solicits proxies in conjunction with a vote of shareholders, we are required to obtain from you and other affected owners instructions as to how to vote those shares. When we receive those instructions, we will vote all of the shares we own in proportion to those instructions. This will also include any shares that we own on our own behalf. The effect of this proportional voting is that a small number of contract owners may control the outcome of a vote. Should we determine that we are no longer required to comply with the above, we will vote the shares in our own right. SUBSTITUTION OF INVESTMENT OPTIONS If investment in the investment portfolios or a particular investment portfolio is no longer possible, in our judgment becomes inappropriate for purposes of the contract, or for any other reason in our sole discretion, we may substitute another investment portfolio or investment portfolios without your consent. The substituted investment portfolio may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future purchase payments, or both. However, we will not make such substitution without any necessary approval of the Securities and Exchange Commission and applicable state insurance departments. Furthermore, we may close investment portfolios to allocation of purchase payments or account value, or both, at any time in our sole discretion. 25 4. EXPENSES There are charges and other expenses associated with the contract that reduce the return on your investment in the contract. These charges and expenses are: PRODUCT CHARGES SEPARATE ACCOUNT PRODUCT CHARGES. Each day, we make a deduction for our Separate Account product charges (which consist of the mortality and expense charge and the administration charge). We do this as part of our calculation of the value of the accumulation units and the annuity units (I.E., during the accumulation phase and the income phase). MORTALITY AND EXPENSE CHARGE. For Series S, we assess a daily mortality and expense charge that is equal, on an annual basis, to 0.90% of the average daily net asset value of each investment portfolio. For Series S - L Share Option, we assess a daily mortality and expense charge that is equal, on an annual basis, to 1.60% of the average daily net asset value of each investment portfolio for the first four contract years. For the fifth contract year and thereafter, this charge declines to 0.90%. This charge compensates us for mortality risks we assume for the annuity payment and death benefit guarantees made under the contract. These guarantees include making annuity payments that will not change based on our actual mortality experience, and providing a guaranteed minimum death benefit under the contract. The charge also compensates us for expense risks we assume to cover contract maintenance expenses. These expenses may include issuing contracts, maintaining records, making and maintaining subaccounts available under the contract and performing accounting, regulatory compliance, and reporting functions. This charge also compensates us for costs associated with the establishment and administration of the contract, including programs like transfers and dollar cost averaging. If the mortality and expense charge is inadequate to cover the actual expenses of mortality, maintenance, and administration, we will bear the loss. If the charge exceeds the actual expenses, we will add the excess to our profit and it may be used to finance distribution expenses or for any other purpose. ADMINISTRATION CHARGE. This charge is equal, on an annual basis, to 0.25% of the average daily net asset value of each investment portfolio. This charge, together with the account fee (see below), is for the expenses associated with the administration of the contract. Some of these expenses are: issuing contracts, maintaining records, providing accounting, valuation, regulatory and reporting services, as well as expenses associated with marketing, sale and distribution of the contracts. ACCOUNT FEE During the accumulation phase, every contract year on your contract anniversary (the anniversary of the date when your contract was issued), we will deduct $30 from your contract as an account fee for the prior contract year if your account value is less than $50,000. If you make a complete withdrawal from your contract, the full account fee will be deducted from the account value regardless of the amount of your account value. During the accumulation phase, the account fee is deducted pro rata from the investment portfolios. This charge is for administrative expenses (see above). This charge cannot be increased. A pro rata portion of the charge will be deducted from the account value on the annuity date if this date is other than a contract anniversary. If your account value on the annuity date is at least $50,000, then we will not deduct the account fee. After the annuity date, the charge will be collected monthly out of the annuity payment, regardless of the size of your contract. DEATH BENEFIT RIDER CHARGE Please check with your registered representative regarding the availability of the optional Enhanced Death Benefit in your state. If you select the Enhanced Death Benefit, we will deduct a charge that compensates us for the costs and risks we assume in providing the benefit. If you are age 69 or younger at issue, this charge (assessed during the accumulation phase) is equal, on an annual basis, to 0.75% of the death benefit base. If you are age 70-75 at issue, this charge is equal to 0.95% of the death benefit base (see "Death Benefit - Optional Death Benefit - Enhanced Death Benefit" for a discussion of how the death benefit base is determined). If your death benefit base is increased due to an Optional Step-Up, we may reset the rider charge to a rate that does not exceed the lower of: (a) the Maximum Optional Step-Up Charge (1.50%) or (b) the current rate that we charge for the same rider available for new contract purchases at the time of the Optional Step-Up. Starting with the first contract anniversary, the charge is assessed for the prior contract year at each contract anniversary before any Optional Step-Up. If you make a full withdrawal (surrender) or if you begin to receive 26 annuity payments at the annuity date, a pro rata portion of the charge will be assessed based on the number of months from the last contract anniversary to the date of withdrawal or application to an annuity option. The charge is deducted from your account value pro rata from each investment portfolio. We take amounts from the investment options that are part of the Separate Account by canceling accumulation units from the Separate Account. For contracts issued from February 24, 2009 through May 1, 2009, the percentage charge for the Enhanced Death Benefit is 0.65% of the death benefit base if you are age 69 or younger at issue and 0.90% of the death benefit base if you are age 70-75 at issue. For contracts issued prior to February 24, 2009, the percentage charge for the Enhanced Death Benefit is 0.65% of the death benefit base if you are age 69 or younger at issue and 0.85% of the death benefit base if you are age 70-75 at issue. For contracts issued prior to May 4, 2009, if you elected both the Enhanced Death Benefit rider and the GMIB Plus II rider (described below), the percentage charge for the Enhanced Death Benefit is reduced by 0.05%. GUARANTEED MINIMUM INCOME BENEFIT - RIDER CHARGE We offer an optional Guaranteed Minimum Income Benefit (GMIB) called the Guaranteed Minimum Income Benefit Plus (GMIB Plus) that you can select when you purchase the contract. There are two different versions of the GMIB Plus under this contract (no more than one of which is available in your state): GMIB Plus II and GMIB Plus I. If you select the GMIB Plus II rider, we will assess a charge during the accumulation phase equal to 1.00% of the income base (see "Living Benefits - Guaranteed Income Benefits" for a discussion of how the income base is determined) at the time the rider charge is assessed prior to any Optional Step-Up. If your income base is increased due to an Optional Step-Up under the GMIB Plus II rider, we may reset the rider charge to a rate that does not exceed the lower of: (a) the Maximum Optional Step-Up Charge (1.50%) or (b) the current rate that we charge for the same rider available for new contract purchases at the time of the Optional Step-Up. If you select the GMIB Plus I rider, we will assess a charge during the accumulation phase equal to 0.80% of the income base at the time the rider charge is assessed. If your income base is increased due to an Optional Reset under the GMIB Plus I rider, we may increase the rider charge to the charge applicable to contract purchases of the same rider at the time of the increase, but to no more than a maximum of 1.50%. For contracts issued prior to February 24, 2009 for which the GMIB Plus II was elected, the rider charge equals 0.80% of the income base. The rider charge is assessed at the first contract anniversary, and then at each subsequent contract anniversary, up to and including the anniversary on or immediately preceding the date the rider is exercised. If you make a full withdrawal (surrender) or if you begin to receive annuity payments at the annuity date, a pro rata portion of the rider charge will be assessed based on the number of months from the last contract anniversary to the date of withdrawal or application to an annuity option. The rider charge is deducted from your account value pro rata from each investment portfolio. We take amounts from the investment options that are part of the Separate Account by cancelling accumulation units from the Separate Account. GUARANTEED WITHDRAWAL BENEFIT - RIDER CHARGE We offer an optional Guaranteed Withdrawal Benefit (GWB) called the Lifetime Withdrawal Guarantee that you can select when you purchase the contract. There are two versions of the Lifetime Withdrawal Guarantee rider: the Lifetime Withdrawal Guarantee II rider and the Lifetime Withdrawal Guarantee I rider (collectively referred to as the Lifetime Withdrawal Guarantee riders). Please check with your registered representative regarding which version is available in your state. If you elect one of the Lifetime Withdrawal Guarantee riders, a charge is deducted from your account value during the accumulation phase on each contract anniversary. The charge for the Lifetime Withdrawal Guarantee II rider is equal to 1.25% (Single Life version) or 1.50% (Joint Life version) of the Total Guaranteed Withdrawal Amount (see "Living Benefits - Guaranteed Withdrawal Benefits - Description of the Lifetime Withdrawal Guarantee II") on the applicable contract anniversary, after applying any 7.25% Compounding Income Amount and prior to taking into account any Automatic Annual Step-Up occurring on such contract anniversary. For contracts issued prior to February 24, 2009, the charge for the Lifetime Withdrawal Guarantee II rider is equal to 0.65% (Single Life version) or 0.85% (Joint Life version) of the Total Guaranteed Withdrawal Amount (see "Living Benefits-Guaranteed Withdrawal Benefits-Description of the Lifetime Withdrawal Guarantee II") on the applicable 27 contract anniversary, after applying any 7.25% Compounding Income Amount and prior to taking into account any Automatic Annual Step-Up occurring on such contract anniversary. The charge for the Lifetime Withdrawal Guarantee I rider is equal to 0.50% (Single Life version) or 0.70% (Joint Life version) of the Total Guaranteed Withdrawal Amount on the applicable contract anniversary, after applying any 5% Compounding Income Amount and prior to taking into account any Automatic Annual Step-Up occurring on such contract anniversary. The rider charge for the Lifetime Withdrawal Guarantee riders is deducted from your account value pro rata from each investment portfolio. We take amounts from the investment options that are part of the Separate Account by canceling accumulation units from the Separate Account. If you make a full withdrawal (surrender) of your account value, you apply your account value to an annuity option, there is a change in owners, joint owners or annuitants (if the owner is a non-natural person), or the contract terminates (except for a termination due to death), a pro rata portion of the rider charge will be assessed based on the number of full months from the last contract anniversary to the date of the change. If a Lifetime Withdrawal Guarantee rider is cancelled pursuant to the cancellation provisions of the rider, a pro rata portion of the rider charge will not be assessed based on the period from the most recent contract anniversary to the date the cancellation takes effect. If an Automatic Annual Step-Up occurs under the Lifetime Withdrawal Guarantee II rider, we may reset the Lifetime Withdrawal Guarantee II rider charge to a rate that does not exceed the lower of: (a) the Maximum Optional Step-Up Charge (1.60% for the Single Life version or 1.80% for the Joint Life version) or (b) the current rate that we charge for the same rider available for new contract purchases at the time of the step-up. For contracts issued prior to February 24, 2009, the Maximum Optional Step-Up Charge is 1.25% (Single Life version) or 1.50% (Joint Life version). If an Automatic Annual Step-Up occurs under the Lifetime Withdrawal Guarantee I rider, we may increase the Lifetime Withdrawal Guarantee I rider charge to the charge applicable to current contract purchases of the same rider at the time of the step-up, but to no more than a maximum of 0.95% (Single Life version) or 1.40% (Joint Life version) of the Total Guaranteed Withdrawal Amount. If one of the Lifetime Withdrawal Guarantee riders is in effect, the rider charge will continue if your Remaining Guaranteed Withdrawal Amount (see "Living Benefits - Guaranteed Withdrawal Benefits - Description of the Lifetime Withdrawal Guarantee II") equals zero. WITHDRAWAL CHARGE We impose a withdrawal charge to reimburse us for contract sales expenses, including commissions and other distribution, promotion, and acquisition expenses. During the accumulation phase, you can make a withdrawal from your contract (either a partial or a complete withdrawal). If the amount you withdraw is determined to include the withdrawal of any of your prior purchase payments, a withdrawal charge is assessed against the purchase payment withdrawn. To determine if your withdrawal includes prior purchase payments, amounts are withdrawn from your contract in the following order: 1. Earnings in your contract (earnings are equal to your account value, less purchase payments not previously withdrawn); then 2. The free withdrawal amount described below; then 3. Purchase payments not previously withdrawn, in the order such purchase payments were made: the oldest purchase payment first, the next purchase payment second, etc. until all purchase payments have been withdrawn. A withdrawal charge will be assessed if prior purchase payments are withdrawn pursuant to a request to divide the assets of a contract due to divorce. FREE WITHDRAWAL AMOUNT. The free withdrawal amount for each contract year after the first (there is no free withdrawal amount in the first contract year) is equal to 10% of your total purchase payments, less the total free withdrawal amount previously withdrawn in the same contract year. Also, we currently will not assess the withdrawal charge on amounts withdrawn during the first contract year under the Systematic Withdrawal Program. Any unused free withdrawal amount in one contract year does not carry over to the next contract year. 28 The withdrawal charge is calculated at the time of each withdrawal in accordance with the following: SERIES S
Number of Complete Years from Withdrawal Charge Receipt of Purchase Payment (% of Purchase Payment) ------------------------------ ------------------------ 0 7 1 6 2 6 3 5 4 4 5 3 6 2 7 and thereafter 0
SERIES S - L SHARE OPTION
Number of Complete Years from Withdrawal Charge Receipt of Purchase Payment (% of Purchase Payment) ------------------------------ ------------------------ 0 7 1 6 2 6 3 5 4 and thereafter 0
For a partial withdrawal, the withdrawal charge is deducted from the remaining account value, if sufficient. If the remaining account value is not sufficient, the withdrawal charge is deducted from the amount withdrawn. If the account value is smaller than the total of all purchase payments, the withdrawal charge only applies up to the account value. We do not assess the withdrawal charge on any payments paid out as annuity payments or as death benefits, although we do assess the withdrawal charge in calculating GMIB payments, if applicable. In addition, we will not assess the withdrawal charge on required minimum distributions from qualified contracts but only as to amounts required to be distributed from this contract. We do not assess the withdrawal charge on earnings in your contract. NOTE: For tax purposes, earnings from non-qualified contracts are considered to come out first. REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE GENERAL. We may elect to reduce or eliminate the amount of the withdrawal charge when the contract is sold under circumstances which reduce our sales expenses. Some examples are: if there is a large group of individuals that will be purchasing the contract or a prospective purchaser already had a relationship with us. We may not deduct a withdrawal charge under a contract issued to an officer, director, employee, or a family member of an officer, director, or employee of ours or any of our affiliates, and we may not deduct a withdrawal charge under a contract issued to an officer, director or employee or family member of an officer, director or employee of a broker-dealer that is participating in the offering of the contract. In lieu of a withdrawal charge waiver, we may provide an account value credit. NURSING HOME OR HOSPITAL CONFINEMENT RIDER. We will not impose a withdrawal charge if, after you have owned the contract for one year, you or your joint owner becomes confined to a nursing home and/or hospital for at least 90 consecutive days or confined for a total of at least 90 days if there is no more than a 6 month break in confinement and the confinements are for related causes. The confinement must begin after the first contract anniversary and you must have been the owner continuously since the contract was issued (or have become the owner as the spousal beneficiary who continues the contract). The confinement must be prescribed by a physician and be medically necessary. You must exercise this right no later than 90 days after you or your joint owner exits the nursing home or hospital. This waiver terminates on the annuity date. We will not accept additional payments once this waiver is used. This rider may not be available in your state. (Check with your registered representative regarding availability.) TERMINAL ILLNESS RIDER. After the first contract anniversary, we will waive the withdrawal charge if you or your joint owner are terminally ill and not expected to live more than 12 months; a physician certifies to your illness and life expectancy; you were not diagnosed with the terminal illness as of the date we issued your contract; and you have been the owner continuously since the contract was issued (or have become the owner as the spousal beneficiary who continues the contract). This waiver terminates on the annuity date. We will not accept additional payments once this waiver is used. This rider may not be available in your state. (Check with your registered representative regarding availability.) The Nursing Home or Hospital Confinement rider and the Terminal Illness rider are only available for owners who are age 80 or younger (on the contract issue date). Additional conditions and requirements apply to the Nursing Home or 29 Hospital Confinement rider and the Terminal Illness rider. They are specified in the rider(s) that are part of your contract. PREMIUM AND OTHER TAXES We reserve the right to deduct from purchase payments, account balances, withdrawals, death benefits or income payments any taxes relating to the contracts (including, but not limited to, premium taxes) paid by us to any government entity. Examples of these taxes include, but are not limited to, premium tax, generation-skipping transfer tax or a similar excise tax under federal or state tax law which is imposed on payments we make to certain persons and income tax withholdings on withdrawals and income payments to the extent required by law. Premium taxes generally range from 0 to 3.5%, depending on the state. We will, at our sole discretion, determine when taxes relate to the contracts. We may, at our sole discretion, pay taxes when due and deduct that amount from the account balance at a later date. Payment at an earlier date does not waive any right we may have to deduct amounts at a later date. It is our current practice not to charge premium taxes until annuity payments begin. TRANSFER FEE We currently allow unlimited transfers without charge during the accumulation phase. However, we have reserved the right to limit the number of transfers to a maximum of 12 per year without charge and to charge a transfer fee of $25 for each transfer greater than 12 in any year. We are currently waiving the transfer fee, but reserve the right to charge it in the future. The transfer fee is deducted from the investment portfolio from which the transfer is made. However, if the entire interest in an account is being transferred, the transfer fee will be deducted from the amount which is transferred. If the transfer is part of a pre-scheduled transfer program, it will not count in determining the transfer fee. INCOME TAXES We will deduct from the contract for any income taxes which we incur because of the contract. At the present time, we are not making any such deductions. INVESTMENT PORTFOLIO EXPENSES There are deductions from and expenses paid out of the assets of each investment portfolio, which are described in the fee table in this prospectus and the investment portfolio prospectuses. These deductions and expenses are not charges under the terms of the contract, but are represented in the share values of each investment portfolio. 5. ANNUITY PAYMENTS (THE INCOME PHASE) ANNUITY DATE Under the contract you can receive regular income payments (referred to as ANNUITY PAYMENTS). You can choose the month and year in which those payments begin. We call that date the ANNUITY DATE. Your annuity date must be the first day of a calendar month and must be at least 30 days after we issue the contract. Annuity payments must begin by the first day of the calendar month following the annuitant's 90th birthday or 10 years from the date we issue your contract, whichever is later (this requirement may be changed by us). When you purchase the contract, the annuity date will be the later of the first day of the calendar month after the annuitant's 90th birthday or 10 years from the date your contract was issued. You can change the annuity date at any time before the annuity date with 30 days prior notice to us, subject to restrictions that may apply in your state. Please be aware that once your contract is annuitized, you are ineligible to receive the death benefit you have selected. Additionally, if you have selected a living benefit rider such as a Guaranteed Minimum Income Benefit Plus or Lifetime Withdrawal Guarantee rider, annuitizing your contract terminates the rider, including any death benefit provided by the rider and any Guaranteed Principal Adjustment that may also be provided by the rider. ANNUITY PAYMENTS You (unless another payee is named) will receive the annuity payments during the income phase. The annuitant is the natural person(s) whose life we look to in the determination of annuity payments. During the income phase, you have the same investment choices you had just before the start of the income phase. At the annuity date, you can choose whether payments will be: o fixed annuity payments, or o variable annuity payments, or o a combination of both. 30 If you don't tell us otherwise, your annuity payments will be based on the investment allocations that were in place just before the start of the income phase. If you choose to have any portion of your annuity payments based on the investment portfolio(s), the dollar amount of your initial payment will vary and will depend upon three things: 1) the value of your contract in the investment portfolio(s) just before the start of the income phase, 2) the assumed investment return (AIR) (you select) used in the annuity table for the contract, and 3) the annuity option elected. Subsequent variable annuity payments will vary with the performance of the investment portfolios you selected. (For more information, see "Variable Annuity Payments" below.) At the time you choose an annuity option, you select the AIR, which must be acceptable to us. Currently, you can select an AIR of 3% or 4%. You can change the AIR with 30 days notice to us prior to the annuity date. If you do not select an AIR, we will use 3%. If the actual performance exceeds the AIR, your variable annuity payments will increase. Similarly, if the actual investment performance is less than the AIR, your variable annuity payments will decrease. Your variable annuity payment is based on ANNUITY UNITS. An annuity unit is an accounting device used to calculate the dollar amount of annuity payments. (For more information, see "Variable Annuity Payments" below.) When selecting an AIR, you should keep in mind that a lower AIR will result in a lower initial variable annuity payment, but subsequent variable annuity payments will increase more rapidly or decline more slowly as changes occur in the investment experience of the investment portfolios. On the other hand, a higher AIR will result in a higher initial variable annuity payment than a lower AIR, but later variable annuity payments will rise more slowly or fall more rapidly. A transfer during the income phase from a variable annuity payment option to a fixed annuity payment option may result in a reduction in the amount of annuity payments. If you choose to have any portion of your annuity payments be a fixed annuity payment, the dollar amount of each fixed annuity payment will not change, unless you make a transfer from a variable annuity payment option to the fixed annuity payment that causes the fixed annuity payment to increase. Please refer to the "Annuity Provisions" section of the Statement of Additional Information for more information. Annuity payments are made monthly (or at any frequency permitted under the contract) unless you have less than $5,000 to apply toward an annuity option. In that case, we may provide your annuity payment in a single lump sum instead of annuity payments. Likewise, if your annuity payments would be or become less than $100 a month, we have the right to change the frequency of payments so that your annuity payments are at least $100. ANNUITY OPTIONS You can choose among income plans. We call those ANNUITY OPTIONS. We ask you to choose an annuity option when you purchase the contract. You can change it at any time before the annuity date with 30 days notice to us. If you do not choose an annuity option at the time you purchase the contract, Option 2, which provides a life annuity with 10 years of guaranteed annuity payments, will automatically be applied. You can choose one of the following annuity options or any other annuity option acceptable to us. After annuity payments begin, you cannot change the annuity option. OPTION 1. LIFE ANNUITY. Under this option, we will make annuity payments so long as the annuitant is alive. We stop making annuity payments after the annuitant's death. It is possible under this option to receive only one annuity payment if the annuitant dies before the due date of the second payment or to receive only two annuity payments if the annuitant dies before the due date of the third payment, and so on. OPTION 2. LIFE ANNUITY WITH 10 YEARS OF ANNUITY PAYMENTS GUARANTEED. Under this option, we will make annuity payments so long as the annuitant is alive. If, when the annuitant dies, we have made annuity payments for less than ten years, we will then continue to make annuity payments for the rest of the 10 year period. OPTION 3. JOINT AND LAST SURVIVOR ANNUITY. Under this option, we will make annuity payments so long as the annuitant and a second person (joint annuitant) are both alive. When either annuitant dies, we will continue to make annuity payments, so long as the survivor continues to live. 31 We will stop making annuity payments after the last survivor's death. OPTION 4. JOINT AND LAST SURVIVOR ANNUITY WITH 10 YEARS OF ANNUITY PAYMENTS GUARANTEED. Under this option, we will make annuity payments so long as the annuitant and a second person (joint annuitant) are both alive. When either annuitant dies, we will continue to make annuity payments, so long as the survivor continues to live. If, at the last death of the annuitant and the joint annuitant, we have made annuity payments for less than ten years, we will then continue to make annuity payments for the rest of the 10 year period. OPTION 5. PAYMENTS FOR A DESIGNATED PERIOD. We currently offer an annuity option under which fixed or variable monthly annuity payments are made for a selected number of years as approved by us, currently not less than 10 years. This annuity option may be limited or withdrawn by us in our discretion. We may require proof of age or sex of an annuitant before making any annuity payments under the contract that are measured by the annuitant's life. If the age or sex of the annuitant has been misstated, the amount payable will be the amount that the account value would have provided at the correct age or sex. Once annuity payments have begun, any underpayments will be made up in one sum with the next annuity payment. Any overpayments will be deducted from future annuity payments until the total is repaid. You may withdraw the commuted value of the payments remaining under the variable Payments for a Designated Period annuity option (Option 5). You may not commute the fixed Payments for a Designated Period annuity option or any option involving a life contingency, whether fixed or variable, prior to the death of the last surviving annuitant. Upon the death of the last surviving annuitant, the beneficiary may choose to continue receiving income payments or to receive the commuted value of the remaining guaranteed payments. For variable annuity options, the calculation of the commuted value will be done using the AIR applicable to the contract. (See "Annuity Payments" above.) For fixed annuity options, the calculation of the commuted value will be done using the then current annuity option rates. There may be tax consequences resulting from the election of an annuity payment option containing a commutation feature (I.E., an annuity payment option that permits the withdrawal of a commuted value). (See "Federal Income Tax Status.") Due to underwriting, administrative or Internal Revenue Code considerations, there may be limitations on payments to the survivor under Options 3 and 4 and/or the duration of the guarantee period under Options 2, 4, and 5. In addition to the annuity options described above, we may offer an additional payment option that would allow your beneficiary to take distribution of the account value over a period not extending beyond his or her life expectancy. Under this option, annual distributions would not be made in the form of an annuity, but would be calculated in a manner similar to the calculation of required minimum distributions from IRAs. (See "Federal Income Tax Status.") We intend to make this payment option available to both tax qualified and non-tax qualified contracts. In the event that you purchased the contract as a tax qualified contract, you must take distribution of the account value in accordance with the minimum required distribution rules set forth in applicable tax law. (See "Federal Income Tax Status.") Under certain circumstances, you may satisfy those requirements by electing an annuity option. You may choose any death benefit available under the contract, but certain other contract provisions and programs will not be available. Upon your death, if annuity payments have already begun, the death benefit would be required to be distributed to your beneficiary at least as rapidly as under the method of distribution in effect at the time of your death. VARIABLE ANNUITY PAYMENTS The Adjusted Contract Value (the account value, less any applicable premium taxes, account fee, and any prorated rider charge) is determined on the annuity calculation date, which is a business day no more than five (5) business days before the annuity date. The first variable annuity payment will be based upon the Adjusted Contract Value, the annuity option elected, the annuitant's age, the annuitant's sex (where permitted by law), and the appropriate variable annuity option table. Your annuity rates will not be less than those guaranteed in your contract at the time of purchase for the assumed investment return and annuity option elected. If, as of the annuity calculation date, the then current variable annuity option rates applicable to this class of contracts provide a first annuity payment greater than that which is guaranteed under the same annuity option under this contract, the greater payment will be made. The dollar amount of variable annuity payments after the first payment is determined as follows: 32 o The dollar amount of the first variable annuity payment is divided by the value of an annuity unit for each applicable investment portfolio as of the annuity calculation date. This establishes the number of annuity units for each payment. The number of annuity units for each applicable investment portfolio remains fixed during the annuity period, provided that transfers among the subaccounts will be made by converting the number of annuity units being transferred to the number of annuity units of the subaccount to which the transfer is made, and the number of annuity units will be adjusted for transfers to a fixed annuity option. Please see the Statement of Additional Information for details about making transfers during the Annuity Phase. o The fixed number of annuity units per payment in each investment portfolio is multiplied by the annuity unit value for that investment portfolio for the business day for which the annuity payment is being calculated. This result is the dollar amount of the payment for each applicable investment portfolio, less any account fee. The account fee will be deducted pro rata out of each annuity payment. o The total dollar amount of each variable annuity payment is the sum of all investment portfolio variable annuity payments. ANNUITY UNIT. The initial annuity unit value for each investment portfolio of the Separate Account was set by us. The subsequent annuity unit value for each investment portfolio is determined by multiplying the annuity unit value for the immediately preceding business day by the net investment factor (see the Statement of Additional Information for a definition) for the investment portfolio for the current business day and multiplying the result by a factor for each day since the last business day which represents the daily equivalent of the AIR you elected. FIXED ANNUITY PAYMENTS The Adjusted Contract Value (defined above under "Variable Annuity Payments") on the day immediately preceding the annuity date will be used to determine a fixed annuity payment. The annuity payment will be based upon the annuity option elected, the annuitant's age, the annuitant's sex (where permitted by law), and the appropriate annuity option table. Your annuity rates will not be less than those guaranteed in your contract at the time of purchase. If, as of the annuity calculation date, the then current annuity option rates applicable to this class of contracts provide an annuity payment greater than that which is guaranteed under the same annuity option under this contract, the greater payment will be made. You may not make a transfer from the fixed annuity option to the variable annuity option. 6. ACCESS TO YOUR MONEY You (or in the case of a death benefit, your beneficiary) can have access to the money in your contract: (1) by making a withdrawal (either a partial or a complete withdrawal); (2) by electing to receive annuity payments; or (3) when a death benefit is paid to your beneficiary. Under most circumstances, withdrawals can only be made during the accumulation phase. You may establish a withdrawal plan under which you can receive substantially equal periodic payments in order to comply with the requirements of Sections 72(q) or (t) of the Code. Premature modification or termination of such payments may result in substantial penalty taxes. (See "Federal Income Tax Status.") When you make a complete withdrawal, you will receive the withdrawal value of the contract. The withdrawal value of the contract is the account value of the contract at the end of the business day when we receive a written request for a withdrawal: o less any applicable withdrawal charge; o less any premium or other tax; o less any account fee; and o less any applicable pro rata GMIB, GWB or Enhanced Death Benefit rider charge. Unless you instruct us otherwise, any partial withdrawal will be made pro rata from the investment portfolio(s) you selected. Under most circumstances the amount of any partial withdrawal must be for at least $500, or your entire interest in the investment portfolio(s). We require that after a partial withdrawal is made you keep at least $2,000 in the contract. If the withdrawal would result in the account value being less than $2,000 after a partial withdrawal, we will treat the withdrawal request as a request for a full withdrawal. 33 We will pay the amount of any withdrawal from the Separate Account within seven days of when we receive the request in good order unless the suspension of payments or transfers provision is in effect. We may withhold payment of withdrawal proceeds if any portion of those proceeds would be derived from a contract owner's check that has not yet cleared (I.E., that could still be dishonored by the contract owner's banking institution). We may use telephone, fax, Internet or other means of communication to verify that payment from the contract 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. Contract owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. How to withdraw all or part of your account value: o You must submit a request to our Annuity Service Center. (See "Other Information - Requests and Elections.") o You must provide satisfactory evidence of terminal illness or confinement to a nursing home if you would like to have the withdrawal charge waived. (See "Expenses - Reduction or Elimination of the Withdrawal Charge.") o You must state in your request whether you would like to apply the proceeds to a payment option (otherwise you will receive the proceeds in a lump sum and may be taxed on them). o We have to receive your withdrawal request in our Annuity Service Center prior to the annuity date or owner's death. There are limits to the amount you can withdraw from certain qualified plans including Qualified and TSA plans. (See "Federal Income Tax Status.") INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL YOU MAKE. SYSTEMATIC WITHDRAWAL PROGRAM You may elect the Systematic Withdrawal Program at any time. We do not assess a charge for this program. This program provides an automatic payment to you of up to 10% of your total purchase payments each year. You can receive payments monthly or quarterly, provided that each payment must amount to at least $100 (unless we consent otherwise). We reserve the right to change the required minimum systematic withdrawal amount. If the New York Stock Exchange is closed on a day when the withdrawal is to be made, we will process the withdrawal on the next business day. While the Systematic Withdrawal Program is in effect you can make additional withdrawals. However, such withdrawals plus the systematic withdrawals will be considered when determining the applicability of any withdrawal charge. (For a discussion of the withdrawal charge, see "Expenses" above.) INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO SYSTEMATIC WITHDRAWALS. SUSPENSION OF PAYMENTS OR TRANSFERS We may be required to suspend or postpone payments for withdrawals or transfers for any period when: o the New York Stock Exchange is closed (other than customary weekend and holiday closings); o trading on the New York Stock Exchange is restricted; o an emergency exists, as determined by the Securities and Exchange Commission, as a result of which disposal of shares of the investment portfolios is not reasonably practicable or we cannot reasonably value the shares of the investment portfolios; or o during any other period when the Securities and Exchange Commission, by order, so permits for the protection of owners. Federal laws designed to counter terrorism and prevent money laundering might, in certain circumstances, require us to block an owner's ability to make certain transactions and thereby refuse to accept any requests for transfers, withdrawals, surrenders, or death benefits until instructions are received from the appropriate regulator. We may also be required to provide additional information about you and your contract to government regulators. 7. LIVING BENEFITS OVERVIEW OF LIVING BENEFIT RIDERS We offer a suite of optional living benefit riders that, for certain additional charges, offer protection against market risk (the risk that your investments may decline in value or underperform your expectations). Only one of these riders may be elected, and the rider must be elected at contract issue. These optional riders are described briefly below. 34 Please see the more detailed description that follows for important information on the costs, restrictions and availability of each optional rider. We offer two types of living benefit riders - guaranteed income benefits and guaranteed withdrawal benefits: Guaranteed Income Benefits -------------------------- o Guaranteed Minimum Income Benefit Plus II (GMIB Plus II) o Guaranteed Minimum Income Benefit Plus I (GMIB Plus I) Our guaranteed income benefit riders are designed to allow you to invest your account value in the market while at the same time assuring a specified guaranteed level of minimum fixed annuity payments if you elect the income phase. The fixed annuity payment amount is guaranteed regardless of investment performance or the actual account value at the time you annuitize. Prior to exercising the rider and annuitizing your contract, you may make withdrawals up to a maximum level specified in the rider and still maintain the benefit amount. Guaranteed Withdrawal Benefits ------------------------------ o Lifetime Withdrawal Guarantee II (LWG II) o Lifetime Withdrawal Guarantee I (LWG I) The Lifetime Withdrawal Guarantee riders are designed to guarantee that at least the entire amount of purchase payments you make will be returned to you through a series of withdrawals without annuitizing, regardless of investment performance, as long as withdrawals in any contract year do not exceed the maximum amount allowed under the rider. In addition, if you make your first withdrawal on or after the date you reach age 59 1/2, you are guaranteed income without annuitizing for your life (and the life of your spouse, if the Joint Life version of the rider was elected and your spouse elects to continue the contract and is at least age 59 1/2 at continuation), even after the entire amount of purchase payments has been returned. GUARANTEED INCOME BENEFITS At the time you buy the contract, you may elect a guaranteed income benefit rider, called a Guaranteed Minimum Income Benefit (GMIB), for an additional charge. Each version of these riders is designed to guarantee a predictable, minimum level of fixed annuity payments, regardless of investment performance during the accumulation phase. HOWEVER, IF APPLYING YOUR ACTUAL ACCOUNT VALUE AT THE TIME YOU ANNUITIZE THE CONTRACT TO THEN CURRENT ANNUITY PURCHASE RATES (OUTSIDE OF THE RIDER) PRODUCES HIGHER INCOME PAYMENTS, YOU WILL RECEIVE THE HIGHER PAYMENTS, AND THUS YOU WILL HAVE PAID FOR THE RIDER EVEN THOUGH IT WAS NOT USED. Also, prior to exercising the rider, you may make specified withdrawals that reduce your income base (as explained below) during the accumulation phase and still leave the rider guarantees intact, provided the conditions of the rider are met. Your registered representative can provide you an illustration of the amounts you would receive, with or without withdrawals, if you exercised the rider. There are two versions of the GMIB available with this contract, NO MORE THAN ONE OF WHICH IS OFFERED IN ANY PARTICULAR STATE: o GMIB Plus II o GMIB Plus I Additionally, there may be versions of each rider that vary by issue date and state availability. Please check with your registered representative regarding which version(s) are available in your state. You may not have this benefit and a GWB rider in effect at the same time. Once elected, the rider cannot be terminated except as discussed below. FACTS ABOUT GUARANTEED INCOME BENEFIT RIDERS INCOME BASE AND GMIB ANNUITY PAYMENTS. Under the GMIB, we calculate an "income base" (as described below) that determines, in part, the minimum amount you receive as an income payment upon exercising the GMIB rider and annuitizing the contract. IT IS IMPORTANT TO RECOGNIZE THAT THIS INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND DOES NOT ESTABLISH OR GUARANTEE YOUR ACCOUNT VALUE OR A MINIMUM RETURN FOR ANY INVESTMENT PORTFOLIO. After a minimum 10-year waiting period, and then only within 30 days following a contract anniversary, you may exercise the rider. We then will apply the income base calculated at the time of exercise to the conservative GMIB Annuity Table (as described below) specified in the rider in order to determine your minimum guaranteed lifetime fixed monthly annuity payments (your actual payment may be higher than this minimum if, as discussed above, the base contract under its terms would provide a higher payment). THE GMIB ANNUITY TABLE. The GMIB Annuity Table is specified in the rider. For GMIB Plus II in contracts issued after May 1, 2009, this table is calculated based on the Annuity 2000 Mortality Table with a 10-year age set back 35 with interest of 1.5% per annum. For GMIB Plus II in contracts issued from February 24, 2009 through May 1, 2009, this table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 1.5% per annum. For GMIB Plus II in contracts issued before February 24, 2009, and for GMIB Plus I, this table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per annum. As with other pay-out types, the amount you receive as an income payment also depends on the annuity option you select, your age, and (where permitted by law) your sex. For GMIB Plus II, the annuity rates for attained ages 86 to 90 are the same as those for attained age 85. THE ANNUITY RATES IN THE GMIB ANNUITY TABLE ARE CONSERVATIVE AND A WITHDRAWAL CHARGE MAY BE APPLICABLE, SO THE AMOUNT OF GUARANTEED MINIMUM LIFETIME INCOME THAT THE GMIB PRODUCES MAY BE LESS THAN THE AMOUNT OF ANNUITY INCOME THAT WOULD BE PROVIDED BY APPLYING YOUR ACCOUNT VALUE ON YOUR ANNUITY DATE TO THEN-CURRENT ANNUITY PURCHASE RATES. If you exercise the GMIB rider, your annuity payments will be the greater of: o the annuity payment determined by applying the amount of the income base to the GMIB Annuity Table, or o the annuity payment determined for the same annuity option in accordance with the base contract. (See "Annuity Payments (The Income Phase).") If you choose not to receive annuity payments as guaranteed under the GMIB, you may elect any of the annuity options available under the contract. OWNERSHIP. If you, the owner, are a natural person, you must also be the annuitant. If a non-natural person owns the contract, then the annuitant will be considered the owner in determining the income base and GMIB annuity payments. If joint owners are named, the age of the older joint owner will be used to determine the income base and GMIB annuity payments. For the purposes of the Guaranteed Income Benefits section of the prospectus, "you" always means the owner, oldest joint owner or the annuitant, if the owner is a non-natural person. GMIB, QUALIFIED CONTRACTS AND DECEDENT CONTRACTS. The GMIB may have limited usefulness in connection with a Qualified Contract, such as an IRA (see "Federal Income Tax Status - Taxation of Qualified Contracts"), in circumstances where, due to the ten-year waiting period after purchase or after an Optional Step-Up/ Optional Reset the owner is unable to exercise the rider until after the required beginning date of required minimum distributions under the contract. In such event, required minimum distributions received from the contract during the 10-year waiting period will have the effect of reducing the income base either on a proportionate or dollar for dollar basis, as the case may be. This may have the effect of reducing or eliminating the value of annuity payments under the GMIB. You should consult your tax adviser prior to electing a GMIB rider. Additionally, the GMIB is not available for purchase by a beneficiary under a decedent's Non-Qualified Contract (see "Federal Income Tax Status - Taxation of Non-Qualified Contracts") or IRA (or where otherwise offered, under any other contract which is being "stretched" by a beneficiary after the death of the owner or after the death of the annuitant in certain cases). The GMIB benefit may not be exercised until 10 years after purchase or after an Optional Step-Up/Optional Reset, and the benefit provides guaranteed monthly fixed income payments for life (or joint lives, if applicable), with payments guaranteed for a specified number of years. However, the tax rules require distributions prior to the end of the 10-year waiting period, commencing generally in the year after the owner's death, and also prohibit payments for as long as the beneficiary's life in certain circumstances. (See Appendix C for examples of the GMIB.) DESCRIPTION OF GMIB PLUS II In states where approved, the version of the GMIB Plus II described below is available for contracts issued based on applications and necessary information that we receive in good order at our Annuity Service Center on and after May 4, 2009. In order for us to issue you the previous version of this rider (that has different features), we must receive your application and necessary information at our Annuity Service Center, in good order, before the close of the New York Stock Exchange on May 1, 2009. In states where approved, the GMIB Plus II rider is available only for owners up through age 78, and you can only elect the GMIB Plus II at the time you purchase the contract. THE GMIB PLUS II MAY BE EXERCISED AFTER A 10-YEAR WAITING PERIOD AND THEN ONLY WITHIN 30 DAYS FOLLOWING A CONTRACT ANNIVERSARY, PROVIDED THAT THE EXERCISE MUST OCCUR NO LATER 36 THAN THE 30-DAY PERIOD FOLLOWING THE CONTRACT ANNIVERSARY PRIOR TO THE OWNER'S 91ST BIRTHDAY. INCOME BASE. The INCOME BASE is the greater of (a) or (b) below. (a) Highest Anniversary Value: On the issue date, the "Highest Anniversary Value" is equal to your initial purchase payment. Thereafter, the Highest Anniversary Value will be increased by subsequent purchase payments and reduced proportionately by the percentage reduction in account value attributable to each subsequent withdrawal (including any applicable withdrawal charge). On each contract anniversary prior to the owner's 81st birthday, the Highest Anniversary Value will be recalculated and set equal to the greater of the Highest Anniversary Value before the recalculation or the account value on the date of the recalculation. The Highest Anniversary Value does not change after the contract anniversary immediately preceding the owner's 81st birthday, except that it is increased for each subsequent purchase payment and reduced proportionally by the percentage reduction in account value attributable to each subsequent withdrawal (including any applicable withdrawal charge). (b) Annual Increase Amount: On the issue date, the "Annual Increase Amount" is equal to your initial purchase payment. (For these purposes, all purchase payments credited within 120 days of the date we issued the contract will be treated as if they were received on the date we issue the contract.) Thereafter, the Annual Increase Amount is equal to (i) less (ii), where: (i) is purchase payments accumulated at the annual increase rate. The annual increase rate is 5% per year through the contract anniversary prior to the owner's 91st birthday and 0% thereafter; and (ii) is withdrawal adjustments accumulated at the annual increase rate. Withdrawal adjustments in a contract year are determined according to (1) or (2) as defined below: (1) The withdrawal adjustment for each withdrawal in a contract year is the value of the Annual Increase Amount immediately prior to the withdrawal multiplied by the percentage reduction in account value attributed to that withdrawal (including any applicable withdrawal charge); or (2) If total withdrawals in a contract year are 5% or less of the Annual Increase Amount on the issue date or on the prior contract anniversary after the first contract year, and if these withdrawals are paid to you (or the annuitant if the contract is owned by a non-natural person) or to another payee we agree to, the total withdrawal adjustments for that contract year will be set equal to the dollar amount of total withdrawals (including any applicable withdrawal charge) in that contract year. These withdrawal adjustments will replace the withdrawal adjustments defined in (1) above and be treated as though the corresponding withdrawals occurred at the end of that contract year. (See section (1) of Appendix C for examples of the calculation of the withdrawal adjustment.) In determining the GMIB Plus II annuity income, an amount equal to the withdrawal charge that would be assessed upon a complete withdrawal and the amount of any premium and other taxes that may apply will be deducted from the income base. OPTIONAL STEP-UP. On each contract anniversary as permitted, you may elect to reset the Annual Increase Amount to the account value. An Optional Step-Up may be beneficial if your account value has grown at a rate above the 5% accumulation rate on the Annual Increase Amount. HOWEVER, IF YOU ELECT TO RESET THE ANNUAL INCREASE AMOUNT, WE WILL RESTART THE 10-YEAR WAITING PERIOD. IN ADDITION, WE MAY RESET THE GMIB PLUS II RIDER CHARGE TO A RATE THAT DOES NOT EXCEED THE LOWER OF: (A) THE MAXIMUM OPTIONAL STEP-UP CHARGE (1.50%) OR (B) THE CURRENT RATE THAT WE CHARGE FOR THE SAME RIDER AVAILABLE FOR NEW CONTRACT PURCHASES AT THE TIME OF THE OPTIONAL STEP-UP. An Optional Step-Up is permitted only if: (1) the account value exceeds the Annual Increase Amount immediately before the reset; and (2) the owner (or oldest joint owner or annuitant if the contract is owned 37 by a non-natural person) is not older than age 80 on the date of the Optional Step-Up. You may elect either: (1) a one-time Optional Step-Up at any contract anniversary provided the above requirements are met, or (2) Optional Step-Ups to occur under the Automatic Annual Step-Up. If you elect Automatic Annual Step-Ups, on any contract anniversary while this election is in effect, the Annual Increase Amount will reset to the account value automatically, provided the above requirements are met. The same conditions described above will apply to each Automatic Step-Up. You may discontinue this election at any time by notifying us in writing, at our Annuity Service Center (or by any other method acceptable to us), at least 30 days prior to the contract anniversary on which a reset may otherwise occur. Otherwise, it will remain in effect through the seventh contract anniversary following the date you make this election, at which point you must make a new election if you want Automatic Annual Step-Ups to continue. If you discontinue or do not re-elect the Automatic Annual Step- Ups, no Optional Step-Up will occur automatically on any subsequent contract anniversary unless you make a new election under the terms described above. (If you discontinue Automatic Annual Step-Ups, the GMIB Plus II rider (and the rider charge) will continue, and you may choose to elect a one time Optional Step-Up or reinstate Automatic Annual Step-Ups as described above.) We must receive your request to exercise the Optional Step-Up in writing, at our Annuity Service Center, or any other method acceptable to us. We must receive your request prior to the contract anniversary for an Optional Step-Up to occur on that contract anniversary. The Optional Step-Up: (1) resets the Annual Increase Amount to the account value on the contract anniversary following the receipt of an Optional Step-Up election; (2) resets the GMIB Plus II waiting period to the tenth contract anniversary following the date the Optional Step-Up took effect; and (3) may reset the GMIB Plus II rider charge to a rate that does not exceed the lower of: (a) the Maximum Optional Step-Up Charge (1.50%) or (b) the current rate that we charge for the same rider available for new contract purchases at the time of the Optional Step-Up. On the date of the Optional Step-Up, the account value on that day will be treated as a single purchase payment received on the date of the step-up for purposes of determining the Annual Increase Amount after the reset. All purchase payments and withdrawal adjustments previously used to calculate the Annual Increase Amount will be set equal to zero on the date of the step-up. INVESTMENT ALLOCATION RESTRICTIONS. If you elect the GMIB Plus II, there are certain investment allocation restrictions. (See "Purchase - Investment Allocation Restrictions for Certain Riders.") If you elect the GMIB Plus II, you may not participate in the Dollar Cost Averaging (DCA) program. GUARANTEED PRINCIPAL OPTION. On each contract anniversary starting with the tenth contract anniversary and through the contract anniversary prior to the owner's 91st birthday, you may exercise the Guaranteed Principal Option. If the owner is a non-natural person, the annuitant's age is the basis for determining the birthday. If there are joint owners, the age of the oldest owner is used for determining the birthday. We must receive your request to exercise the Guaranteed Principal Option in writing, or any other method that we agree to, within 30 days following the applicable contract anniversary. The Guaranteed Principal Option will take effect at the end of this 30-day period following that contract anniversary. By exercising the Guaranteed Principal Option, you elect to receive an additional amount to be added to your account value intended to restore your initial investment in the contract, in lieu of receiving GMIB payments. The additional amount is called the Guaranteed Principal Adjustment and is equal to (a) minus (b) where: (a) is purchase payments credited within 120 days of the date we issued the contract (reduced proportionately by the percentage reduction in account value attributable to each partial withdrawal (including applicable withdrawal charges) prior to the exercise of the Guaranteed Principal Option) and (b) the account value on the contract anniversary immediately preceding exercise of the Guaranteed Principal Option. The Guaranteed Principal Option can only be exercised if (a) exceeds (b), as defined above. The Guaranteed Principal Adjustment will be added to each applicable investment portfolio in the ratio the portion of the account value in such investment portfolio bears to the total account value in all investment portfolios. IT IS IMPORTANT TO NOTE THAT ONLY PURCHASE PAYMENTS MADE DURING THE 38 FIRST 120 DAYS THAT YOU HOLD THE CONTRACT ARE TAKEN INTO CONSIDERATION IN DETERMINING THE GUARANTEED PRINCIPAL ADJUSTMENT. IF YOU ANTICIPATE MAKING PURCHASE PAYMENTS AFTER 120 DAYS, YOU SHOULD UNDERSTAND THAT SUCH PAYMENTS WILL NOT INCREASE THE GUARANTEED PRINCIPAL ADJUSTMENT. However, because purchase payments made after 120 days will increase your account value, such payments may have a significant impact on whether or not a Guaranteed Principal Adjustment is due. Therefore, GMIB Plus II may not be appropriate for you if you intend to make additional purchase payments after the 120-day period and are purchasing the GMIB Plus II for this feature. The Guaranteed Principal Adjustment will never be less than zero. IF THE GUARANTEED PRINCIPAL OPTION IS EXERCISED, THE GMIB PLUS II RIDER WILL TERMINATE AS OF THE DATE THE OPTION TAKES EFFECT AND NO ADDITIONAL GMIB CHARGES WILL APPLY THEREAFTER. The variable annuity contract, however, will continue, and the GMIB Plus II investment allocation restrictions, described above, will no longer apply. EXERCISING THE GMIB PLUS II RIDER. If you exercise the GMIB Plus II, you must elect to receive annuity payments under one of the following fixed annuity options: (1) Life annuity with 5 years of annuity payments guaranteed. (2) Joint and last survivor annuity with 5 years of annuity payments guaranteed. Based on federal tax rules, this option is not available for Qualified Contracts where the difference in ages of the joint annuitants, who are not spouses, is greater than 10 years. (See "Annuity Payments (The Income Phase).") These options are described in the contract and the GMIB Plus II rider. The GMIB Annuity Table is specified in the rider. This table is calculated based on the Annuity 2000 Mortality Table with a 10-year age set back with interest of 1.5% per annum for GMIB Plus II. As with other payout types, the amount you receive as an income payment also depends on the annuity option you select, your age, and (where permitted by law) your sex. For GMIB Plus II, the annuity rates for attained ages 86 to 90 are the same as those for attained age 85. THE ANNUITY RATES IN THE GMIB ANNUITY TABLE ARE CONSERVATIVE AND A WITHDRAWAL CHARGE MAY BE APPLICABLE, SO THE AMOUNT OF GUARANTEED MINIMUM LIFETIME INCOME THAT THE GMIB PRODUCES MAY BE LESS THAN THE AMOUNT OF ANNUITY INCOME THAT WOULD BE PROVIDED BY APPLYING YOUR ACCOUNT VALUE ON YOUR ANNUITY DATE TO THEN-CURRENT ANNUITY PURCHASE RATES. If you exercise the GMIB Plus II, your annuity payments will be the greater of: o the annuity payment determined by applying the amount of the income base to the GMIB Annuity Table, or o the annuity payment determined for the same annuity option in accordance with the base contract. (See "Annuity Payments (The Income Phase).") If the amount of the guaranteed minimum lifetime income that the GMIB Plus II produces is less than the amount of annuity income that would be provided by applying contract value on the annuity date to the then-current annuity purchase rates, then you would have paid for a benefit that you did not use. If you take a full withdrawal of your account value, your contract is terminated by us due to its small account value and inactivity (see "Purchase - Purchase Payments"), or your contract lapses and there remains any income base, we will commence making income payments within 30 days of the date of the full withdrawal, termination or lapse. In such cases, your income payments under this benefit, if any, will be determined using the income base and any applicable withdrawal adjustment that was taken on account of the withdrawal, termination or lapse. The GMIB payout rates are enhanced under the following circumstances. If: o you begin withdrawals on or after your 62nd birthday; o your account value is fully withdrawn or decreases to zero at or after your 62nd birthday and there is an income base remaining; and o the annuity option you select is the single life annuity with 5 years of annuity payments guaranteed; then the annual annuity payments under the GMIB Plus II rider will equal or exceed 5.5% of the income base (calculated on the date the payments are determined). Alternatively, if: o you begin withdrawals on or after your 60th birthday; 39 o your account value is fully withdrawn or decreases to zero at or after your 60th birthday and there is an income base remaining; and o the annuity option you select is the single life annuity with 5 years of annuity payments guaranteed; then the annual annuity payments under the GMIB Plus II rider will equal or exceed 5% of the income base (calculated on the date the payments are determined). If you choose not to receive annuity payments as guaranteed under the GMIB Plus II, you may elect any of the annuity options available under the contract. TERMINATING THE GMIB PLUS II RIDER. Except as otherwise provided in the GMIB Plus II rider, the GMIB Plus II will terminate upon the earliest of: a) The 30th day following the contract anniversary prior to your 91st birthday; b) The date you make a complete withdrawal of your account value (if there is an income base remaining you will receive payments based on the remaining income base); c) The date you elect to receive annuity payments under the contract and you do not elect to receive payments under the GMIB; d) Death of the owner or joint owner (unless the spouse (age 89 or younger) is the beneficiary and elects to continue the contract), or death of the annuitant if a non-natural person owns the contract; e) A change for any reason of the owner or joint owner or the annuitant, if a non-natural person owns the contract, subject to our administrative procedures; f) The effective date of the Guaranteed Principal Option; or g) The date you assign your contract, subject to our administrative procedures. When the GMIB Plus II rider terminates, the corresponding GMIB Plus II rider charge terminates and the GMIB Plus II investment allocation restrictions no longer apply. For contracts issued from February 24, 2009 through May 1, 2009, the following --------------------------------------------------------------- differences apply: (1) The annual increase rate is 6% through the contract anniversary immediately prior to your 91st birthday, and 0% per year thereafter. (2) If total withdrawals in a contract year are 6% or less of the Annual Increase Amount on the issue date or on the prior contract anniversary after the first contract year, and if these withdrawals are paid to you (or the annuitant if the contract is owned by a non-natural person) or to another payee we agree to, the total withdrawal adjustments for that contract year will be set equal to the dollar amount of total withdrawals (including any applicable withdrawal charge) in that contract year. (3) The fixed annuity options are the single life annuity with 10 years of annuity payments guaranteed (if you choose to start the Annuity Option after age 79, the year of the Guarantee Period component of the Annuity Option is reduced to: 9 years at age 80, 8 years at age 81, 7 years at age 82, 6 years at age 83, or 5 years at ages 84 through 90) or the joint and last survivor annuity with 10 years of annuity payments guaranteed (not available for Qualified Contracts where the difference in ages of the joint annuitants is greater than 10 years; this limitation only applies to joint annuitants who are not spouses). (4) Different investment allocation restrictions apply. (See "Purchase - Investment Allocation Restrictions for Certain Riders.") (5) The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 1.5% per annum. (6) The GMIB payout rates are enhanced to be at least (a) 6% of the income base (calculated on the date the payments are determined) in the event: (i) you begin withdrawals on or after your 62nd birthday; (ii) your account value is fully withdrawn or decreases to zero on or after your 62nd birthday and there is an income base remaining; and (iii) the annuity option you select is the single life annuity with 10 years of annuity payments guaranteed, or (b) 5% of the income base (calculated on the date the payments are determined) if: (i) you begin withdrawals on or after your 60th birthday; (ii) your account value is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and (iii) the annuity option you select is the 40 single life annuity with 10 years of annuity payments guaranteed. For contracts issued before February 24, 2009, differences (1) through (4) --------------------------------------------- above apply, and the following replaces differences (5) and (6): (5) The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per annum. (6) The GMIB payout rates are enhanced to be at least 6% of the income base (calculated on the date the payments are determined) in the event: (i) you begin withdrawals on or after your 60th birthday; (ii) your account value is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and (iii) the annuity option you select is the single life annuity with 10 years of annuity payments guaranteed. (See Appendix C for examples illustrating the operation of the GMIB Plus II.) DESCRIPTION OF GMIB PLUS I In states where the GMIB Plus I has been approved and the GMIB Plus II has not been approved, the GMIB Plus I is available only for owners up through age 75, and you can only elect GMIB Plus I at the time you purchase the contract. GMIB Plus I may be exercised after a 10-year waiting period and then only within 30 days following a contract anniversary, provided that the exercise must occur no later than the 30-day period following the contract anniversary on or following the owner's 85th birthday. GMIB Plus I is otherwise identical to GMIB Plus II, with the following exceptions: (1) The GMIB Plus I Income Base is calculated as described above, except that the annual increase rate is 6% per year through the contract anniversary on or following the owner's 85th birthday and 0% thereafter. (2) An "Optional Step-Up" under the GMIB Plus II rider is referred to as an "Optional Reset" under the GMIB Plus I rider. An Optional Reset is permitted only if: (a) the account value exceeds the Annual Increase Amount immediately before the reset; and (b) the owner (or oldest joint owner or annuitant if the contract is owned by a non-natural person) is not older than age 75 on the date of the Optional Reset. (3) If your income base is increased due to an Optional Reset under the GMIB Plus I rider, we may increase the rider charge to the charge applicable to contract purchases of the same rider at the time of the increase, but to no more than a maximum of 1.50%. (4) The Guaranteed Principal Option may be exercised on each contract anniversary starting with the tenth contract anniversary and through the contract anniversary prior to the owner's 86th birthday. (5) We reserve the right to prohibit an Optional Reset if we no longer offer this benefit for this class of contract. We are waiving this right with respect to purchasers of the contract offered by this prospectus who elect or have elected the GMIB Plus I rider and will allow Optional Resets by those purchasers even if this benefit is no longer offered for this class of contract. (6) The fixed annuity options are the single life annuity with 10 years of annuity payments guaranteed (if you choose to start the Annuity Option after age 79, the year of the Guarantee Period component of the Annuity Option is reduced to: 9 years at age 80, 8 years at age 81, 7 years at age 82, 6 years at age 83, or 5 years at ages 84 and 85) or the joint and last survivor annuity with 10 years of annuity payments guaranteed (not available for Qualified Contracts where the difference in ages of the joint annuitants is greater than 10 years; this limitation only applies to joint annuitants who are not spouses). (7) Termination provision g) above does not apply, and the following replaces termination provision a), above: The 30th day following the contract anniversary on or following your 85th birthday. and the following replaces termination provision d), above: Death of the owner or joint owner (unless the spouse (age 84 or younger) is the beneficiary and elects to continue the contract), or death of the annuitant if a non-natural person owns the contract. (8) The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per annum. (9) If approved in your state, the GMIB payout rates are enhanced to be at least 6% of the income base (calculated on the date the payments are determined) in the event: (i) you begin withdrawals on or after your 60th birthday; (ii) your account value is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and 41 (iii) the annuity option you select is the single life annuity with 10 years of annuity payments guaranteed. (10) The investment allocation restrictions that apply to the GMIB Plus I rider are different from the restrictions that apply to the GMIB Plus II rider. (See "Purchase - Investment Allocation Restrictions for Certain Riders.") For contracts issued before July 16, 2007, the enhanced GMIB payout rates ----------------------------------------- described under "Exercising the GMIB Plus II Rider" will not be applied. GUARANTEED WITHDRAWAL BENEFITS We offer optional guaranteed withdrawal benefit (GWB) riders for an additional charge. There are two guaranteed withdrawal benefit riders available under this contract, NO MORE THAN ONE OF WHICH IS OFFERED IN ANY PARTICULAR STATE: o Lifetime Withdrawal Guarantee II ("LWG II") o Lifetime Withdrawal Guarantee I ("LWG I") Additionally, there may be versions of each rider that vary by issue date and state availability. Please check with your registered representative regarding which version is available in your state. The Lifetime Withdrawal Guarantee riders guarantee that the entire amount of purchase payments you make will be returned to you through a series of withdrawals that you may begin taking immediately or at a later time, provided withdrawals in any contract year do not exceed the maximum amount allowed. This means that, regardless of negative investment performance, you can take specified annual withdrawals until the entire amount of the purchase payments you made during the time period specified in your rider has been returned to you. Moreover, if you make your first withdrawal on or after the date you reach age 59 1/2, the Lifetime Withdrawal Guarantee riders guarantee income, without annuitizing the contract, for your life (and the life of your spouse, if the Joint Life version of the rider was elected, and your spouse elects to continue the contract and is at least age 59 1/2 at continuation), even after the entire amount of purchase payments has been returned. (See "Description of the Lifetime Withdrawal Guarantee II" below.) If you purchase a guaranteed withdrawal benefit rider, you must elect one version at the time you purchase the contract, prior to age 86. You may not have this benefit and a GMIB or Enhanced Death Benefit rider in effect at the same time. Once elected, these riders may not be terminated except as stated below. FACTS ABOUT GUARANTEED WITHDRAWAL BENEFIT RIDERS MANAGING WITHDRAWALS. The GWB guarantee may be reduced if your annual withdrawals are greater than the maximum amount allowed, called the Annual Benefit Payment, which is described in more detail below. The GWB does not establish or guarantee an account value or minimum return for any investment portfolio. The Remaining Guaranteed Withdrawal Amount (as described below) cannot be taken as a lump sum. (However, if you cancel the Lifetime Withdrawal Guarantee riders after a waiting period of at least fifteen years, the Guaranteed Principal Adjustment will increase your account value to the purchase payments credited within the first 120 days of the date that we issue the contract, reduced proportionately for any withdrawals. See "Description of the Lifetime Withdrawal Guarantee II-Cancellation and Guaranteed Principal Adjustment" below.) Income taxes and penalties may apply to your withdrawals, and withdrawal charges may apply to withdrawals during the first contract year unless you take the necessary steps to elect to take such withdrawals under a Systematic Withdrawal Program. Withdrawal charges will also apply to withdrawals of purchase payments that exceed the free withdrawal amount. (See "Expenses-Withdrawal Charge.") IF IN ANY CONTRACT YEAR YOU TAKE CUMULATIVE WITHDRAWALS THAT EXCEED THE ANNUAL BENEFIT PAYMENT, THE TOTAL PAYMENTS THAT THE GWB GUARANTEES THAT YOU OR YOUR BENEFICIARY WILL RECEIVE FROM THE CONTRACT OVER TIME MAY BE LESS THAN THE INITIAL TOTAL GUARANTEED WITHDRAWAL AMOUNT. THIS REDUCTION MAY BE SIGNIFICANT AND MEANS THAT RETURN OF YOUR PURCHASE PAYMENTS MAY BE LOST. THE GWB RIDER CHARGE WILL CONTINUE TO BE DEDUCTED AND CALCULATED BASED ON THE TOTAL GUARANTEED WITHDRAWAL AMOUNT UNTIL TERMINATION OF THE RIDER. RIDER CHARGES. If a Lifetime Withdrawal Guarantee rider is in effect, we will continue to assess the GWB rider charge even in the case where your Remaining Guaranteed Withdrawal Amount, as described below, equals zero. WITHDRAWAL CHARGE. We will apply a withdrawal charge to withdrawals from purchase payments of up to 7% of purchase payments taken in the first seven years (for 42 Series S) or four years (for Series S - L Share Option) following receipt of the applicable purchase payment. (See "Expenses - Withdrawal Charge - Free Withdrawal Amount" and "Access to Your Money - Systematic Withdrawal Program.") TAXES. Withdrawals of taxable amounts will be subject to ordinary income tax and, if made prior to age 59 1/2, a 10% federal tax penalty may apply. TAX TREATMENT. THE TAX TREATMENT OF WITHDRAWALS UNDER THE LWG RIDERS IS UNCERTAIN. IT IS CONCEIVABLE THAT THE AMOUNT OF POTENTIAL GAIN COULD BE DETERMINED BASED ON THE REMAINING GUARANTEED WITHDRAWAL AMOUNT AT THE TIME OF THE WITHDRAWAL, IF THE REMAINING GUARANTEED WITHDRAWAL AMOUNT IS GREATER THAN THE ACCOUNT VALUE (PRIOR TO WITHDRAWAL CHARGES, IF APPLICABLE). THIS COULD RESULT IN A GREATER AMOUNT OF TAXABLE INCOME REPORTED UNDER A WITHDRAWAL AND CONCEIVABLY A LIMITED ABILITY TO RECOVER ANY REMAINING BASIS IF THERE IS A LOSS ON SURRENDER OF THE CONTRACT. CONSULT YOUR TAX ADVISER PRIOR TO PURCHASE. GWB, LIFETIME WITHDRAWAL GUARANTEE AND DECEDENT CONTRACTS. The Lifetime Withdrawal Guarantee is not available for purchase under a decedent's Non-Qualified Contract (see "Federal Income Tax Status - Taxation of Non-Qualified Contracts") or IRA (or where otherwise offered, under any other contract which is being "stretched" by a beneficiary after the death of the owner or after the death of the annuitant in certain cases). Under the tax rules, such contracts generally require distributions to commence in accordance with tax regulations by the end of the calendar year following the year of the owner's death. However, these required distributions can in certain circumstances exceed the Annual Benefit Payment, and any such excess will have the effect of reducing the lifetime payments under the Lifetime Withdrawal Guarantee. (See Appendix D for examples of the Lifetime Withdrawal Guarantee.) DESCRIPTION OF THE LIFETIME WITHDRAWAL GUARANTEE II In states where approved, the version of the Lifetime Withdrawal Guarantee II described below is available for contracts issued based on applications and necessary information that we receive in good order at our Annuity Service Center on and after May 4, 2009. In order for us to issue you the previous version of this rider (that has different investment allocation restrictions - see "Purchase - Investment Allocation Restrictions for Certain Riders"), we must receive your application and necessary information at our Annuity Service Center, in good order, before the close of the New York Stock Exchange on May 1, 2009. TOTAL GUARANTEED WITHDRAWAL AMOUNT. While the Lifetime Withdrawal Guarantee II rider is in effect, we guarantee that you will receive a minimum amount over time. We refer to this minimum amount as the TOTAL GUARANTEED WITHDRAWAL AMOUNT. The initial Total Guaranteed Withdrawal Amount is equal to your initial purchase payment. We increase the Total Guaranteed Withdrawal Amount (up to a maximum of $10,000,000) by each additional purchase payment. If you take a withdrawal that does not exceed the Annual Benefit Payment (see "Annual Benefit Payment" below), then we will not reduce the Total Guaranteed Withdrawal Amount. We refer to this type of withdrawal as a Non-Excess Withdrawal. IF, HOWEVER, YOU TAKE A WITHDRAWAL THAT RESULTS IN CUMULATIVE WITHDRAWALS FOR THE CURRENT CONTRACT YEAR THAT EXCEED THE ANNUAL BENEFIT PAYMENT, THEN WE WILL REDUCE THE TOTAL GUARANTEED WITHDRAWAL AMOUNT IN THE SAME PROPORTION THAT THE ENTIRE WITHDRAWAL (INCLUDING ANY APPLICABLE WITHDRAWAL CHARGES) REDUCED THE ACCOUNT VALUE. WE REFER TO THIS TYPE OF WITHDRAWAL AS AN EXCESS WITHDRAWAL. REMAINING GUARANTEED WITHDRAWAL AMOUNT. The REMAINING GUARANTEED WITHDRAWAL AMOUNT is the remaining amount you are guaranteed to receive over time. We increase the Remaining Guaranteed Withdrawal Amount (up to a maximum of $10,000,000) by additional purchase payments. If you take a Non-Excess Withdrawal, we will decrease the Remaining Guaranteed Withdrawal Amount by the amount of the Non-Excess Withdrawal (including any applicable withdrawal charges). IF, HOWEVER, YOU TAKE AN EXCESS WITHDRAWAL, THEN WE WILL REDUCE THE REMAINING GUARANTEED WITHDRAWAL AMOUNT IN THE SAME PROPORTION THAT THE WITHDRAWAL (INCLUDING ANY APPLICABLE WITHDRAWAL CHARGES) REDUCES THE ACCOUNT VALUE. 7.25% COMPOUNDING INCOME AMOUNT. On each contract anniversary until the earlier of: (a) the date of the second withdrawal from the contract or (b) the tenth contract anniversary, we increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed 43 Withdrawal Amount by an amount equal to 7.25% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase (up to a maximum of $10,000,000). We may also increase the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount by the Automatic Annual Step-Up (discussed below), if that would result in a higher Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount. ANNUAL BENEFIT PAYMENT. The initial ANNUAL BENEFIT PAYMENT is equal to the initial Total Guaranteed Withdrawal Amount multiplied by the 5% Withdrawal Rate (6% Withdrawal Rate if you make your first withdrawal on or after the date you reach age 76). If the Total Guaranteed Withdrawal Amount is later recalculated (for example, because of additional purchase payments, the 7.25% Compounding Income Amount, the Automatic Annual Step-Up, or Excess Withdrawals), the Annual Benefit Payment is reset equal to the new Total Guaranteed Withdrawal Amount multiplied by the 5% Withdrawal Rate (6% Withdrawal Rate if you make your first withdrawal on or after the date you reach age 76). IT IS IMPORTANT TO NOTE: o If you take your first withdrawal before the date you reach age 59 1/2, we will continue to pay the Annual Benefit Payment each year until the Remaining Guaranteed Withdrawal Amount is depleted, even if your account value declines to zero. This means if your account value is depleted due to a Non-Excess Withdrawal or the deduction of the rider charge, and your Remaining Guaranteed Withdrawal Amount is greater than zero, we will pay you the remaining Annual Benefit Payment, if any, not yet withdrawn during the contract year that the account value was depleted, and beginning in the following contract year, we will continue paying the Annual Benefit Payment to you each year until your Remaining Guaranteed Withdrawal Amount is depleted. This guarantees that you will receive your purchase payments regardless of market performance so long as you do not take Excess Withdrawals; however, you will not be guaranteed income for the rest of your life. o If you take your first withdrawal on or after the date you reach age 59 1/2, we will continue to pay the Annual Benefit Payment each year for the rest of your life (and the life of your spouse, if the Joint Life version of the rider was elected, and your spouse elects to continue the contract and is at least age 59 1/2 at continuation), even if your Remaining Guaranteed Withdrawal Amount and/or account value declines to zero. This means if your Remaining Guaranteed Withdrawal Amount and/or your account value is depleted due to a Non-Excess Withdrawal or the deduction of the rider charge, we will pay to you the remaining Annual Benefit Payment, if any, not yet withdrawn during that contract year that the account value was depleted, and beginning in the following contract year, we will continue paying the Annual Benefit Payment to you each year for the rest of your life (and your spouse's life, if the Joint Life version of the rider was elected, and your spouse elects to continue the contract and is at least age 59 1/2 at continuation). Therefore, you will be guaranteed income for life. o If you take your first withdrawal on or after the date you reach age 76, your Annual Benefit payment will be set equal to a 6% Withdrawal Rate multiplied by the Total Guaranteed Withdrawal Amount. o IF YOU HAVE ELECTED THE LWG II, YOU SHOULD CAREFULLY CONSIDER WHEN TO BEGIN TAKING WITHDRAWALS. IF YOU BEGIN TAKING WITHDRAWALS TOO SOON, YOU MAY LIMIT THE VALUE OF THE LWG II. FOR EXAMPLE, WE NO LONGER INCREASE YOUR TOTAL GUARANTEED WITHDRAWAL AMOUNT BY THE 7.25% COMPOUNDING INCOME AMOUNT ONCE YOU MAKE YOUR SECOND WITHDRAWAL. HOWEVER, IF YOU DELAY TAKING WITHDRAWALS FOR TOO LONG, YOU MAY LIMIT THE NUMBER OF YEARS AVAILABLE FOR YOU TO TAKE WITHDRAWALS IN THE FUTURE (DUE TO LIFE EXPECTANCY) AND YOU MAY BE PAYING FOR A BENEFIT YOU ARE NOT USING. o At any time during the accumulation phase, you can elect to annuitize under current annuity rates in lieu of continuing the LWG II rider. Annuitization may provide higher income amounts if the current annuity option rates applied to the Adjusted Contract Value on the Annuity Date exceed the payments under the LWG II rider. Also, income amounts provided by annuitizing under current annuity rates may be higher due to different tax treatment of this income compared to the 44 tax treatment of the payments received under the LWG II rider. (See "Federal Income Tax Status - Withdrawals.") MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your annual withdrawals. To retain the full guarantees of this rider, your annual withdrawals cannot exceed the Annual Benefit Payment each contract year. In other words, you should not take Excess Withdrawals. We do not include withdrawal charges for the purpose of calculating whether you have made an Excess Withdrawal. IF YOU DO TAKE AN EXCESS WITHDRAWAL, WE WILL RECALCULATE THE TOTAL GUARANTEED WITHDRAWAL AMOUNT AND REDUCE THE ANNUAL BENEFIT PAYMENT TO THE NEW TOTAL GUARANTEED WITHDRAWAL AMOUNT MULTIPLIED BY THE 5% WITHDRAWAL RATE (6% WITHDRAWAL RATE IF YOU MAKE YOUR FIRST WITHDRAWAL ON OR AFTER THE DATE YOU REACH AGE 76). IN ADDITION, AS NOTED ABOVE, IF YOU TAKE AN EXCESS WITHDRAWAL, WE WILL REDUCE THE REMAINING GUARANTEED WITHDRAWAL AMOUNT IN THE SAME PROPORTION THAT THE WITHDRAWAL REDUCES THE ACCOUNT VALUE. THESE REDUCTIONS IN THE TOTAL GUARANTEED WITHDRAWAL AMOUNT, ANNUAL BENEFIT PAYMENT, AND REMAINING GUARANTEED WITHDRAWAL AMOUNT MAY BE SIGNIFICANT. You are still eligible to receive either lifetime payments or the remainder of the Remaining Guaranteed Withdrawal Amount so long as the withdrawal that exceeded the Annual Benefit Payment did not cause your account value to decline to zero. You can always take Non-Excess Withdrawals. However, if you choose to receive only a part of your Annual Benefit Payment in any given contract year, your Annual Benefit Payment is not cumulative and your Remaining Guaranteed Withdrawal Amount and Annual Benefit Payment will not increase. For example, since your Annual Benefit Payment is 5% of your Total Guaranteed Withdrawal Amount (or 6% if you make your first withdrawal on or after the date you reach age 76), you cannot withdraw 3% of the Total Guaranteed Withdrawal Amount in one year and then withdraw 7% of the Total Guaranteed Withdrawal Amount the next year without making an Excess Withdrawal in the second year. AUTOMATIC ANNUAL STEP-UP. On each contract anniversary prior to the owner's 91st birthday, an Automatic Annual Step-Up will occur, provided that the account value exceeds the Total Guaranteed Withdrawal Amount (after compounding) immediately before the step-up (and provided that you have not chosen to decline the step-up as described below). The Automatic Annual Step-Up: o resets the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount to the account value on the date of the step-up, up to a maximum of $10,000,000, regardless of whether or not you have taken any withdrawals; o resets the Annual Benefit Payment equal to 5% of the Total Guaranteed Withdrawal Amount after the step-up (or 6% if you make your first withdrawal on or after the date you reach age 76); and o may reset the LWG II rider charge to a rate that does not exceed the lower of: (a) the Maximum Optional Step-Up Charge (1.60% for the Single Life version or 1.80% for the Joint Life version) or (b) the current rate that we charge for the same rider available for new contract purchases at the time of the Automatic Annual Step-Up. For contracts issued before February 24, 2009, the maximum charge upon an --------------------------------------------- Automatic Annual Step-Up is 1.25% (Single Life version) or 1.50% (Joint Life version). In the event that the charge applicable to contract purchases at the time of the step-up is higher than your current LWG II rider charge, we will notify you in writing a minimum of 30 days in advance of the applicable contract anniversary and inform you that you may choose to decline the Automatic Annual Step-Up. If you choose to decline the Automatic Annual Step-Up, you must notify us in accordance with our Administrative Procedures (currently we require you to submit your request in writing to our Annuity Service Center no less than seven calendar days prior to the applicable contract anniversary). Once you notify us of your decision to decline the Automatic Annual Step-Up, you will no longer be eligible for future Automatic Annual Step-Ups until you notify us in writing to our Annuity Service Center that you wish to reinstate the step-ups. This reinstatement will take effect at the next contract anniversary after we receive your request for reinstatement. Please note that the Automatic Annual Step-Up may be of limited benefit if you intend to make purchase payments that would cause your account value to approach 45 $10,000,000, because the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount cannot exceed $10,000,000. REQUIRED MINIMUM DISTRIBUTIONS. For IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code, you may be required to take withdrawals to fulfill minimum distribution requirements generally beginning at age 70 1/2. These required distributions may be larger than your Annual Benefit Payment. If you enroll in the Automated Required Minimum Distribution program and elect annual withdrawals, AFTER THE FIRST CONTRACT YEAR, we will increase your Annual Benefit Payment to equal your most recently calculated required minimum distribution amount, if such amount is greater than your Annual Benefit Payment. Otherwise, any cumulative withdrawals you make to satisfy your required minimum distribution amount will be treated as Excess Withdrawals if they exceed your Annual Benefit Payment. YOU MUST BE ENROLLED ONLY IN THE ---- AUTOMATED REQUIRED MINIMUM DISTRIBUTION PROGRAM TO QUALIFY FOR THIS INCREASE IN THE ANNUAL BENEFIT PAYMENT. YOU MAY NOT BE ENROLLED IN ANY OTHER SYSTEMATIC WITHDRAWAL PROGRAM. THE FREQUENCY OF YOUR WITHDRAWALS MUST BE ANNUAL. THE AUTOMATED REQUIRED MINIMUM DISTRIBUTION PROGRAM IS BASED ON INFORMATION RELATING TO THIS CONTRACT ONLY. To enroll in the Automated Required Minimum Distribution program, please contact our Annuity Service Center. INVESTMENT ALLOCATION RESTRICTIONS. If you elect the LWG II rider, there are certain investment allocation restrictions. Please see "Purchase - Investment Allocation Restrictions for Certain Riders" above. If you elect the LWG II, you may not participate in the Dollar Cost Averaging (DCA) program. JOINT LIFE VERSION. A Joint Life version of the LWG II rider is available for a charge of 1.50% (which may increase upon an Automatic Annual Step-Up to a maximum of 1.80%). Like the Single Life version of the LWG II rider, the Joint Life version must be elected at the time you purchase the contract, and the owner (or oldest joint owner) must be age 85 or younger. Under the Joint Life version, when the owner of the contract dies (or when the first joint owner dies), the LWG II rider will automatically remain in effect only if the spouse is the primary beneficiary and elects to continue the contract under the spousal continuation provisions. (See "Death Benefit-Spousal Continuation.") This means that if you purchase the Joint Life version and subsequently get divorced, or your spouse is no longer the primary beneficiary at the time of your death, he or she will not be eligible to receive payments under the LWG II rider. If the spouse is younger than age 59 1/2 when he or she elects to continue the contract, the spouse will receive the Annual Benefit Payment each year until the Remaining Guaranteed Withdrawal Amount is depleted. If the spouse is age 59 1/2 or older when he or she elects to continue the contract, the spouse will receive the Annual Benefit Payment each year for the remainder of his or her life. If the first withdrawal was taken before the contract owner died (or before the first joint owner died), the Withdrawal Rate upon continuation of the contract and LWG II rider by the spouse will be based on the age of the contract owner, or oldest joint owner, at the time the first withdrawal was taken (see "Annual Benefit Payment" above). In situations in which a trust is both the owner and beneficiary of the contract, the Joint Life version of the LWG II would not apply. In addition, because of the definition of "spouse" under federal law, a purchaser who has or is contemplating a civil union or same sex marriage should note that such partner/spouse would not be able to receive continued payments after the death of the contract owner under the Joint Life version of the LWG II. For contracts issued prior to February 24, 2009, the current charge for the ----------------------------------------------- Joint Life version is 0.85% (which may increase upon an Automatic Annual Step-Up to a maximum of 1.50%). CANCELLATION AND GUARANTEED PRINCIPAL ADJUSTMENT. You may elect to cancel the LWG II rider on the contract anniversary every five contract years for the first 15 contract years and annually thereafter. We must receive your cancellation request within 30 days following the applicable contract anniversary in accordance with our Administrative Procedures (currently we require you to submit your request in writing to our Annuity Service Center). The cancellation will take effect upon our receipt of your request. If cancelled, the LWG II rider will terminate, we will no longer deduct the LWG II rider charge, and the investment allocation restrictions described in "Purchase - Investment Allocation Restrictions for Certain Riders" will no longer apply. The variable annuity contract, however, will continue. If you cancel the LWG II rider on the fifteenth contract anniversary or any contract anniversary thereafter, we will add a Guaranteed Principal Adjustment to your account 46 value. The Guaranteed Principal Adjustment is intended to restore your initial investment in the contract in the case of poor investment performance. The Guaranteed Principal Adjustment is equal to (a) - (b) where: (a) is purchase payments credited within 120 days of the date that we issued the contract, reduced proportionately by the percentage reduction in account value attributable to any partial withdrawals taken (including any applicable withdrawal charges) and (b) is the account value on the date of cancellation. The Guaranteed Principal Adjustment will be added to each applicable investment portfolio in the ratio the portion of the account value in such investment portfolio bears to the total account value in all investment portfolios. The Guaranteed Principal Adjustment will never be less than zero. Only purchase payments made during the first 120 days that you hold the contract are taken into consideration in determining the Guaranteed Principal Adjustment. Contract owners who anticipate making purchase payments after 120 days should understand that such payments will not increase the Guaranteed Principal Adjustment. Purchase payments made after 120 days are added to your account value and impact whether or not a benefit is due. Therefore, the LWG II may not be appropriate for you if you intend to make additional purchase payments after the 120-day period and are purchasing the LWG II for its Guaranteed Principal Adjustment feature. TERMINATION OF THE LIFETIME WITHDRAWAL GUARANTEE II RIDER. The Lifetime Withdrawal Guarantee II rider will terminate upon the earliest of: (1) the date of a full withdrawal of the account value (a pro rata portion of the rider charge will be assessed; you are still eligible to receive either the Remaining Guaranteed Withdrawal Amount or lifetime payments, provided the withdrawal did not exceed the Annual Benefit Payment and the provisions and conditions of the rider have been met); (2) the date all of the account value is applied to an annuity option (a pro rata portion of the rider charge will be assessed); (3) the date there are insufficient funds to deduct the Lifetime Withdrawal Guarantee rider charge from the account value and your contract is thereby terminated (whatever account value is available will be applied to pay the rider charge and you are still eligible to receive either the Remaining Guaranteed Withdrawal Amount or lifetime payments, provided the provisions and conditions of the rider have been met; however, you will have no other benefits under the contract); (4) death of the owner or joint owner (or the annuitant if the owner is a non-natural person), except where the contract is issued under the Joint Life version of the Lifetime Withdrawal Guarantee, the primary beneficiary is the spouse, and the spouse elects to continue the contract under the spousal continuation provisions of the contract; (5) change of the owner or joint owner for any reason (a pro rata portion of the rider charge will be assessed), subject to our administrative procedures; (6) the effective date of the cancellation of the rider; (7) termination of the contract to which the rider is attached (a pro rata portion of the rider charge will be assessed, except for a termination due to death); or (8) the date you assign your contract, subject to our administrative procedures (a pro rata portion of the rider charge will be assessed). Once the rider is terminated, the LWG II rider charge will no longer be deducted and the LWG II investment allocation restrictions will no longer apply. ADDITIONAL INFORMATION. The LWG II rider may affect the death benefit available under your contract. If the owner or joint owner should die while the LWG II rider is in effect, an alternate death benefit amount will be calculated under the LWG II rider that can be taken in a lump sum. The LWG II death benefit amount that may be taken as a lump sum will be equal to total purchase payments less any partial withdrawals (deducted on a dollar-for-dollar basis). If this death benefit amount is greater than the death benefit provided by your contract, and if you made no Excess Withdrawals, then this death benefit amount will be paid instead of the death benefit provided by the contract. All other provisions of your contract's death benefit will apply. Alternatively, the beneficiary may elect to receive the Remaining Guaranteed Withdrawal Amount as a death benefit, in which case we will pay the Remaining Guaranteed Withdrawal Amount on a monthly basis (or any mutually agreed upon frequency, but no less frequently than annually) until the Remaining Guaranteed Withdrawal Amount is exhausted. The beneficiary's 47 withdrawal rights then come to an end. Currently, there is no minimum dollar amount for the payments; however, we reserve the right to accelerate any payment, in a lump sum, that is less than $500 (see below). This death benefit will be paid instead of the applicable contractual death benefit or the additional death benefit amount calculated under the LWG II as described above. Otherwise, the provisions of those contractual death benefits will determine the amount of the death benefit. Except as may be required by the Internal Revenue Code, an annual payment will not exceed the Annual Benefit Payment. If your beneficiary dies while such payments are made, we will continue making the payments to the beneficiary's estate unless we have agreed to another payee in writing. If the contract is a Non-Qualified Contract, any death benefit must be paid out over a time period and in a manner that satisfies Section 72(s) of the Internal Revenue Code. If the owner (or the annuitant, if the owner is not a natural person) dies prior to the "annuity starting date" (as defined under the Internal Revenue Code and regulations thereunder), the period over which the Remaining Guaranteed Withdrawal Amount is paid as a death benefit cannot exceed the remaining life expectancy of the payee under the appropriate IRS tables. For purposes of the preceding sentence, if the payee is a non-natural person, the Remaining Guaranteed Withdrawal Amount must be paid out within 5 years from the date of death. Payments under this death benefit must begin within 12 months following the date of death. We reserve the right to accelerate any payment, in a lump sum, that is less than $500 or to comply with requirements under the Internal Revenue Code (including minimum distribution requirements for IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code and Non-Qualified Contracts subject to Section 72(s)). If you terminate the LWG II rider because (1) you make a total withdrawal of your account value; (2) your account value is insufficient to pay the LWG II rider charge; or (3) the contract owner dies, except where the beneficiary or joint owner is the spouse of the owner and the spouse elects to continue the contract, you may not make additional purchase payments under the contract. DESCRIPTION OF THE LIFETIME WITHDRAWAL GUARANTEE I In states where the Lifetime Withdrawal Guarantee II is not yet approved, we offer (in states where approved) the Lifetime Withdrawal Guarantee I rider. The Lifetime Withdrawal Guarantee I rider is identical to the Lifetime Withdrawal Guarantee II, with the exceptions described below. TOTAL GUARANTEED WITHDRAWAL AMOUNT. The maximum Total Guaranteed Withdrawal Amount for the Lifetime Withdrawal Guarantee I rider is $5,000,000. If you elect the Lifetime Withdrawal Guarantee I rider and take an Excess Withdrawal, we will reduce the Total Guaranteed Withdrawal Amount by an amount equal to the difference between the Total Guaranteed Withdrawal Amount after the withdrawal and the account value after the withdrawal (if lower). On the other hand, if you elect the LWG II rider and take an Excess Withdrawal, we will reduce the Total Guaranteed Withdrawal Amount in the same proportion that the withdrawal reduces the account value. REMAINING GUARANTEED WITHDRAWAL AMOUNT. The maximum Remaining Guaranteed Withdrawal Amount for the Lifetime Withdrawal Guarantee I rider is $5,000,000. If you elect the Lifetime Withdrawal Guarantee I rider and take a withdrawal, we will reduce the Remaining Guaranteed Withdrawal Amount by the amount of each withdrawal regardless of whether it is an Excess or Non-Excess withdrawal. However, if the withdrawal is an Excess Withdrawal, then we will additionally reduce the Remaining Guaranteed Withdrawal Amount to equal the difference between the Remaining Guaranteed Withdrawal Amount after the withdrawal and the account value after the withdrawal (if lower). On the other hand, if you elect the LWG II rider and take a withdrawal, we will reduce the Remaining Guaranteed Withdrawal Amount by the amount of each withdrawal for withdrawals that are Non-Excess Withdrawals and for Excess Withdrawals, we will reduce the Remaining Guaranteed Withdrawal Amount in the same proportion that the withdrawal reduces the account value. COMPOUNDING INCOME AMOUNT. If you elect the Lifetime Withdrawal Guarantee I rider, on each contract anniversary until the earlier of: (a) the date of the first withdrawal from the contract or (b) the tenth contract anniversary, we ----- increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by an amount equal to 5% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase. On the other hand, if you elect the LWG II rider, on each contract anniversary until the earlier of: (a) the date of the 48 second withdrawal from the contract or (b) the tenth contract anniversary, we ------ increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by an amount equal to 7.25% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase. ANNUAL BENEFIT PAYMENT. Under the Lifetime Withdrawal Guarantee I, the Annual Benefit Payment is set equal to the Total Guaranteed Withdrawal Amount multiplied by the 5% Withdrawal Rate (there is no 6% Withdrawal Rate for taking later withdrawals). AUTOMATIC ANNUAL STEP-UP. If an Automatic Annual Step-Up occurs under the Lifetime Withdrawal Guarantee I rider, we may increase the Lifetime Withdrawal Guarantee I rider charge to the charge applicable to current contract purchases of the same rider at the time of the step-up, but to no more than a maximum of 0.95% (Single Life version) or 1.40% (Joint Life version) of the Total Guaranteed Withdrawal Amount. Automatic Annual Step-Ups may occur on each contract anniversary prior to the owner's 86th birthday. RIDER CHARGE. The charge for the Lifetime Withdrawal Guarantee I rider is 0.50% (Single Life version) or 0.70% (Joint Life version) of the Total Guaranteed Withdrawal Amount (see "Expenses - Guaranteed Withdrawal Benefit - Rider Charge"). INVESTMENT ALLOCATION RESTRICTIONS. The investment allocation restrictions that apply to the Lifetime Withdrawal Guarantee I rider are different from the restrictions that apply to the Lifetime Withdrawal Guarantee II rider. (See "Purchase - Investment Allocation Restrictions for Certain Riders.") You may elect to participate in the Dollar Cost Averaging (DCA) program, provided that your destination investment portfolios are one or more of the permitted investment portfolios. 49 SUMMARY OF LIVING BENEFIT RIDERS The chart below summarizes certain differences among the living benefit riders. Please refer to the detailed descriptions above for specific information about the features, costs and restrictions associated with the riders.
INCOME WITHDRAWAL GUARANTEES GUARANTEES GMIB PLUS LIFETIME WITHDRAWAL GUARANTEE I & II I & II LIFETIME INCOME Yes (after waiting period) Yes (if first withdrawal on or after age 59 1/2) BENEFIT RIDER INVOLVES ANNUITIZATION Yes No WITHDRAWALS PERMITTED/1/ Prior to Annuitization Yes WAITING PERIOD Must wait 10 years to annuitize under None (age 59 1/2 for lifetime withdrawals) rider; Optional Step-Up/2/ restarts waiting period; withdrawals available immediately RESET/STEP-UP Yes Yes MAY INVEST IN VARIABLE INVESTMENT Prior to annuitization Yes OPTIONS ABILITY TO CANCEL RIDER Yes, after 10 years, can take lump-sum Yes, at 5th, 10th & 15th contract option under the GPO provisions anniversary, annually thereafter; lump-sum option under the GPA provisions after 15 years DEATH BENEFIT Prior to annuitization, contract death Contract death benefit or alternate rider benefit available/3/ death benefit; ability to receive Remaining Guaranteed Withdrawal Amount in series of payments instead of contract death benefit CURRENT RIDER CHARGES/4/ 1.00% (GMIB Plus II) 1.25% (LWG II Single Life version) or 0.80% (GMIB Plus I) 1.50% (LWG II Joint Life version); 0.50% (LWG I Single Life version) or 0.70% (LWG I Joint Life version)
-------- (1) Withdrawals will reduce the living and death benefits and account value. (2) For GMIB Plus I, the Optional Step-Up is called the "Optional Reset." (3) If the contract is annuitized, annuity payments may be guaranteed for a certain period of time (depending on the annuity option selected) and therefore payable upon death of the annuitant. See "Annuity Payments" and the rider descriptions for more information. (4) Certain rider charges may increase upon an Optional Step-Up or Optional Reset. Generally, rider charges are assessed as a percentage of the guaranteed benefit rather than the account value. For example, the charge for GMIB Plus II is 1.00% of the income base. See the Expenses section and the individual rider descriptions for more information. 50 8. PERFORMANCE We periodically advertise subaccount performance relating to the investment portfolios. We will calculate performance by determining the percentage change in the value of an accumulation unit by dividing the increase (decrease) for that unit by the value of the accumulation unit at the beginning of the period. This performance number reflects the deduction of the Separate Account product charges (including certain death benefit rider charges) and the investment portfolio expenses. It does not reflect the deduction of any applicable account fee, withdrawal charge, or applicable optional rider charges. The deduction of these charges would reduce the percentage increase or make greater any percentage decrease. Any advertisement will also include total return figures which reflect the deduction of the Separate Account product charges (including certain death benefit rider charges), account fee, withdrawal charges, applicable optional rider charges, and the investment portfolio expenses. For periods starting prior to the date the contract was first offered, the performance will be based on the historical performance of the corresponding investment portfolios for the periods commencing from the date on which the particular investment portfolio was made available through the Separate Account. In addition, the performance for the investment portfolios may be shown for the period commencing from the inception date of the investment portfolios. These figures should not be interpreted to reflect actual historical performance of the Separate Account. We may, from time to time, include in our advertising and sales materials performance information for funds or investment accounts related to the investment portfolios and/or their investment advisers or subadvisers. Such related performance information also may reflect the deduction of certain contract charges. We may also include in our advertising and sales materials tax deferred compounding charts and other hypothetical illustrations, which may include comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets. We may advertise the living benefit and death benefit riders using illustrations showing how the benefit works with historical performance of specific investment portfolios or with a hypothetical rate of return (which rate will not exceed 12%) or a combination of historical and hypothetical returns. These illustrations will reflect the deduction of all applicable charges including the portfolio expenses of the underlying investment portfolios. You should know that for any performance we illustrate, future performance will vary and results shown are not necessarily representative of future results. 9. DEATH BENEFIT UPON YOUR DEATH If you die during the accumulation phase, we will pay a death benefit to your beneficiary (or beneficiaries). The Principal Protection is the standard death benefit for your contract. At the time you purchase the contract, depending on availability in your state, you can select the optional Enhanced Death Benefit rider. The death benefits are described below. Check your contract and riders for the specific provisions applicable. The optional Enhanced Death Benefit may not be available in your state (check with your registered representative regarding availability). The death benefit is determined as of the end of the business day on which we receive both due proof of death and an election for the payment method. Where there are multiple beneficiaries, the death benefit will only be determined as of the time the first beneficiary submits the necessary documentation in good order. If you have a joint owner, the death benefit will be paid when the first owner dies. Upon the death of either owner, the surviving joint owner will be the primary beneficiary. Any other beneficiary designation will be treated as a contingent beneficiary, unless instructed otherwise. If a non-natural person owns the contract, the annuitant will be deemed to be the owner in determining the death benefit. If there are joint owners, the age of the oldest owner will be used to determine the death benefit amount. STANDARD DEATH BENEFIT (PRINCIPAL PROTECTION) The death benefit will be the greater of: (1) the account value; or (2) total purchase payments, reduced proportionately by the percentage reduction in account value attributable to each partial withdrawal. If the owner is a natural person and the owner is changed to someone other than a spouse, the death benefit amount will be determined as defined above; however, subsection 51 (2) will be changed to provide as follows: "the account value as of the effective date of the change of owner, increased by purchase payments received after the date of the change of owner, reduced proportionately by the percentage reduction in account value attributable to each partial withdrawal made after such date." In the event that a beneficiary who is the spouse of the owner elects to continue the contract in his or her name after the owner dies, the death benefit amount will be determined in accordance with (1) or (2) above. (See Appendix E for examples of the Principal Protection death benefit rider.) OPTIONAL DEATH BENEFIT - ENHANCED DEATH BENEFIT In states where approved, the version of the Enhanced Death Benefit described below is available for contracts issued based on applications and necessary information that we receive in good order at our Annuity Service Center on and after May 4, 2009. In order for us to issue you the previous version of this rider (that has a lower charge and different features), we must receive your application and necessary information at our Annuity Service Center, in good order, before the close of the New York Stock Exchange on May 1, 2009. In states where approved, you may select the Enhanced Death Benefit rider (subject to investment allocation restrictions) if you are age 75 or younger at the effective date of your contract and you either (a) have not elected any living benefit rider or (b) have elected the GMIB Plus II rider. If you select the Enhanced Death Benefit rider, the amount of the death benefit will be the greater of: (1) the account value; or (2) the death benefit base. The DEATH BENEFIT BASE provides protection against adverse investment experience. It guarantees that the death benefit will not be less than the greater of: (1) the highest account value on any anniversary (adjusted for withdrawals), or (2) the amount of your initial investment (adjusted for withdrawals), accumulated at 5% per year. The death benefit base is the greater of (a) or (b) below: (a) Highest Anniversary Value: On the date we issue your contract, the Highest Anniversary Value is equal to your initial purchase payment. Thereafter, the Highest Anniversary Value will be increased by subsequent purchase payments and reduced proportionately by the percentage reduction in account value attributable to each partial withdrawal. The percentage reduction in account value is the dollar amount of the withdrawal (including any applicable withdrawal charge) divided by the account value immediately preceding such withdrawal. On each contract anniversary prior to your 81st birthday, the Highest Anniversary Value will be recalculated to equal the greater of the Highest Anniversary Value before the recalculation or the account value on the date of the recalculation. (b) Annual Increase Amount: On the date we issue your contract, the Annual Increase Amount is equal to your initial purchase payment. All purchase payments received within 120 days of the date we issue your contract will be treated as part of the initial purchase payment for this purpose. Thereafter, the Annual Increase Amount is equal to (i) less (ii), where: (i) is purchase payments accumulated at the annual increase rate. The annual increase rate is 5% per year through the contract anniversary immediately prior to your 91st birthday, and 0% per year thereafter; and (ii) is withdrawal adjustments accumulated at the annual increase rate. The annual increase rate is 5% per year through the contract anniversary immediately prior to your 91st birthday, and 0% per year thereafter. The withdrawal adjustment for any partial withdrawal in a contract year is equal to the Annual Increase Amount immediately prior to the withdrawal multiplied by the percentage reduction in account value attributable to that partial withdrawal (including any applicable withdrawal charge). However, (1) if the partial withdrawal occurs before the contract anniversary immediately prior to your 91st birthday; (2) if all partial withdrawals in a contract year are payable to the owner (or the annuitant if the owner is a non-natural person) or other payees that we agree to; and (3) if total partial withdrawals in a contract year are not greater than 5% of the Annual Increase Amount on the previous contract anniversary, 52 the total withdrawal adjustments for that contract year will be set equal to the dollar amount of total partial withdrawals in that contract year and will be treated as a single withdrawal at the end of that contract year. The Highest Anniversary Value does not change after the contract anniversary immediately preceding the owner's 81st birthday, except that it is increased for each subsequent purchase payment and reduced proportionately by the percentage reduction in account value attributable to each subsequent withdrawal (including any applicable withdrawal charge). The Annual Increase Amount does not change after the contract anniversary immediately preceding the owner's 91st birthday, except that it is increased for each subsequent purchase payment and reduced by the withdrawal adjustments described in (b)(ii) above. For contracts issued based on applications and necessary information received ----------------------------------------------------------------------------- in good order at our Annuity Service Center on or before May 1, 2009, we -------------------------------------------------------------------- offered a version of the Enhanced Death Benefit rider that is no longer available. The prior version is the same as the current version except that: (1) the annual increase rate for the Annual Increase Amount and for withdrawal adjustments is 6% with respect to (b)(i) and (ii) above; (2) different investment allocation restrictions apply (see "Purchase - Investment Allocation Restrictions for Certain Riders"); and (3) different rider charges apply (see "Expenses - Death Benefit Rider Charges"). OPTIONAL STEP-UP. On each contract anniversary on or after the first anniversary following the effective date of the rider, you may elect an Optional Step-Up provided that (1) the account value exceeds the Annual Increase Amount immediately before the Optional Step-Up; and (2) the owner (or oldest joint owner or annuitant if the contract is owned by a non-natural person) is not older than age 80 on the date of the Optional Step-Up. We must receive your request to exercise the Optional Step-Up in writing, at our Annuity Service Center, or any other method acceptable to us. We must receive your request prior to the contract anniversary for an Optional Step-Up to occur on that contract anniversary. The Optional Step-Up will: (a) Reset the Annual Increase Amount to the account value on the contract anniversary following the receipt of an Optional Step-Up election; and (b) Reset the Enhanced Death Benefit rider charge to a rate we shall determine that does not exceed the maximum Optional Step-Up charge (1.50%), provided that this rate will not exceed the rate currently applicable to the same rider available for new contract purchases at the time of the step-up. On the date of the Optional Step-Up, the account value on that day will be treated as a single purchase payment received on the date of the step-up for purposes of determining the Annual Increase Amount after the step-up. All purchase payments and withdrawal adjustments previously used to calculate the Annual Increase Amount will be set equal to zero on the date of the Optional Step-Up. When you elect the Optional Step-Up, provided the above requirements are met, you may elect either: 1) a one time Optional Step-Up at any contract anniversary; or 2) Optional Step-Ups to occur under the Automatic Annual Step-Up (on any contract anniversary while this election is in effect, the Annual Increase Amount will reset to the account value automatically). In the event that the charge applicable to contract purchases at the time of the step-up is higher than your current Enhanced Death Benefit rider charge, you will be notified in writing a minimum of 30 days in advance of the applicable contract anniversary and be informed that you may choose to decline the Automatic Annual Step-Up. If you decline the Automatic Annual Step-Up, you must notify us in accordance with our Administrative Procedures (currently we require you to submit your request in writing to our Annuity Service Center no less than seven calendar days prior to the applicable contract anniversary). Once you notify us of your decision to decline the Automatic Annual Step-Up, you will no longer be eligible for future Automatic Annual Step-Ups until you notify us in writing to our Annuity Service Center that you wish to reinstate the Automatic Annual Step-Ups. This reinstatement will take effect at the next contract anniversary after we receive your request for reinstatement. If you have also elected the GMIB Plus II rider and you elect Optional Step-Ups to occur under the Automatic Annual Step-up, it will remain in effect through the seventh contract anniversary following the date you make the election. You may make a new election if you want 53 Automatic Annual Step-Ups to continue after the seventh contract anniversary. You may discontinue Automatic Annual Step-Ups at any time by notifying us in writing, at our Annuity Service Center (or by any other method acceptable to us), at least 30 days prior to the contract anniversary following the date you make this election. If you discontinue Automatic Annual Step-Ups, the Enhanced Death Benefit rider (and the rider charge) will continue, and you may choose to elect a one time Optional Step-Up or reinstate Automatic Annual Step-Ups as described above. INVESTMENT ALLOCATION RESTRICTIONS. If you select the Enhanced Death Benefit rider, there are certain investment allocation restrictions. (See "Purchase - Investment Allocation Restrictions for Certain Riders.") If you elect the Enhanced Death Benefit, you may not participate in the Dollar Cost Averaging (DCA) program. TERMINATION OF THE ENHANCED DEATH BENEFIT. The Enhanced Death Benefit will terminate upon the earliest of: a) The date you make a total withdrawal of your account value (a pro rata portion of the rider charge will be assessed); b) The date there are insufficient funds to deduct the Enhanced Death Benefit rider charge from your account value; c) The date you annuitize your contract (a pro rata portion of the rider charge will be assessed); d) A change of the owner or joint owner (or annuitant if the owner is a non-natural person), subject to our administrative procedures; e) The date you assign your contract, subject to our administrative procedures; f) The date the death benefit amount is determined (excluding the determination of the death benefit amount under the spousal continuation option); or g) Termination of the contract to which this rider is attached. (See Appendix E for examples of the Enhanced Death Benefit.) GENERAL DEATH BENEFIT PROVISIONS The death benefit amount remains in the Separate Account until distribution begins. From the time the death benefit is determined until complete distribution is made, any amount in the Separate Account will continue to be subject to investment risk. This risk is borne by the beneficiary. Please check with your registered representative regarding the availability of the following in your state. If the beneficiary under a tax qualified contract is the annuitant's spouse, the tax law generally allows distributions to begin by the year in which the annuitant would have reached 70 1/2 (which may be more or less than five years after the annuitant's death). A beneficiary must elect the death benefit to be paid under one of the payment options (unless the owner has previously made the election). The entire death benefit must be paid within five years of the date of death unless the beneficiary elects to have the death benefit payable under an annuity option. The death benefit payable under an annuity option must be paid over the beneficiary's lifetime or for a period not extending beyond the beneficiary's life expectancy. For non-qualified contracts, payment must begin within one year of the date of death. For tax qualified contracts, payment must begin no later than the end of the calendar year immediately following the year of death. We may also offer a payment option, for both non-tax qualified contracts and certain tax qualified contracts, under which your beneficiary may receive payments, over a period not extending beyond his or her life expectancy, under a method of distribution similar to the distribution of required minimum distributions from Individual Retirement Accounts. If this option is elected, we will issue a new contract to your beneficiary in order to facilitate the distribution of payments. Your beneficiary may choose any optional death benefit available under the new contract. Upon the death of your beneficiary, the death benefit would be required to be distributed to your beneficiary's beneficiary at least as rapidly as under the method of distribution in effect at the time of your beneficiary's death. (See "Federal Income Tax Status.") To the extent permitted under the tax law, and in accordance with our procedures, your designated beneficiary is permitted under our procedures to make additional purchase payments consisting of monies which are direct transfers (as permitted under tax law) from other tax qualified or non-tax qualified contracts, depending on which type of contract you own, held in the name of the decedent. Any such additional purchase payments would be subject to applicable withdrawal charges. Your beneficiary is also 54 permitted to choose some of the optional benefits available under the contract, but certain contract provisions or programs may not be available. If a lump sum payment is elected and all the necessary requirements are met, the payment will be made within seven days. Payment to the beneficiary under an annuity option may only be elected during the 60 day period beginning with the date we receive due proof of death. If the owner or a joint owner, who is not the annuitant, dies during the income phase, any remaining payments under the annuity option elected will continue at least as rapidly as under the method of distribution in effect at the time of the owner's death. Upon the death of the owner or a joint owner during the income phase, the beneficiary becomes the owner. SPOUSAL CONTINUATION If the primary beneficiary is the spouse of the owner, upon the owner's death, the beneficiary may elect to continue the contract in his or her own name. Upon such election, the account value will be adjusted upward (but not downward) to an amount equal to the death benefit amount determined upon such election and receipt of due proof of death of the owner. Any excess of the death benefit amount over the account value will be allocated to each applicable investment portfolio in the ratio that the account value in the investment portfolio bears to the total account value. The terms and conditions of the contract that applied prior to the owner's death will continue to apply, with certain exceptions described in the contract. For purposes of the death benefit on the continued contract, the death benefit is calculated in the same manner as it was prior to continuation except that all values used to calculate the death benefit, which may include a highest anniversary value and/or an annual increase amount (depending on whether you elected an optional death benefit), are reset on the date the spouse continues the contract. Spousal continuation will not satisfy minimum required distribution rules for Qualified Contracts other than IRAs (see "Federal Income Tax Status"). Because the contract proceeds must be distributed within the time periods required by the federal Internal Revenue Code, the right of a spouse to continue the contract, and all contract provisions relating to spousal continuation are available only to a person who is defined as a "spouse" under the federal Defense of Marriage Act, or any other applicable federal law. Therefore, under current federal law, a purchaser who has or is contemplating a civil union or same sex marriage should note that the rights of a spouse under the spousal continuation provisions of this contract will not be available to such partner or same sex marriage spouse. Accordingly, a purchaser who has or is contemplating a civil union or same sex marriage should note that such partner/spouse would not be able to receive continued payments after the death of the contract owner under the Joint Life version of the Lifetime Withdrawal Guarantee (see "Living Benefits - Guaranteed Withdrawal Benefits"). DEATH OF THE ANNUITANT If the annuitant, not an owner or joint owner, dies during the accumulation phase, you automatically become the annuitant. You can select a new annuitant if you do not want to be the annuitant (subject to our then current underwriting standards). However, if the owner is a non- natural person (for example, a corporation), then the death of the primary annuitant will be treated as the death of the owner, and a new annuitant may not be named. Upon the death of the annuitant after annuity payments begin, the death benefit, if any, will be as provided for in the annuity option selected. Death benefits will be paid at least as rapidly as under the method of distribution in effect at the annuitant's death. CONTROLLED PAYOUT You may elect to have the death benefit proceeds paid to your beneficiary in the form of annuity payments for life or over a period of time that does not exceed your beneficiary's life expectancy. This election must be in writing in a form acceptable to us. You may revoke the election only in writing and only in a form acceptable to us. Upon your death, the beneficiary cannot revoke or modify your election. The Controlled Payout is only available to Non-Qualified Contracts (see "Federal Income Tax Status"). 10. FEDERAL INCOME TAX STATUS The following discussion is general in nature and is not intended as tax advice. Each person concerned should consult a competent tax adviser. No attempt is made to consider any applicable state tax or other tax laws, or to address any state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a contract. 55 When you invest in an annuity contract, you usually do not pay taxes on your investment gains until you withdraw the money, generally for retirement purposes. If you invest in an annuity contract as part of an individual retirement plan, pension plan or employer-sponsored retirement program, your contract is called a "Qualified Contract." The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. You should note that for any Qualified Contract, the tax deferred accrual feature is provided by the tax qualified retirement plan, and as a result there should be reasons other than tax deferral for acquiring the contract within a qualified plan. If your annuity is independent of any formal retirement or pension plan, it is termed a "Non-Qualified Contract." Under current federal income tax law, the taxable portion of distributions under variable annuity contracts and qualified plans (including IRAs) is not eligible for the reduced tax rate applicable to long-term capital gains and qualifying dividends. TAXATION OF NON-QUALIFIED CONTRACTS NON-NATURAL PERSON. If a non-natural person (e.g., a trust) owns a Non-Qualified Contract, the taxpayer generally must include in income any increase in the excess of the account value over the investment in the contract (generally, the premiums or other consideration paid for the contract) during the taxable year. There are some exceptions to this rule and a prospective owner that is not a natural person should discuss these with a tax adviser. The following discussion generally applies to Non-Qualified Contracts owned by natural persons. WITHDRAWALS. When a withdrawal from a Non-Qualified Contract occurs, the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the account value immediately before the distribution over the owner's investment in the contract (generally, the premiums or other consideration paid for the contract, reduced by any amount previously distributed from the contract that was not subject to tax) at that time. In the case of a surrender under a Non-Qualified Contract, the amount received generally will be taxable only to the extent it exceeds the owner's investment in the contract. In the case of a withdrawal under a Qualified Contract, a ratable portion of the amount received is taxable, generally based on the ratio of the "investment in the contract" to the individual's total account balance or accrued benefit under the retirement plan. The "investment in the contract" generally equals the amount of any non-deductible purchase payments paid by or on behalf of any individual. In many cases, the "investment in the contract" under a Qualified Contract can be zero. It is conceivable that certain benefits or the charges for certain benefits such as any of the guaranteed death benefits and certain living benefits (E.G., the LWG rider), could be considered to be taxable each year as deemed distributions from the contract to pay for non-annuity benefits. We currently treat these charges and benefits as an intrinsic part of the annuity contract and do not tax report these as taxable income until distributions are actually made. However, it is possible that this may change in the future if we determine that this is required by the IRS. If so, the charges or benefits could also be subject to a 10% penalty tax if the taxpayer is under age 59 1/2. The tax treatment of withdrawals under a Guaranteed Withdrawal Benefit is also uncertain. It is conceivable that the amount of potential gain could be determined based on the Remaining Guaranteed Withdrawal Amount at the time of the withdrawal, if greater than the account value. This could result in a greater amount of taxable income in certain cases. In general, at the present time, we intend to tax report such withdrawals using the gross account value rather than the Remaining Guaranteed Withdrawal Amount at the time of the withdrawal to determine gain. However, in cases where the maximum permitted withdrawal in any year under the LWG exceeds the gross account value, the portion of the withdrawal treated as taxable gain (not to exceed the amount of the withdrawal) should be measured as the difference between the maximum permitted withdrawal amount under the benefit and the remaining after-tax basis immediately preceding the withdrawal. Consult your tax adviser. We reserve the right to change our tax reporting practices if we determine that they are not in accordance with IRS guidance (whether formal or informal). ADDITIONAL PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution (or a deemed distribution) from a Non-Qualified Contract, there may be imposed a federal tax penalty equal to 10% of the amount treated as income. In general, however, there is no penalty on distributions: o made on or after the taxpayer reaches age 59 1/2; o made on or after the death of an owner; o attributable to the taxpayer's becoming disabled; 56 o made as part of a series of substantially equal periodic payment (at least annually) for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his or her designated beneficiary; or o under certain immediate income annuities providing for substantially equal payments made at least annually. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. Also, additional exceptions apply to distributions from a Qualified Contract. You should consult a tax adviser with regard to exceptions from the penalty tax. ANNUITY PAYMENTS. Although tax consequences may vary depending on the payout option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of any annuity payment is generally determined in a manner that is designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once your investment in the contract has been fully recovered, however, the full amount of each annuity payment is subject to tax as ordinary income. In general, the amount of each payment under a variable annuity payment option that can be excluded from federal income tax is the remaining after-tax cost in the amount annuitized at the time such payments commence, divided by the number of expected payments, subject to certain adjustments. No deduction is permitted for any excess of such excludable amount for a year over the annuity payments actually received in that year. However, you may elect to increase the excludable amount attributable to future years by a ratable portion of such excess. Consult your tax adviser as to how to make such election and also as to how to treat the loss due to any unrecovered investment in the contract when the income stream is terminated. Once the investment in the contract has been recovered through the use of the excludable amount, the entire amount of all future payments are includable in taxable income. The IRS has not furnished explicit guidance as to how the excludable amount is to be determined each year under variable income annuities that permit transfers between the fixed account and variable investment portfolios, as well as transfers between investment portfolios after the annuity starting date. Consult your tax adviser. TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a Non-Qualified Contract because of your death or the death of the annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the contract, or (ii) if distributed under a payout option, they are taxed in the same way as annuity payments. See the Statement of Additional Information as well as "Death Benefit - General Death Benefit Provisions" in this prospectus for a general discussion on the federal income tax rules applicable to how death benefits must be distributed. TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A CONTRACT. Where otherwise permitted under the terms of the contract, a transfer or assignment of ownership of a Non-Qualified Contract, the designation or change of an annuitant, the selection of certain maturity dates, or the exchange of a contract may result in certain adverse tax consequences to you that are not discussed herein. An owner contemplating any such transfer, assignment, exchange or event should consult a tax adviser as to the tax consequences. WITHHOLDING. Annuity distributions 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. MULTIPLE CONTRACTS. The tax law provides that deferred annuities issued after October 21, 1988 by the same insurance company or an affiliate in the same calendar year to the same owner are combined for tax purposes. As a result, a greater portion of your withdrawals may be considered taxable income than you would otherwise expect. Please consult your own tax adviser. OWNERSHIP OF THE INVESTMENTS. In certain circumstances, owners of variable annuity contracts have been considered to be the owners of the assets of the underlying Separate Account for Federal income tax purposes due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains attributable to the variable account assets. There is little guidance in this area, and some features of the contract, 57 such as the number of funds available and the flexibility of the contract owner to allocate premium payments and transfer amounts among the funding options, have not been addressed in public rulings. While we believe that the contract does not give the contract owner investment control over Separate Account assets, we reserve the right to modify the contract as necessary to prevent a contract owner from being treated as the owner of the Separate Account assets supporting the contract. FURTHER INFORMATION. We believe that the contracts will qualify as annuity contracts for federal income tax purposes and the above discussion is based on that assumption. Further details can be found in the Statement of Additional Information under the heading "Tax Status of the Contracts." TAXATION OF QUALIFIED CONTRACTS The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. Your rights under a Qualified Contract may be subject to the terms of the retirement plan itself, regardless of the terms of the Qualified Contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions with respect to the contract comply with the law. INDIVIDUAL RETIREMENT ACCOUNTS (IRAS). IRAs, as defined in Section 408 of the Internal Revenue Code (Code), permit individuals to make annual contributions of up to the lesser of the applicable dollar amount for the year (for 2009, $5,000 plus, for an owner age 50 or older, $1,000) or the amount of compensation includible in the individual's gross income for the year. The contributions may be deductible in whole or in part, depending on the individual's income. Distributions from certain retirement plans may be "rolled over" into an IRA on a tax-deferred basis without regard to these limits. Amounts in the IRA (other than non-deductible contributions) are taxed when distributed from the IRA. A 10% penalty tax generally applies to distributions made before age 59 1/2, unless an exception applies. The Internal Revenue Service (IRS) has approved the forms of the IRA and SIMPLE IRA endorsements, when used with the contract and certain of its riders (including enhanced death benefits), but your contract may differ from the approved version because of differences in riders or state insurance law requirements. Traditional IRAs/SEPs, SIMPLE IRAs and Roth IRAs may not invest in life insurance. The contract may provide death benefits that could exceed the greater of premiums paid or the account balance. The final required minimum distribution income tax regulations generally treat such benefits as part of the annuity contract and not as life insurance and require the value of such benefits to be included in the participant's interest that is subject to the required minimum distribution rules. SIMPLE IRA. A SIMPLE IRA permits certain small employers to establish SIMPLE plans as provided by Section 408(p) of the Code, under which employees may elect to defer to a SIMPLE IRA a percentage of compensation up to $11,500 for 2009. The sponsoring employer is generally required to make matching or non- elective contributions on behalf of employees. Distributions from SIMPLE IRA's are subject to the same restrictions that apply to IRA distributions and are taxed as ordinary income. Subject to certain exceptions, premature distributions prior to age 59 1/2 are subject to a 10% penalty tax, which is increased to 25% if the distribution occurs within the first two years after the commencement of the employee's participation in the plan. ROTH IRA. A Roth IRA, as described in Code section 408A, permits certain eligible individuals to make non-deductible contributions to a Roth IRA in cash or as a rollover or transfer from another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA is generally subject to tax, and other special rules apply. The owner may wish to consult a tax adviser before combining any converted amounts with any other Roth IRA contributions, including any other conversion amounts from other tax years. Distributions from a Roth IRA generally are not taxed, except that, once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA. A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if they are distributed during the five taxable years beginning with the year in which the conversion was made. PENSION PLANS. Corporate pension and profit-sharing plans under Section 401(a) of the Code allow corporate employers to establish various types of retirement plans for employees, and self-employed individuals to establish qualified plans for themselves and their employees. Adverse tax consequences to the retirement plan, the participant or both may result if the contract is transferred to any 58 individual as a means to provide benefit payments, unless the plan complies with all the requirements applicable to such benefits prior to transferring the contract. The contract includes optional death benefits that in some cases may exceed the greater of the premium payments or the account value. TAX SHELTERED ANNUITIES. Tax Sheltered Annuities (TSA) that qualify under section 403(b) of the Code allow employees of certain Section 501(c)(3) organizations and public schools to exclude from their gross income the premium payments made, within certain limits, on a contract that will provide an annuity for the employee's retirement. These premium payments may be subject to FICA (social security) tax. Distributions of (1) salary reduction contributions made in years beginning after December 31, 1988; (2) earnings on those contributions; and (3) earnings on amounts held as of the close of the last year beginning before January 1, 1989, are not allowed prior to age 59 1/2, severance from employment, death or disability. Salary reduction contributions may also be distributed upon hardship, but would generally be subject to penalties. Income tax regulations issued in July 2007 will require certain fundamental changes to these arrangements including (a) a requirement that there be a written plan document in addition to the annuity contract (or section 403(b)(7) custodial account), (b) significant restrictions on the ability of participants to direct proceeds between 403(b) annuity contracts and (c) new restrictions on withdrawals of amounts attributable to contributions other than elective deferrals. The regulations are generally effective for taxable years beginning after December 31, 2008. However, certain aspects, including a proposed prohibition on use of new life insurance under section 403(b) arrangements and rules affecting payroll taxes on certain types of contributions are currently effective. Please note that, in light of the regulations, this contract is not available for purchase via a "90-24" transfer. If your contract was issued previously in a 90-24 transfer completed on or before September 24, 2007, we urge you to consult with your tax adviser prior to making additional purchase payments. Recent income tax regulations also provide certain new restrictions on withdrawals of amounts from tax sheltered annuities that are not attributable to salary reduction contributions. Under these regulations, a Section 403(b) contract is permitted to distribute retirement benefits attributable to pre-tax contributions other than elective deferrals to the participant no earlier than upon the earlier of the participant's severance from employment or upon the prior occurrence of some event such as after a fixed number of years, the attainment of a stated age, or disability. This new withdrawal restriction is applicable for tax sheltered annuity contracts issued on or after January 1, 2009. SECTION 457(B) PLANS. An eligible 457(b) plan, while not actually a qualified plan as that term is normally used, provides for certain eligible deferred compensation plans with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. Under such plans a participant may specify the form of investment in which his or her participation will be made. Under a non-governmental plan, which must be a tax-exempt entity under section 501(c) of the Code, all such investments, however, are owned by and are subject to, the claims of the general creditors of the sponsoring employer. In general, all amounts received under a non-governmental section 457(b) plan are taxable and are subject to federal income tax withholding as wages. SEPARATE ACCOUNT CHARGES FOR DEATH BENEFITS. For contracts purchased under section 401(a) plans or 403(b) plans, certain death benefits could conceivably be characterized as an incidental benefit, the amount of which is limited in any pension or profit-sharing plan. Because the death benefits, in certain cases, may exceed this limitation employers using a contract in connection with such plans should consult their tax adviser. Additionally, it is conceivable that the explicit charges for, or the amount of the mortality and expense charges allocable to, such benefits may be considered taxable distributions. OTHER TAX ISSUES. Qualified Contracts (including contracts under section 457(b) plans) have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan, adoption agreement, or consult a tax adviser for more information about these distribution rules. Failure to meet such rules generally results in the imposition of a 50% excise tax on the amount that should have been, but was not, distributed. Final income tax regulations regarding minimum distribution requirements were released in June 2004. These regulations affect both deferred and income 59 annuities. Under these new rules, effective with respect to minimum distributions required for the 2006 distribution year, in general, the value of all benefits under a deferred annuity (including death benefits in excess of account value, as well as all living benefits) must be added to the account value in computing the amount required to be distributed over the applicable period. (See "Living Benefits.") The final required minimum distribution regulations permit income payments to increase due to "actuarial gain" which includes the investment performance of the underlying assets, as well as changes in actuarial factors and assumptions under certain conditions. Additionally, withdrawals may also be permitted under certain conditions. The new rules are not entirely clear, and you should consult with your own tax adviser to determine whether your variable income annuity will satisfy these rules for your own situation. Under recently enacted legislation, you (and after your death, your designated beneficiaries) generally do not have to take the required minimum distribution for 2009. The waiver does not apply to any 2008 payments even if received in 2009, so for those payments, you are still required to receive your first required minimum distribution payment by April 1, 2009. In contrast, if your first required minimum distribution would have been due by April 1, 2010, you are not required to take such distribution; however, your 2010 required minimum distribution is due by December 31, 2010. For after-death required minimum distributions, the five year rule is applied without regard to calendar year 2009. For instance, if you died in 2007, the five year period ends in 2013 instead of 2012. This required minimum distribution waiver does not apply if you are receiving annuitized payments under your contract. The required minimum distribution rules are complex, so consult with your tax advisor before waiving your 2009 required minimum distribution payment. Distributions from Qualified Contracts generally are subject to withholding for the owner's federal income tax liability. The withholding rate varies according to the type of distribution and the owner's tax status. The owner will be provided the opportunity to elect not to have tax withheld from distributions. "Eligible rollover distributions" from section 401(a), 403(a), 403(b) and governmental section 457(b) plans are subject to a mandatory federal income tax withholding of 20%. An eligible rollover distribution is any distribution to an employee (or employee's spouse or former spouse as beneficiary or alternate payee) from such a plan, except certain distributions such as distributions required by the Code, distributions in a specified annuity form or hardship distributions. The 20% withholding does not apply, however, if the employee chooses a "direct rollover" from the plan to a tax-qualified plan, IRA or tax sheltered annuity or to a governmental 457(b) plan that agrees to separately account for rollover contributions. Effective March 28, 2005, certain mandatory distributions made to participants in an amount in excess of $1,000 must be rolled over to an IRA designated by the Plan, unless the participant elects to receive it in cash or roll it over to a different IRA or eligible retirement plan of his or her own choosing. General transitional rules apply as to when plans have to be amended. Special effective date rules apply for governmental plans and church plans. COMMUTATION FEATURES UNDER ANNUITY PAYMENT OPTIONS. Please be advised that the tax consequences resulting from the election of an annuity payment option containing a commutation feature are uncertain and the IRS may determine that the taxable amount of annuity payments and withdrawals received for any year could be greater than or less than the taxable amount reported by us. The exercise of the commutation feature also may result in adverse tax consequences including: o The imposition of a 10% penalty tax on the taxable amount of the commuted value, if the taxpayer has not attained age 59 1/2 at the time the withdrawal is made. This 10% penalty tax is in addition to the ordinary income tax on the taxable amount of the commuted value. o The retroactive imposition of the 10% penalty tax on annuity payments received prior to the taxpayer attaining age 59 1/2. o The possibility that the exercise of the commutation feature could adversely affect the amount excluded from federal income tax under any annuity payments made after such commutation. A payee should consult with his or her own tax adviser prior to electing to annuitize the contract and prior to exercising any commutation feature under an annuity payment option. 60 FEDERAL ESTATE TAXES. While no attempt is being made to discuss the federal estate tax implications of the contract, you should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent's gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning adviser for more information. GENERATION-SKIPPING TRANSFER TAX. Under certain circumstances, the Code may impose a "generation-skipping transfer tax" when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the contract owner. Regulations issued under the Code may require us to deduct the tax from your contract, or from any applicable payment, and pay it directly to the IRS. ANNUITY PURCHASE PAYMENTS BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS. The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to the U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation with respect to an annuity contract purchase. PUERTO RICO TAX CONSIDERATIONS The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") taxes distributions from non-qualified annuity contracts differently than in the U.S. Distributions that are not in the form of an annuity (including partial surrenders and period certain payments) are treated under the 1994 Code first as a return of investment. Therefore, a substantial portion of the amounts distributed generally will be excluded from gross income for Puerto Rico tax purposes until the cumulative amount paid exceeds your tax basis. The amount of income on annuity distributions (payable over your lifetime) is also calculated differently under the 1994 Code. Since Puerto Rico residents are also subject to U.S. income tax on all income other than income sourced to Puerto Rico and the Internal Revenue Service issued guidance in 2004 which indicated that the income from an annuity contract issued by a U.S. life insurer would be considered U.S. source income, the timing of recognition of income from an annuity contract could vary between the two jurisdictions. Although the 1994 Code provides a credit against the Puerto Rico income tax for U.S. income taxes paid, an individual may not get full credit because of the timing differences. You should consult with a personal tax adviser regarding the tax consequences of purchasing an annuity contract and/or any proposed distribution, particularly a partial distribution or election to annuitize. TAX BENEFITS RELATED TO THE ASSETS OF THE SEPARATE ACCOUNT We may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividends received deductions, are not passed back to the Separate Account or to contract owners because we are the owner of the assets from which the tax benefits are derived. POSSIBLE TAX LAW CHANGES Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the contract could change by legislation or otherwise. We will notify you of any changes to your contract. Consult a tax adviser with respect to legislative developments and their effect on the contract. We have the right to modify the contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of the contract and do not intend the above discussion as tax advice. 11. OTHER INFORMATION METLIFE INVESTORS USA MetLife Investors USA Insurance Company (MetLife Investors USA) is a stock life insurance company founded on September 13, 1960, and organized under the laws of the State of Delaware. Its principal executive offices are located at 5 Park Plaza, Suite 1900, Irvine, CA 92614. MetLife Investors USA is authorized to transact the business of life insurance, including annuities, and is currently licensed to do business in all states (except New York), the District of Columbia and Puerto Rico. Our name 61 was changed to Security First Life Insurance Company on September 27, 1979. We changed our name to MetLife Investors USA Insurance Company on January 8, 2001. On December 31, 2002, MetLife Investors USA became an indirect subsidiary of MetLife, Inc., a listed company on the New York Stock Exchange. On October 11, 2006, MetLife Investors USA became a wholly-owned subsidiary of MetLife Insurance Company of Connecticut. MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and institutional customers. We are a member of the Insurance Marketplace Standards Association (IMSA). Companies that belong to IMSA subscribe to a set of ethical standards covering the various aspects of sales and service for individually sold life insurance and annuities. THE SEPARATE ACCOUNT We have established a SEPARATE ACCOUNT, MetLife Investors USA Separate Account A (Separate Account), to hold the assets that underlie the contracts. Our Board of Directors adopted a resolution to establish the Separate Account under Delaware insurance law on May 29, 1980. We have registered the Separate Account with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. The Separate Account is divided into subaccounts. The assets of the Separate Account are held in our name on behalf of the Separate Account and legally belong to us. However, those assets that underlie the contracts, are not chargeable with liabilities arising out of any other business we may conduct. All the income, gains and losses (realized or unrealized) resulting from these assets are credited to or charged against the contracts and not against any other contracts we may issue. We reserve the right to transfer assets of the Separate Account to another account, and to modify the structure or operation of the Separate Account, subject to necessary regulatory approvals. If we do so, we guarantee that the modification will not affect your account value. The amount of the guaranteed death benefit that exceeds the account value is paid from our general account. In addition, portions of the contract's guaranteed living benefits payable may exceed the amount of the account value and be paid from our general account. Benefit amounts paid from the general account are subject to the claims-paying ability of MetLife Investors USA. DISTRIBUTOR We have entered into a distribution agreement with our affiliate, MetLife Investors Distribution Company (Distributor), 5 Park Plaza, Suite 1900, Irvine, CA 92614, for the distribution of the contracts. Distributor is a member of the Financial Industry Regulatory Authority (FINRA). FINRA maintains a Public Disclosure Program for investors. A brochure that includes information describing the Program is available by calling FINRA's Public Disclosure Program hotline at 1-800-289-9999, or by visiting FINRA's website at www.finra.org. Distributor, and in certain cases, we, have entered into selling agreements with other selling firms for the sale of the contracts. We pay compensation to Distributor for sales of the contracts by selling firms. 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 the Distributor's management team, advertising expenses, and other expenses of distributing the contracts. Distributor's management team also may 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 other similar items. All of the investment portfolios make payments to Distributor under their distribution plans in consideration of services provided and expenses incurred by Distributor in distributing shares of the investment portfolios. (See "Fee Tables and Examples - Investment Portfolio Expenses" and the fund prospectuses.) These payments range from 0.25% to 0.55% of Separate Account assets invested in the particular investment portfolio. SELLING FIRMS As noted above, Distributor, and in certain cases, we, have entered into selling agreements with selling firms for the sale of the contracts. All selling firms receive commissions, and they may also receive some form of non-cash compensation. Certain selected selling firms receive additional compensation (described below under "Additional Compensation for Selected Selling Firms"). These commissions and other incentives or payments are not charged directly to contract owners or the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the 62 contract or from our general account. A portion of the payments made to selling firms may be passed on to their sales representatives in accordance with the selling firms' internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. COMPENSATION PAID TO SELLING FIRMS. We and Distributor pay compensation to all selling firms in the form of commissions and may also provide certain types of non-cash compensation. The maximum commission payable for contract sales and additional purchase payments by selling firms is 7% of purchase payments. Some selling firms may elect to receive a lower commission when a purchase payment is made, along with annual trail commissions up to 1% of account value (less purchase payments received within the previous 12 months) for so long as the contract remains in effect or as agreed in the selling agreement. We also pay commissions when a contract owner elects to begin receiving regular income payments (referred to as "annuity payments"). (See "Annuity Payments - The Income Phase.") Distributor may also provide non-cash compensation items that we may provide jointly with Distributor. Non-cash items include expenses for conference or seminar trips and certain gifts. Ask your registered representative for further information about what payments your registered representative and the selling firm for which he or she works may receive in connection with your purchase of a contract. ADDITIONAL COMPENSATION FOR SELECTED SELLING FIRMS. We and Distributor have entered into distribution arrangements with certain selected selling firms. Under these arrangements we and Distributor may pay additional compensation to selected selling firms, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. Marketing allowances are periodic payments to certain selling firms based on cumulative periodic (usually quarterly) sales of our variable insurance contracts (including the contracts). Introduction fees are payments to selling firms in connection with the addition of our 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 our products. Persistency payments are periodic payments based on account values of our variable insurance contracts (including account values of the contracts) or other persistency standards. Preferred status fees are paid to obtain preferred treatment of the contracts 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. We and Distributor have entered into such distribution agreements with selling firms identified in the Statement of Additional Information. The additional types of compensation discussed above 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. The prospect of receiving, or the receipt of, additional compensation as described above may provide selling firms and/or their sales representatives with an incentive to favor sales of the contracts over other variable annuity contracts (or other investments) with respect to which 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 contracts. For more information about any such additional compensation arrangements, ask your registered representative. (See the Statement of Additional Information - "Distribution" for a list of selling firms that received compensation during 2008, as well as the range of additional compensation paid.) REQUESTS AND ELECTIONS We will treat your request for a contract transaction, or your submission of a purchase payment, as received by us if we receive a request conforming to our administrative procedures or a payment at our Annuity Service Center before the close of regular trading on the New York Stock Exchange on that day. We will treat your submission of a purchase payment as received by us if we receive a payment at our Annuity Service Center (or a designee receives a payment in accordance with the designee's administrative procedures) before the close of regular trading on the New York Stock Exchange on that day. If we receive the request, or if we (or our designee) receive the payment, after the close of trading on the New York Stock Exchange on that day, or if the New York Stock Exchange is not open that day, then the request or payment will be treated as received on the next day when the New York Stock Exchange is open. Our Annuity Service Center is located at P.O. Box 10366, Des Moines, IA 50306-0366. If you send your 63 purchase payments or transaction requests to an address other than the one we have designated for receipt of such purchase payments or requests, we may return the purchase payment to you, or there may be a delay in applying the purchase payment or transaction to your contract. Requests for service may be made: o Through your registered representative o By telephone at (800) 343-8496, between the hours of 7:30AM and 5:30PM Central Time Monday through Thursday and 7:30AM and 5:00PM Central Time on Friday o In writing to our Annuity Service Center o By fax at (515) 457-4400 or o By Internet at www.metlifeinvestors.com All other requests must be in written form, satisfactory to us. A request or transaction generally is considered in GOOD ORDER if it complies with our administrative procedures and the required information is complete and accurate. A request or transaction may be rejected or delayed if not in good order. If you have any questions, you should contact us or your registered representative before submitting the form or request. We will use reasonable procedures such as requiring certain identifying information, tape recording the telephone instructions, and providing written confirmation of the transaction, in order to confirm that instructions communicated by telephone, fax, Internet or other means are genuine. Any telephone, fax or Internet instructions reasonably believed by us to be genuine will be your responsibility, including losses arising from any errors in the communication of instructions. As a result of this policy, you will bear the risk of loss. If we do not employ reasonable procedures to confirm that instructions communicated by telephone, fax or Internet are genuine, we may be liable for any losses due to unauthorized or fraudulent transactions. All other requests and elections under your contract must be in writing signed by the proper party, must include any necessary documentation and must be received at our Annuity Service Center to be effective. If acceptable to us, requests or elections relating to beneficiaries and ownership will take effect as of the date signed unless we have already acted in reliance on the prior status. We are not responsible for the validity of any written request or action. Telephone and computer systems may not always be available. Any telephone or computer system, whether it is yours, your service provider's, your agent's, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you experience technical difficulties or problems, you should make your transaction request in writing to our Annuity Service Center. CONFIRMING TRANSACTIONS. We will send out written statements confirming that a transaction was recently completed. Unless you inform us of any errors within 60 days of receipt, we will consider these communications to be accurate and complete. OWNERSHIP OWNER. You, as the OWNER of the contract, have all the interest and rights under the contract. These rights include the right to: o change the beneficiary. o change the annuitant before the annuity date (subject to our underwriting and administrative rules). o assign the contract (subject to limitation). o change the payment option. o exercise all other rights, benefits, options and privileges allowed by the contract or us. The owner is as designated at the time the contract is issued, unless changed. Any change of owner is subject to our underwriting rules in effect at the time of the request. JOINT OWNER. The contract can be owned by JOINT OWNERS, limited to two natural persons. Upon the death of either owner, the surviving owner will be the primary beneficiary. Any other beneficiary designation will be treated as a contingent beneficiary unless otherwise indicated. BENEFICIARY. The BENEFICIARY is the person(s) or entity you name to receive any death benefit. The beneficiary is named at the time the contract is issued unless changed at a later date. Unless an irrevocable beneficiary has been named, you can change the beneficiary at any time before you die. If joint owners are named, unless you tell us otherwise, the surviving joint owner will be the primary beneficiary. Any 64 other beneficiary designation will be treated as a contingent beneficiary (unless you tell us otherwise). ANNUITANT. The ANNUITANT is the natural person(s) on whose life we base annuity payments. You can change the annuitant at any time prior to the annuity date, unless an owner is not a natural person. Any reference to annuitant includes any joint annuitant under an annuity option. The owner and the annuitant do not have to be the same person except as required under certain sections of the Internal Revenue Code or under a GMIB rider (see "Living Benefits - Guaranteed Income Benefits"). ASSIGNMENT. You can assign a Non-Qualified Contract at any time during your lifetime. We will not be bound by the assignment until the written notice of the assignment is recorded by us. We will not be liable for any payment or other action we take in accordance with the contract before we record the assignment. AN ASSIGNMENT MAY BE A TAXABLE EVENT. If the contract is issued pursuant to a qualified plan, there may be limitations on your ability to assign the contract. LEGAL PROCEEDINGS In the ordinary course of business, MetLife Investors USA, 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 Investors USA 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 Investors USA to meet its obligations under the contracts. FINANCIAL STATEMENTS Our financial statements and the financial statements of the Separate Account have been included in the SAI. TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Company Independent Registered Public Accounting Firm Custodian Distribution Calculation of Performance Information Annuity Provisions Tax Status of the Contracts Condensed Financial Information Financial Statements 65 APPENDIX A CONDENSED FINANCIAL INFORMATION The following charts list the Condensed Financial Information (the accumulation unit value information for the accumulation units outstanding) for contracts issued as of December 31, 2008. See "Purchase - Accumulation Units" in the prospectus for information on how accumulation unit values are calculated. Chart 1 presents accumulation unit values for the lowest possible combination of separate account product charges and death benefit rider charges, and Chart 2 presents accumulation unit values for the highest possible combination of such charges. The SAI contains the accumulation unit values for all other possible combinations of separate account product charges and death benefit rider charges. (See "Cover Page" for how to obtain a copy of the SAI.) SERIES S
1.15% SEPARATE ACCOUNT PRODUCT CHARGES NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE AT UNIT VALUE AT UNITS BEGINNING OF END OF OUTSTANDING AT PERIOD PERIOD END OF PERIOD --------------- --------------- ----------------- MET INVESTORS SERIES TRUST AMERICAN FUNDS BALANCED ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 10.008740 7.023768 535,202.3951 ============= ==== ========== ========= ========= ============== AMERICAN FUNDS GROWTH ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 9.998740 6.370800 671,262.6741 ============= ==== ========== ========= ========= ============== AMERICAN FUNDS MODERATE ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 10.018739 7.698632 349,242.6646 ============= ==== ========== ========= ========= ============== MET/FRANKLIN TEMPLETON FOUNDING STRATEGY SUB-ACCOUNT (CLASS B) 04/28/2008 to 12/31/2008 9.998740 7.045776 437,900.0394 ============= ==== ========== ========= ========= ============== METROPOLITAN SERIES FUND, INC. BLACKROCK MONEY MARKET SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 24.486257 25.077084 3,945.2312 01/01/2008 to 12/31/2008 25.077084 25.433922 206,894.0335 ============= ==== ========== ========= ========= ============== MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM METLIFE AGGRESSIVE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 13.706944 13.336480 460.7624 01/01/2008 to 12/31/2008 13.336480 7.802916 456.7467 ============= ==== ========== ========= ========= ============== METLIFE BALANCED STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 12.727427 12.639980 566,465.8270 01/01/2008 to 12/31/2008 12.639980 8.504600 1,691,571.2459 ============= ==== ========== ========= ========= ============== METLIFE DEFENSIVE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 11.617533 11.747495 72,168.3282 01/01/2008 to 12/31/2008 11.747495 9.214676 458,025.4405 ============= ==== ========== ========= ========= ==============
A-1 APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED)
1.15% SEPARATE ACCOUNT PRODUCT CHARGES NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE AT UNIT VALUE AT UNITS BEGINNING OF END OF OUTSTANDING AT PERIOD PERIOD END OF PERIOD --------------- --------------- ------------------- METLIFE GROWTH STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 13.438865 13.304450 1,218,726.7750 01/01/2008 to 12/31/2008 13.304450 8.171629 2,043,085.3805 ============= ==== ========== ========= ========= ============== METLIFE MODERATE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 12.144518 12.250068 165,157.4215 01/01/2008 to 12/31/2008 12.250068 8.910201 719,289.9853 ============= ==== ========== ========= ========= ==============
A-2 APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) SERIES S - L SHARE OPTION
1.85% SEPARATE ACCOUNT PRODUCT CHARGES NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE AT UNIT VALUE AT UNITS BEGINNING OF END OF OUTSTANDING AT PERIOD PERIOD END OF PERIOD --------------- --------------- ----------------- MET INVESTORS SERIES TRUST AMERICAN FUNDS BALANCED ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 10.007972 6.989945 413,620.6181 ============= ==== ========== ========= ========= ============== AMERICAN FUNDS GROWTH ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 9.997973 6.340094 673,196.8497 ============= ==== ========== ========= ========= ============== AMERICAN FUNDS MODERATE ALLOCATION SUB-ACCOUNT (CLASS C) 04/28/2008 to 12/31/2008 10.017972 7.661591 540,012.3109 ============= ==== ========== ========= ========= ============== MET/FRANKLIN TEMPLETON FOUNDING STRATEGY SUB-ACCOUNT (CLASS B) 04/28/2008 to 12/31/2008 9.997973 7.011851 214,344.6661 ============= ==== ========== ========= ========= ============== METROPOLITAN SERIES FUND, INC. BLACKROCK MONEY MARKET SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 10.211819 10.409201 199,115.8653 01/01/2008 to 12/31/2008 10.409201 10.483469 603,221.9929 ============= ==== ========== ========= ========= ============== MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM METLIFE AGGRESSIVE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 13.470411 13.044878 393,745.0904 01/01/2008 to 12/31/2008 13.044878 7.578746 366,896.4756 ============= ==== ========== ========= ========= ============== METLIFE BALANCED STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 12.507778 12.363600 3,925,618.3040 01/01/2008 to 12/31/2008 12.363600 8.260324 3,371,375.1096 ============= ==== ========== ========= ========= ============== METLIFE DEFENSIVE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 11.417011 11.490612 442,922.6592 01/01/2008 to 12/31/2008 11.490612 8.950055 652,459.2995 ============= ==== ========== ========= ========= ============== METLIFE GROWTH STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 13.206947 13.013546 2,173,055.5702 01/01/2008 to 12/31/2008 13.013546 7.936885 2,116,008.2824 ============= ==== ========== ========= ========= ============== METLIFE MODERATE STRATEGY SUB-ACCOUNT (CLASS B) 04/30/2007 to 12/31/2007 11.934914 11.982205 1,549,580.3515 01/01/2008 to 12/31/2008 11.982205 8.654300 1,679,198.1799 ============= ==== ========== ========= ========= ==============
A-3 APPENDIX B PARTICIPATING INVESTMENT PORTFOLIOS Below are the advisers and subadvisers and investment objectives of each investment portfolio available under the contract. The fund prospectuses contain more complete information, including a description of the investment objectives, policies, restrictions and risks. THERE CAN BE NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE ACHIEVED. MET INVESTORS SERIES TRUST - METLIFE ASSET ALLOCATION PROGRAM (CLASS B) Met Investors Series Trust is managed by MetLife Advisers, LLC, which is an affiliate of MetLife Investors USA. (Met Investors Advisory, LLC, the former investment manager of Met Investors Series Trust, merged into MetLife Advisers, LLC on May 1, 2009.) Met Investors Series Trust is a mutual fund with multiple portfolios. The following Class B portfolios are available under the contract: METLIFE DEFENSIVE STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The MetLife Defensive Strategy Portfolio seeks to provide a high level of current income with growth of capital, a secondary objective. METLIFE MODERATE STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The MetLife Moderate Strategy Portfolio seeks to provide a high total return in the form of income and growth of capital, with a greater emphasis on income. METLIFE BALANCED STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The MetLife Balanced Strategy Portfolio seeks to provide a balance between a high level of current income and growth of capital with a greater emphasis on growth of capital. METLIFE GROWTH STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The MetLife Growth Strategy Portfolio seeks to provide growth of capital. METLIFE AGGRESSIVE STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The MetLife Aggressive Strategy Portfolio seeks to provide growth of capital. MET INVESTORS SERIES TRUST - AMERICAN FUNDS ASSET ALLOCATION PORTFOLIOS (CLASS C) In addition to the Met Investors Series Trust portfolios listed above, the following Class C portfolios managed by MetLife Advisers, LLC are also available under the contract: AMERICAN FUNDS MODERATE ALLOCATION PORTFOLIO INVESTMENT OBJECTIVE: The American Funds Moderate Allocation Portfolio seeks a high total return in the form of income and growth of capital, with a greater emphasis on income. AMERICAN FUNDS BALANCED ALLOCATION PORTFOLIO INVESTMENT OBJECTIVE: The American Funds Balanced Allocation Portfolio seeks a balance between a high level of current income and growth of capital with a greater emphasis on growth of capital. AMERICAN FUNDS GROWTH ALLOCATION PORTFOLIO INVESTMENT OBJECTIVE: The American Funds Growth Allocation Portfolio seeks growth of capital. MET INVESTORS SERIES TRUST - FRANKLIN TEMPLETON ASSET ALLOCATION PORTFOLIO (CLASS B) In addition to the Met Investors Series Trust portfolios listed above, the following Class B portfolio managed by MetLife Advisers, LLC is also available under the contract: MET/FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO INVESTMENT OBJECTIVE: The Met/Franklin Templeton Founding Strategy Portfolio primarily seeks capital appreciation and secondarily seeks income. B-1 MET INVESTORS SERIES TRUST - SSGA ETF PORTFOLIOS (CLASS B) In addition to the Met Investors Series Trust portfolios listed above, the following Class B portfolios managed by MetLife Advisers, LLC are also available under the contract: SSGA GROWTH AND INCOME ETF PORTFOLIO+ SUBADVISER: SSgA Funds Management, Inc. INVESTMENT OBJECTIVE: The SSgA Growth and Income ETF Portfolio seeks growth of capital and income. SSGA GROWTH ETF PORTFOLIO+ SUBADVISER: SSgA Funds Management, Inc. INVESTMENT OBJECTIVE: The SSgA Growth ETF Portfolio seeks growth of capital. +These portfolios are not available for investment prior to May 4, 2009. METROPOLITAN SERIES FUND, INC. (CLASS B) Metropolitan Series Fund, Inc. is a mutual fund with multiple portfolios. MetLife Advisers, LLC, an affiliate of MetLife Investors USA, is the investment adviser to the portfolios. The following Class B portfolio is available under the contract: BLACKROCK MONEY MARKET PORTFOLIO SUBADVISER: BlackRock Advisors, LLC INVESTMENT OBJECTIVE: The BlackRock Money Market Portfolio seeks a high level of current income consistent with preservation of capital. An investment in the BlackRock Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Company or any other government agency. Although the BlackRock Money Market Portfolio seeks to preserve the value of your investment at $100 per share, it is possible to lose money by investing in the BlackRock Money Market Portfolio. During extended periods of low interest rates, the yields of the BlackRock Money Market Portfolio may become extremely low and possibly negative. B-2 APPENDIX C GUARANTEED MINIMUM INCOME BENEFIT EXAMPLES The purpose of these examples is to illustrate the operation of the Guaranteed Minimum Income Benefit. (Unless otherwise noted, these examples are for the GMIB Plus II rider.) The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including investment allocations and the investment experience of the investment portfolios chosen. THE EXAMPLES DO NOT REFLECT THE DEDUCTION OF FEES AND CHARGES, WITHDRAWAL CHARGES OR INCOME TAXES AND TAX PENALITIES. (1) WITHDRAWAL ADJUSTMENTS TO ANNUAL INCREASE AMOUNT Dollar-for-dollar adjustment when withdrawal is less than or equal to 5% of --------------------------------------------------------------------------- the Annual Increase Amount from the prior contract anniversary -------------------------------------------------------------- Assume the initial purchase payment is $100,000 and the GMIB Plus II is selected. Assume that during the first contract year, $5,000 is withdrawn. Because the withdrawal is less than or equal to 5% of the Annual Increase Amount from the prior contract anniversary, the Annual Increase Amount is reduced by the withdrawal on a dollar-for-dollar basis to $100,000 ($100,000 increased by 5% per year, compounded annually, less $5,000 = $100,000). Assuming no other purchase payments or withdrawals are made before the second contract anniversary, the Annual Increase Amount at the second contract anniversary will be $105,000 ($100,000 increased by 5% per year, compounded annually). Proportionate adjustment when withdrawal is greater than 5% of the Annual ------------------------------------------------------------------------- Increase Amount from the prior contract anniversary --------------------------------------------------- Assume the initial purchase payment is $100,000 and the GMIB Plus II is selected. Assume the account value at the first contract anniversary is $100,000. The Annual Increase Amount at the first contract anniversary will be $105,000 ($100,000 increased by 5% per year, compounded annually). Assume that on the first contract anniversary, $10,000 is withdrawn (leaving an account balance of $90,000). Because the withdrawal is greater than 5% of the Annual Increase Amount from the prior contract anniversary, the Annual Increase Amount is reduced by the value of the Annual Increase Amount immediately prior to the withdrawal ($105,000) multiplied by the percentage reduction in the account value attributed to that entire withdrawal: 10% (the $10,000 withdrawal reduced the $100,000 account value by 10%). Therefore, the new Annual Increase Amount is $94,500 ($105,000 x 10% = $10,500; $105,000 - $10,500 = $94,500). (If multiple withdrawals are made during a contract year - for example, two $5,000 withdrawals instead of one $10,000 withdrawal - and those withdrawals total more than 5% of the Annual Increase Amount from the prior contract anniversary, the Annual Increase Amount is reduced proportionately by each of the withdrawals made during that contract year and there will be no dollar-for-dollar withdrawal adjustment for the contract year.) Assuming no other purchase payments or withdrawals are made before the second contract anniversary, the Annual Increase Amount at the second contract anniversary will be $99,225 ($94,500 increased by 5% per year, compounded annually). (Based on the date a contract was issued with the GMIB Plus II rider or the GMIB Plus I rider, the annual increase rate may be higher than 5%. See "Living Benefits - Guaranteed Income Benefits.") (2) THE 5% ANNUAL INCREASE AMOUNT Example ------- Assume the owner of the contract is a male, age 55 at issue, and he elects the GMIB Plus II rider. He makes an initial purchase payment of $100,000, and makes no additional purchase payments or partial withdrawals. On the contract issue date, the 5% Annual Increase Amount is equal to $100,000 (the initial purchase payment). The 5% Annual Increase Amount is calculated at each contract anniversary (through the contract anniversary prior to the owner's 91st birthday). At the tenth contract anniversary, when the owner is age 65, the 5% Annual Increase Amount is $162,889 ($100,000 increased by 5% per year, C-1 compounded annually). See section (3) below for an example of the calculation of the Highest Anniversary Value. Graphic Example: Determining a value upon which future income payments can -------------------------------------------------------------------------- be based -------- Assume that you make an initial purchase payment of $100,000. Prior to annuitization, your account value fluctuates above and below your initial purchase payment depending on the investment performance of the investment options you selected. Your purchase payments accumulate at the annual increase rate of 5%, until the contract anniversary on or immediately after the contract owner's 90th birthday. Your purchase payments are also adjusted for any withdrawals (including any applicable withdrawal charge) made during this period. The line (your purchase payments accumulated at 5% a year adjusted for withdrawals and charges "the 5% Annual Increase Amount") is the value upon which future income payments can be based. [GRAPHIC APPEARS HERE] Graphic Example: Determining your guaranteed lifetime income stream ------------------------------------------------------------------- Assume that you decide to annuitize your contract and begin taking annuity payments after 20 years. In this example, your 5% Annual Increase Amount is higher than the Highest Anniversary Value and will produce a higher income benefit. Accordingly, the 5% Annual Increase Amount will be applied to the annuity pay-out rates in the Guaranteed Minimum Income Benefit Annuity Table to determine your lifetime annuity payments. THE INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE GUARANTEED MINIMUM INCOME BENEFIT PAYMENT AND THE CHARGE FOR THE BENEFIT. [GRAPHIC APPEARS HERE] (3) THE "HIGHEST ANNIVERSARY VALUE" ("HAV") Example ------- Assume, as in the example in section (2) above, the owner of the contract is a male, age 55 at issue, and he elects the GMIB Plus II rider. He makes an initial purchase payment of $100,000, and makes no additional purchase payments or partial withdrawals. On the contract issue date, the Highest Anniversary Value is equal to $100,000 (the initial purchase payment). Assume the account value on the first contract anniversary is $108,000 due to good market performance. Because the account value is greater than the Highest Anniversary Value ($100,000), the Highest Anniversary Value is set equal to the account value ($108,000). Assume the account value on the second contract anniversary is $102,000 due to poor market performance. Because the account value is less than the Highest Anniversary Value ($108,000), the Highest Anniversary Value remains $108,000. Assume this process is repeated on each contract anniversary until the tenth contract anniversary, when the account value is $155,000 and the Highest Anniversary Value is $150,000. The Highest Anniversary Value is set equal to the account value ($155,000). See section (4) below for an example of the exercise of the GMIB Plus II rider. Graphic Example: Determining a value upon which future income payments can -------------------------------------------------------------------------- be based -------- Prior to annuitization, the Highest Anniversary Value begins to lock in growth. The Highest Anniversary Value is adjusted upward each contract anniversary if the account value at that time is greater than the amount of the current Highest Anniversary Value. Upward adjustments will continue until the contract anniversary immediately prior to the contract owner's 81st birthday. The Highest Anniversary Value also is C-2 adjusted for any withdrawals taken (including any applicable withdrawal charge) or any additional payments made. The Highest Anniversary Value line is the value upon which future income payments can be based. [GRAPHIC APPEARS HERE] Graphic Example: Determining your guaranteed lifetime income stream ------------------------------------------------------------------- Assume that you decide to annuitize your contract and begin taking annuity payments after 20 years. In this example, the Highest Anniversary Value is higher than the account value. Accordingly, the Highest Anniversary Value will be applied to the annuity payout rates in the Guaranteed Minimum Income Benefit Annuity Table to determine your lifetime annuity payments. THE INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE GUARANTEED MINIMUM INCOME BENEFIT PAYMENT AND THE CHARGE FOR THE BENEFIT. [GRAPHIC APPEARS HERE] (4) PUTTING IT ALL TOGETHER Example ------- Continuing the examples in sections (2) and (3) above, assume the owner chooses to exercise the GMIB Plus II rider at the tenth contract anniversary and elects a life annuity with 5 years of annuity payments guaranteed. Because the 5% Annual Increase Amount ($162,889) is greater than the Highest Anniversary Value ($155,000), the 5% Annual Increase Amount ($162,889) is used as the income base. The income base of $162,889 is applied to the GMIB Annuity Table. This yields annuity payments of $591 per month for life, with a minimum of 5 years guaranteed. (If the same owner were instead age 70, the income base of $162,889 would yield monthly payments of $673; if the owner were age 75, the income base of $162,889 would yield monthly payments of $785.) The above example does not take into account the impact of premium and other taxes. As with other pay-out types, the amount you receive as an income payment depends on the income type you select, your age, and (where permitted by law) your sex. THE INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE GUARANTEED MINIMUM INCOME BENEFIT PAYMENT AND THE CHARGE FOR THE BENEFIT. Graphic Example --------------- Prior to annuitization, the two calculations (the 5% Annual Increase Amount and the Highest Anniversary Value) work together to protect your future income. Upon annuitization of the contract, you will receive income payments for life and the income bases and the account value will cease to exist. Also, the GMIB Plus II may only be exercised no later than the contract anniversary on or following the contract owner's 90th birthday, after a 10 year waiting period, and then only within a 30 day period following the contract anniversary. C-3 [GRAPHIC APPEARS HERE] With the Guaranteed Minimum Income Benefit, the income base is applied to special, conservative Guaranteed Minimum Income Benefit annuity purchase factors, which are guaranteed at the time the contract is issued. However, if then-current annuity purchase factors applied to the account value would produce a greater amount of income, then you will receive the greater amount. In other words, when you annuitize your contract you will receive whatever amount produces the greatest income payment. Therefore, if your account value would provide greater income than would the amount provided under the Guaranteed Minimum Income Benefit, you will have paid for the Guaranteed Minimum Income Benefit although it was never used. [GRAPHIC APPEARS HERE] (5) THE GUARANTEED PRINCIPAL OPTION - GMIB PLUS II Assume your initial purchase payment is $100,000 and no withdrawals are taken. Assume that the account value at the 10th contract anniversary is $50,000 due to poor market performance, and you exercise the Guaranteed Principal Option at this time. The effects of exercising the Guaranteed Principal Option are: 1) A Guaranteed Principal Adjustment of $100,000 - $50,000 = $50,000 is added to the account value 30 days after the 10th contract anniversary bringing the account value back up to $100,000. 2) The GMIB Plus II rider and rider fee terminates as of the date that the adjustment is made to the account value; the variable annuity contract continues. 3) GMIB Plus allocation and transfer restrictions terminate as of the date that the adjustment is made to the account value. [GRAPHIC APPEARS HERE] *Withdrawals reduce the original purchase payment (I.E. those payments credited within 120 days of contract issue date) proportionately and therefore, may have a significant impact on the amount of the Guaranteed Principal Adjustment. (6) THE OPTIONAL RESET: AUTOMATIC ANNUAL STEP-UP - GMIB PLUS II Assume your initial investment is $100,000 and no withdrawals are taken. The 5% Annual Increase Amount increases to $105,000 on the first anniversary ($100,000 increased by 5% per year, compounded annually). Assume your account value at the first contract anniversary is $110,000 due to good market performance, and you elected Optional Resets to occur under the Automatic Annual Step-Up feature prior to the first contract anniversary. Because your account value is higher than your 5% Annual Increase Amount, an Optional Reset will automatically occur. The effect of the Optional Reset is: (1) The 5% Annual Increase Amount automatically resets from $105,000 to $110,000; C-4 (2) The 10-year waiting period to annuitize the contract under the GMIB Plus II is reset to 10 years from the first contract anniversary; (3) The GMIB Plus II rider charge is reset to the fee we charge new contract owners for the same GMIB Plus II rider at that time; and (4) The Guaranteed Principal Option can still be elected on the 10th contract anniversary. The 5% Annual Increase Amount increases to $115,500 on the second anniversary ($110,000 increased by 5% per year, compounded annually). Assume your account value at the second contract anniversary is $120,000 due to good market performance, and you have not discontinued the Automatic Annual Step-Up feature. Because your account value is higher than your 5% Annual Increase Amount, an Optional Reset will automatically occur. The effect of the Optional Reset is: (1) The 5% Annual Increase Amount automatically resets from $115,500 to $120,000; (2) The 10-year waiting period to annuitize the contract under the GMIB Plus II is reset to 10 years from the second contract anniversary; (3) The GMIB Plus II rider charge is reset to the fee we charge new contract owners for the same GMIB Plus II rider at that time; and (4) The Guaranteed Principal Option can still be elected on the 10th contract anniversary. Assume your account value increases by $10,000 at each contract anniversary in years three through seven. At each contract anniversary, your account value would exceed the 5% Annual Increase Amount and an Optional Reset would automatically occur (provided you had not discontinued the Automatic Annual Step-Up feature, and other requirements were met). The effect of each Optional Reset is: (1) The 5% Annual Increase Amount automatically resets to the higher account value; (2) The 10-year waiting period to annuitize the contract under the GMIB Plus II is reset to 10 years from the date of the Optional Reset; (3) The GMIB Plus II rider charge is reset to the fee we charge new contract owners for the same GMIB Plus II rider at that time; and (4) The Guaranteed Principal Option can still be elected on the 10th contract anniversary. After the seventh contract anniversary, the initial Automatic Annual Step-Up election expires. Assume you do not make a new election of the Automatic Annual Step-Up. The 5% Annual Increase Amount increases to $178,500 on the eighth anniversary ($170,000 increased by 5% per year, compounded annually). Assume your account value at the eighth contract anniversary is $160,000 due to poor market performance. An Optional Reset is NOT permitted because your account value is lower than your 5% Annual Increase Amount. However, because the Optional Reset has locked-in previous gains, the 5% Annual Increase Amount remains at $178,500 despite poor market performance, and, provided the rider continues in effect, will continue to grow at 5% annually (subject to adjustments for additional purchase payments and/or withdrawals) through the contract anniversary on or after your 90th birthday. Also, please note: (1) The 10-year waiting period to annuitize the contract under the GMIB Plus II remains at the 17th contract anniversary (10 years from the date of the last Optional Reset); (2) The GMIB Plus II rider charge remains at its current level; and (3) The Guaranteed Principal Option can still be elected on the 10th contract anniversary. [GRAPHIC APPEARS HERE] C-5 APPENDIX D GUARANTEED WITHDRAWAL BENEFIT EXAMPLES The purpose of these examples is to illustrate the operation of the Lifetime Withdrawal Guarantee. The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including investment allocations and the investment experience of the investment portfolios chosen. THE EXAMPLES DO NOT REFLECT THE DEDUCTION OF FEES AND CHARGES, WITHDRAWAL CHARGES OR INCOME TAXES AND TAX PENALTIES. The Lifetime Withdrawal Guarantee does not establish or guarantee an account value or minimum return for any investment portfolio. The Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount cannot be taken as a lump sum. A. Lifetime Withdrawal Guarantee 1. When Withdrawals Do Not Exceed the Annual Benefit Payment Assume that a contract had an initial purchase payment of $100,000. The initial account value would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 x 5%). Assume that $5,000 is withdrawn each year, beginning before the contract owner attains age 59 1/2. The Remaining Guaranteed Withdrawal Amount is reduced by $5,000 each year as withdrawals are taken (the Total Guaranteed Withdrawal Amount is not reduced by these withdrawals). The Annual Benefit Payment of $5,000 is guaranteed to be received until the Remaining Guaranteed Withdrawal Amount is depleted, even if the account value is reduced to zero. If the first withdrawal is taken after age 59 1/2, then the Annual Benefit Payment of $5,000 is guaranteed to be received for the owner's lifetime, even if the Remaining Guaranteed Withdrawal Amount and the account value are reduced to zero. (Under the Lifetime Withdrawal Guarantee II rider, if the contract owner makes the first withdrawal at or after age 76, the Withdrawal Rate is 6% instead of 5% and the Annual Benefit Payment is $6,000.) [GRAPHIC APPEARS HERE]
Remaining Annual Guaranteed Guaranteed Benefit Cumulative Account Withdrawal Withdrawal Payment Withdrawals Value Amount Amount $5,000 $5,000 $100,000 $100,000 $100,000 5,000 10,000 90,250 95,000 100,000 5,000 15,000 80,987.5 90,000 100,000 5,000 20,000 72,188.13 85,000 100,000 5,000 25,000 63,828.72 80,000 100,000 5,000 30,000 55,887.28 75,000 100,000 5,000 35,000 48,342.92 70,000 100,000 5,000 40,000 41,175.77 65,000 100,000 5,000 45,000 34,366.98 60,000 100,000 5,000 50,000 27,898.63 55,000 100,000 5,000 55,000 21,753.7 50,000 100,000 5,000 60,000 15,916.02 45,000 100,000 5,000 65,000 10,370.22 40,000 100,000 5,000 70,000 5,101.706 35,000 100,000 5,000 75,000 96.62093 30,000 100,000 5,000 80,000 0 0 100,000 5,000 85,000 0 0 100,000 5,000 90,000 0 0 100,000 5,000 95,000 0 0 100,000 5,000 100,000 0 0 100,000
2. When Withdrawals Do Exceed the Annual Benefit Payment a. Lifetime Withdrawal Guarantee II - Proportionate Reduction Assume that a contract with the Lifetime Withdrawal Guarantee II rider had an initial purchase payment of $100,000. The initial account value would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 x 5%). (If the contract owner makes the first withdrawal on or after the date he or she reaches age 76, the Withdrawal Rate is 6% instead of 5% and the initial Annual Benefit Payment would be $6,000. For the purposes of this example, assume the contract owner makes the first withdrawal before he or she reaches age 76 and the Withdrawal Rate is therefore 5%.) D-1 Assume that the Remaining Guaranteed Withdrawal Amount is reduced to $95,000 due to a withdrawal of $5,000 in the first year. Assume the account value was further reduced to $80,000 at year two due to poor market performance. If you withdrew $10,000 at this time, your account value would be reduced to $80,000 - $10,000 = $70,000. Since the withdrawal of $10,000 exceeded the Annual Benefit Payment of $5,000, there would be a proportional reduction to the Remaining Guaranteed Withdrawal Amount and the Total Guaranteed Withdrawal Amount. The proportional reduction is equal to the withdrawal ($10,000) divided by the account value before the withdrawal ($80,000), or 12.5%. The Remaining Guaranteed Withdrawal Amount after the withdrawal would be $83,125 ($95,000 reduced by 12.5%). This new Remaining Guaranteed Withdrawal Amount of $83,125 would now be the amount guaranteed to be available to be withdrawn over time. The Total Guaranteed Withdrawal Amount would be reduced to $87,500 ($100,000 reduced by 12.5%). The Annual Benefit Payment would be set equal to 5% x $87,500 = $4,375. b. Lifetime Withdrawal Guarantee I - Reduction to Account Value Assume that a contract with the Lifetime Withdrawal Guarantee I rider had an initial purchase payment of $100,000. The initial account value would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 x 5%). Assume that the Remaining Guaranteed Withdrawal Amount is reduced to $95,000 due to a withdrawal of $5,000 in the first year. Assume the account value was further reduced to $75,000 at year two due to poor market performance. If you withdrew $10,000 at this time, your account value would be reduced to $75,000 - $10,000 = $65,000. Your Remaining Guaranteed Withdrawal Amount would be reduced to $95,000 - $10,000 = $85,000. Since the withdrawal of $10,000 exceeded the Annual Benefit Payment of $5,000 and the resulting Remaining Guaranteed Withdrawal Amount would be greater than the resulting account value, there would be an additional reduction to the Remaining Guaranteed Withdrawal Amount. The Remaining Guaranteed Withdrawal Amount after the withdrawal would be set equal to the account value after the withdrawal ($65,000). This new Remaining Guaranteed Withdrawal Amount of $65,000 would now be the amount guaranteed to be available to be withdrawn over time. The Total Guaranteed Withdrawal Amount would also be reduced to $65,000. The Annual Benefit Payment would be set equal to 5% x $65,000 = $3,250. B. Compounding Income Amount Assume that a contract with the Lifetime Withdrawal Guarantee II rider had an initial purchase payment of $100,000. The initial Remaining Guaranteed Withdrawal Amount would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, and the Annual Benefit Payment would be $5,000 ($100,000 x 5%). (If the contract owner makes the first withdrawal at or after age 76, the Withdrawal Rate is 6% instead of 5% and the Annual Benefit Payment would be $6,000. For the purposes of this example, assume the contract owner makes the first withdrawal before he or she reaches age 76 and the Withdrawal Rate is therefore 5%.) The Total Guaranteed Withdrawal Amount will increase by 7.25% of the previous year's Total Guaranteed Withdrawal Amount until the earlier of the second withdrawal or the 10th contract anniversary. The Annual Benefit Payment will be recalculated as 5% of the new Total Guaranteed Withdrawal Amount. If the second withdrawal is taken in the first contract year, then there would be no increase: the Total Guaranteed Withdrawal Amount would remain at $100,000 and the Annual Benefit Payment will remain at $5,000 ($100,000 x 5%). If the second withdrawal is taken in the second contract year, then the Total Guaranteed Withdrawal Amount would increase to $107,250 ($100,000 x 107.25%), and the Annual Benefit Payment would increase to $5,362 ($107,250 x 5%). If the second withdrawal is taken in the third contract year, then the Total Guaranteed Withdrawal Amount would increase to $115,025 ($107,250 x 107.25%), and the Annual Benefit Payment would increase to $5,751 ($115,025 x 5%). D-2 If the second withdrawal is taken after the 10th contract year, then the Total Guaranteed Withdrawal Amount would increase to $201,360 (the initial $100,000, increased by 7.25% per year, compounded annually for 10 years), and the Annual Benefit Payment would increase to $10,068 ($201,360 x 5%). (In contrast to the Lifetime Withdrawal Guarantee II rider, the Lifetime Withdrawal Guarantee I rider has a 5% Compounding Income Amount and the Total -- Guaranteed Withdrawal Amount is increased by 5% on each contract anniversary until the earlier of the date of the first withdrawal or the tenth contract ----- anniversary.) [GRAPHIC APPEARS HERE]
Year Annual of Second Benefit Withdrawal Payment 1 $5,000 2 5,363 3 5,751 4 6,168 5 6,615 6 7,095 7 7,609 8 8,161 9 8,753 10 9,387 11 10,068
C. Lifetime Withdrawal Guarantee II - Automatic Annual Step-Ups and 7.25% Compounding Income Amount (No Withdrawals) Assume that a contract with the Lifetime Withdrawal Guarantee II rider had an initial purchase payment of $100,000. Assume that no withdrawals are taken. At the first contract anniversary, assuming that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $107,250 ($100,000 increased by 7.25%, compounded annually). Assume the account value has increased to $110,000 at the first contract anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $107,250 to $110,000 and reset the Annual Benefit Payment to $5,500 ($110,000 x 5%). At the second contract anniversary, assuming that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $117,975 ($110,000 increased by 7.25%, compounded annually). Assume the account value has increased to $120,000 at the second contract anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $117,975 to $120,000 and reset the Annual Benefit Payment to $6,000 ($120,000 x 5%). Assuming that no withdrawals are taken, each year the Total Guaranteed Withdrawal Amount would increase by 7.25%, compounded annually, from the second contract anniversary through the ninth contract anniversary, and at that point would be equal to $195,867. Assume that during these contract years the account value does not exceed the Total Guaranteed Withdrawal Amount due to poor market performance. Assume the account value at the ninth contract anniversary has D-3 increased to $200,000 due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $195,867 to $200,000 and reset the Annual Benefit Payment to $10,000 ($200,000 x 5%). At the 10th contract anniversary, assuming that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $214,500 ($200,000 increased by 7.25%, compounded annually). Assume the account value is less than $214,500. There is no Automatic Annual Step-Up since the account value is below the Total Guaranteed Withdrawal Amount; however, due to the 7.25% increase in the Total Guaranteed Withdrawal Amount, the Annual Benefit Payment is increased to $10,725 ($214,500 x 5%). [GRAPHIC APPEARS HERE] D-4 APPENDIX E DEATH BENEFIT EXAMPLES The purpose of these examples is to illustrate the operation of the Principal Protection death benefit and the Enhanced Death Benefit. The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including the investment allocation made by a contract owner and the investment experience of the investment portfolios chosen. THE EXAMPLES DO NOT REFLECT THE DEDUCTION OF FEES AND CHARGES, WITHDRAWAL CHARGES OR INCOME TAXES AND TAX PENALTIES. PRINCIPAL PROTECTION DEATH BENEFIT The purpose of this example is to show how partial withdrawals reduce the Principal Protection death benefit proportionately by the percentage reduction in account value attributable to each partial withdrawal.
DATE AMOUNT ------------------------------ ------------------------- A Initial Purchase Payment 10/1/2009 $100,000 B Account Value 10/1/2010 $104,000 (First Contract Anniversary) C Death Benefit As of 10/1/2010 $104,000 (= greater of A and B) D Account Value 10/1/2011 $ 90,000 (Second Contract Anniversary) E Death Benefit 10/1/2011 $100,000 (= greater of A and D) F Withdrawal 10/2/2011 $ 9,000 G Percentage Reduction in Account 10/2/2011 10% Value (= F/D) H Account Value after Withdrawal 10/2/2011 $ 81,000 (= D-F) I Purchase Payments reduced for As of 10/2/2011 $ 90,000 Withdrawal (= A-(A x G)) J Death Benefit 10/2/2011 $ 90,000 (= greater of H and I)
Notes to Example ---------------- Purchaser is age 60 at issue. The account values on 10/1/11 and 10/2/11 are assumed to be equal prior to the withdrawal. E-1 ENHANCED DEATH BENEFIT The purpose of these examples is to illustrate the operation of the death benefit base under the Enhanced Death Benefit rider. (1) WITHDRAWAL ADJUSTMENTS TO ANNUAL INCREASE AMOUNT Dollar-for-dollar adjustment when withdrawal is less than or equal to 5% of --------------------------------------------------------------------------- the Annual Increase Amount from the prior contract anniversary -------------------------------------------------------------- Assume the initial purchase payment is $100,000 and the Enhanced Death Benefit is selected. Assume that during the first contract year, $5,000 is withdrawn. Because the withdrawal is less than or equal to 5% of the Annual Increase Amount from the prior contract anniversary, the Annual Increase Amount is reduced by the withdrawal on a dollar-for-dollar basis to $100,000 ($100,000 increased by 5% per year, compounded annually, less $5,000 = $100,000). Assuming no other purchase payments or withdrawals are made before the second contract anniversary, the Annual Increase Amount at the second contract anniversary will be $105,000 ($100,000 increased by 5% per year, compounded annually). Proportionate adjustment when withdrawal is greater than 5% of the Annual ------------------------------------------------------------------------- Increase Amount from the prior contract anniversary --------------------------------------------------- Assume the initial purchase payment is $100,000 and the Enhanced Death Benefit is selected. Assume the account value at the first contract anniversary is $100,000. The Annual Increase Amount at the first contract anniversary will be $105,000 ($100,000 increased by 5% per year, compounded annually). Assume that on the first contract anniversary, $10,000 is withdrawn (leaving an account balance of $90,000). Because the withdrawal is greater than 5% of the Annual Increase Amount from the prior contract anniversary, the Annual Increase Amount is reduced by the value of the Annual Increase Amount immediately prior to the withdrawal ($105,000) multiplied by the percentage reduction in the account value attributed to that withdrawal (10%). Therefore, the new Annual Increase Amount is $94,500 ($105,000 x 10% = $10,500; $105,000 - $10,500 = $94,500). Assuming no other purchase payments or withdrawals are made before the second contract anniversary, the Annual Increase Amount at the second contract anniversary will be $99,225 ($94,500 increased by 5% per year, compounded annually). (For contracts issued with the Enhanced Death Benefit rider based on applications and necessary information received in good order at our Annuity Service Center on or before May 1, 2009, the annual increase rate is 6% per year.) (2) THE 5% ANNUAL INCREASE AMOUNT Example ------- Assume the contract owner is a male, age 55 at issue, and he elects the Enhanced Death Benefit rider. He makes an initial purchase payment of $100,000, and makes no additional purchase payments or partial withdrawals. On the contract issue date, the 5% Annual Increase Amount is equal to $100,000 (the initial purchase payment). The 5% Annual Increase Amount is calculated at each contract anniversary (through the contract anniversary on or following the contract owner's 90th birthday). At the tenth contract anniversary, when the contract owner is age 65, the 5% Annual Increase Amount is $162,889 ($100,000 increased by 5% per year, compounded annually). See section (3) below for an example of the calculation of the Highest Anniversary Value. Determining a death benefit based on the Annual Increase Amount --------------------------------------------------------------- Assume that you make an initial purchase payment of $100,000. Prior to annuitization, your account value fluctuates above and below your initial purchase payment depending on the investment performance of the subaccounts you selected. The 5% Annual Increase Amount, however, accumulates an amount equal to your purchase payments at the Annual Increase Rate of 5% per year, until the contract anniversary on or following the contract owner's 90th birthday. The 5% Annual Increase Amount is also adjusted for any withdrawals (including any applicable withdrawal charge) made during this period. The 5% Annual Increase Amount is the value upon which a future death benefit amount can be based (if it is greater than the Highest Anniversary Value and account value on the date the death benefit amount is determined). E-2 (3) THE HIGHEST ANNIVERSARY VALUE (HAV) Example ------- Assume, as in the example in section (2) above, the contract owner is a male, age 55 at issue, and he elects the Enhanced Death Benefit rider. He makes an initial purchase payment of $100,000, and makes no additional purchase payments or partial withdrawals. On the contract issue date, the Highest Anniversary Value is equal to $100,000 (the initial purchase payment). Assume the account value on the first contract anniversary is $108,000 due to good market performance. Because the account value is greater than the Highest Anniversary Value ($100,000), the Highest Anniversary Value is set equal to the account value ($108,000). Assume the account value on the second contract anniversary is $102,000 due to poor market performance. Because the account value is less than the Highest Anniversary Value ($108,000), the Highest Anniversary Value remains $108,000. Assume this process is repeated on each contract anniversary until the tenth contract anniversary, when the account value is $155,000 and the Highest Anniversary Value is $150,000. The Highest Anniversary Value is set equal to the account value ($155,000). Determining a death benefit based on the Highest Anniversary Value ------------------------------------------------------------------ Prior to annuitization, the Highest Anniversary Value begins to lock in growth. The Highest Anniversary Value is adjusted upward each contract anniversary if the account value at that time is greater than the amount of the current Highest Anniversary Value. Upward adjustments will continue until the contract anniversary immediately prior to the contract owner's 81st birthday. The Highest Anniversary Value also is adjusted for any withdrawals taken (including any applicable withdrawal charge) or any additional payments made. The Highest Anniversary Value is the value upon which a future death benefit amount can be based (if it is greater than the Annual Increase Amount and account value on the date the death benefit amount is determined). (4) PUTTING IT ALL TOGETHER Example ------- Continuing the examples in sections (2) and (3) above, assume the contract owner dies after the tenth contract anniversary but prior to the eleventh contract anniversary, and on the date the death benefit amount is determined, the account value is $150,000 due to poor market performance. Because the 5% Annual Increase Amount ($162,889) is greater than the Highest Anniversary Value ($155,000), the 5% Annual Increase Amount ($162,889) is used as the death benefit base. Because the death benefit base ($162,889) is greater than the account value ($150,000), the death benefit base will be the death benefit amount. The above example does not take into account the impact of premium and other taxes. THE DEATH BENEFIT BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE DEATH BENEFIT AMOUNT AND THE CHARGE FOR THE BENEFIT. (5) THE OPTIONAL STEP-UP Assume your initial purchase payment is $100,000 and no withdrawals are taken. The 5% Annual Increase Amount increases to $105,000 on the first anniversary ($100,000 increased by 5% per year, compounded annually). Assume your account value at the first contract anniversary is $110,000 due to good market performance, and you elect an Optional Step-Up. The effect of the Optional Step-Up election is: (1) The 5% Annual Increase Amount resets from $105,000 to $110,000; and (2) The Enhanced Death Benefit rider charge is reset to the fee we charge new contract owners for the Enhanced Death Benefit at that time. E-3 The 5% Annual Increase Amount increases to $115,500 on the second anniversary ($110,000 increased by 5% per year, compounded annually). Assume your account value at the second contract anniversary is $112,000 due to poor market performance. You may NOT elect an Optional Step-Up at this time, because the account value is less than the 5% Annual Increase Amount (6) THE OPTIONAL STEP-UP: AUTOMATIC ANNUAL STEP-UP Assume your initial purchase payment is $100,000 and no withdrawals are taken. The 5% Annual Increase Amount increases to $105,000 on the first anniversary ($100,000 increased by 5% per year, compounded annually). Assume your account value at the first contract anniversary is $110,000 due to good market performance, and you elected Optional Step-Ups to occur under the Automatic Annual Step-Up feature prior to the first contract anniversary. Because your account value is higher than your 5% Annual Increase Amount, an Optional Step-Up will automatically occur. The effect of the Optional Step-Up is: (1) The 5% Annual Increase Amount automatically resets from $105,000 to $110,000; and (2) The Enhanced Death Benefit rider charge is reset to the fee we charge new contract owners for the Enhanced Death Benefit at that time. The 5% Annual Increase Amount increases to $115,500 on the second anniversary ($110,000 increased by 5% per year, compounded annually). Assume your account value at the second contract anniversary is $120,000 due to good market performance, and you have not discontinued the Automatic Annual Step-Up feature. Because your account value is higher than your 5% Annual Increase Amount, an Optional Step-Up will automatically occur. The effect of the Optional Step-Up is: (1) The 5% Annual Increase Amount automatically resets from $115,500 to $120,000; and (2) The Enhanced Death Benefit rider charge is reset to the fee we charge new contract owners for the Enhanced Death Benefit at that time. Assume your account value increases by $10,000 at each contract anniversary in years three through seven. At each contract anniversary, your account value would exceed the 5% Annual Increase Amount and an Optional Step-Up would automatically occur (provided you had not discontinued the Automatic Annual Step-Up feature, and other requirements were met). The effect of the Optional Step-Up is: (1) The 5% Annual Increase Amount automatically resets to the higher account value; and (2) The Enhanced Death Benefit rider charge is reset to the fee we charge new contract owners for the Enhanced Death Benefit at that time. After the seventh contract anniversary, the initial Automatic Annual Step-Up election expires. Assume you do not make a new election of the Automatic Annual Step-Up. The 5% Annual Increase Amount increases to $178,500 on the eighth anniversary ($170,000 increased by 5% per year, compounded annually). Assume your account value at the eighth contract anniversary is $160,000 due to poor market performance. An Optional Step-Up is NOT permitted because your account value is lower than your 5% Annual Increase Amount. However, because the Optional Step-Up has locked-in previous gains, the 5% Annual Increase Amount remains at $178,500 despite poor market performance, and, provided the rider continues in effect, will continue to grow at 5% annually (subject to adjustments for additional purchase payments and/or withdrawals) through the contract anniversary on or after your 90th birthday. Also, note the Enhanced Death Benefit rider charge remains at its current level. E-4 STATEMENT OF ADDITIONAL INFORMATION INDIVIDUAL VARIABLE DEFERRED ANNUITY CONTRACT ISSUED BY METLIFE INVESTORS USA SEPARATE ACCOUNT A AND METLIFE INVESTORS USA INSURANCE COMPANY SERIES S SERIES S - L SHARE OPTION THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS DATED MAY 1, 2009, FOR THE INDIVIDUAL VARIABLE DEFERRED ANNUITY CONTRACT THAT IS DESCRIBED HEREIN. THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS WRITE US AT: P.O. BOX 10366, DES MOINES, IOWA 50306-0366, OR CALL (800) 343-8496. THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED MAY 1, 2009. SAI-0509USAS TABLE OF CONTENTS PAGE COMPANY................................. 2 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.................................... 2 CUSTODIAN............................... 2 DISTRIBUTION............................ 2 Reduction or Elimination of the 3 Withdrawal Charge . CALCULATION OF PERFORMANCE INFORMATION 4 . Total Return....................... 4 Historical Unit Values............. 5 Reporting Agencies................. 5 ANNUITY PROVISIONS...................... 5 Variable Annuity................... 5 Fixed Annuity...................... 6 Mortality and Expense Guarantee.... 7 Legal or Regulatory Restrictions 7 on Transactions . TAX STATUS OF THE CONTRACTS............. 7 FINANCIAL STATEMENTS.................... 9
1 COMPANY MetLife Investors USA Insurance Company (MetLife Investors USA) is a stock life insurance company founded on September 13, 1960, and organized under the laws of the State of Delaware. Its principal executive offices are located at 5 Park Plaza, Suite 1900 Irvine, CA 92614. MetLife Investors USA is authorized to transact the business of life insurance, including annuities, and is currently licensed to do business in all states (except New York) and the District of Columbia. On October 11, 2006, MetLife Investors USA became a wholly-owned subsidiary of MetLife Insurance Company of Connecticut. We changed our name to MetLife Investors USA Insurance Company on February 12, 2001. On December 31, 2002, MetLife Investors USA became an indirect subsidiary of MetLife, Inc., a listed company on the New York Stock Exchange. MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and institutional customers. We are a member of the Insurance Marketplace Standards Association ("IMSA"). Companies that belong to IMSA subscribe to a set of ethical standards covering the various aspects of sales and service for individually sold life insurance and annuities. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of each of the Sub-Accounts of MetLife Investors USA Separate Account A included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, FL 33602-5827. The financial statements of MetLife Investors USA Insurance Company (the "Company") included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the fact that the Company changed its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008), and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, FL 33602-5827. CUSTODIAN MetLife Investors USA Insurance Company, 5 Park Plaza, Suite 1900, Irvine, CA 92614, is the custodian of the assets of the Separate Account. The custodian has custody of all cash of the Separate Account and handles the collection of proceeds of shares of the underlying funds bought and sold by the Separate Account. DISTRIBUTION Information about the distribution of the contracts is contained in the prospectus. (See "Other Information.") Additional information is provided below. The contracts are offered to the public on a continuous basis. We anticipate continuing to offer the contracts, but reserve the right to discontinue the offering. MetLife Investors Distribution Company ("Distributor") serves as principal underwriter for the contracts. Distributor is a Missouri corporation and its home office is located at 5 Park Plaza, Suite 1900, Irvine, CA 92614. In December 2004, MetLife Investors Distribution Company, which was then a Delaware corporation, was merged into General American Distributors, Inc., and the name of the surviving corporation was changed to MetLife Investors Distribution Company. Distributor is an indirect, wholly-owned subsidiary of MetLife, Inc. Distributor is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority ("FINRA"). Distributor is not a member of the Securities Investor Protection Corporation. Distributor has entered into selling agreements with other broker-dealers ("selling firms") and compensates them for their services. Distributor (including its predecessor) received sales compensation with respect to all contracts issued from the Separate Account in the following amounts during the periods indicated: 2
Aggregate Amount of Commissions Retained Aggregate Amount of by Distributor After Commissions Paid to Payments to Selling Fiscal year Distributor Firms ------------- --------------------- --------------------- 2008 $357,776,663 $0 2007 $383,205,713 $0 2006 $291,020,505 $0
Distributor passes through commissions to selling firms for their sales. In addition we pay compensation to Distributor to offset its expenses, including compensation costs, marketing and distribution expenses, advertising, wholesaling, printing, and other expenses of distributing the contracts. As noted in the prospectus, we and Distributor pay compensation to all selling firms in the form of commissions and certain types of non-cash compensation. We and 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 during 2008 ranged from $4,337 to $12,374,522. The amount of commissions paid to selected selling firms during 2008 ranged from $225,409 to $72, 582,379. The amount of total compensation (includes non-commission as well as commission amounts) paid to selected selling firms during 2008 ranged from $229,747 to $75,145,911. For purposes of calculating such amounts, the amount of compensation received by a selling firm may include additional compensation received by the firm for the sale of insurance products issued by our affiliates within the MetLife Investors group of companies (First MetLife Investors Insurance Company and MetLife Investors Insurance Company). The following list sets forth the names of selling firms that received additional compensation in 2008 in connection with the sale of our variable annuity contracts, variable life policies and other insurance products (including the contracts). The selling firms are listed in alphabetical order. Associated Securities Corp. Centaurus Financial, Inc. Citigroup Global Markets, Inc. Compass Brokerage, Inc. CUSO Financial Sevices, L.P. Ferris, Baker Watts, Inc. First Allied Securities, Inc. Founders Financial Securities, LLC GunnAllen Financial, Inc. H. D. Vest Investment Securities, Inc. Infinex Investments, Inc. InterSecurities, Inc. Investment Professionals, Inc. Janney Montgomery Scott, LLC J. P. Turner & Company Key Investment Services LLC Lincoln Financial Advisors Lincoln Financial Securities Corporation Lincoln Investment Planning, Inc. Merrill Lynch Insurance Group Morgan Keegan & Company, Inc. Morgan Stanley & Co., Inc. Mutual Service Corporation National Planning Holdings National Securities Corp NEXT Financial Group NFP Securities, Inc. Planning Corporation of America PNC Investments Primerica Securities America, Inc. Sigma Financial Corporation Tower Square Securities, Inc. Transamerica Financial Advisors, Inc. U.S. Bancorp Investments, Inc. United Planners Financial Services of America UVEST Financial Services Group, Inc. Valmark Securities Wall Street Financial Group Walnut Street Securities, Inc. Waterstone Financial Group, Inc. Woodbury Financial Services There are other broker dealers who receive compensation for servicing our contracts, and the account value of the contracts or the amount of added purchase payments received may be included in determining their additional compensation, if any. REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE The amount of the withdrawal charge on the contracts may be reduced or eliminated when sales of the contracts are made to individuals or to a group of individuals in a 3 manner that results in savings of sales expenses. The entitlement to reduction of the withdrawal charge will be determined by the Company after examination of all the relevant factors such as: 1. The size and type of group to which sales are to be made will be considered. Generally, the sales expenses for a larger group are less than for a smaller group because of the ability to implement large numbers of contracts with fewer sales contacts. 2. The total amount of purchase payments to be received will be considered. Per contract sales expenses are likely to be less on larger purchase payments than on smaller ones. 3. Any prior or existing relationship with the Company will be considered. Per contract sales expenses are likely to be less when there is a prior existing relationship because of the likelihood of implementing the contract with fewer sales contacts. 4. There may be other circumstances, of which the Company is not presently aware, which could result in reduced sales expenses. If, after consideration of the foregoing factors, the Company determines that there will be a reduction in sales expenses, the Company may provide for a reduction or elimination of the withdrawal charge. The withdrawal charge may be eliminated when the contracts are issued to an officer, director or employee of the Company or any of its affiliates. In no event will any reduction or elimination of the withdrawal charge be permitted where the reduction or elimination will be unfairly discriminatory to any person. In lieu of a withdrawal charge waiver, we may provide an account value credit. CALCULATION OF PERFORMANCE INFORMATION TOTAL RETURN From time to time, the Company may advertise performance data. Such data will show the percentage change in the value of an accumulation unit based on the performance of an investment portfolio over a period of time, usually a calendar year, determined by dividing the increase (decrease) in value for that unit by the accumulation unit value at the beginning of the period. Any such advertisement will include total return figures for the time periods indicated in the advertisement. Such total return figures will reflect the deduction of the separate account product charges, the expenses for the underlying investment portfolio being advertised and any applicable account fee, withdrawal charge, Enhanced Death Benefit rider charge, and/or GMIB or GWB rider charge. For purposes of calculating performance information, the Enhanced Death Benefit rider charge and the GWB rider charge are currently reflected as a percentage of account value. Premium taxes are not reflected. The deduction of such charges would reduce any percentage increase or make greater any percentage decrease. The hypothetical value of a contract purchased for the time periods described in the advertisement will be determined by using the actual accumulation unit values for an initial $1,000 purchase payment, and deducting any applicable account fee and any applicable sales charge to arrive at the ending hypothetical value. The average annual total return is then determined by computing the fixed interest rate that a $1,000 purchase payment would have to earn annually, compounded annually, to grow to the hypothetical value at the end of the time periods described. The formula used in these calculations is: P (1 + T)n = ERV Where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value at the end of the time periods used (or fractional portion thereof) of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods used. The Company may also advertise performance data which will be calculated in the same manner as described above but which will not reflect the deduction of a withdrawal charge, or applicable Enhanced Death Benefit, GMIB, or GWB rider charge. Premium taxes are not reflected. The deduction of such charges would reduce any percentage increase or make greater any percentage decrease. Owners should note that the investment results of each investment portfolio will fluctuate over time, and any presentation of the investment portfolio's total return for 4 any period should not be considered as a representation of what an investment may earn or what the total return may be in any future period. HISTORICAL UNIT VALUES The Company may also show historical accumulation unit values in certain advertisements containing illustrations. These illustrations will be based on actual accumulation unit values. In addition, the Company may distribute sales literature which compares the percentage change in accumulation unit values for any of the investment portfolios against established market indices such as the Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average or other management investment companies which have investment objectives similar to the investment portfolio being compared. The Standard & Poor's 500 Composite Stock Price Index is an unmanaged, unweighted average of 500 stocks, the majority of which are listed on the New York Stock Exchange. The Dow Jones Industrial Average is an unmanaged, weighted average of thirty blue chip industrial corporations listed on the New York Stock Exchange. Both the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average assume quarterly reinvestment of dividends. REPORTING AGENCIES The Company may also distribute sales literature which compares the performance of the accumulation unit values of the Contracts with the unit values of variable annuities issued by other insurance companies. Such information will be derived from the Lipper Variable Insurance Products Performance Analysis Service, the VARDS Report or from Morningstar. The Lipper Variable Insurance Products Performance Analysis Service is published by Lipper Analytical Services, Inc., a publisher of statistical data which currently tracks the performance of thousands of investment companies. The rankings compiled by Lipper may or may not reflect the deduction of asset-based insurance charges. The Company's sales literature utilizing these rankings will indicate whether or not such charges have been deducted. Where the charges have not been deducted, the sales literature will indicate that if the charges had been deducted, the ranking might have been lower. The VARDS Report is a monthly variable annuity industry analysis compiled by Variable Annuity Research & Data Service. The VARDS rankings may or may not reflect the deduction of asset-based insurance charges. In addition, VARDS prepares risk adjusted rankings, which consider the effects of market risk on total return performance. This type of ranking may address the question as to which funds provide the highest total return with the least amount of risk. Other ranking services may be used as sources of performance comparison, such as CDA/Weisenberger. Morningstar rates a variable annuity against its peers with similar investment objectives. Morningstar does not rate any variable annuity that has less than three years of performance data. ANNUITY PROVISIONS VARIABLE ANNUITY A variable annuity is an annuity with payments which: (1) are not predetermined as to dollar amount; and (2) will vary in amount in proportion to the amount that the net investment factor exceeds the assumed investment return selected. The Adjusted Contract Value (the account value, less any applicable premium taxes, account fee, and any prorated rider charge) will be applied to the applicable Annuity Table to determine the first annuity payment. The Adjusted Contract Value is determined on the annuity calculation date, which is a business day no more than five (5) business days before the annuity date. The dollar amount of the first variable annuity payment is determined as follows: The first variable annuity payment will be based upon the annuity option elected, the annuitant's age, the annuitant's sex (where permitted by law), and the appropriate variable annuity option table. Your annuity rates will not be less than those guaranteed in your contract at the time of purchase for the assumed investment return and annuity option elected. If, as of the annuity calculation date, the then current variable annuity option rates applicable to this class of contracts provide a first annuity payment greater than that which is guaranteed under the same annuity option under this contract, the greater payment will be made. The dollar amount of variable annuity payments after the first payment is determined as follows: 1. the dollar amount of the first variable annuity payment is divided by the value of an annuity unit for each applicable investment portfolio as of the annuity calculation date. This establishes the number of annuity units for each monthly payment. The number 5 of annuity units for each applicable investment portfolio remains fixed during the annuity period, unless you transfer values from the investment portfolio to another investment portfolio; 2. the fixed number of annuity units per payment in each investment portfolio is multiplied by the annuity unit value for that investment portfolio for the business day for which the annuity payment is being calculated. This result is the dollar amount of the payment for each applicable investment portfolio, less any account fee. The account fee will be deducted pro rata out of each annuity payment. The total dollar amount of each variable annuity payment is the sum of all investment portfolio variable annuity payments. ANNUITY UNIT - The initial annuity unit value for each investment portfolio of the Separate Account was set by us. The subsequent annuity unit value for each investment portfolio is determined by multiplying the annuity unit value for the immediately preceding business day by the net investment factor for the investment portfolio for the current business day and multiplying the result by a factor for each day since the last business day which represents the daily equivalent of the AIR you elected. (1) the dollar amount of the first annuity payment is divided by the value of an annuity unit as of the annuity date. This establishes the number of annuity units for each monthly payment. The number of annuity units remains fixed during the annuity payment period. (2) the fixed number of annuity units is multiplied by the annuity unit value for the last valuation period of the month preceding the month for which the payment is due. This result is the dollar amount of the payment. NET INVESTMENT FACTOR - The net investment factor for each investment portfolio is determined by dividing A by B and multiplying by (1-C) where: A is (i) the net asset value per share of the portfolio at the end of the current business day; plus (ii) any dividend or capital gains per share declared on behalf of such portfolio that has an ex-dividend date as of the current business day. B is the net asset value per share of the portfolio for the immediately preceding business day. C is (i) the separate account product charges and for each day since the last business day. The daily charge is equal to the annual separate account product charges divided by 365; plus (ii) a charge factor, if any, for any taxes or any tax reserve we have established as a result of the operation of the Separate Account. Transfers During the Annuity Phase: o You may not make a transfer from the fixed account to the Separate Account; o Transfers among the subaccounts will be made by converting the number of annuity units being transferred to the number of annuity units of the subaccount to which the transfer is made, so that the next annuity payment if it were made at that time would be the same amount that it would have been without the transfer. Thereafter, annuity payments will reflect changes in the value of the new annuity units; and o You may make a transfer from the variable annuity option to the fixed annuity option. The amount transferred from a subaccount of the Separate Account will be equal to the product of "(a)" multiplied by "(b)" multiplied by "(c)", where (a) is the number of annuity units representing your interest in the subaccount per annuity payment; (b) is the annuity unit value for the subaccount; and (c) is the present value of $1.00 per payment period for the remaining annuity benefit period based on the attained age of the annuitant at the time of transfer, calculated using the same actuarial basis as the variable annuity rates applied on the annuity date for the annuity option elected. Amounts transferred to the fixed annuity option will be applied under the annuity option elected at the attained age of the annuitant at the time of the transfer using the fixed annuity option table. If at the time of transfer, the then current fixed annuity option rates applicable to this class of contracts provide a greater payment, the greater payment will be made. All amounts and annuity unit values will be determined as of the end of the business day on which the Company receives a notice. FIXED ANNUITY A fixed annuity is a series of payments made during the annuity phase which are guaranteed as to dollar amount by the Company and do not vary with the investment 6 experience of the Separate Account. The Adjusted Contract Value on the day immediately preceding the annuity date will be used to determine the fixed annuity monthly payment. The monthly annuity payment will be based upon the annuity option elected, the annuitant's age, the annuitant's sex (where permitted by law), and the appropriate annuity option table. Your annuity rates will not be less than those guaranteed in your contract at the time of purchase. If, as of the annuity calculation date, the then current annuity option rates applicable to this class of contracts provide an annuity payment greater than that which is guaranteed under the same annuity option under this contract, the greater payment will be made. MORTALITY AND EXPENSE GUARANTEE The Company guarantees that the dollar amount of each annuity payment after the first annuity payment will not be affected by variations in mortality or expense experience. LEGAL OR REGULATORY RESTRICTIONS ON TRANSACTIONS If mandated under applicable law, the Company may be required to reject a premium payment. The Company may also be required to block a contract owner's account and thereby refuse to pay any request for transfers, withdrawals, surrenders, death benefits or continue making annuity payments until instructions are received from the appropriate regulator. TAX STATUS OF THE CONTRACTS Tax law imposes several requirements that variable annuities must satisfy in order to receive the tax treatment normally accorded to annuity contracts. DIVERSIFICATION. In order for your Non-Qualified Contract to be considered an annuity contract for federal income tax purposes, we must comply with certain diversification standards with respect to the investments underlying the contract. We believe that we satisfy and will continue to satisfy these diversification standards. However, the tax law concerning these rules is subject to change and to different interpretations. Inadvertent failure to meet these standards may be correctable. Failure to meet these standards would result in immediate taxation to contract owners of gains under their contracts. Consult your tax adviser prior to purchase. If underlying fund shares are sold directly to tax-qualified retirement plans that later lose their tax-qualified status or to non-qualified plans, the separate accounts investing in the underlying fund may fail the diversification requirements of Section 817, which could have adverse tax consequences for variable contract owners, including losing the benefit of tax deferral. REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for Federal income tax purposes, Section 72(s) of the Code generally requires any Non-Qualified Contract to contain certain provisions specifying how your interest in the contract will be distributed in the event of the death of an owner of the contract (or on the death of, or change in, any primary annuitant where the contract is owned by a non-natural person). Specifically, Section 72(s) requires that: (a) if any owner dies on or after the annuity starting date, but prior to the time the entire interest in the contract has been distributed, the entire interest in the contract will be distributed at least as rapidly as under the method of distribution being used as of the date of such owner's death; and (b) if any owner dies prior to the annuity starting date, the entire interest in the contract will be distributed within five years after the date of such owner's death. These requirements will be considered satisfied as to any portion of an owner's interest which is payable to or for the benefit of a designated beneficiary and which is distributed over the life of such designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary, provided that such distributions begin within one year of the owner's death. The designated beneficiary refers to a natural person designated by the owner as a beneficiary and to whom ownership of the contract passes by reason of death. However, if the designated beneficiary is the surviving spouse of the deceased owner, the contract may be continued with the surviving spouse as the new owner. The Non-Qualified Contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise. Other rules may apply to Qualified Contracts. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS. Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the calendar year in which an IRA owner attains age 70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum distributions until the later of April 1st of 7 the calendar year following the calendar year in which they attain age 70 1/2 or the year of retirement (except for 5% or more owners). If you own more than one individual retirement annuity and/or account, you may satisfy the minimum distribution rules on an aggregate basis (i.e., determine the total amount of required distributions from all IRAs and take the required amount from any one or more IRAs). A similar aggregate approach is available to meet your 403(b) minimum distribution requirements if you have multiple 403(b) annuities. Recently promulgated Treasury regulations changed the distribution requirements; therefore, it is important that you consult your tax adviser as to the impact of these regulations on your personal situation. Final income tax regulations regarding minimum distribution requirements were released in June 2004. These regulations affect both deferred and income annuities. Under these new rules, effective with respect to minimum distributions required for the 2006 distribution year, in general, the value of all benefits under a deferred annuity (including death benefits in excess of cash value) must be added to the account value in computing the amount required to be distributed over the applicable period. We will provide you with additional information as to the amount of your interest in the contract that is subject to required minimum distributions under this new rule and either compute the required amount for you or offer to do so at your request. The new rules are not entirely clear and you should consult your tax adviser as to how these rules affect your contract. MINIMUM DISTRIBUTIONS FOR BENEFICIARIES UPON THE CONTRACT OWNER'S DEATH. Upon the death of the contract owner and/or annuitant of a Qualified Contract, the funds remaining in the contract must be completely withdrawn within 5 years from the date of death (including in a single lump sum) or minimum distributions may be taken over the life expectancy of the individual beneficiaries (and in certain situations, trusts for individuals), provided such distributions are payable at least annually and begin within one year from the date of death. Special rules apply in the case of an IRA where the beneficiary is the surviving spouse which allow the spouse to assume the contract as owner. Alternative rules permit a spousal beneficiary under a qualified contract, including an IRA, to defer the minimum distribution requirements until the end of the year in which the deceased spouse would have attained age 70 1/2 or to rollover the death proceeds to his or her own IRA or to another eligible retirement plan in which he or she participates. Under recently enacted legislation, you (and after your death, your designated beneficiaries) generally do not have to take the required minimum distribution for 2009. The waiver does not apply to any 2008 payments even if received in 2009, so for those payments, you are still required to receive your first required minimum distribution payment by April 1, 2009. In contrast, if your first required minimum distribution would have been due by April 1, 2010, you are not required to take such distribution; however, your 2010 required minimum distribution is due by December 31, 2010. For after-death required minimum distributions, the five year rule is applied without regard to calendar year 2009. For instance, if you died in 2007, the five year period ends in 2013 instead of 2012. This required minimum distribution waiver does not apply if you are receiving annuitized payments under your contract. The required minimum distribution rules are complex, so consult with your tax adviser before waiving your 2009 required minimum distribution payment. 8 FINANCIAL STATEMENTS The financial statements of each of the Sub-Accounts of the Separate Account and the Company are included herein. The financial statements of the Company should be considered only as bearing upon the ability of the Company to meet its obligations under the contract. 9 ANNUAL REPORT December 31, 2008 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Contract Owners of MetLife Investors USA Separate Account A and the Board of Directors of MetLife Investors USA Insurance Company: We have audited the accompanying statements of assets and liabilities of MetLife Investors USA Separate Account A (the "Separate Account") of MetLife Investors USA Insurance Company (the "Company") comprising each of the individual Sub-Accounts listed in Appendix A as of December 31, 2008, the related statements of operations for each of the periods presented in the year then ended, and the statements of changes in net assets for each of the periods presented in the two years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the Sub-Accounts constituting the Separate Account of the Company as of December 31, 2008, the results of their operations for each of the periods presented in the year then ended, and the changes in their net assets for each of the periods presented in the two years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, FL March 31, 2009 APPENDIX A MIST Lord Abbett Growth and Income Sub-Account MIST Lord Abbett Bond Debenture Sub-Account MIST Van Kampen Mid Cap Growth Sub-Account MIST Lord Abbett Mid Cap Value Sub-Account MIST Lazard Mid Cap Sub-Account MIST Met/AIM Small Cap Growth Sub-Account MIST Harris Oakmark International Sub-Account MIST Third Avenue Small Cap Value Sub-Account MIST Oppenheimer Capital Appreciation Sub-Account MIST Legg Mason PartnersAggressive Growth Sub-Account MIST PIMCO Total Return Sub-Account MIST RCM Technology Sub-Account MIST PIMCO Inflation Protected Bond Sub-Account MIST T. Rowe Price Mid Cap Growth Sub-Account MIST MFS Research International Sub-Account MIST Clarion Global Real Estate Sub-Account MIST Turner Mid Cap Growth Sub-Account MIST Goldman Sachs Mid Cap Value Sub-Account MIST MetLife Defensive Strategy Sub-Account MIST MetLife Moderate Strategy Sub-Account MIST MetLife Balanced Strategy Sub-Account MIST MetLife Growth Strategy Sub-Account MIST MetLife Aggressive Strategy Sub-Account MIST Van Kampen Comstock Sub-Account MIST Legg Mason Value Equity Sub-Account MIST MFS Emerging Markets Equity Sub-Account MIST Loomis Sayles Global Markets Sub-Account MIST Met/AIM Capital Appreciation Sub-Account MIST Janus Forty Sub-Account MIST Dreman Small Cap Value Sub-Account MIST Pioneer Fund Sub-Account MIST Pioneer Strategic Income Sub-Account MIST BlackRock Large Cap Core Sub-Account MIST BlackRock High Yield Sub-Account MIST Rainier Large Cap Equity Sub-Account MIST American Funds Balanced Allocation Sub-Account MIST American Funds Bond Sub-Account MIST American Funds Growth Sub-Account MIST American Funds Growth Allocation Sub-Account MIST American Funds International Sub-Account MIST American Funds Moderate Allocation Sub-Account MIST Met/Franklin Mutual Shares Sub-Account MIST Met/Franklin Templeton Founding Strategy Sub-Account MIST SSgA Growth ETF Sub-Account MIST SSgA Growth and Income ETF Sub-Account AIM V.I. Core Equity Sub-Account AIM V.I. Capital Appreciation Sub-Account AIM V.I. International Growth Sub-Account AIM V.I. Basic Balanced Sub-Account AIM V.I. Global Real Estate Sub-Account MFS Research Sub-Account MFS Investors Trust Sub-Account MFS New Discovery Sub-Account Oppenheimer Main Street Sub-Account Oppenheimer Core Bond Sub-Account Oppenheimer Strategic Bond Sub-Account Oppenheimer Main Street Small Cap Sub-Account Oppenheimer Money Sub-Account Fidelity VIP Asset Manager Sub-Account Fidelity VIP Growth Sub-Account Fidelity VIP Contrafund Sub-Account Fidelity VIP Overseas Sub-Account Fidelity VIP Equity-Income Sub-Account Fidelity VIP Index 500 Sub-Account Fidelity VIP Money Market Sub-Account Fidelity VIP Mid Cap Sub-Account DWS International Sub-Account MSF FI Mid Cap Opportunities Sub-Account MSF FI Large Cap Sub-Account MSF FI Value Leaders Sub-Account MSF Russell 2000 Index Sub-Account MSF Julius Baer International Stock Sub-Account MSF MetLife Stock Index Sub-Account MSF BlackRock Legacy Large Cap Growth Sub-Account MSF BlackRock Strategic Value Sub-Account MSF BlackRock Bond Income Sub-Account MSF BlackRock Large Cap Value Sub-Account MSF Lehman Brothers Aggregate Bond Index Sub-Account MSF MFS Value Sub-Account MSF Morgan Stanley EAFE Index Sub-Account MSF MFS Total Return Sub-Account MSF MetLife Mid Cap Stock Index Sub-Account MSF Davis Venture Value Sub-Account MSF Harris Oakmark Focused Value Sub-Account MSF Jennison Growth Sub-Account MSF BlackRock Money Market Sub-Account MSF T. Rowe Price Small Cap Growth Sub-Account MSF Western Asset Management U.S. Government Sub-Account MSF Oppenheimer Global Equity Sub-Account MSF MetLife Aggressive Allocation Sub-Account MSF MetLife Conservative Allocation Sub-Account MSF MetLife Conservative to Moderate Allocation Sub-Account MSF MetLife Moderate Allocation Sub-Account APPENDIX A -- (CONTINUED) MSF MetLife Moderate to Aggressive Allocation Sub-Account MSF T. Rowe Price Large Cap Growth Sub-Account MSF Loomis Sayles Small Cap Sub-Account MSF Neuberger Berman Mid Cap Value Sub-Account MSF Met/Dimensional International Small Company Sub-Account Van Kampen LIT Capital Growth Sub-Account Van Kampen LIT Enterprise Sub-Account Van Kapmen LIT Growth and Income Sub-Account Van Kampen LIT Comstock Sub-Account Federated Equity Income Sub-Account Federated High Income Bond Sub-Account Federated Mid Cap Growth Strategy Sub-Account Neuberger Genesis Sub-Account Alger American SmallCap Growth Sub-Account T. Rowe Price Growth Sub-Account T. Rowe Price International Sub-Account T. Rowe Price Prime Reserve Sub-Account Janus Aspen Worldwide Growth Sub-Account American Funds Global Small Capitalization Sub-Account American Funds Growth Sub-Account American Funds Growth - Income Sub-Account American Funds Global Growth Sub-Account American Funds Bond Sub-Account FTVIPT Mutual Shares Securities Sub-Account FTVIPT Templeton Foreign Securities Sub-Account FTVIPT Templeton Growth Securities Sub-Account FTVIPT Franklin Income Securities Sub-Account FTVIPT Templeton Global Income Securities Sub-Account FTVIPT Franklin Small Cap Value Securities Sub-Account UIF Equity & Income Sub-Account UIF U.S. Real Estate Sub-Account UIF U.S. Mid Cap Sub-Account Pioneer VCT Bond Sub-Account Pioneer VCT Cullen Value Sub-Account Pioneer VCT Emerging Markets Sub-Account Pioneer VCT Equity Income Sub-Account Pioneer VCT Fund Sub-Account Pioneer VCT Global High Yield Sub-Account Pioneer VCT High Yield Sub-Account Pioneer VCT Ibbotson Aggressive Allocation Sub-Account Pioneer VCT Ibbotson Growth Allocation Sub-Account Pioneer VCT Ibbotson Moderate Allocation Sub-Account Pioneer VCT International Value Sub-Account Pioneer VCT Mid Cap Value Sub-Account Pioneer VCT Oak Ridge Large Cap Growth Sub-Account Pioneer VCT Real Estate Shares Sub-Account Pioneer VCT Small Cap Value Sub-Account Pioneer VCT Strategic Income Sub-Account LMPVET Small Cap Growth Sub-Account LMPVET Investors Sub-Account LMPVET Equity Index Sub-Account LMPVET Fundamental Value Sub-Account LMPVET Appreciation Sub-Account LMPVET Aggressive Growth Sub-Account LMPVET Large Cap Growth Sub-Account LMPVET Social Awareness Sub-Account LMPVET Capital and Income Sub-Account LMPVET Capital Sub-Account LMPVET Global Equity Sub-Account LMPVET Dividend Strategy Sub-Account LMPVET Lifestyle Allocation 50% Sub-Account LMPVET Lifestyle Allocation 70% Sub-Account LMPVET Lifestyle Allocation 85% Sub-Account LMPVIT Adjustable Rate Income Sub-Account LMPVIT Global High Yield Bond Sub-Account LMPVIT Money Market Sub-Account This page is intentionally left blank. METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2008 MIST LORD ABBETT MIST LORD ABBETT MIST VAN KAMPEN MIST LORD ABBETT GROWTH AND INCOME BOND DEBENTURE MID CAP GROWTH MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ---------------- --------------- ---------------- ASSETS: Investments at fair value $ 447,267,051 $ 178,177,901 $ 27,227,873 $ 23,900,320 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------------- ---------------- --------------- ---------------- Total Assets 447,267,051 178,177,901 27,227,873 23,900,320 ----------------- ---------------- --------------- ---------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 454 644 606 760 ----------------- ---------------- --------------- ---------------- Total Liabilities 454 644 606 760 ----------------- ---------------- --------------- ---------------- NET ASSETS $ 447,266,597 $ 178,177,257 $ 27,227,267 $ 23,899,560 ================= ================ =============== ================ CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 447,062,046 $ 177,943,976 $ 27,227,267 $ 23,899,560 Net assets from contracts in payout 204,551 233,281 -- -- ----------------- ---------------- --------------- ---------------- Total Net Assets $ 447,266,597 $ 178,177,257 $ 27,227,267 $ 23,899,560 ================= ================ =============== ================
The accompanying notes are an integral part of these financial statements. 1 MIST HARRIS MIST LEGG MASON MIST LAZARD MIST MET/AIM OAKMARK MIST THIRD AVENUE MIST OPPENHEIMER PARTNERS MID CAP SMALL CAP GROWTH INTERNATIONAL SMALL CAP VALUE CAPITAL APPRECIATION AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------ ---------------- ------------- ----------------- -------------------- ----------------- $ 70,202,272 $ 100,448,361 $ 189,181,912 $ 194,917,823 $ 159,164,428 $ 56,694,975 -- -- -- -- -- -- -- -- -- -- -- -- ------------ ---------------- ------------- ----------------- -------------------- ----------------- 70,202,272 100,448,361 189,181,912 194,917,823 159,164,428 56,694,975 ------------ ---------------- ------------- ----------------- -------------------- ----------------- 528 1,136 457 527 843 463 ------------ ---------------- ------------- ----------------- -------------------- ----------------- 528 1,136 457 527 843 463 ------------ ---------------- ------------- ----------------- -------------------- ----------------- $ 70,201,744 $ 100,447,225 $ 189,181,455 $ 194,917,296 $ 159,163,585 $ 56,694,512 ============ ================ ============= ================= ==================== ================= $ 70,164,278 $ 100,408,403 $ 189,089,661 $ 194,804,426 $ 158,979,744 $ 56,686,006 37,466 38,822 91,794 112,870 183,841 8,506 ------------ ---------------- ------------- ----------------- -------------------- ----------------- $ 70,201,744 $ 100,447,225 $ 189,181,455 $ 194,917,296 $ 159,163,585 $ 56,694,512 ============ ================ ============= ================= ==================== =================
The accompanying notes are an integral part of these financial statements. 2 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST PIMCO MIST PIMCO MIST RCM INFLATION MIST T. ROWE PRICE TOTAL RETURN TECHNOLOGY PROTECTED BOND MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ------------ -------------- ------------------ ASSETS: Investments at fair value $ 542,564,122 $ 37,390,388 $ 254,892,045 $ 139,068,033 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- 4 -- ------------- ------------ -------------- ------------------ Total Assets 542,564,122 37,390,388 254,892,049 139,068,033 ------------- ------------ -------------- ------------------ LIABILITIES: Due to MetLife Investors USA Insurance Company 320 528 370 382 ------------- ------------ -------------- ------------------ Total Liabilities 320 528 370 382 ------------- ------------ -------------- ------------------ NET ASSETS $ 542,563,802 $ 37,389,860 $ 254,891,679 $ 139,067,651 ============= ============ ============== ================== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 542,244,674 $ 37,388,441 $ 254,704,097 $ 139,041,538 Net assets from contracts in payout 319,128 1,419 187,582 26,113 ------------- ------------ -------------- ------------------ Total Net Assets $ 542,563,802 $ 37,389,860 $ 254,891,679 $ 139,067,651 ============= ============ ============== ==================
The accompanying notes are an integral part of these financial statements. 3 MIST MFS RESEARCH MIST CLARION GLOBAL MIST TURNER MIST GOLDMAN SACHS MIST METLIFE MIST METLIFE INTERNATIONAL REAL ESTATE MID CAP GROWTH MID CAP VALUE DEFENSIVE STRATEGY MODERATE STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ------------------- -------------- ------------------ ------------------ ----------------- $ 204,676,146 $ 63,965,715 $ 35,218,086 $ 68,936,289 $ 887,719,475 $ 1,371,421,095 -- -- -- -- -- -- -- -- -- -- -- -- ----------------- ------------------- -------------- ------------------ ------------------ ----------------- 204,676,146 63,965,715 35,218,086 68,936,289 887,719,475 1,371,421,095 ----------------- ------------------- -------------- ------------------ ------------------ ----------------- 635 609 673 827 136 140 ----------------- ------------------- -------------- ------------------ ------------------ ----------------- 635 609 673 827 136 140 ----------------- ------------------- -------------- ------------------ ------------------ ----------------- $ 204,675,511 $ 63,965,106 $ 35,217,413 $ 68,935,462 $ 887,719,339 $ 1,371,420,955 ================= =================== ============== ================== ================== ================= $ 204,596,010 $ 63,942,527 $ 35,207,230 $ 68,912,156 $ 887,538,401 $ 1,371,312,011 79,501 22,579 10,183 23,306 180,938 108,944 ----------------- ------------------- -------------- ------------------ ------------------ ----------------- $ 204,675,511 $ 63,965,106 $ 35,217,413 $ 68,935,462 $ 887,719,339 $ 1,371,420,955 ================= =================== ============== ================== ================== =================
The accompanying notes are an integral part of these financial statements. 4 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST METLIFE MIST METLIFE MIST METLIFE MIST VAN KAMPEN BALANCED STRATEGY GROWTH STRATEGY AGGRESSIVE STRATEGY COMSTOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- --------------- ------------------- --------------- ASSETS: Investments at fair value $ 3,383,790,115 $ 3,958,612,630 $ 302,274,874 $ 40,652,490 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------------- --------------- ------------------- --------------- Total Assets 3,383,790,115 3,958,612,630 302,274,874 40,652,490 ----------------- --------------- ------------------- --------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 185 307 340 760 ----------------- --------------- ------------------- --------------- Total Liabilities 185 307 340 760 ----------------- --------------- ------------------- --------------- NET ASSETS $ 3,383,789,930 $ 3,958,612,323 $ 302,274,534 $ 40,651,730 ================= =============== =================== =============== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 3,382,760,800 $ 3,958,519,751 $ 302,214,656 $ 40,632,137 Net assets from contracts in payout 1,029,130 92,572 59,878 19,593 ----------------- --------------- ------------------- --------------- Total Net Assets $ 3,383,789,930 $ 3,958,612,323 $ 302,274,534 $ 40,651,730 ================= =============== =================== ===============
The accompanying notes are an integral part of these financial statements. 5 MIST LEGG MASON MIST MFS EMERGING MIST LOOMIS SAYLES MIST MET/AIM MIST DREMAN VALUE EQUITY MARKETS EQUITY GLOBAL MARKETS CAPITAL APPRECIATION MIST JANUS FORTY SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ----------------- ------------------ -------------------- ---------------- --------------- $ 44,429,899 $ 60,423,663 $ 45,350,814 $ 2,453,563 $ 11,491,170 $ 12,262,076 -- -- -- -- -- -- -- -- -- -- 1 -- --------------- ----------------- ------------------ -------------------- ---------------- --------------- 44,429,899 60,423,663 45,350,814 2,453,563 11,491,171 12,262,076 --------------- ----------------- ------------------ -------------------- ---------------- --------------- 836 905 559 797 590 399 --------------- ----------------- ------------------ -------------------- ---------------- --------------- 836 905 559 797 590 399 --------------- ----------------- ------------------ -------------------- ---------------- --------------- $ 44,429,063 $ 60,422,758 $ 45,350,255 $ 2,452,766 $ 11,490,581 $ 12,261,677 =============== ================= ================== ==================== ================ =============== $ 44,429,063 $ 60,422,758 $ 45,350,255 $ 2,452,766 $ 11,490,581 $ 12,261,677 -- -- -- -- -- -- --------------- ----------------- ------------------ -------------------- ---------------- --------------- $ 44,429,063 $ 60,422,758 $ 45,350,255 $ 2,452,766 $ 11,490,581 $ 12,261,677 =============== ================= ================== ==================== ================ ===============
The accompanying notes are an integral part of these financial statements. 6 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST PIONEER MIST BLACKROCK MIST BLACKROCK MIST PIONEER FUND STRATEGIC INCOME LARGE CAP CORE HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ---------------- -------------- -------------- ASSETS: Investments at fair value $ 16,448,533 $ 129,051,872 $ 3,599,609 $ 13,710,423 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------------- ---------------- -------------- -------------- Total Assets 16,448,533 129,051,872 3,599,609 13,710,423 ----------------- ---------------- -------------- -------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 664 330 521 740 ----------------- ---------------- -------------- -------------- Total Liabilities 664 330 521 740 ----------------- ---------------- -------------- -------------- NET ASSETS $ 16,447,869 $ 129,051,542 $ 3,599,088 $ 13,709,683 ================= ================ ============== ============== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 16,447,869 $ 129,051,542 $ 3,599,088 $ 13,704,495 Net assets from contracts in payout -- -- -- 5,188 ----------------- ---------------- -------------- -------------- Total Net Assets $ 16,447,869 $ 129,051,542 $ 3,599,088 $ 13,709,683 ================= ================ ============== ==============
The accompanying notes are an integral part of these financial statements. 7 MIST AMERICAN MIST AMERICAN MIST AMERICAN MIST RAINIER FUNDS BALANCED MIST AMERICAN MIST AMERICAN FUNDS GROWTH FUNDS LARGE CAP EQUITY ALLOCATION FUNDS BOND FUNDS GROWTH ALLOCATION INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- -------------- ------------- ------------- ------------- ------------- $ 23,654,855 $ 332,865,280 $ 28,171,741 $ 54,966,640 $ 475,227,109 $ 45,811,024 -- -- -- -- -- -- -- -- -- -- -- -- ---------------- -------------- ------------- ------------- ------------- ------------- 23,654,855 332,865,280 28,171,741 54,966,640 475,227,109 45,811,024 ---------------- -------------- ------------- ------------- ------------- ------------- 743 263 716 392 288 556 ---------------- -------------- ------------- ------------- ------------- ------------- 743 263 716 392 288 556 ---------------- -------------- ------------- ------------- ------------- ------------- $ 23,654,112 $ 332,865,017 $ 28,171,025 $ 54,966,248 $ 475,226,821 $ 45,810,468 ================ ============== ============= ============= ============= ============= $ 23,654,112 $ 332,865,017 $ 28,171,025 $ 54,966,248 $ 475,226,821 $ 45,810,468 -- -- -- -- -- -- ---------------- -------------- ------------- ------------- ------------- ------------- $ 23,654,112 $ 332,865,017 $ 28,171,025 $ 54,966,248 $ 475,226,821 $ 45,810,468 ================ ============== ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements. 8 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST AMERICAN MIST MET/FRANKLIN FUNDS MODERATE MIST MET/FRANKLIN TEMPLETON FOUNDING MIST SSGA ALLOCATION MUTUAL SHARES STRATEGY GROWTH ETF SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ----------------- ------------------ ----------- ASSETS: Investments at fair value $ 223,820,787 $ 13,039,483 $ 193,348,387 $ 1,489,907 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- -------------- ----------------- ------------------ ----------- Total Assets 223,820,787 13,039,483 193,348,387 1,489,907 -------------- ----------------- ------------------ ----------- LIABILITIES: Due to MetLife Investors USA Insurance Company 334 638 268 376 -------------- ----------------- ------------------ ----------- Total Liabilities 334 638 268 376 -------------- ----------------- ------------------ ----------- NET ASSETS $ 223,820,453 $ 13,038,845 $ 193,348,119 $ 1,489,531 ============== ================= ================== =========== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 223,820,453 $ 13,038,845 $ 193,348,119 $ 1,489,531 Net assets from contracts in payout -- -- -- -- -------------- ----------------- ------------------ ----------- Total Net Assets $ 223,820,453 $ 13,038,845 $ 193,348,119 $ 1,489,531 ============== ================= ================== ===========
The accompanying notes are an integral part of these financial statements. 9 MIST SSGA GROWTH AIM V.I. AIM V.I. CAPITAL AIM V.I. AIM V.I. BASIC AIM V.I. GLOBAL AND INCOME ETF CORE EQUITY APPRECIATION INTERNATIONAL GROWTH BALANCED REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ----------- ---------------- -------------------- -------------- --------------- $ 2,651,485 $ 391,943 $ 160,676 $ 27,961,399 $ 289,023 $ 2,360,584 -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ----------- ---------------- -------------------- -------------- --------------- 2,651,485 391,943 160,676 27,961,399 289,023 2,360,584 ---------------- ----------- ---------------- -------------------- -------------- --------------- 355 15 32 289 24 522 ---------------- ----------- ---------------- -------------------- -------------- --------------- 355 15 32 289 24 522 ---------------- ----------- ---------------- -------------------- -------------- --------------- $ 2,651,130 $ 391,928 $ 160,644 $ 27,961,110 $ 288,999 $ 2,360,062 ================ =========== ================ ==================== ============== =============== $ 2,651,130 $ 391,928 $ 160,644 $ 27,961,110 $ 288,999 $ 2,360,062 -- -- -- -- -- -- ---------------- ----------- ---------------- -------------------- -------------- --------------- $ 2,651,130 $ 391,928 $ 160,644 $ 27,961,110 $ 288,999 $ 2,360,062 ================ =========== ================ ==================== ============== ===============
The accompanying notes are an integral part of these financial statements. 10 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 OPPENHEIMER MFS RESEARCH MFS INVESTORS TRUST MFS NEW DISCOVERY MAIN STREET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------ ------------------- ----------------- ----------- ASSETS: Investments at fair value $ 94,523 $ 48,440 $ 44,705 $ 108,437 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ------------ ------------------- ----------------- ----------- Total Assets 94,523 48,440 44,705 108,437 ------------ ------------------- ----------------- ----------- LIABILITIES: Due to MetLife Investors USA Insurance Company 8 49 51 38 ------------ ------------------- ----------------- ----------- Total Liabilities 8 49 51 38 ------------ ------------------- ----------------- ----------- NET ASSETS $ 94,515 $ 48,391 $ 44,654 $ 108,399 ============ =================== ================= =========== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 94,515 $ 48,391 $ 44,654 $ 108,399 Net assets from contracts in payout -- -- -- -- ------------ ------------------- ----------------- ----------- Total Net Assets $ 94,515 $ 48,391 $ 44,654 $ 108,399 ============ =================== ================= ===========
The accompanying notes are an integral part of these financial statements. 11 OPPENHEIMER OPPENHEIMER OPPENHEIMER MAIN FIDELITY VIP ASSET CORE BOND STRATEGIC BOND STREET SMALL CAP OPPENHEIMER MONEY MANAGER FIDELITY VIP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- -------------- ---------------- ----------------- ------------------ ------------------- $ 96,031 $ 13,256 $ 19,372,639 $ 149,602 $ 88,545,977 $ 111,413,524 -- -- -- 64 -- -- -- 30 -- -- -- 4 ----------- -------------- ---------------- ----------------- ------------------ ------------------- 96,031 13,286 19,372,639 149,666 88,545,977 111,413,528 ----------- -------------- ---------------- ----------------- ------------------ ------------------- 26 32 311 13 4 21 ----------- -------------- ---------------- ----------------- ------------------ ------------------- 26 32 311 13 4 21 ----------- -------------- ---------------- ----------------- ------------------ ------------------- $ 96,005 $ 13,254 $ 19,372,328 $ 149,653 $ 88,545,973 $ 111,413,507 =========== ============== ================ ================= ================== =================== $ 96,005 $ 13,254 $ 19,372,328 $ 149,653 $ 88,545,973 $ 111,413,507 -- -- -- -- -- -- ----------- -------------- ---------------- ----------------- ------------------ ------------------- $ 96,005 $ 13,254 $ 19,372,328 $ 149,653 $ 88,545,973 $ 111,413,507 =========== ============== ================ ================= ================== ===================
The accompanying notes are an integral part of these financial statements. 12 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP CONTRAFUND OVERSEAS EQUITY-INCOME INDEX 500 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ------------ ------------- ------------ ASSETS: Investments at fair value $ 222,674,748 $ 5,413,451 $ 6,119,781 $ 64,164,495 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- 2 -- ------------- ------------ ------------- ------------ Total Assets 222,674,748 5,413,451 6,119,783 64,164,495 ------------- ------------ ------------- ------------ LIABILITIES: Due to MetLife Investors USA Insurance Company 640 2 -- 56 ------------- ------------ ------------- ------------ Total Liabilities 640 2 -- 56 ------------- ------------ ------------- ------------ NET ASSETS $ 222,674,108 $ 5,413,449 $ 6,119,783 $ 64,164,439 ============= ============ ============= ============ CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 222,674,108 $ 5,413,449 $ 6,119,783 $ 64,164,439 Net assets from contracts in payout -- -- -- -- ------------- ------------ ------------- ------------ Total Net Assets $ 222,674,108 $ 5,413,449 $ 6,119,783 $ 64,164,439 ============= ============ ============= ============
The accompanying notes are an integral part of these financial statements. 13 FIDELITY VIP FIDELITY VIP MSF FI MID CAP MSF FI MONEY MARKET MID CAP DWS INTERNATIONAL OPPORTUNITIES MSF FI LARGE CAP VALUE LEADERS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------ ------------ ----------------- -------------- ---------------- ------------- $ 41,701,899 $ 46,484,490 $ 18,108,690 $ 2,819,156 $ 2,882,542 $ 3,224,007 -- -- -- -- -- -- -- -- -- -- -- 5 ------------ ------------ ----------------- -------------- ---------------- ------------- 41,701,899 46,484,490 18,108,690 2,819,156 2,882,542 3,224,012 ------------ ------------ ----------------- -------------- ---------------- ------------- 103 392 11 125 421 449 ------------ ------------ ----------------- -------------- ---------------- ------------- 103 392 11 125 421 449 ------------ ------------ ----------------- -------------- ---------------- ------------- $ 41,701,796 $ 46,484,098 $ 18,108,679 $ 2,819,031 $ 2,882,121 $ 3,223,563 ============ ============ ================= ============== ================ ============= $ 41,701,796 $ 46,484,098 $ 18,108,679 $ 2,819,031 $ 2,882,121 $ 3,223,563 -- -- -- -- -- -- ------------ ------------ ----------------- -------------- ---------------- ------------- $ 41,701,796 $ 46,484,098 $ 18,108,679 $ 2,819,031 $ 2,882,121 $ 3,223,563 ============ ============ ================= ============== ================ =============
The accompanying notes are an integral part of these financial statements. 14 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF BLACKROCK MSF RUSSELL 2000 MSF JULIUS BAER MSF METLIFE LEGACY LARGE CAP INDEX INTERNATIONAL STOCK STOCK INDEX GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ------------------- ------------- ---------------- ASSETS: Investments at fair value $ 5,298,121 $ 3,539,468 $ 164,167,112 $ 1,031,816 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ---------------- ------------------- ------------- ---------------- Total Assets 5,298,121 3,539,468 164,167,112 1,031,816 ---------------- ------------------- ------------- ---------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 65 157 465 16 ---------------- ------------------- ------------- ---------------- Total Liabilities 65 157 465 16 ---------------- ------------------- ------------- ---------------- NET ASSETS $ 5,298,056 $ 3,539,311 $ 164,166,647 $ 1,031,800 ================ =================== ============= ================ CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 5,298,056 $ 3,539,311 $ 164,062,036 $ 1,031,800 Net assets from contracts in payout -- -- 104,611 -- ---------------- ------------------- ------------- ---------------- Total Net Assets $ 5,298,056 $ 3,539,311 $ 164,166,647 $ 1,031,800 ================ =================== ============= ================
The accompanying notes are an integral part of these financial statements. 15 MSF LEHMAN MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK BROTHERS AGGREGATE MSF MORGAN STANLEY STRATEGIC VALUE BOND INCOME LARGE CAP VALUE BOND INDEX MSF MFS VALUE EAFE INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ------------- --------------- ------------------ ------------- ------------------ $ 7,377,762 $ 32,696,377 $ 2,464,909 $ 7,896,025 $ 22,208,047 $ 11,178,573 -- -- -- -- -- -- -- 10 -- -- -- 1 --------------- ------------- --------------- ------------------ ------------- ------------------ 7,377,762 32,696,387 2,464,909 7,896,025 22,208,047 11,178,574 --------------- ------------- --------------- ------------------ ------------- ------------------ 53 592 75 5 427 59 --------------- ------------- --------------- ------------------ ------------- ------------------ 53 592 75 5 427 59 --------------- ------------- --------------- ------------------ ------------- ------------------ $ 7,377,709 $ 32,695,795 $ 2,464,834 $ 7,896,020 $ 22,207,620 $ 11,178,515 =============== ============= =============== ================== ============= ================== $ 7,377,709 $ 32,688,953 $ 2,464,834 $ 7,896,020 $ 22,207,620 $ 11,178,515 -- 6,842 -- -- -- -- --------------- ------------- --------------- ------------------ ------------- ------------------ $ 7,377,709 $ 32,695,795 $ 2,464,834 $ 7,896,020 $ 22,207,620 $ 11,178,515 =============== ============= =============== ================== ============= ==================
The accompanying notes are an integral part of these financial statements. 16 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF HARRIS MSF MFS TOTAL MSF METLIFE MSF DAVIS OAKMARK RETURN MID CAP STOCK INDEX VENTURE VALUE FOCUSED VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ------------------- ------------- ------------- ASSETS: Investments at fair value $ 34,110,653 $ 10,679,454 $ 339,963,250 $ 146,717,345 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company 73 -- -- 58 ------------- ------------------- ------------- ------------- Total Assets 34,110,726 10,679,454 339,963,250 146,717,403 ------------- ------------------- ------------- ------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 462 29 605 459 ------------- ------------------- ------------- ------------- Total Liabilities 462 29 605 459 ------------- ------------------- ------------- ------------- NET ASSETS $ 34,110,264 $ 10,679,425 $ 339,962,645 $ 146,716,944 ============= =================== ============= ============= CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 34,110,264 $ 10,679,425 $ 339,722,146 $ 146,615,806 Net assets from contracts in payout -- -- 240,499 101,138 ------------- ------------------- ------------- ------------- Total Net Assets $ 34,110,264 $ 10,679,425 $ 339,962,645 $ 146,716,944 ============= =================== ============= =============
The accompanying notes are an integral part of these financial statements. 17 MSF WESTERN ASSET MSF JENNISON MSF BLACKROCK MSF T. ROWE PRICE MANAGEMENT MSF OPPENHEIMER MSF METLIFE GROWTH MONEY MARKET SMALL CAP GROWTH U.S. GOVERNMENT GLOBAL EQUITY AGGRESSIVE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ------------- ----------------- ----------------- --------------- --------------------- $ 112,407,775 $ 595,304,823 $ 3,244,079 $ 85,352,840 $ 7,900,482 $ 1,183,568 -- -- -- -- -- -- -- 35 -- -- -- -- ------------- ------------- ----------------- ----------------- --------------- --------------------- 112,407,775 595,304,858 3,244,079 85,352,840 7,900,482 1,183,568 ------------- ------------- ----------------- ----------------- --------------- --------------------- 577 313 377 878 389 385 ------------- ------------- ----------------- ----------------- --------------- --------------------- 577 313 377 878 389 385 ------------- ------------- ----------------- ----------------- --------------- --------------------- $ 112,407,198 $ 595,304,545 $ 3,243,702 $ 85,351,962 $ 7,900,093 $ 1,183,183 ============= ============= ================= ================= =============== ===================== $ 112,342,248 $ 595,166,621 $ 3,243,702 $ 85,341,036 $ 7,900,093 $ 1,183,183 64,950 137,924 -- 10,926 -- -- ------------- ------------- ----------------- ----------------- --------------- --------------------- $ 112,407,198 $ 595,304,545 $ 3,243,702 $ 85,351,962 $ 7,900,093 $ 1,183,183 ============= ============= ================= ================= =============== =====================
The accompanying notes are an integral part of these financial statements. 18 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF METLIFE MSF METLIFE MSF METLIFE CONSERVATIVE CONSERVATIVE TO MSF METLIFE MODERATE TO ALLOCATION MODERATE ALLOCATION MODERATE ALLOCATION AGGRESSIVE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------ ------------------- ------------------- --------------------- ASSETS: Investments at fair value $ 5,653,719 $ 5,902,633 $ 35,786,941 $ 44,674,873 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ------------ ------------------- ------------------- --------------------- Total Assets 5,653,719 5,902,633 35,786,941 44,674,873 ------------ ------------------- ------------------- --------------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 259 282 114 251 ------------ ------------------- ------------------- --------------------- Total Liabilities 259 282 114 251 ------------ ------------------- ------------------- --------------------- NET ASSETS $ 5,653,460 $ 5,902,351 $ 35,786,827 $ 44,674,622 ============ =================== =================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 5,653,460 $ 5,902,351 $ 35,786,827 $ 44,674,622 Net assets from contracts in payout -- -- -- -- ------------ ------------------- ------------------- --------------------- Total Net Assets $ 5,653,460 $ 5,902,351 $ 35,786,827 $ 44,674,622 ============ =================== =================== =====================
The accompanying notes are an integral part of these financial statements. 19 MSF NEUBERGER MSF MET/DIMENSIONAL MSF T. ROWE PRICE MSF LOOMIS SAYLES BERMAN INTERNATIONAL SMALL VAN KAMPEN LIT VAN KAMPEN LIT LARGE CAP GROWTH SMALL CAP MID CAP VALUE COMPANY CAPITAL GROWTH ENTERPRISE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ----------------- ------------- ------------------- -------------- -------------- $ 565,197 $ 20,228 $ 18,604 $ 128,248 $ 88,937 $ 49,653 -- -- -- -- -- -- -- -- -- -- 3 -- ----------------- ----------------- ------------- ------------------- -------------- -------------- 565,197 20,228 18,604 128,248 88,940 49,653 ----------------- ----------------- ------------- ------------------- -------------- -------------- 51 66 31 109 17 34 ----------------- ----------------- ------------- ------------------- -------------- -------------- 51 66 31 109 17 34 ----------------- ----------------- ------------- ------------------- -------------- -------------- $ 565,146 $ 20,162 $ 18,573 $ 128,139 $ 88,923 $ 49,619 ================= ================= ============= =================== ============== ============== $ 565,146 $ 20,162 $ 18,573 $ 128,139 $ 88,923 $ 49,619 -- -- -- -- -- -- ----------------- ----------------- ------------- ------------------- -------------- -------------- $ 565,146 $ 20,162 $ 18,573 $ 128,139 $ 88,923 $ 49,619 ================= ================= ============= =================== ============== ==============
The accompanying notes are an integral part of these financial statements. 20 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 VAN KAMPEN LIT VAN KAMPEN LIT FEDERATED EQUITY FEDERATED HIGH GROWTH AND INCOME COMSTOCK INCOME INCOME BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- -------------- ---------------- -------------- ASSETS: Investments at fair value $ 57,517,791 $ 60,484,215 $ 18,774 $ 51,741 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------------- -------------- ---------------- -------------- Total Assets 57,517,791 60,484,215 18,774 51,741 ----------------- -------------- ---------------- -------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 248 345 6 46 ----------------- -------------- ---------------- -------------- Total Liabilities 248 345 6 46 ----------------- -------------- ---------------- -------------- NET ASSETS $ 57,517,543 $ 60,483,870 $ 18,768 $ 51,695 ================= ============== ================ ============== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 57,517,543 $ 60,483,870 $ 18,768 $ 51,695 Net assets from contracts in payout -- -- -- -- ----------------- -------------- ---------------- -------------- Total Net Assets $ 57,517,543 $ 60,483,870 $ 18,768 $ 51,695 ================= ============== ================ ==============
The accompanying notes are an integral part of these financial statements. 21 FEDERATED MID CAP NEUBERGER BERMAN ALGER AMERICAN T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE PRIME GROWTH STRATEGIES GENESIS SMALLCAP GROWTH GROWTH STOCK INTERNATIONAL STOCK RESERVE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ---------------- --------------- ------------- ------------------- ------------------- $ 72,701 $ 8,179 $ 37,826,341 $ 5,327,165 $ 611,025 $ 2,218,541 -- -- -- -- -- -- -- -- -- -- -- -- ----------------- ------- -------- --------------- ------------- ------------------- ------------------- 72,701 8,179 37,826,341 5,327,165 611,025 2,218,541 ----------------- ------- -------- --------------- ------------- ------------------- ------------------- 51 33 2 -- 30 68 ----------------- ------- -------- --------------- ------------- ------------------- ------------------- 51 33 2 -- 30 68 ----------------- ------- -------- --------------- ------------- ------------------- ------------------- $ 72,650 $ 8,146 $ 37,826,339 $ 5,327,165 $ 610,995 $ 2,218,473 ================= ================ =============== ============= =================== =================== $ 72,650 $ 8,146 $ 37,826,339 $ 5,327,165 $ 610,995 $ 2,218,473 -- -- -- -- -- -- ----------------- ------- -------- --------------- ------------- ------------------- ------------------- $ 72,650 $ 8,146 $ 37,826,339 $ 5,327,165 $ 610,995 $ 2,218,473 ================= ================ =============== ============= =================== ===================
The accompanying notes are an integral part of these financial statements. 22 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 AMERICAN FUNDS JANUS ASPEN GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS WORLDWIDE GROWTH CAPITALIZATION GROWTH GROWTH-INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- -------------- -------------- -------------- ASSETS: Investments at fair value $ 5,033 $ 27,429,138 $ 231,101,616 $ 136,812,170 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company 3 -- -- -- ---------------- -------------- -------------- -------------- Total Assets 5,036 27,429,138 231,101,616 136,812,170 ---------------- -------------- -------------- -------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 18 434 542 666 ---------------- -------------- -------------- -------------- Total Liabilities 18 434 542 666 ---------------- -------------- -------------- -------------- NET ASSETS $ 5,018 $ 27,428,704 $ 231,101,074 $ 136,811,504 ================ ============== ============== ============== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 5,018 $ 27,428,704 $ 231,095,431 $ 136,805,617 Net assets from contracts in payout -- -- 5,643 5,887 ---------------- -------------- -------------- -------------- Total Net Assets $ 5,018 $ 27,428,704 $ 231,101,074 $ 136,811,504 ================ ============== ============== ==============
The accompanying notes are an integral part of these financial statements. 23 AMERICAN FUNDS AMERICAN FUNDS FTVIPT MUTUAL FTVIPT TEMPLETON FTVIPT TEMPLETON FTVIPT FRANKLIN GLOBAL GROWTH BOND SHARES SECURITIES FOREIGN SECURITIES GROWTH SECURITIES INCOME SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- -------------- ----------------- ------------------ ----------------- ----------------- $ 101,451,395 $ 27,017,466 $ 58,571,417 $ 48,552,138 $ 27,930,060 $ 82,449,798 -- -- -- -- -- -- -- -- -- -- -- -- -------------- -------------- ----------------- ------------------ ----------------- ----------------- 101,451,395 27,017,466 58,571,417 48,552,138 27,930,060 82,449,798 -------------- -------------- ----------------- ------------------ ----------------- ----------------- 586 355 275 529 277 341 -------------- -------------- ----------------- ------------------ ----------------- ----------------- 586 355 275 529 277 341 -------------- -------------- ----------------- ------------------ ----------------- ----------------- $ 101,450,809 $ 27,017,111 $ 58,571,142 $ 48,551,609 $ 27,929,783 $ 82,449,457 ============== ============== ================= ================== ================= ================= $ 101,443,980 $ 27,017,111 $ 58,571,142 $ 48,551,609 $ 27,929,783 $ 82,449,457 6,829 -- -- -- -- -- -------------- -------------- ----------------- ------------------ ----------------- ----------------- $ 101,450,809 $ 27,017,111 $ 58,571,142 $ 48,551,609 $ 27,929,783 $ 82,449,457 ============== ============== ================= ================== ================= =================
The accompanying notes are an integral part of these financial statements. 24 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 FTVIPT TEMPLETON FTVIPT FRANKLIN GLOBAL INCOME SMALL CAP VALUE UIF EQUITY AND SECURITIES SECURITIES INCOME UIF U.S. REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- --------------- -------------- -------------------- ASSETS: Investments at fair value $ 19,576,108 $ 4,965,978 $ 158,238,563 $ 38,153,992 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company 36 -- -- -- ---------------- --------------- -------------- -------------------- Total Assets 19,576,144 4,965,978 158,238,563 38,153,992 ---------------- --------------- -------------- -------------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 267 392 151 243 ---------------- --------------- -------------- -------------------- Total Liabilities 267 392 151 243 ---------------- --------------- -------------- -------------------- NET ASSETS $ 19,575,877 $ 4,965,586 $ 158,238,412 $ 38,153,749 ================ =============== ============== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 19,575,877 $ 4,965,586 $ 158,238,412 $ 38,153,749 Net assets from contracts in payout -- -- -- -- ---------------- --------------- -------------- -------------------- Total Net Assets $ 19,575,877 $ 4,965,586 $ 158,238,412 $ 38,153,749 ================ =============== ============== ====================
The accompanying notes are an integral part of these financial statements. 25 UIF U.S. PIONEER VCT PIONEER VCT PIONEER VCT PIONEER VCT PIONEER VCT MID CAP VALUE BOND CULLEN VALUE EMERGING MARKETS EQUITY INCOME FUND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------- ----------- ------------ ---------------- ------------- ----------- $ 7,194,777 $ 82,108 $ 156,729 $ 43,879 $ 32,490 $ 39,728 -- -- -- -- -- -- -- -- -- -- -- -- ------------- ----------- ------------ ---------------- ------------- ----------- 7,194,777 82,108 156,729 43,879 32,490 39,728 ------------- ----------- ------------ ---------------- ------------- ----------- 369 106 163 75 45 55 ------------- ----------- ------------ ---------------- ------------- ----------- 369 106 163 75 45 55 ------------- ----------- ------------ ---------------- ------------- ----------- $ 7,194,408 $ 82,002 $ 156,566 $ 43,804 $ 32,445 $ 39,673 ============= =========== ============ ================ ============= =========== $ 7,194,408 $ 82,002 $ 156,566 $ 43,804 $ 32,445 $ 39,673 -- -- -- -- -- -- ------------- ----------- ------------ ---------------- ------------- ----------- $ 7,194,408 $ 82,002 $ 156,566 $ 43,804 $ 32,445 $ 39,673 ============= =========== ============ ================ ============= ===========
The accompanying notes are an integral part of these financial statements. 26 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 PIONEER VCT PIONEER VCT PIONEER VCT IBBOTSON PIONEER VCT IBBOTSON GLOBAL HIGH YIELD HIGH YIELD AGGRESSIVE ALLOCATION GROWTH ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ----------- --------------------- -------------------- ASSETS: Investments at fair value $ 3,333 $ 10,172 $ 5,080 $ 3,587,721 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------------- ----------- --------------------- -------------------- Total Assets 3,333 10,172 5,080 3,587,721 ----------------- ----------- --------------------- -------------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 6 26 13 486 ----------------- ----------- --------------------- -------------------- Total Liabilities 6 26 13 486 ----------------- ----------- --------------------- -------------------- NET ASSETS $ 3,327 $ 10,146 $ 5,067 $ 3,587,235 ================= =========== ===================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 3,327 $ 10,146 $ 5,067 $ 3,587,235 Net assets from contracts in payout -- -- -- -- ----------------- ----------- --------------------- -------------------- Total Net Assets $ 3,327 $ 10,146 $ 5,067 $ 3,587,235 ================= =========== ===================== ====================
The accompanying notes are an integral part of these financial statements. 27 PIONEER VCT OAK PIONEER VCT IBBOTSON PIONEER VCT PIONEER VCT RIDGE LARGE CAP PIONEER VCT REAL PIONEER VCT MODERATE ALLOCATION INTERNATIONAL VALUE MID CAP VALUE GROWTH ESTATE SHARES SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------- --------------- ---------------- --------------- $ 1,127,368 $ 3,383 $ 23,892,100 $ 14,470 $ 33,174 $ 10,376 -- -- -- -- -- -- -- -- -- -- -- -- -------------------- ------------------- ------------- --------------- ---------------- --------------- 1,127,368 3,383 23,892,100 14,470 33,174 10,376 -------------------- ------------------- ------------- --------------- ---------------- --------------- 207 8 304 15 41 28 -------------------- ------------------- ------------- --------------- ---------------- --------------- 207 8 304 15 41 28 -------------------- ------------------- ------------- --------------- ---------------- --------------- $ 1,127,161 $ 3,375 $ 23,891,796 $ 14,455 $ 33,133 $ 10,348 ==================== =================== ============= =============== ================ =============== $ 1,127,161 $ 3,375 $ 23,891,796 $ 14,455 $ 33,133 $ 10,348 -- -- -- -- -- -- -------------------- ------------------- ------------- --------------- ---------------- --------------- $ 1,127,161 $ 3,375 $ 23,891,796 $ 14,455 $ 33,133 $ 10,348 ==================== =================== ============= =============== ================ ===============
The accompanying notes are an integral part of these financial statements. 28 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 PIONEER VCT LMPVET LMPVET LMPVET STRATEGIC INCOME SMALL CAP GROWTH INVESTORS EQUITY INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ---------------- ----------- ------------ ASSETS: Investments at fair value $ 55,678 $ 10,578,463 $ 2,012,600 $ 37,329,648 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ---------------- ---------------- ----------- ------------ Total Assets 55,678 10,578,463 2,012,600 37,329,648 ---------------- ---------------- ----------- ------------ LIABILITIES: Due to MetLife Investors USA Insurance Company 68 784 537 302 ---------------- ---------------- ----------- ------------ Total Liabilities 68 784 537 302 ---------------- ---------------- ----------- ------------ NET ASSETS $ 55,610 $ 10,577,679 $ 2,012,063 $ 37,329,346 ================ ================ =========== ============ CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 55,610 $ 10,577,679 $ 2,012,063 $ 37,329,346 Net assets from contracts in payout -- -- -- -- ---------------- ---------------- ----------- ------------ Total Net Assets $ 55,610 $ 10,577,679 $ 2,012,063 $ 37,329,346 ================ ================ =========== ============
The accompanying notes are an integral part of these financial statements. 29 LMPVET LMPVET LMPVET LMPVET LMPVET SOCIAL LMPVET CAPITAL FUNDAMENTAL VALUE APPRECIATION AGGRESSIVE GROWTH LARGE CAP GROWTH AWARENESS AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ------------ ----------------- ---------------- ------------- -------------- $ 59,326,964 $ 70,123,262 $ 86,705,139 $ 5,504,121 $ 568,035 $ 43,322,379 -- -- -- -- -- -- -- -- -- -- -- -- ----------------- ------------ ----------------- ---------------- ------------- -------------- 59,326,964 70,123,262 86,705,139 5,504,121 568,035 43,322,379 ----------------- ------------ ----------------- ---------------- ------------- -------------- 548 1,037 599 381 134 365 ----------------- ------------ ----------------- ---------------- ------------- -------------- 548 1,037 599 381 134 365 ----------------- ------------ ----------------- ---------------- ------------- -------------- $ 59,326,416 $ 70,122,225 $ 86,704,540 $ 5,503,740 $ 567,901 $ 43,322,014 ================= ============ ================= ================ ============= ============== $ 59,326,416 $ 70,122,225 $ 86,704,540 $ 5,503,740 $ 567,901 $ 43,322,014 -- -- -- -- -- -- ----------------- ------------ ----------------- ---------------- ------------- -------------- $ 59,326,416 $ 70,122,225 $ 86,704,540 $ 5,503,740 $ 567,901 $ 43,322,014 ================= ============ ================= ================ ============= ==============
The accompanying notes are an integral part of these financial statements. 30 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2008 LMPVET LMPVET LMPVET DIVIDEND LMPVET LIFESTYLE CAPITAL GLOBAL EQUITY STRATEGY ALLOCATION 50% SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------- ------------- --------------- ---------------- ASSETS: Investments at fair value $ 4,320,716 $ 3,246,606 $ 5,523,074 $ 6,471,484 Other receivables -- -- -- -- Due from MetLife Investors USA Insurance Company -- -- -- -- ----------- ------------- --------------- ---------------- Total Assets 4,320,716 3,246,606 5,523,074 6,471,484 ----------- ------------- --------------- ---------------- LIABILITIES: Due to MetLife Investors USA Insurance Company 503 383 323 133 ----------- ------------- --------------- ---------------- Total Liabilities 503 383 323 133 ----------- ------------- --------------- ---------------- NET ASSETS $ 4,320,213 $ 3,246,223 $ 5,522,751 $ 6,471,351 =========== ============= =============== ================ CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 4,320,213 $ 3,246,223 $ 5,522,751 $ 6,471,351 Net assets from contracts in payout -- -- -- -- ----------- ------------- --------------- ---------------- Total Net Assets $ 4,320,213 $ 3,246,223 $ 5,522,751 $ 6,471,351 =========== ============= =============== ================
The accompanying notes are an integral part of these financial statements. 31 LMPVET LIFESTYLE LMPVET LIFESTYLE LMPVIT ADJUSTABLE LMPVIT GLOBAL LMPVIT MONEY ALLOCATION 70% ALLOCATION 85% RATE INCOME HIGH YIELD BOND MARKET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ---------------- ----------------- --------------- ------------- $ 2,719,171 $ 25,876,285 $ 1,788,551 $ 29,373,741 $ 115,203,998 -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ----------------- --------------- ------------- 2,719,171 25,876,285 1,788,551 29,373,741 115,203,998 ---------------- ---------------- ----------------- --------------- ------------- 124 352 312 718 402 ---------------- ---------------- ----------------- --------------- ------------- 124 352 312 718 402 ---------------- ---------------- ----------------- --------------- ------------- $ 2,719,047 $ 25,875,933 $ 1,788,239 $ 29,373,023 $ 115,203,596 ================ ================ ================= =============== ============= $ 2,719,047 $ 25,875,933 $ 1,788,239 $ 29,373,023 $ 115,201,634 -- -- -- -- 1,962 ---------------- ---------------- ----------------- --------------- ------------- $ 2,719,047 $ 25,875,933 $ 1,788,239 $ 29,373,023 $ 115,203,596 ================ ================ ================= =============== =============
The accompanying notes are an integral part of these financial statements. 32 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008 MIST LORD ABBETT MIST LORD ABBETT MIST VAN KAMPEN MIST LORD ABBETT GROWTH AND INCOME BOND DEBENTURE MID CAP GROWTH MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends $ 10,570,094 $ 10,695,130 $ 351,618 $ 78,107 -------------------- ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges 8,642,429 3,461,951 400,496 283,816 Administrative charges 1,007,672 599,521 71,942 46,308 -------------------- ------------------- ------------------ ------------------- Total expenses 9,650,101 4,061,472 472,438 330,124 -------------------- ------------------- ------------------ ------------------- Net investment income (loss) 919,993 6,633,658 (120,820) (252,017) -------------------- ------------------- ------------------ ------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 67,589,055 3,871,990 2,436,667 2,068,965 Realized gains (losses) on sale of investments (14,027,589) (8,281,442) (305,993) (696,987) -------------------- ------------------- ------------------ ------------------- Net realized gains (losses) 53,561,466 (4,409,452) 2,130,674 1,371,978 -------------------- ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments (337,506,715) (54,017,190) (20,664,604) (11,033,703) -------------------- ------------------- ------------------ ------------------- Net realized and unrealized gains (losses) on investments (283,945,249) (58,426,642) (18,533,930) (9,661,725) -------------------- ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations $ (283,025,256) $ (51,792,984) $ (18,654,750) $ (9,913,742) ==================== =================== ================== ===================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 33 MIST HARRIS MIST LEGG MASON MIST LAZARD MIST MET/AIM OAKMARK MIST THIRD AVENUE MIST OPPENHEIMER PARTNERS MID CAP SMALL CAP GROWTH INTERNATIONAL SMALL CAP VALUE CAPITAL APPRECIATION AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- $ 959,339 $ -- $ 4,788,824 $ 2,056,641 $ 9,182,818 $ -- ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- 1,402,343 1,981,037 3,970,100 3,749,463 3,555,458 1,153,355 247,145 355,581 708,750 650,723 617,638 205,150 ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- 1,649,488 2,336,618 4,678,850 4,400,186 4,173,096 1,358,505 ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- (690,149) (2,336,618) 109,974 (2,343,545) 5,009,722 (1,358,505) ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- 7,760,436 13,428,104 49,862,624 18,595,000 73,204,336 669,534 (4,574,658) (1,228,854) (12,196,864) 800,478 (7,463,250) (1,747,942) ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- 3,185,778 12,199,250 37,665,760 19,395,478 65,741,086 (1,078,408) ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- (47,991,389) (77,286,162) (184,812,243) (104,970,939) (216,168,936) (36,608,829) ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- (44,805,611) (65,086,912) (147,146,483) (85,575,461) (150,427,850) (37,687,237) ---------------- ------------------- ----------------- -------------------- ----------------------- -------------------- $ (45,495,760) $ (67,423,530) $ (147,036,509) $ (87,919,006) $ (145,418,128) $ (39,045,742) ================ =================== ================= ==================== ======================= ====================
The accompanying notes are an integral part of these financial statements. 34 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST PIMCO MIST PIMCO MIST RCM INFLATION MIST T. ROWE PRICE TOTAL RETURN TECHNOLOGY PROTECTED BOND MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ---------------- ----------------- --------------------- INVESTMENT INCOME: Dividends $ 18,736,505 $ 7,864,582 $ 10,543,558 $ -- ---------------- ---------------- ----------------- --------------------- EXPENSES: Mortality and expense risk charges 7,100,760 796,892 4,085,698 2,634,479 Administrative charges 1,122,702 139,238 720,327 475,358 --------------- ---------------- ----------------- --------------------- Total expenses 8,223,462 936,130 4,806,025 3,109,837 --------------- ---------------- ----------------- --------------------- Net investment income (loss) 10,513,043 6,928,452 5,737,533 (3,109,837) --------------- ---------------- ----------------- --------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 12,004,734 16,659,671 582,703 22,909,149 Realized gains (losses) on sale of investments 307,026 (4,240,859) (3,168,741) 2,340,217 --------------- ---------------- ----------------- --------------------- Net realized gains (losses) 12,311,760 12,418,812 (2,586,038) 25,249,366 --------------- ---------------- ----------------- --------------------- Change in unrealized gains (losses) on investments (28,451,249) (52,183,275) (32,695,477) (115,238,774) --------------- ---------------- ----------------- --------------------- Net realized and unrealized gains (losses) on investments (16,139,489) (39,764,463) (35,281,515) (89,989,408) --------------- ---------------- ----------------- --------------------- Net increase (decrease) in net assets resulting from operations $ (5,626,446) $ (32,836,011) $ (29,543,982) $ (93,099,245) ================ ================ ================= =====================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 35 MIST MFS RESEARCH MIST CLARION MIST TURNER MIST GOLDMAN SACHS MIST METLIFE MIST METLIFE INTERNATIONAL GLOBAL REAL ESTATE MID CAP GROWTH MID CAP VALUE DEFENSIVE STRATEGY MODERATE STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- $ 5,446,200 $ 1,441,824 $ -- $ 868,855 $ 11,973,335 $ 28,083,832 -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- 4,005,267 1,228,875 751,416 1,534,926 12,070,043 22,607,474 690,982 214,467 133,881 271,904 2,137,377 4,015,428 -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- 4,696,249 1,443,342 885,297 1,806,830 14,207,420 26,622,902 -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- 749,951 (1,518) (885,297) (937,975) (2,234,085) 1,460,930 -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- 31,241,250 8,517,599 4,913,034 9,402,467 16,840,987 42,546,070 (3,124,468) (4,921,608) (271,421) (4,588,293) (7,811,463) (11,284,480) -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- 28,116,782 3,595,991 4,641,613 4,814,174 9,029,524 31,261,590 -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- (181,895,929) (47,457,118) (37,334,322) (48,477,533) (217,070,681) (538,226,402) -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- (153,779,147) (43,861,127) (32,692,709) (43,663,359) (208,041,157) (506,964,812) -------------------- --------------------- ----------------- --------------------- --------------------- -------------------- $ (153,029,196) $ (43,862,645) $ (33,578,006) $ (44,601,334) $ (210,275,242) $ (505,503,882) ==================== ===================== ================= ===================== ===================== ====================
The accompanying notes are an integral part of these financial statements. 36 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST METLIFE MIST METLIFE MIST METLIFE MIST VAN KAMPEN BALANCED STRATEGY GROWTH STRATEGY AGGRESSIVE STRATEGY COMSTOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ---------------------- ------------------ INVESTMENT INCOME: Dividends $ 210,816,196 $ 189,644,395 $ 16,542,186 $ 902,628 -------------------- ------------------- ---------------------- ------------------ EXPENSES: Mortality and expense risk charges 61,656,198 75,388,397 6,415,210 738,378 Administrative charges 11,046,985 13,496,858 1,137,233 128,718 -------------------- ------------------- ---------------------- ------------------ Total expenses 72,703,183 88,885,255 7,552,443 867,096 -------------------- ------------------- ---------------------- ------------------ Net investment income (loss) 138,113,013 100,759,140 8,989,743 35,532 -------------------- ------------------- ---------------------- ------------------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 289,726,880 380,636,086 57,856,669 1,991,125 Realized gains (losses) on sale of investments (39,025,067) (52,840,808) (11,387,113) (2,710,466) -------------------- ------------------- ---------------------- ------------------ Net realized gains (losses) 250,701,813 327,795,278 46,469,556 (719,341) -------------------- ------------------- ---------------------- ------------------ Change in unrealized gains (losses) on investments (2,084,196,961) (2,936,404,011) (283,905,358) (22,431,043) -------------------- ------------------- ---------------------- ------------------ Net realized and unrealized gains (losses) on investments (1,833,495,148) (2,608,608,733) (237,435,802) (23,150,384) -------------------- ------------------- ---------------------- ------------------ Net increase (decrease) in net assets resulting from operations $ (1,695,382,135) $ (2,507,849,593) $ (228,446,059) $ (23,114,852) ==================== =================== ====================== ==================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 37 MIST LEGG MASON MIST MFS EMERGING MIST LOOMIS SAYLES MIST MET/AIM MIST DREMAN VALUE EQUITY MARKETS EQUITY GLOBAL MARKETS CAPITAL APPRECIATION MIST JANUS FORTY SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ $ 8,829 $ 768,669 $ 2,727,201 $ 51,886 $ 586,174 $ 92,545 ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ 698,830 797,479 833,714 36,266 188,810 198,837 133,220 145,828 147,843 6,953 30,283 31,699 ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ 832,050 943,307 981,557 43,219 219,093 230,536 ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ (823,221) (174,638) 1,745,644 8,667 367,081 (137,991) ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ 2,161,071 5,589,604 3,579,705 -- 253,696 347,638 (2,988,851) (2,105,288) (3,239,170) (79,118) (493,331) (50,628) ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ (827,780) 3,484,316 340,535 (79,118) (239,635) 297,010 ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ (40,220,689) (47,764,673) (31,624,027) (1,479,081) (7,533,817) (4,164,065) ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ (41,048,469) (44,280,357) (31,283,492) (1,558,199) (7,773,452) (3,867,055) ------------------ -------------------- --------------------- ----------------------- ------------------- ------------------ $ (41,871,690) $ (44,454,995) $ (29,537,848) $ (1,549,532) $ (7,406,371) $ (4,005,046) ================== ==================== ===================== ======================= =================== ==================
The accompanying notes are an integral part of these financial statements. 38 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST PIONEER MIST BLACKROCK MIST BLACKROCK MIST PIONEER FUND STRATEGIC INCOME LARGE CAP CORE HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 93,189 $ 7,684,639 $ 24,429 $ 590,220 -------------------- ------------------- ----------------- ----------------- EXPENSES: Mortality and expense risk charges 142,846 1,541,108 66,196 177,751 Administrative charges 27,217 309,317 10,537 29,322 -------------------- ------------------- ----------------- ----------------- Total expenses 170,063 1,850,425 76,733 207,073 -------------------- ------------------- ----------------- ----------------- Net investment income (loss) (76,874) 5,834,214 (52,304) 383,147 -------------------- ------------------- ----------------- ----------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- 195,603 -- Realized gains (losses) on sale of investments (1,105,314) (2,001,682) (140,974) (1,764,755) -------------------- ------------------- ----------------- ----------------- Net realized gains (losses) (1,105,314) (2,001,682) 54,629 (1,764,755) -------------------- ------------------- ----------------- ----------------- Change in unrealized gains (losses) on investments (3,729,034) (21,409,793) (1,971,499) (3,738,362) -------------------- ------------------- ----------------- ----------------- Net realized and unrealized gains (losses) on investments (4,834,348) (23,411,475) (1,916,870) (5,503,117) -------------------- ------------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations $ (4,911,222) $ (17,577,261) $ (1,969,174) $ (5,119,970) ==================== =================== ================= =================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 39 MIST AMERICAN MIST AMERICAN MIST RAINIER FUNDS BALANCED MIST AMERICAN MIST AMERICAN MIST AMERICAN FUNDS FUNDS LARGE CAP EQUITY ALLOCATION FUNDS BOND FUNDS GROWTH GROWTH ALLOCATION INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT (a) SUB-ACCOUNT (a) SUB-ACCOUNT (a) SUB-ACCOUNT (a) SUB-ACCOUNT (a) ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ $ -- $ 12,056,144 $ 1,430,938 $ 2,183,567 $ 20,545,284 $ 3,014,445 ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ 318,145 1,645,377 140,283 265,218 2,695,365 244,785 57,557 298,906 25,524 48,505 491,783 44,628 ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ 375,702 1,944,283 165,807 313,723 3,187,148 289,413 ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ (375,702) 10,111,861 1,265,131 1,869,844 17,358,136 2,725,032 ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ 242,401 18,803 -- -- 8,685 969 (725,094) (1,187,498) (42,761) (31,924) (24,152) (294,185) ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ (482,693) (1,168,695) (42,761) (31,924) (15,467) (293,216) ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ (12,232,869) (79,902,745) (3,081,576) (19,679,152) (170,403,804) (16,971,992) ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ (12,715,562) (81,071,440) (3,124,337) (19,711,076) (170,419,271) (17,265,208) ------------------- ------------------ ------------------ ------------------ ---------------------- ------------------ $ (13,091,264) $ (70,959,579) $ (1,859,206) $ (17,841,232) $ (153,061,135) $ (14,540,176) =================== ================== ================== ================== ====================== ==================
The accompanying notes are an integral part of these financial statements. 40 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST AMERICAN MIST MET/FRANKLIN FUNDS MODERATE MIST MET/FRANKLIN TEMPLETON FOUNDING MIST SSGA ALLOCATION MUTUAL SHARES STRATEGY GROWTH ETF SUB-ACCOUNT (a) SUB-ACCOUNT (a) SUB-ACCOUNT (a) SUB-ACCOUNT (b) ------------------- -------------------- --------------------- ------------------ INVESTMENT INCOME: Dividends $ 7,956,812 $ 358,327 $ 3,544,132 $ -- ------------------- -------------------- --------------------- ------------------ EXPENSES: Mortality and expense risk charges 1,020,888 60,481 1,016,581 887 Administrative charges 188,088 11,072 187,356 166 ------------------ -------------------- --------------------- ------------------ Total expenses 1,208,976 71,553 1,203,937 1,053 ------------------ -------------------- --------------------- ------------------ Net investment income (loss) 6,747,836 286,774 2,340,195 (1,053) ------------------ -------------------- --------------------- ------------------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 7,114 -- -- -- Realized gains (losses) on sale of investments (1,356,772) (104,240) (46,625) -- ------------------ -------------------- --------------------- ------------------ Net realized gains (losses) (1,349,658) (104,240) (46,625) -- ------------------ -------------------- --------------------- ------------------ Change in unrealized gains (losses) on investments (39,805,795) (3,194,226) (44,949,267) 68,421 ------------------ -------------------- --------------------- ------------------ Net realized and unrealized gains (losses) on investments (41,155,453) (3,298,466) (44,995,892) 68,421 ------------------ -------------------- --------------------- ------------------ Net increase (decrease) in net assets resulting from operations $ (34,407,617) $ (3,011,692) $ (42,655,697) $ 67,368 =================== ==================== ===================== ==================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 41 MIST SSGA GROWTH AIM V.I. AIM V.I. CAPITAL AIM V.I. AIM V.I. BASIC AIM V.I. AND INCOME ETF CORE EQUITY APPRECIATION INTERNATIONAL GROWTH BALANCED GLOBAL REAL ESTATE SUB-ACCOUNT (b) SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- $ -- $ 11,196 $ -- $ 172,612 $ 18,818 $ 197,136 ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- 2,621 8,682 4,139 231,239 6,877 22,324 455 -- -- 52,571 -- 5,163 ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- 3,076 8,682 4,139 283,810 6,877 27,487 ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- (3,076) 2,514 (4,139) (111,198) 11,941 169,649 ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- -- -- -- 501,006 -- 307,358 2,403 16,517 (14,342) (1,303,819) (26,155) (50,769) ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- 2,403 16,517 (14,342) (802,813) (26,155) 256,589 ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- 158,177 (222,155) (138,973) (11,002,806) (207,594) (1,703,426) ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- 160,580 (205,638) (153,315) (11,805,619) (233,749) (1,446,837) ------------------- -------------- ------------------- ----------------------- ----------------- --------------------- $ 157,504 $ (203,124) $ (157,454) $ (11,916,817) $ (221,808) $ (1,277,188) =================== ============== =================== ======================= ================= =====================
The accompanying notes are an integral part of these financial statements. 42 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 OPPENHEIMER MFS RESEARCH MFS INVESTORS TRUST MFS NEW DISCOVERY MAIN STREET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ---------------------- -------------------- -------------- INVESTMENT INCOME: Dividends $ 856 $ 873 $ -- $ 2,696 ---------------- ---------------------- -------------------- -------------- EXPENSES: Mortality and expense risk charges 2,042 1,258 964 2,453 Administrative charges -- -- -- -- --------------- ---------------------- -------------------- -------------- Total expenses 2,042 1,258 964 2,453 --------------- ---------------------- -------------------- -------------- Net investment income (loss) (1,186) (385) (964) 243 --------------- ---------------------- -------------------- -------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 7,206 14,047 11,713 Realized gains (losses) on sale of investments 6,421 5,803 (3,636) 886 --------------- ---------------------- -------------------- -------------- Net realized gains (losses) 6,421 13,009 10,411 12,599 --------------- ---------------------- -------------------- -------------- Change in unrealized gains (losses) on investments (64,104) (43,568) (42,333) (94,975) --------------- ---------------------- -------------------- -------------- Net realized and unrealized gains (losses) on investments (57,683) (30,559) (31,922) (82,376) --------------- ---------------------- -------------------- -------------- Net increase (decrease) in net assets resulting from operations $ (58,869) $ (30,944) $ (32,886) $ (82,133) =============== ====================== ==================== ==============
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 43 OPPENHEIMER OPPENHEIMER OPPENHEIMER MAIN OPPENHEIMER FIDELITY VIP FIDELITY VIP CORE BOND STRATEGIC BOND STREET SMALL CAP MONEY ASSET MANAGER GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ----------------- ------------------- ----------- ---------------- ----------------- $ 8,395 $ 1,250 $ 27,640 $ 4,242 $ 3,073,691 $ 1,427,995 -------------- ----------------- ------------------- ----------- ---------------- ----------------- 2,598 322 162,196 2,148 1,653,508 2,434,202 -- -- 37,697 -- -- -- -------------- ----------------- ------------------- ----------- ---------------- ----------------- 2,598 322 199,893 2,148 1,653,508 2,434,202 -------------- ----------------- ------------------- ----------- ---------------- ----------------- 5,797 928 (172,253) 2,094 1,420,183 (1,006,207) -------------- ----------------- ------------------- ----------- ---------------- ----------------- -- 289 569,406 -- 12,845,835 -- (16,558) 3,759 (906,887) -- (2,816,740) (1,495,360) -------------- ----------------- ------------------- ----------- ---------------- ----------------- (16,558) 4,048 (337,481) -- 10,029,095 (1,495,360) -------------- ----------------- ------------------- ----------- ---------------- ----------------- (69,378) (7,449) (7,281,710) -- (50,937,043) (105,165,298) -------------- ----------------- ------------------- ----------- ---------------- ----------------- (85,936) (3,401) (7,619,191) -- (40,907,948) (106,660,658) -------------- ----------------- ------------------- ----------- ---------------- ----------------- $ (80,139) $ (2,473) $ (7,791,444) $ 2,094 $ (39,487,765) $ (107,666,865) ============== ================= =================== =========== ================ =================
The accompanying notes are an integral part of these financial statements. 44 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP CONTRAFUND OVERSEAS EQUITY-INCOME INDEX 500 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- --------------- ---------------- ---------------- INVESTMENT INCOME: Dividends $ 3,152,933 $ 212,046 $ 227,171 $ 1,929,785 ----------------- --------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges 4,098,392 108,515 141,105 1,280,711 Administrative charges 80,107 -- -- -- ----------------- --------------- ---------------- ---------------- Total expenses 4,178,499 108,515 141,105 1,280,711 ----------------- --------------- ---------------- ---------------- Net investment income (loss) (1,025,566) 103,531 86,066 649,074 ----------------- --------------- ---------------- ---------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 8,766,656 1,078,686 11,202 1,083,940 Realized gains (losses) on sale of investments (4,126,861) (84,229) (599,600) 956,879 ----------------- --------------- ---------------- ---------------- Net realized gains (losses) 4,639,795 994,457 (588,398) 2,040,819 ----------------- --------------- ---------------- ---------------- Change in unrealized gains (losses) on investments (169,629,453) (5,763,565) (4,751,685) (45,013,396) ----------------- --------------- ---------------- ---------------- Net realized and unrealized gains (losses) on investments (164,989,658) (4,769,108) (5,340,083) (42,972,577) ----------------- --------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations $ (166,015,224) $ (4,665,577) $ (5,254,017) $ (42,323,503) ================= =============== ================ ================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 45 FIDELITY VIP FIDELITY VIP DWS MSF FI MID CAP MSF FI MSF FI MONEY MARKET MID CAP INTERNATIONAL OPPORTUNITIES LARGE CAP VALUE LEADERS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------ ---------------- ---------------- ----------------- --------------- ---------------- $ 1,197,054 $ 118,913 $ 419,964 $ 21,125 $ -- $ 75,092 ------------ ---------------- ---------------- ----------------- --------------- ---------------- 543,443 570,616 404,756 68,451 62,442 63,037 -- 113,801 -- -- 9,849 10,378 ------------ ---------------- ---------------- ----------------- --------------- ---------------- 543,443 684,417 404,756 68,451 72,291 73,415 ------------ ---------------- ---------------- ----------------- --------------- ---------------- 653,611 (565,504) 15,208 (47,326) (72,291) 1,677 ------------ ---------------- ---------------- ----------------- --------------- ---------------- -- 6,038,242 5,461,569 -- -- 436,547 -- (2,032,243) (300,549) (88,745) (290,186) (223,761) ------------ ---------------- ---------------- ----------------- --------------- ---------------- -- 4,005,999 5,161,020 (88,745) (290,186) 212,786 ------------ ---------------- ---------------- ----------------- --------------- ---------------- -- (27,042,018) (23,324,279) (3,499,091) (1,977,983) (2,258,092) ------------ ---------------- ---------------- ----------------- --------------- ---------------- -- (23,036,019) (18,163,259) (3,587,836) (2,268,169) (2,045,306) ------------ ---------------- ---------------- ----------------- --------------- ---------------- $ 653,611 $ (23,601,523) $ (18,148,051) $ (3,635,162) $ (2,340,460) $ (2,043,629) ============ ================ ================ ================= =============== ================
The accompanying notes are an integral part of these financial statements. 46 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF BLACKROCK MSF RUSSELL MSF JULIUS BAER MSF METLIFE LEGACY LARGE CAP 2000 INDEX INTERNATIONAL STOCK STOCK INDEX GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ---------------------- ----------------- ------------------- INVESTMENT INCOME: Dividends $ 97,711 $ 153,673 $ 4,250,686 $ 4,860 --------------- ---------------------- ----------------- ------------------- EXPENSES: Mortality and expense risk charges 96,580 71,831 3,209,455 14,896 Administrative charges -- 11,786 422,995 -- -------------- ---------------------- ----------------- ------------------- Total expenses 96,580 83,617 3,632,450 14,896 -------------- ---------------------- ----------------- ------------------- Net investment income (loss) 1,131 70,056 618,236 (10,036) -------------- ---------------------- ----------------- ------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 383,327 648,873 10,241,113 -- Realized gains (losses) on sale of investments (766,832) (251,473) (1,043,695) (6,667) -------------- ---------------------- ----------------- ------------------- Net realized gains (losses) (383,505) 397,400 9,197,418 (6,667) -------------- ---------------------- ----------------- ------------------- Change in unrealized gains (losses) on investments (2,531,381) (3,432,086) (115,000,965) (479,683) -------------- ---------------------- ----------------- ------------------- Net realized and unrealized gains (losses) on investments (2,914,886) (3,034,686) (105,803,547) (486,350) -------------- ---------------------- ----------------- ------------------- Net increase (decrease) in net assets resulting from operations $ (2,913,755) $ (2,964,630) $ (105,185,311) $ (496,386) =============== ====================== ================= ===================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 47 MSF LEHMAN MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK BROTHERS AGGREGATE MSF MORGAN STANLEY STRATEGIC VALUE BOND INCOME LARGE CAP VALUE BOND INDEX MSF MFS VALUE EAFE INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- $ 55,184 $ 1,718,701 $ 27,324 $ 378,323 $ 457,351 $ 462,012 ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- 137,859 524,207 42,238 108,296 368,883 208,790 -- 69,813 -- -- 49,802 -- ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- 137,859 594,020 42,238 108,296 418,685 208,790 ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- (82,675) 1,124,681 (14,914) 270,027 38,666 253,222 ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- 1,001,301 -- 52,991 -- 2,525,228 638,336 (640,702) (342,658) (170,841) (33,327) (1,801,773) (173,393) ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- 360,599 (342,658) (117,850) (33,327) 723,455 464,943 ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- (5,059,965) (2,808,583) (1,221,978) 71,367 (11,171,380) (8,998,610) ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- (4,699,366) (3,151,241) (1,339,828) 38,040 (10,447,925) (8,533,667) ------------------ ---------------- ------------------ --------------------- ---------------- --------------------- $ (4,782,041) $ (2,026,560) $ (1,354,742) $ 308,067 $ (10,409,259) $ (8,280,445) ================== ================ ================== ===================== ================ =====================
The accompanying notes are an integral part of these financial statements. 48 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF HARRIS MSF MFS MSF METLIFE MSF DAVIS OAKMARK TOTAL RETURN MID CAP STOCK INDEX VENTURE VALUE FOCUSED VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ---------------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 1,552,965 $ 190,720 $ 5,729,164 $ 152,489 ---------------- ---------------------- ----------------- ----------------- EXPENSES: Mortality and expense risk charges 612,452 181,562 6,583,513 3,236,439 Administrative charges 80,535 -- 1,161,945 539,234 --------------- ---------------------- ----------------- ----------------- Total expenses 692,987 181,562 7,745,458 3,775,673 --------------- ---------------------- ----------------- ----------------- Net investment income (loss) 859,978 9,158 (2,016,294) (3,623,184) --------------- ---------------------- ----------------- ----------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 3,504,659 1,256,924 2,728,972 28,206,598 Realized gains (losses) on sale of investments (2,021,246) (339,467) 9,104,672 (14,285,692) --------------- ---------------------- ----------------- ----------------- Net realized gains (losses) 1,483,413 917,457 11,833,644 13,920,906 --------------- ---------------------- ----------------- ----------------- Change in unrealized gains (losses) on investments (13,827,196) (6,892,549) (240,704,599) (145,506,995) --------------- ---------------------- ----------------- ----------------- Net realized and unrealized gains (losses) on investments (12,343,783) (5,975,092) (228,870,955) (131,586,089) --------------- ---------------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations $ (11,483,805) $ (5,965,934) $ (230,887,249) $ (135,209,273) ================ ====================== ================= =================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 49 MSF WESTERN ASSET MSF JENNISON MSF BLACKROCK MSF T. ROWE PRICE MANAGEMENT MSF OPPENHEIMER MSF METLIFE GROWTH MONEY MARKET SMALL CAP GROWTH U.S. GOVERNMENT GLOBAL EQUITY AGGRESSIVE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ $ 3,283,695 $ 9,172,077 $ -- $ 2,357,556 $ 168,999 $ 10,281 ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ 2,139,920 5,400,810 28,508 910,685 118,759 30,970 382,172 942,166 2,231 167,553 23,726 5,085 ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ 2,522,092 6,342,976 30,739 1,078,238 142,485 36,055 ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ 761,603 2,829,101 (30,739) 1,279,318 26,514 (25,774) ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ 12,827,545 -- 217,636 -- 340,550 60,328 229,671 -- (81,376) (532,690) (250,444) (257,274) ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ 13,057,216 -- 136,260 (532,690) 90,106 (196,946) ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ (82,069,768) -- (1,371,897) (2,345,788) (5,106,339) (850,302) ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ (69,012,552) -- (1,235,637) (2,878,478) (5,016,233) (1,047,248) ---------------- ------------- -------------------- -------------------- ------------------ ------------------------ $ (68,250,949) $ 2,829,101 $ (1,266,376) $ (1,599,160) $ (4,989,719) $ (1,073,022) ================ ============= ==================== ==================== ================== ========================
The accompanying notes are an integral part of these financial statements. 50 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF METLIFE MSF METLIFE MSF METLIFE CONSERVATIVE CONSERVATIVE TO MSF METLIFE MODERATE TO ALLOCATION MODERATE ALLOCATION MODERATE ALLOCATION AGGRESSIVE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- ---------------------- ---------------------- ------------------------ INVESTMENT INCOME: Dividends $ 38,717 $ 59,475 $ 317,363 $ 352,641 ---------------- ---------------------- ---------------------- ------------------------ EXPENSES: Mortality and expense risk charges 67,880 87,574 611,109 852,830 Administrative charges 11,545 14,290 103,501 144,079 --------------- ---------------------- ---------------------- ------------------------ Total expenses 79,425 101,864 714,610 996,909 --------------- ---------------------- ---------------------- ------------------------ Net investment income (loss) (40,708) (42,389) (397,247) (644,268) --------------- ---------------------- ---------------------- ------------------------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 35,524 63,613 522,716 969,763 Realized gains (losses) on sale of investments (106,999) (150,611) (503,237) (1,315,848) --------------- ---------------------- ---------------------- ------------------------ Net realized gains (losses) (71,475) (86,998) 19,479 (346,085) --------------- ---------------------- ---------------------- ------------------------ Change in unrealized gains (losses) on investments (717,596) (1,454,221) (14,209,553) (23,919,604) --------------- ---------------------- ---------------------- ------------------------ Net realized and unrealized gains (losses) on investments (789,071) (1,541,219) (14,190,074) (24,265,689) --------------- ---------------------- ---------------------- ------------------------ Net increase (decrease) in net assets resulting from operations $ (829,779) $ (1,583,608) $ (14,587,321) $ (24,909,957) ================ ====================== ====================== ========================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 51 MSF NEUBERGER MSF MET/DIMENSIONAL MSF T. ROWE PRICE MSF LOOMIS SAYLES BERMAN INTERNATIONAL SMALL VAN KAMPEN LIT VAN KAMPEN LIT LARGE CAP GROWTH SMALL CAP MID CAP VALUE COMPANY CAPITAL GROWTH ENTERPRISE SUB-ACCOUNT (a) SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (b) SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- $ -- $ -- $ -- $ -- $ 15,504 $ 1,053 -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- 8,091 53 24 91 40,456 1,194 1,498 9 4 14 6,711 -- -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- 9,589 62 28 105 47,167 1,194 -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- (9,589) (62) (28) (105) (31,663) (141) -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- -- -- -- -- -- -- (67,717) -- -- 414 757,973 1,217 -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- (67,717) -- -- 414 757,973 1,217 -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- (340,288) (3,170) 2,058 7,962 (1,228,958) (43,899) -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- (408,005) (3,170) 2,058 8,376 (470,985) (42,682) -------------------- -------------------- ------------------ ---------------------- ----------------- ----------------- $ (417,594) $ (3,232) $ 2,030 $ 8,271 $ (502,648) $ (42,823) ==================== ==================== ================== ====================== ================= =================
The accompanying notes are an integral part of these financial statements. 52 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 VAN KAMPEN LIT VAN KAMPEN LIT FEDERATED FEDERATED HIGH GROWTH AND INCOME COMSTOCK EQUITY INCOME INCOME BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ----------------- ---------------- ----------------- INVESTMENT INCOME: Dividends $ 852,984 $ 1,527,887 $ 899 $ 10,241 -------------------- ----------------- ---------------- ----------------- EXPENSES: Mortality and expense risk charges 690,292 935,534 333 1,419 Administrative charges 140,918 183,107 -- -- -------------------- ----------------- ---------------- ----------------- Total expenses 831,210 1,118,641 333 1,419 -------------------- ----------------- ---------------- ----------------- Net investment income (loss) 21,774 409,246 566 8,822 -------------------- ----------------- ---------------- ----------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,656,383 3,752,491 -- -- Realized gains (losses) on sale of investments (2,168,968) (2,271,607) 621 (15,911) -------------------- ----------------- ---------------- ----------------- Net realized gains (losses) (512,585) 1,480,884 621 (15,911) -------------------- ----------------- ---------------- ----------------- Change in unrealized gains (losses) on investments (22,626,597) (34,943,157) (9,945) (22,836) -------------------- ----------------- ---------------- ----------------- Net realized and unrealized gains (losses) on investments (23,139,182) (33,462,273) (9,324) (38,747) -------------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations $ (23,117,408) $ (33,053,027) $ (8,758) $ (29,925) ==================== ================= ================ =================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 53 FEDERATED MID CAP NEUBERGER BERMAN ALGER AMERICAN T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE PRIME GROWTH STRATEGIES GENESIS SMALLCAP GROWTH GROWTH STOCK INTERNATIONAL STOCK RESERVE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- $ -- $ 467 $ -- $ 32,957 $ 15,429 $ 45,576 -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- 1,563 112 788,573 72,690 9,006 16,349 -- -- -- -- -- -- -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- 1,563 112 788,573 72,690 9,006 16,349 -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- (1,563) 355 (788,573) (39,733) 6,423 29,227 -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- 31,619 -- 812,709 19,225 2,805 -- (2,360) (85) (1,047,123) (64,740) (8,769) (22) -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- 29,259 (85) (234,414) (45,515) (5,964) (22) -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- (86,498) (5,060) (34,617,982) (4,164,867) (606,967) 200 -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- (57,239) (5,145) (34,852,396) (4,210,382) (612,931) 178 -------------------- ------------------- ------------------ ---------------- ---------------------- ---------------------- $ (58,802) $ (4,790) $ (35,640,969) $ (4,250,115) $ (606,508) $ 29,405 ==================== =================== ================== ================ ====================== ======================
The accompanying notes are an integral part of these financial statements. 54 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 AMERICAN FUNDS JANUS ASPEN GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS WORLDWIDE GROWTH CAPITALIZATION GROWTH GROWTH-INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 89 $ -- $ 2,686,126 $ 3,135,251 ------------------- ----------------- ----------------- ----------------- EXPENSES: Mortality and expense risk charges 64 435,041 3,468,676 2,153,664 Administrative charges -- 32,310 554,913 325,284 ------------------- ----------------- ----------------- ----------------- Total expenses 64 467,351 4,023,589 2,478,948 ------------------- ----------------- ----------------- ----------------- Net investment income (loss) 25 (467,351) (1,337,463) 656,303 ------------------- ----------------- ----------------- ----------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 4,932,765 29,196,195 10,385,364 Realized gains (losses) on sale of investments 215 (996,016) (3,596,451) (1,152,882) ------------------- ----------------- ----------------- ----------------- Net realized gains (losses) 215 3,936,749 25,599,744 9,232,482 ------------------- ----------------- ----------------- ----------------- Change in unrealized gains (losses) on investments (4,434) (29,905,104) (174,410,801) (85,104,056) ------------------- ----------------- ----------------- ----------------- Net realized and unrealized gains (losses) on investments (4,219) (25,968,355) (148,811,057) (75,871,574) ------------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations $ (4,194) $ (26,435,706) $ (150,148,520) $ (75,215,271) =================== ================= ================= =================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 55 AMERICAN FUNDS AMERICAN FUNDS FTVIPT MUTUAL FTVIPT TEMPLETON FTVIPT TEMPLETON FTVIPT FRANKLIN GLOBAL GROWTH BOND SHARES SECURITIES FOREIGN SECURITIES GROWTH SECURITIES INCOME SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- $ 2,484,577 $ 1,490,291 $ 2,279,247 $ 1,291,052 $ 620,410 $ 5,117,615 ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- 1,562,106 172,244 887,293 866,493 445,416 1,184,622 285,685 40,873 173,965 137,459 86,327 233,337 ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- 1,847,791 213,117 1,061,258 1,003,952 531,743 1,417,959 ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- 636,786 1,277,174 1,217,989 287,100 88,667 3,699,656 ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- 9,836,967 37,323 3,241,852 5,283,931 2,444,798 2,142,862 (856,422) (61,519) (1,365,724) (273,151) (977,497) (1,702,477) ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- 8,980,545 (24,196) 1,876,128 5,010,780 1,467,301 440,385 ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- (66,659,058) (3,510,614) (36,089,735) (34,118,181) (20,786,300) (38,217,481) ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- (57,678,513) (3,534,810) (34,213,607) (29,107,401) (19,318,999) (37,777,096) ----------------- ----------------- -------------------- --------------------- -------------------- -------------------- $ (57,041,727) $ (2,257,636) $ (32,995,618) $ (28,820,301) $ (19,230,332) $ (34,077,440) ================= ================= ==================== ===================== ==================== ====================
The accompanying notes are an integral part of these financial statements. 56 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 FTVIPT TEMPLETON FTVIPT FRANKLIN GLOBAL INCOME SMALL CAP VALUE UIF EQUITY AND SECURITIES SECURITIES INCOME UIF U.S. REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------ ----------------- ----------------------- INVESTMENT INCOME: Dividends $ 404,964 $ 39,859 $ 4,193,304 $ 1,707,532 ------------------- ------------------ ----------------- ----------------------- EXPENSES: Mortality and expense risk charges 120,998 40,231 2,163,719 659,311 Administrative charges 28,945 9,467 428,932 125,338 ------------------- ------------------ ----------------- ----------------------- Total expenses 149,943 49,698 2,592,651 784,649 ------------------- ------------------ ----------------- ----------------------- Net investment income (loss) 255,021 (9,839) 1,600,653 922,883 ------------------- ------------------ ----------------- ----------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 276,058 5,643,649 18,727,195 Realized gains (losses) on sale of investments (28,320) (78,576) (4,211,776) (1,651,931) ------------------- ------------------ ----------------- ----------------------- Net realized gains (losses) (28,320) 197,482 1,431,873 17,075,264 ------------------- ------------------ ----------------- ----------------------- Change in unrealized gains (losses) on investments 289,110 (1,934,460) (50,294,653) (39,422,041) ------------------- ------------------ ----------------- ----------------------- Net realized and unrealized gains (losses) on investments 260,790 (1,736,978) (48,862,780) (22,346,777) ------------------- ------------------ ----------------- ----------------------- Net increase (decrease) in net assets resulting from operations $ 515,811 $ (1,746,817) $ (47,262,127) $ (21,423,894) =================== ================== ================= =======================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 57 UIF U.S. PIONEER VCT PIONEER VCT PIONEER VCT PIONEER VCT PIONEER VCT MID CAP VALUE BOND CULLEN VALUE EMERGING MARKETS EQUITY INCOME FUND SUB-ACCOUNT SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) ---------------- ------------------ ------------------ ------------------- --------------- ------------------ $ 47,040 $ 912 $ -- $ -- $ 210 $ 279 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ 64,197 168 327 105 80 81 14,970 38 69 19 14 21 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ 79,167 206 396 124 94 102 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ (32,127) 706 (396) (124) 116 177 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ 1,972,450 -- -- -- -- -- (138,436) (509) (1,801) (7) -- 36,059 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ 1,834,014 (509) (1,801) (7) -- 36,059 ---------------- ------------------ ------------------ ------------------- --------------- ------------------ (5,269,797) 444 3,133 (1,056) 3 (39,483) ---------------- ------------------ ------------------ ------------------- --------------- ------------------ (3,435,783) (65) 1,332 (1,063) 3 (3,424) ---------------- ------------------ ------------------ ------------------- --------------- ------------------ $ (3,467,910) $ 641 $ 936 $ (1,187) $ 119 $ (3,247) ================ ================== ================== =================== =============== ==================
The accompanying notes are an integral part of these financial statements. 58 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 PIONEER VCT PIONEER VCT PIONEER VCT IBBOTSON PIONEER VCT IBBOTSON GLOBAL HIGH YIELD HIGH YIELD AGGRESSIVE ALLOCATION GROWTH ALLOCATION SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) -------------------- ------------------ ------------------------ --------------------- INVESTMENT INCOME: Dividends $ 113 $ 274 $ -- $ -- --------------------- ------------------ ------------------------ --------------------- EXPENSES: Mortality & expense risk charges 5 19 9 3,336 Administrative charges -- 5 2 684 -------------------- ------------------ ------------------------ --------------------- Total expenses 5 24 11 4,020 -------------------- ------------------ ------------------------ --------------------- Net investment income (loss) 108 250 (11) (4,020) -------------------- ------------------ ------------------------ --------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- -- -- Realized gains (losses) on sale of investments -- -- -- (544) -------------------- ------------------ ------------------------ --------------------- Net realized gains (losses) -- -- -- (544) -------------------- ------------------ ------------------------ --------------------- Change in unrealized gains (losses) on investments (200) (1,915) (113) 65,380 -------------------- ------------------ ------------------------ --------------------- Net realized and unrealized gains (losses) on investments (200) (1,915) (113) 64,836 -------------------- ------------------ ------------------------ --------------------- Net increase (decrease) in net assets resulting from operations $ (92) $ (1,665) $ (124) $ 60,816 ===================== ================== ======================== =====================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 59 PIONEER VCT OAK PIONEER VCT IBBOTSON PIONEER VCT PIONEER VCT RIDGE LARGE CAP PIONEER VCT REAL PIONEER VCT MODERATE ALLOCATION INTERNATIONAL VALUE MID CAP VALUE GROWTH ESTATE SHARES SMALL CAP VALUE SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT SUB-ACCOUNT (c) SUB-ACCOUNT (c) SUB-ACCOUNT (c) ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ $ -- $ -- $ 237,680 $ -- $ 529 $ -- ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ 2,947 5 341,735 12 76 21 554 1 67,486 2 14 5 ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ 3,501 6 409,221 14 90 26 ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ (3,501) (6) (171,541) (14) 439 (26) ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ -- -- 2,158,358 -- -- -- (966) -- (449,177) -- (7) -- ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ (966) -- 1,709,181 -- (7) -- ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ (168,655) 30 (12,832,992) 909 (3,723) (1,807) ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ (169,621) 30 (11,123,811) 909 (3,730) (1,807) ----------------------- ---------------------- ---------------- ------------------ ------------------- ------------------ $ (173,122) $ 24 $ (11,295,352) $ 895 $ (3,291) $ (1,833) ======================= ====================== ================ ================== =================== ==================
The accompanying notes are an integral part of these financial statements. 60 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 PIONEER VCT LMPVET LMPVET LMPVET STRATEGIC INCOME SMALL CAP GROWTH INVESTORS EQUITY INDEX SUB-ACCOUNT (c) SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- --------------- ---------------- INVESTMENT INCOME: Dividends $ 391 $ -- $ 36,298 $ 1,069,447 -------------------- ------------------- --------------- ---------------- EXPENSES: Mortality & expense risk charges 53 164,288 50,497 1,412,852 Administrative charges 13 29,118 8,263 133,672 ------------------- ------------------- --------------- ---------------- Total expenses 66 193,406 58,760 1,546,524 ------------------- ------------------- --------------- ---------------- Net investment income (loss) 325 (193,406) (22,462) (477,077) ------------------- ------------------- --------------- ---------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 398,158 82,407 1,244,637 Realized gains (losses) on sale of investments (61) (89,605) (241,569) (1,282,040) ------------------- ------------------- --------------- ---------------- Net realized gains (losses) (61) 308,553 (159,162) (37,403) ------------------- ------------------- --------------- ---------------- Change in unrealized gains (losses) on investments 676 (6,234,277) (1,122,112) (24,324,125) ------------------- ------------------- --------------- ---------------- Net realized and unrealized gains (losses) on investments 615 (5,925,724) (1,281,274) (24,361,528) ------------------- ------------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations $ 940 $ (6,119,130) $ (1,303,736) $ (24,838,605) ==================== =================== =============== ================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 61 LMPVET LMPVET LMPVET AGGRESSIVE LMPVET LARGE CAP LMPVET SOCIAL LMPVET CAPITAL FUNDAMENTAL VALUE APPRECIATION GROWTH GROWTH AWARENESS AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- $ 1,405,531 $ 1,172,991 $ -- $ 21,169 $ 13,689 $ 615,990 -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- 998,176 1,064,423 1,511,538 122,954 9,186 727,149 190,463 201,744 280,002 20,016 1,687 135,111 -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- 1,188,639 1,266,167 1,791,540 142,970 10,873 862,260 -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- 216,892 (93,176) (1,791,540) (121,801) 2,816 (246,270) -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- 58,007 3,269,769 -- -- -- 1,164,376 (1,506,554) (931,453) (890,539) (160,593) (46,175) (3,245,634) -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- (1,448,547) 2,338,316 (890,539) (160,593) (46,175) (2,081,258) -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- (33,402,986) (31,109,184) (53,980,569) (3,323,792) (179,725) (20,848,047) -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- (34,851,533) (28,770,868) (54,871,108) (3,484,385) (225,900) (22,929,305) -------------------- ---------------- -------------------- ------------------- ---------------- ----------------- $ (34,634,641) $ (28,864,044) $ (56,662,648) $ (3,606,186) $ (223,084) $ (23,175,575) ==================== ================ ==================== =================== ================ =================
The accompanying notes are an integral part of these financial statements. 62 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31, 2008 LMPVET LMPVET LMPVET DIVIDEND LMPVET LIFESTYLE CAPITAL GLOBAL EQUITY STRATEGY ALLOCATION 50% SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ---------------- ------------------ ------------------- INVESTMENT INCOME: Dividends $ 3,333 $ 4,542 $ 208,461 $ 297,859 --------------- ---------------- ------------------ ------------------- EXPENSES: Mortality & expense risk charges 109,701 82,830 111,069 116,208 Administrative charges 17,525 14,548 18,762 21,588 -------------- ---------------- ------------------ ------------------- Total expenses 127,226 97,378 129,831 137,796 -------------- ---------------- ------------------ ------------------- Net investment income (loss) (123,893) (92,836) 78,630 160,063 -------------- ---------------- ------------------ ------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,641,376 824,647 -- 310,926 Realized gains (losses) on sale of investments (639,481) (833,054) (240,972) (409,399) -------------- ---------------- ------------------ ------------------- Net realized gains (losses) 1,001,895 (8,407) (240,972) (98,473) -------------- ---------------- ------------------ ------------------- Change in unrealized gains (losses) on investments (4,421,596) (2,901,842) (2,364,206) (2,836,929) -------------- ---------------- ------------------ ------------------- Net realized and unrealized gains (losses) on investments (3,419,701) (2,910,249) (2,605,178) (2,935,402) -------------- ---------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations $ (3,543,594) $ (3,003,085) $ (2,526,548) $ (2,775,339) =============== ================ ================== ===================
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 63 LMPVET LIFESTYLE LMPVET LIFESTYLE LMPVIT ADJUSTABLE LMPVIT GLOBAL LMPVIT MONEY ALLOCATION 70% ALLOCATION 85% RATE INCOME HIGH YIELD BOND MARKET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------ ------------ $ 88,747 $ 597,086 $ 110,961 $ 4,292,700 $ 1,778,972 ------------------- ------------------- -------------------- ------------------ ------------ 48,596 263,629 34,955 531,300 963,703 8,838 59,697 6,460 97,929 185,699 ------------------- ------------------- -------------------- ------------------ ------------ 57,434 323,326 41,415 629,229 1,149,402 ------------------- ------------------- -------------------- ------------------ ------------ 31,313 273,760 69,546 3,663,471 629,570 ------------------- ------------------- -------------------- ------------------ ------------ 3,608 170,644 -- -- -- (153,834) (228,705) (164,548) (1,351,968) -- ------------------- ------------------- -------------------- ------------------ ------------ (150,226) (58,061) (164,548) (1,351,968) -- ------------------- ------------------- -------------------- ------------------ ------------ (1,315,549) (12,155,524) (521,720) (16,334,758) -- ------------------- ------------------- -------------------- ------------------ ------------ (1,465,775) (12,213,585) (686,268) (17,686,726) -- ------------------- ------------------- -------------------- ------------------ ------------ $ (1,434,462) $ (11,939,825) $ (616,722) $ (14,023,255) $ 629,570 =================== =================== ==================== ================== ============
The accompanying notes are an integral part of these financial statements. 64 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST MIST MIST LORD ABBETT GROWTH AND INCOME LORD ABBETT BOND DEBENTURE VAN KAMPEN MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------- --------------------------------- ---------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ---------------- ---------------- ---------------- --------------- ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 919,993 $ (5,228,738) $ 6,633,658 $ 11,005,391 $ (120,820) $ (213,159) Net realized gains (losses) 53,561,466 66,973,185 (4,409,452) 1,357,269 2,130,674 677,224 Change in unrealized gains (losses) on investments (337,506,715) (41,085,573) (54,017,190) 1,748,154 (20,664,604) 1,346,860 ---------------- ---------------- ---------------- ---------------- --------------- ------------ Net increase (decrease) in net assets resulting from operations (283,025,256) 20,658,874 (51,792,984) 14,110,814 (18,654,750) 1,810,925 ---------------- ---------------- ---------------- ---------------- --------------- ------------ CONTRACT TRANSACTIONS: Purchase payments received from contract owners 28,492,525 46,834,968 6,616,627 11,866,307 20,235,767 16,272,511 Net transfers (including fixed account) (60,571,133) (42,192,503) (37,026,776) (537,799) 3,880,753 1,160,441 Contract charges (1,821,738) (2,005,324) (1,012,375) (1,008,101) (123,259) (24,193) Transfers for contract benefits and terminations (58,140,110) (99,400,248) (27,555,849) (41,996,259) (1,787,329) (1,974,131) ---------------- ---------------- ---------------- ---------------- --------------- ------------ Net increase (decrease) in net assets resulting from contract transactions (92,040,456) (96,763,107) (58,978,373) (31,675,852) 22,205,932 15,434,628 ---------------- ---------------- ---------------- ---------------- --------------- ------------ Net increase (decrease) in net assets (375,065,712) (76,104,233) (110,771,357) (17,565,038) 3,551,182 17,245,553 NET ASSETS: Beginning of period 822,332,309 898,436,542 288,948,614 306,513,652 23,676,085 6,430,532 ---------------- ---------------- ---------------- ---------------- --------------- ------------ End of period $ 447,266,597 $ 822,332,309 $ 178,177,257 $ 288,948,614 $ 27,227,267 $ 23,676,085 ================ ================ ================ ================ =============== ============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 65 MIST MIST MIST MIST LORD ABBETT MID CAP VALUE LAZARD MID CAP MET/AIM SMALL CAP GROWTH HARRIS OAKMARK INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- -------------------------------- --------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- ---------------- $ (252,017) $ (170,332) $ (690,149) $ (1,802,344) $ (2,336,618) $ (3,078,140) $ 109,974 $ (3,677,588) 1,371,978 1,572,469 3,185,778 16,993,970 12,199,250 11,493,314 37,665,760 58,328,270 (11,033,703) (1,981,561) (47,991,389) (22,036,063) (77,286,162) 7,260,878 (184,812,243) (66,126,162) --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- --------------- (9,913,742) (579,424) (45,495,760) (6,844,437) (67,423,530) 15,676,052 (147,036,509) (11,475,480) --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- --------------- 11,699,635 7,930,644 11,607,428 17,011,941 11,094,928 16,457,316 18,439,524 40,484,716 6,833,294 711,375 (8,565,531) (712,183) (10,392,592) (4,862,063) (42,593,295) (13,002,405) (79,498) (34,495) (449,254) (462,156) (650,997) (676,125) (1,322,536) (1,545,713) (715,198) (1,681,654) (8,150,431) (14,103,323) (13,225,101) (24,185,235) (22,579,304) (42,657,980) --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- --------------- 17,738,233 6,925,870 (5,557,788) 1,734,279 (13,173,762) (13,266,107) (48,055,611) (16,721,382) --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- --------------- 7,824,491 6,346,446 (51,053,548) (5,110,158) (80,597,292) 2,409,945 (195,092,120) (28,196,862) 16,075,069 9,728,623 121,255,292 126,365,450 181,044,517 178,634,572 384,273,575 412,470,437 --------------- ------------- --------------- ---------------- ---------------- ---------------- --------------- --------------- $ 23,899,560 $ 16,075,069 $ 70,201,744 $ 121,255,292 $ 100,447,225 $ 181,044,517 $ 189,181,455 $ 384,273,575 =============== ============= =============== ================ ================ ================ =============== ================
The accompanying notes are an integral part of these financial statements. 66 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST MIST MIST THIRD AVENUE OPPENHEIMER LEGG MASON SMALL CAP VALUE CAPITAL APPRECIATION PARTNERS AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- -------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 -------------- -------------- -------------- ----------------- ------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (2,343,545) $ (2,365,462) $ 5,009,722 $ (5,919,663) $ (1,358,505) $ (1,880,795) Net realized gains (losses) 19,395,478 46,171,378 65,741,086 29,552,170 (1,078,408) 12,298,558 Change in unrealized gains (losses) on investments (104,970,939) (58,768,816) (216,168,936) 18,087,115 (36,608,829) (9,545,677) -------------- -------------- -------------- ----------------- ------------- ----------------- Net increase (decrease) in net assets resulting from operations (87,919,006) (14,962,900) (145,418,128) 41,719,622 (39,045,742) 872,086 -------------- -------------- -------------- ----------------- ------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 19,598,032 28,238,237 9,600,619 15,359,065 4,323,622 5,158,552 Net transfers (including fixed account) (28,143,045) (26,301,845) (31,744,780) (17,480,507) (5,593,265) (4,650,232) Contract charges (1,177,753) (1,239,790) (1,071,481) (1,196,654) (379,140) (412,688) Transfers for contract benefits and terminations (23,942,334) (38,149,421) (27,085,254) (41,412,366) (6,797,784) (13,668,575) -------------- -------------- -------------- ----------------- ------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions (33,665,100) (37,452,819) (50,300,896) (44,730,462) (8,446,567) (13,572,943) -------------- -------------- -------------- ----------------- ------------- ----------------- Net increase (decrease) in net assets (121,584,106) (52,415,719) (195,719,024) (3,010,840) (47,492,309) (12,700,857) NET ASSETS: Beginning of period 316,501,402 368,917,121 354,882,609 357,893,449 104,186,821 116,887,678 -------------- -------------- -------------- ----------------- ------------- ----------------- End of period $ 194,917,296 $ 316,501,402 $ 159,163,585 $ 354,882,609 $ 56,694,512 $ 104,186,821 ============== ============== ============== ================= ============= =================
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 67 MIST MIST MIST PIMCO TOTAL RETURN MIST RCM TECHNOLOGY PIMCO INFLATION PROTECTED BOND T. ROWE PRICE MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ------------------------------- ------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- $ 10,513,043 $ 7,582,839 $ 6,928,452 $ (924,396) $ 5,737,533 $ 1,153,679 $ (3,109,837) $ (3,913,251) 12,311,760 1,865,721 12,418,812 5,238,101 (2,586,038) (630,364) 25,249,366 29,910,027 (28,451,249) 16,489,342 (52,183,275) 9,989,409 (32,695,477) 20,764,489 (115,238,774) 7,709,385 ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- (5,626,446) 25,937,902 (32,836,011) 14,303,114 (29,543,982) 21,287,804 (93,099,245) 33,706,161 ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- 95,176,720 50,324,363 5,954,390 3,593,950 49,514,203 20,751,843 20,123,917 14,767,868 39,581,392 8,186,069 (9,623,654) 16,177,923 8,664,472 (7,516,750) (13,345,044) 348,445 (1,829,452) (1,270,612) (246,642) (200,345) (1,225,730) (825,450) (860,659) (856,284) (54,723,772) (54,019,084) (3,904,218) (6,035,134) (28,140,448) (28,756,476) (15,795,048) (25,938,293) ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- 78,204,888 3,220,736 (7,820,124) 13,536,394 28,812,497 (16,346,833) (9,876,834) (11,678,264) ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- 72,578,442 29,158,638 (40,656,135) 27,839,508 (731,485) 4,940,971 (102,976,079) 22,027,897 469,985,360 440,826,722 78,045,995 50,206,487 255,623,164 250,682,193 242,043,730 220,015,833 ---------------- ---------------- --------------- --------------- ---------------- -------------- ---------------- -------------- $ 542,563,802 $ 469,985,360 $ 37,389,860 $ 78,045,995 $ 254,891,679 $ 255,623,164 $ 139,067,651 $ 242,043,730 ================ ================ =============== =============== ================ ============== ================ ==============
The accompanying notes are an integral part of these financial statements. 68 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST MFS RESEARCH INTERNATIONAL MIST CLARION GLOBAL REAL ESTATE MIST TURNER MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- -------------------------------- ---------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ----------------- --------------- ---------------- -------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 749,951 $ (1,384,020) $ (1,518) $ (925,011) $ (885,297) $ (916,886) Net realized gains (losses) 28,116,782 53,418,957 3,595,991 26,163,946 4,641,613 5,271,106 Change in unrealized gains (losses) on investments (181,895,929) (18,855,679) (47,457,118) (48,097,283) (37,334,322) 6,353,919 ---------------- ----------------- --------------- ---------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (153,029,196) 33,179,258 (43,862,645) (22,858,348) (33,578,006) 10,708,139 ---------------- ----------------- --------------- ---------------- -------------- -------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 42,412,806 50,987,545 15,277,404 21,175,505 5,450,341 4,172,741 Net transfers (including fixed account) (5,062,960) 8,788,864 236,362 (21,480,375) (1,604,909) 10,905,125 Contract charges (1,174,104) (1,009,685) (388,408) (441,641) (252,183) (207,551) Transfers for contract benefits and terminations (24,040,007) (34,281,775) (7,965,701) (12,322,862) (4,037,420) (6,050,984) ---------------- ----------------- --------------- ---------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 12,135,735 24,484,949 7,159,657 (13,069,373) (444,171) 8,819,331 ---------------- ----------------- --------------- ---------------- -------------- -------------- Net increase (decrease) in net assets (140,893,461) 57,664,207 (36,702,988) (35,927,721) (34,022,177) 19,527,470 NET ASSETS: Beginning of period 345,568,972 287,904,765 100,668,094 136,595,815 69,239,590 49,712,120 ---------------- ----------------- --------------- ---------------- -------------- -------------- End of period $ 204,675,511 $ 345,568,972 $ 63,965,106 $ 100,668,094 $ 35,217,413 $ 69,239,590 ================ ================= =============== ================ ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 69 MIST GOLDMAN SACHS MID CAP VALUE MIST METLIFE DEFENSIVE STRATEGY MIST METLIFE MODERATE STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- ------------------------------------- 2008 2007 2008 2007 2008 2007 --------------- ------------------- ---------------- ----------------- ------------------ ------------------ $ (937,975) $ (1,760,295) $ (2,234,085) $ 1,078,222 $ 1,460,930 $ 3,519,276 4,814,174 20,057,549 9,029,524 25,559,373 31,261,590 43,528,582 (48,477,533) (17,017,038) (217,070,681) (5,702,644) (538,226,402) 9,710,951 --------------- ------------------- ---------------- ----------------- ------------------ ------------------ (44,601,334) 1,280,216 (210,275,242) 20,934,951 (505,503,882) 56,758,809 --------------- ------------------- ---------------- ----------------- ------------------ ------------------ 2,321,516 16,314,472 153,700,709 116,678,354 290,839,853 355,826,125 (20,324,037) 2,122,054 435,345,135 135,710,237 119,607,963 91,228,471 (493,567) (515,879) (4,847,046) (2,050,972) (8,602,394) (5,309,332) (8,040,835) (14,733,985) (86,614,542) (69,979,695) (126,988,809) (124,395,950) --------------- ------------------- ---------------- ----------------- ------------------ ------------------ (26,536,923) 3,186,662 497,584,256 180,357,924 274,856,613 317,349,314 --------------- ------------------- ---------------- ----------------- ------------------ ------------------ (71,138,257) 4,466,878 287,309,014 201,292,875 (230,647,269) 374,108,123 140,073,719 135,606,841 600,410,325 399,117,450 1,602,068,224 1,227,960,101 --------------- ------------------- ---------------- ----------------- ------------------ ------------------ $ 68,935,462 $ 140,073,719 $ 887,719,339 $ 600,410,325 $ 1,371,420,955 $ 1,602,068,224 =============== =================== ================ ================= ================== ==================
MIST MetLife Balanced Strategy Sub-Account ------------------------------------- 2008 2007 ------------------ ------------------ $ 138,113,013 $ (1,240,824) 250,701,813 146,572,128 (2,084,196,961) (28,996,861) ------------------ ------------------ (1,695,382,135) 116,334,443 ------------------ ------------------ 574,850,779 1,172,544,439 (222,330,114) 258,572,420 (25,874,538) (17,811,972) (320,692,713) (374,125,107) ------------------ ------------------ 5,953,414 1,039,179,780 ------------------ ------------------ (1,689,428,721) 1,155,514,223 5,073,218,651 3,917,704,428 ------------------ ------------------ $ 3,383,789,930 $ 5,073,218,651 ================== ==================
The accompanying notes are an integral part of these financial statements. 70 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST METLIFE GROWTH STRATEGY MIST METLIFE AGGRESSIVE STRATEGY MIST VAN KAMPEN COMSTOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------- -------------------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ---------------- -------------- ----------------- --------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 100,759,140 $ (29,926,788) $ 8,989,743 $ (2,488,811) $ 35,532 $ (204,833) Net realized gains (losses) 327,795,278 168,111,583 46,469,556 56,147,163 (719,341) 2,603,944 Change in unrealized gains (losses) on investments (2,936,404,011) (39,049,469) (283,905,358) (45,549,415) (22,431,043) (5,459,293) ---------------- ---------------- -------------- ----------------- --------------- ------------- Net increase (decrease) in net assets resulting from operations (2,507,849,593) 99,135,326 (228,446,059) 8,108,937 (23,114,852) (3,060,182) ---------------- ---------------- -------------- ----------------- --------------- ------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 919,799,464 2,245,127,704 21,066,874 56,256,592 9,348,146 16,420,919 Net transfers (including fixed account) (449,948,925) 179,235,678 (66,271,525) (34,875,419) (1,164,106) 2,301,133 Contract charges (36,791,542) (20,295,766) (2,428,995) (2,548,131) (221,489) (197,140) Transfers for contract benefits and terminations (271,257,542) (335,301,976) (28,669,676) (56,394,234) (5,189,664) (4,820,685) ---------------- ---------------- -------------- ----------------- --------------- ------------- Net increase (decrease) in net assets resulting from contract transactions 161,801,455 2,068,765,640 (76,303,322) (37,561,192) 2,772,887 13,704,227 ---------------- ---------------- -------------- ----------------- --------------- ------------- Net increase (decrease) in net assets (2,346,048,138) 2,167,900,966 (304,749,381) (29,452,255) (20,341,965) 10,644,045 NET ASSETS: Beginning of period 6,304,660,461 4,136,759,495 607,023,915 636,476,170 60,993,695 50,349,650 ---------------- ---------------- -------------- ----------------- --------------- ------------- End of period $ 3,958,612,323 $ 6,304,660,461 $ 302,274,534 $ 607,023,915 $ 40,651,730 $ 60,993,695 ================ ================ ============== ================= =============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 71 MIST MIST LEGG MASON VALUE EQUITY MIST MFS EMERGING MARKETS EQUITY MIST LOOMIS SAYLES GLOBAL MARKETS MET/AIM CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------- -------------------------------- --------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- $ (823,221) $ (825,219) $ (174,638) $ (439,794) $ 1,745,644 $ (322,177) $ 8,667 $ (24,229) (827,780) 349,121 3,484,316 1,483,800 340,535 699,708 (79,118) (11,771) (40,220,689) (4,218,334) (47,764,673) 6,322,422 (31,624,027) 4,061,051 (1,479,081) 153,974 ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- (41,871,690) (4,694,432) (44,454,995) 7,366,428 (29,537,848) 4,438,582 (1,549,532) 117,974 ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- 26,313,328 24,730,317 24,360,591 10,010,256 12,997,335 5,973,340 1,626,130 1,114,663 5,543,238 3,022,118 21,894,965 37,585,850 10,325,061 40,306,250 283,602 90,690 (194,102) (138,508) (215,626) (83,937) (246,616) (68,552) (5,888) (1,628) (3,184,514) (5,184,945) (3,237,424) (2,228,009) (3,661,899) (2,962,307) (235,573) (121,519) ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- 28,477,950 22,428,982 42,802,506 45,284,160 19,413,881 43,248,731 1,668,271 1,082,206 ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- (13,393,740) 17,734,550 (1,652,489) 52,650,588 (10,123,967) 47,687,313 118,739 1,200,180 57,822,803 40,088,253 62,075,247 9,424,659 55,474,222 7,786,909 2,334,027 1,133,847 ------------- -------------- --------------- ---------------- ---------------- ---------------- -------------- ---------------- $ 44,429,063 $ 57,822,803 $ 60,422,758 $ 62,075,247 $ 45,350,255 $ 55,474,222 $ 2,452,766 $ 2,334,027 ============= ============== =============== ================ ================ ================ ============== ================
The accompanying notes are an integral part of these financial statements. 72 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST JANUS FORTY MIST DREMAN SMALL CAP VALUE MIST PIONEER FUND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 --------------- -------------- --------------- --------------- --------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 367,081 $ (58,234) $ (137,991) $ (152,699) $ (76,874) $ (61,130) Net realized gains (losses) (239,635) 290,551 297,010 111,787 (1,105,314) 41,030 Change in unrealized gains (losses) on investments (7,533,817) 745,181 (4,164,065) (482,953) (3,729,034) 90,072 --------------- -------------- --------------- --------------- --------------- -------------- Net increase (decrease) in net assets resulting from operations (7,406,371) 977,498 (4,005,046) (523,865) (4,911,222) 69,972 --------------- -------------- --------------- --------------- --------------- -------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 8,704,411 5,345,268 5,307,493 7,266,348 13,071,422 4,912,407 Net transfers (including fixed account) 2,522,305 1,181,536 232,223 461,445 59,643 513,788 Contract charges (50,087) (4,708) (61,604) (16,511) (15,784) (5,706) Transfers for contract benefits and terminations (994,768) (194,912) (722,443) (963,992) (435,949) (649,899) --------------- -------------- --------------- --------------- --------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 10,181,861 6,327,184 4,755,669 6,747,290 12,679,332 4,770,590 --------------- -------------- --------------- --------------- --------------- -------------- Net increase (decrease) in net assets 2,775,490 7,304,682 750,623 6,223,425 7,768,110 4,840,562 NET ASSETS: Beginning of period 8,715,091 1,410,409 11,511,054 5,287,629 8,679,759 3,839,197 --------------- -------------- --------------- --------------- --------------- -------------- End of period $ 11,490,581 $ 8,715,091 $ 12,261,677 $ 11,511,054 $ 16,447,869 $ 8,679,759 =============== ============== =============== =============== =============== ==============
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 73 MIST PIONEER STRATEGIC INCOME MIST BLACKROCK LARGE CAP CORE MIST BLACKROCK HIGH YIELD MIST RAINIER LARGE CAP EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- -------------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 (a) ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- $ 5,834,214 $ (701,142) $ (52,304) $ (42,023) $ 383,147 $ 334,483 $ (375,702) $ (2,935) (2,001,682) 6,106 54,629 265,390 (1,764,755) (5,218) (482,693) 1,427 (21,409,793) 4,115,896 (1,971,499) (95,545) (3,738,362) (351,001) (12,232,869) 80,318 ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- (17,577,261) 3,420,860 (1,969,174) 127,822 (5,119,970) (21,736) (13,091,264) 78,810 ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- 66,037,341 54,487,997 1,283,270 2,331,465 7,815,219 5,403,583 10,812,941 520,514 (9,048,953) 6,487,557 37,832 252,641 4,450,167 (269,073) 21,312,024 5,813,549 (174,007) (11,004) (20,009) (7,280) (43,642) (9,703) (99,748) (1,771) (8,359,991) (3,650,191) (200,047) (185,175) (844,271) (897,289) (1,669,933) (21,010) ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- 48,454,390 57,314,359 1,101,046 2,391,651 11,377,473 4,227,518 30,355,284 6,311,282 ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- 30,877,129 60,735,219 (868,128) 2,519,473 6,257,503 4,205,782 17,264,020 6,390,092 98,174,413 37,439,194 4,467,216 1,947,743 7,452,180 3,246,398 6,390,092 -- ---------------- --------------- -------------- ----------------- --------------- ---------------- --------------- ---------------- $ 129,051,542 $ 98,174,413 $ 3,599,088 $ 4,467,216 $ 13,709,683 $ 7,452,180 $ 23,654,112 $ 6,390,092 ================ =============== ============== ================= =============== ================ =============== ================
The accompanying notes are an integral part of these financial statements. 74 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST AMERICAN MIST AMERICAN MIST MIST AMERICAN FUNDS BALANCED MIST AMERICAN MIST AMERICAN FUNDS GROWTH AMERICAN FUNDS FUNDS MODERATE ALLOCATION FUNDS BOND FUNDS GROWTH ALLOCATION INTERNATIONAL ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------- -------------- -------------- -------------- --------------- --------------- 2008 (b) 2008 (b) 2008 (b) 2008 (b) 2008 (b) 2008 (b) --------------- -------------- -------------- -------------- --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 10,111,861 $ 1,265,131 $ 1,869,844 $ 17,358,136 $ 2,725,032 $ 6,747,836 Net realized gains (losses) (1,168,695) (42,761) (31,924) (15,467) (293,216) (1,349,658) Change in unrealized gains (losses) on investments (79,902,745) (3,081,576) (19,679,152) (170,403,804) (16,971,992) (39,805,795) --------------- -------------- -------------- -------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (70,959,579) (1,859,206) (17,841,232) (153,061,135) (14,540,176) (34,407,617) --------------- -------------- -------------- -------------- --------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 197,108,337 20,714,403 39,065,845 357,346,624 36,555,600 136,742,654 Net transfers (including fixed account) 212,064,719 9,622,103 34,446,446 278,459,593 24,327,566 125,028,215 Contract charges (468,802) (15,114) (31,706) (700,335) (26,478) (211,971) Transfers for contract benefits and terminations (4,879,658) (291,161) (673,105) (6,817,926) (506,044) (3,330,828) --------------- -------------- -------------- -------------- --------------- --------------- Net increase (decrease) in net assets resulting from contract transactions 403,824,596 30,030,231 72,807,480 628,287,956 60,350,644 258,228,070 --------------- -------------- -------------- -------------- --------------- --------------- Net increase (decrease) in net assets 332,865,017 28,171,025 54,966,248 475,226,821 45,810,468 223,820,453 NET ASSETS: Beginning of period -- -- -- -- -- -- --------------- -------------- -------------- -------------- --------------- --------------- End of period $ 332,865,017 $ 28,171,025 $ 54,966,248 $ 475,226,821 $ 45,810,468 $ 223,820,453 =============== ============== ============== ============== =============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 75 MIST MET/FRANKLIN MIST TEMPLETON MIST SSGA MET/FRANKLIN FOUNDING MIST SSGA GROWTH AND MUTUAL SHARES STRATEGY GROWTH ETF INCOME ETF AIM V.I. CORE EQUITY AIM V.I. CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- -------------- ------------- ------------- --------------------- --------------------------------- 2008 (b) 2008 (b) 2008 (c) 2008 (c) 2008 2007 2008 2007 --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- $ 286,774 $ 2,340,195 $ (1,053) $ (3,076) $ 2,514 $ (4,390) $ (4,139) $ (8,159) (104,240) (46,625) -- 2,403 16,517 52,971 (14,342) 18,910 (3,194,226) (44,949,267) 68,421 158,177 (222,155) 22,869 (138,973) 46,579 --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- (3,011,692) (42,655,697) 67,368 157,504 (203,124) 71,450 (157,454) 57,330 --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- 10,367,163 128,082,273 1,336,071 1,205,430 -- -- -- -- 5,730,009 111,137,585 80,744 1,299,330 (16,448) (31,665) (8,849) (45,892) (4,678) (233,346) -- (2,281) -- -- -- -- (41,957) (2,982,696) 5,348 (8,853) (247,618) (357,025) (106,540) (210,349) --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- 16,050,537 236,003,816 1,422,163 2,493,626 (264,066) (388,690) (115,389) (256,241) --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- 13,038,845 193,348,119 1,489,531 2,651,130 (467,190) (317,240) (272,843) (198,911) -- -- -- -- 859,118 1,176,358 433,487 632,398 --------------- --------------- -------------- ------------- ------------- ------------ ------------ -------------- $ 13,038,845 $ 193,348,119 $ 1,489,531 $ 2,651,130 $ 391,928 $ 859,118 $ 160,644 $ 433,487 =============== =============== ============== ============= ============= ============ ============ ==============
The accompanying notes are an integral part of these financial statements. 76 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AIM V.I. INTERNATIONAL GROWTH AIM V.I. BASIC BALANCED AIM V.I. GLOBAL REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 (d) --------------- ---------------- ------------ ------------- -------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (111,198) $ (7,096) $ 11,941 $ 11,306 $ 169,649 $ 80,202 Net realized gains (losses) (802,813) 166,260 (26,155) 22,846 256,589 205,271 Change in unrealized gains (losses) on investments (11,002,806) (94,729) (207,594) (21,687) (1,703,426) (363,478) --------------- ---------------- ------------ ------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations (11,916,817) 64,435 (221,808) 12,465 (1,277,188) (78,005) --------------- ---------------- ------------ ------------- -------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 26,202,690 11,183,339 -- -- 2,087,485 1,584,128 Net transfers (including fixed account) 2,508,802 263,678 (7,225) (89,126) 140,397 6,314 Contract charges (64,997) -- -- -- (7,042) -- Transfers for contract benefits and terminations (722,625) (457,237) (155,781) (226,938) (94,274) (1,753) --------------- ---------------- ------------ ------------- -------------- --------------- Net increase (decrease) in net assets resulting from contract transactions 27,923,870 10,989,780 (163,006) (316,064) 2,126,566 1,588,689 --------------- ---------------- ------------ ------------- -------------- --------------- Net increase (decrease) in net assets 16,007,053 11,054,215 (384,814) (303,599) 849,378 1,510,684 NET ASSETS: Beginning of period 11,954,057 899,842 673,813 977,412 1,510,684 -- --------------- ---------------- ------------ ------------- -------------- --------------- End of period $ 27,961,110 $ 11,954,057 $ 288,999 $ 673,813 $ 2,360,062 $ 1,510,684 =============== ================ ============ ============= ============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 77 MFS RESEARCH MFS INVESTORS TRUST MFS NEW DISCOVERY OPPENHEIMER MAIN STREET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------ ---------------------- ----------------------- ----------------------- 2008 2007 2008 2007 2008 2007 2008 2007 ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- $ (1,186) $ (1,771) $ (385) $ (968) $ (964) $ (2,260) $ 243 $ (836) 6,421 13,554 13,009 16,385 10,411 28,928 12,599 15,776 (64,104) 13,793 (43,568) (1,764) (42,333) (23,022) (94,975) (4,165) ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- (58,869) 25,576 (30,944) 13,653 (32,886) 3,646 (82,133) 10,775 ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- -- -- -- -- -- -- -- -- -- (37,362) (11,815) (18,567) 12 (18,325) (9,606) -- -- -- -- -- -- -- -- -- (45,933) (65,602) (40,972) (33,795) (21,826) (92,147) (54,322) (77,938) ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- (45,933) (102,964) (52,787) (52,362) (21,814) (110,472) (63,928) (77,938) ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- (104,802) (77,388) (83,731) (38,709) (54,700) (106,826) (146,061) (67,163) 199,317 276,705 132,122 170,831 99,354 206,180 254,460 321,623 ----------- ------------ ----------- ---------- ----------- ----------- ------------ ---------- $ 94,515 $ 199,317 $ 48,391 $ 132,122 $ 44,654 $ 99,354 $ 108,399 $ 254,460 =========== ============ =========== ========== =========== =========== ============ ==========
The accompanying notes are an integral part of these financial statements. 78 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 OPPENHEIMER OPPENHEIMER CORE BOND OPPENHEIMER STRATEGIC BOND MAIN STREET SMALL CAP SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------- --------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 ----------- ---------- ------------ -------------- --------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 5,797 $ 12,268 $ 928 $ 1,046 $ (172,253) $ (27,014) Net realized gains (losses) (16,558) (766) 4,048 1,332 (337,481) 23,038 Change in unrealized gains (losses) on investments (69,378) (3,427) (7,449) 1,375 (7,281,710) (357,522) ----------- ---------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets resulting from operations (80,139) 8,075 (2,473) 3,753 (7,791,444) (361,498) ----------- ---------- ------------ -------------- --------------- -------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners -- -- -- -- 18,064,243 8,250,497 Net transfers (including fixed account) (1,237) -- -- -- 1,291,361 277,612 Contract charges -- -- -- -- (51,393) -- Transfers for contract benefits and terminations (87,148) (67,923) (30,887) (8,457) (454,625) (39,830) ----------- ---------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets resulting from contract transactions (88,385) (67,923) (30,887) (8,457) 18,849,586 8,488,279 ----------- ---------- ------------ -------------- --------------- -------------- Net increase (decrease) in net assets (168,524) (59,848) (33,360) (4,704) 11,058,142 8,126,781 NET ASSETS: Beginning of period 264,529 324,377 46,614 51,318 8,314,186 187,405 ----------- ---------- ------------ -------------- --------------- -------------- End of period $ 96,005 $ 264,529 $ 13,254 $ 46,614 $ 19,372,328 $ 8,314,186 =========== ========== ============ ============== =============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 79 OPPENHEIMER MONEY FIDELITY VIP ASSET MANAGER FIDELITY VIP GROWTH FIDELITY VIP CONTRAFUND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- -------------------------------- --------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ 2,094 $ 6,496 $ 1,420,183 $ 6,672,314 $ (1,006,207) $ (1,164,218) $ (1,025,566) $ (1,478,162) -- -- 10,029,095 3,845,543 (1,495,360) 1,137,735 4,639,795 102,560,295 -- -- (50,937,043) 7,775,552 (105,165,298) 50,354,170 (169,629,453) (48,785,560) ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- 2,094 6,496 (39,487,765) 18,293,409 (107,666,865) 50,327,687 (166,015,224) 52,296,573 ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- -- -- 4,619,969 5,515,702 8,171,631 9,741,030 48,023,268 26,914,007 -- (22,681) (7,167,156) (5,230,911) (13,257,206) (11,295,438) (13,246,442) (4,821,333) -- -- (20,581) (12,697) (35,592) (24,060) (140,686) (53,138) (20,793) (3,240) (12,468,435) (16,139,564) (15,036,076) (24,377,267) (23,343,805) (35,357,279) ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- (20,793) (25,921) (15,036,203) (15,867,470) (20,157,243) (25,955,735) 11,292,335 (13,317,743) ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- (18,699) (19,425) (54,523,968) 2,425,939 (127,824,108) 24,371,952 (154,722,889) 38,978,830 168,352 187,777 143,069,941 140,644,002 239,237,615 214,865,663 377,396,997 338,418,167 ------------ -------------- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ 149,653 $ 168,352 $ 88,545,973 $ 143,069,941 $ 111,413,507 $ 239,237,615 $ 222,674,108 $ 377,396,997 ============ ============== =============== ================ ================ ================ ================ ================
The accompanying notes are an integral part of these financial statements. 80 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 FIDELITY VIP OVERSEAS FIDELITY VIP EQUITY-INCOME FIDELITY VIP INDEX 500 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------ -------------------------------- 2008 2007 2008 2007 2008 2007 -------------- --------------- -------------- --------------- --------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 103,531 $ 230,825 $ 86,066 $ 36,348 $ 649,074 $ 2,903,956 Net realized gains (losses) 994,457 1,235,506 (588,398) 1,883,461 2,040,819 4,803,371 Change in unrealized gains (losses) on investments (5,763,565) 203,682 (4,751,685) (1,744,928) (45,013,396) (2,246,692) -------------- --------------- -------------- --------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations (4,665,577) 1,670,013 (5,254,017) 174,881 (42,323,503) 5,460,635 -------------- --------------- -------------- --------------- --------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 155,740 204,541 31,562 42,317 2,310 2,570 Net transfers (including fixed account) (294,072) (242,634) (607,670) (248,525) (8,580,638) (6,452,896) Contract charges (112) (67) -- -- (36,738) (25,541) Transfers for contract benefits and terminations (1,110,264) (1,563,464) (1,744,122) (4,084,425) (7,709,697) (11,968,753) -------------- --------------- -------------- --------------- --------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions (1,248,708) (1,601,624) (2,320,230) (4,290,633) (16,324,763) (18,444,620) -------------- --------------- -------------- --------------- --------------- ---------------- Net increase (decrease) in net assets (5,914,285) 68,389 (7,574,247) (4,115,752) (58,648,266) (12,983,985) NET ASSETS: Beginning of period 11,327,734 11,259,345 13,694,030 17,809,782 122,812,705 135,796,690 -------------- --------------- -------------- --------------- --------------- ---------------- End of period $ 5,413,449 $ 11,327,734 $ 6,119,783 $ 13,694,030 $ 64,164,439 $ 122,812,705 ============== =============== ============== =============== =============== ================
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 81 FIDELITY VIP MONEY MARKET FIDELITY VIP MID CAP DWS INTERNATIONAL MSF FI MID CAP OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ $ 653,611 $ 1,373,106 $ (565,504) $ (286,975) $ 15,208 $ 391,713 $ (47,326) $ (72,825) -- -- 4,005,999 1,489,249 5,161,020 732,180 (88,745) 162,396 -- -- (27,042,018) 1,421,180 (23,324,279) 3,398,301 (3,499,091) 243,487 --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ 653,611 1,373,106 (23,601,523) 2,623,454 (18,148,051) 4,522,194 (3,635,162) 333,058 --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ 4,469,433 5,298,830 29,092,735 21,898,285 1,880,993 2,213,191 567,543 565,032 3,370,828 416,063 2,770,299 3,229,460 (1,947,706) 394,829 (126,132) 904,548 (6,862) (3,482) (66,163) (5,301) (4,301) (2,802) (327) (199) (4,967,871) (4,509,159) (2,207,566) (1,395,375) (2,885,281) (3,174,740) (505,809) (543,928) --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ 2,865,528 1,202,252 29,589,305 23,727,069 (2,956,295) (569,522) (64,725) 925,453 --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ 3,519,139 2,575,358 5,987,782 26,350,523 (21,104,346) 3,952,672 (3,699,887) 1,258,511 38,182,657 35,607,299 40,496,316 14,145,793 39,213,025 35,260,353 6,518,918 5,260,407 --------------- --------------- --------------- --------------- --------------- --------------- -------------- ------------ $ 41,701,796 $ 38,182,657 $ 46,484,098 $ 40,496,316 $ 18,108,679 $ 39,213,025 $ 2,819,031 $ 6,518,918 =============== =============== =============== =============== =============== =============== ============== ============
The accompanying notes are an integral part of these financial statements. 82 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF FI LARGE CAP MSF FI VALUE LEADERS MSF RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 -------------- -------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (72,291) $ (63,663) $ 1,677 $ (40,154) $ 1,131 $ (37,175) Net realized gains (losses) (290,186) 224,533 212,786 275,415 (383,505) 820,954 Change in unrealized gains (losses) on investments (1,977,983) (129,030) (2,258,092) (250,698) (2,531,381) (1,007,958) -------------- -------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (2,340,460) 31,840 (2,043,629) (15,437) (2,913,755) (224,179) -------------- -------------- -------------- -------------- -------------- -------------- CONTRACT TRANSACTIONS: Payments received from contract owners 941,338 2,347,773 610,290 2,375,376 855,484 986,954 Net transfers (including fixed account) (231,035) 692,021 427,348 (83,879) 8,135 (303,487) Contract charges (14,010) (7,541) (15,371) (6,613) (477) (311) Transfers for contract benefits and terminations (241,077) (582,773) (297,836) (388,773) (667,163) (671,040) -------------- -------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 455,216 2,449,480 724,431 1,896,111 195,979 12,116 -------------- -------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets (1,885,244) 2,481,320 (1,319,198) 1,880,674 (2,717,776) (212,063) NET ASSETS: Beginning of period 4,767,365 2,286,045 4,542,761 2,662,087 8,015,832 8,227,895 -------------- -------------- -------------- -------------- -------------- -------------- End of period $ 2,882,121 $ 4,767,365 $ 3,223,563 $ 4,542,761 $ 5,298,056 $ 8,015,832 ============== ============== ============== ============== ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 83 MSF BLACKROCK MSF JULIUS BAER INTERNATIONAL STOCK MSF METLIFE STOCK INDEX LEGACY LARGE CAP GROWTH MSF BLACKROCK STRATEGIC VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- --------------------------------- ----------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- $ 70,056 $ (42,899) $ 618,236 $ (2,087,640) $ (10,036) $ (9,569) $ (82,675) $ (144,805) 397,400 310,620 9,197,418 22,014,259 (6,667) 65,625 360,599 1,509,061 (3,432,086) 48,677 (115,000,965) (9,054,135) (479,683) 70,108 (5,059,965) (2,028,210) --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- (2,964,630) 316,398 (105,185,311) 10,872,484 (496,386) 126,164 (4,782,041) (663,954) --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- 281,018 2,825,776 13,864,485 18,130,798 97,784 101,671 1,485,269 1,866,113 413,588 437,743 (21,265,657) (5,345,963) 429,217 309,928 (1,490,563) (506,986) (1,406) (798) (771,007) (804,890) (90) (43) (817) (542) (611,330) (389,969) (22,465,702) (35,956,121) (45,328) (29,773) (758,797) (1,075,463) --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- 81,870 2,872,752 (30,637,881) (23,976,176) 481,583 381,783 (764,908) 283,122 --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- (2,882,760) 3,189,150 (135,823,192) (13,103,692) (14,803) 507,947 (5,546,949) (380,832) 6,422,071 3,232,921 299,989,839 313,093,531 1,046,603 538,656 12,924,658 13,305,490 --------------- ------------------- ---------------- ---------------- -------------- -------------- -------------- ----------------- $ 3,539,311 $ 6,422,071 $ 164,166,647 $ 299,989,839 $ 1,031,800 $ 1,046,603 $ 7,377,709 $ 12,924,658 =============== =================== ================ ================ ============== ============== ============== =================
The accompanying notes are an integral part of these financial statements. 84 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF LEHMAN BROTHERS MSF BLACKROCK BOND INCOME MSF BLACKROCK LARGE CAP VALUE AGGREGATE BOND INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 --------------- --------------- -------------- ----------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 1,124,681 $ 148,712 $ (14,914) $ (14,386) $ 270,027 $ 162,454 Net realized gains (losses) (342,658) 8,061 (117,850) 221,970 (33,327) (6,457) Change in unrealized gains (losses) on investments (2,808,583) 908,389 (1,221,978) (177,922) 71,367 152,003 --------------- --------------- -------------- ----------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (2,026,560) 1,065,162 (1,354,742) 29,662 308,067 308,000 --------------- --------------- -------------- ----------------- -------------- -------------- CONTRACT TRANSACTIONS: Payments received from contract owners 11,915,342 17,154,514 283,419 285,688 1,079,219 668,220 Net transfers (including fixed account) (4,631,754) 2,143,188 62,383 1,473,025 1,116,624 1,145,624 Contract charges (137,935) (21,995) (279) (154) (653) (310) Transfers for contract benefits and terminations (2,583,411) (2,092,128) (280,398) (299,540) (853,245) (485,663) --------------- --------------- -------------- ----------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 4,562,242 17,183,579 65,125 1,459,019 1,341,945 1,327,871 --------------- --------------- -------------- ----------------- -------------- -------------- Net increase (decrease) in net assets 2,535,682 18,248,741 (1,289,617) 1,488,681 1,650,012 1,635,871 NET ASSETS: Beginning of period 30,160,113 11,911,372 3,754,451 2,265,770 6,246,008 4,610,137 --------------- --------------- -------------- ----------------- -------------- -------------- End of period $ 32,695,795 $ 30,160,113 $ 2,464,834 $ 3,754,451 $ 7,896,020 $ 6,246,008 =============== =============== ============== ================= ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 85 MSF METLIFE MSF MFS VALUE MSF MORGAN STANLEY EAFE INDEX MSF MFS TOTAL RETURN MID CAP STOCK INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- ------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- $ 38,666 $ (262,320) $ 253,222 $ 99,702 $ 859,978 $ 110,001 $ 9,158 $ (80,366) 723,455 622,671 464,943 1,449,110 1,483,413 1,449,865 917,457 1,113,940 (11,171,380) (275,851) (8,998,610) (207,275) (13,827,196) (955,552) (6,892,549) (259,259) --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- (10,409,259) 84,500 (8,280,445) 1,341,537 (11,483,805) 604,314 (5,965,934) 774,315 --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- 6,820,629 13,519,451 2,326,951 2,472,875 3,624,174 18,558,703 2,119,662 2,166,478 1,865,616 1,016,870 (317,622) 1,914,186 (3,662,735) 4,902,925 414,700 1,135,415 (77,745) (13,613) (1,096) (707) (34,506) (13,282) (1,122) (641) (1,625,690) (1,422,029) (1,233,894) (1,454,812) (4,531,196) (2,891,760) (924,304) (1,031,278) --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- 6,982,810 13,100,679 774,339 2,931,542 (4,604,263) 20,556,586 1,608,936 2,269,974 --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- (3,426,449) 13,185,179 (7,506,106) 4,273,079 (16,088,068) 21,160,900 (4,356,998) 3,044,289 25,634,069 12,448,890 18,684,621 14,411,542 50,198,332 29,037,432 15,036,423 11,992,134 --------------- --------------- --------------- ---------------- --------------- --------------- --------------- --------------- $ 22,207,620 $ 25,634,069 $ 11,178,515 $ 18,684,621 $ 34,110,264 $ 50,198,332 $ 10,679,425 $ 15,036,423 =============== =============== =============== ================ =============== =============== =============== ===============
The accompanying notes are an integral part of these financial statements. 86 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF HARRIS OAKMARK FOCUSED MSF DAVIS VENTURE VALUE VALUE MSF JENNISON GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 --------------- --------------- --------------- --------------- --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (2,016,294) $ (6,081,195) $ (3,623,184) $ (4,794,988) $ 761,603 $ (2,659,080) Net realized gains (losses) 11,833,644 22,595,716 13,920,906 64,495,483 13,057,216 13,041,098 Change in unrealized gains (losses) on investments (240,704,599) 509,254 (145,506,995) (89,503,608) (82,069,768) 6,006,766 --------------- --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (230,887,249) 17,023,775 (135,209,273) (29,803,113) (68,250,949) 16,388,784 --------------- --------------- --------------- --------------- --------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners 40,000,397 36,845,784 9,130,249 16,537,749 12,824,167 8,277,681 Net transfers (including fixed account) (23,752,834) (16,538,380) (20,033,647) (28,581,064) (197,343) (2,611,046) Contract charges (2,092,456) (2,197,714) (990,188) (1,248,800) (667,143) (657,263) Transfers for contract benefits and terminations (43,178,507) (67,858,900) (22,228,269) (42,905,325) (13,545,955) (21,304,737) --------------- --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets resulting from contract transactions (29,023,400) (49,749,210) (34,121,855) (56,197,440) (1,586,274) (16,295,365) --------------- --------------- --------------- --------------- --------------- --------------- Net increase (decrease) in net assets (259,910,649) (32,725,435) (169,331,128) (86,000,553) (69,837,223) 93,419 NET ASSETS: Beginning of period 599,873,294 632,598,729 316,048,072 402,048,625 182,244,421 182,151,002 --------------- --------------- --------------- --------------- --------------- --------------- End of period $ 339,962,645 $ 599,873,294 $ 146,716,944 $ 316,048,072 $ 112,407,198 $ 182,244,421 =============== =============== =============== =============== =============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 87 MSF T. ROWE MSF WESTERN ASSET MANAGEMENT MSF BLACKROCK MONEY MARKET PRICE SMALL CAP GROWTH U.S. GOVERNMENT MSF OPPENHEIMER GLOBAL EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ------------------------------- ------------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- $ 2,829,101 $ 6,785,333 $ (30,739) $ (16,671) $ 1,279,318 $ 224,217 $ 26,514 $ (59,550) -- -- 136,260 67,666 (532,690) 361,346 90,106 153,158 -- -- (1,371,897) 41,398 (2,345,788) 305,583 (5,106,339) 39,076 ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- 2,829,101 6,785,333 (1,266,376) 92,393 (1,599,160) 891,146 (4,989,719) 132,684 ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- 154,753,709 79,822,231 2,578,082 88,226 28,151,479 17,013,754 3,325,583 6,101,038 335,399,240 159,285,695 869,829 107,142 21,091,451 8,882,987 374,004 420,568 (1,518,673) (784,175) (388) (46) (178,206) (71,101) (14,744) (1,005) (137,760,015) (191,085,821) (216,735) (123,964) (6,755,537) (6,114,274) (782,065) (357,753) ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- 350,874,261 47,237,930 3,230,788 71,358 42,309,187 19,711,366 2,902,778 6,162,848 ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- 353,703,362 54,023,263 1,964,412 163,751 40,710,027 20,602,512 (2,086,941) 6,295,532 241,601,183 187,577,920 1,279,290 1,115,539 44,641,935 24,039,423 9,987,034 3,691,502 ---------------- ---------------- ---------------- -------------- --------------- --------------- ---------------- --------------- $ 595,304,545 $ 241,601,183 $ 3,243,702 $ 1,279,290 $ 85,351,962 $ 44,641,935 $ 7,900,093 $ 9,987,034 ================ ================ ================ ============== =============== =============== ================ ================
The accompanying notes are an integral part of these financial statements. 88 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF METLIFE MSF METLIFE MSF METLIFE CONSERVATIVE TO AGGRESSIVE ALLOCATION CONSERVATIVE ALLOCATION MODERATE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 -------------- -------------- -------------- -------------- -------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (25,774) $ (30,845) $ (40,708) $ (41,865) $ (42,389) $ (68,745) Net realized gains (losses) (196,946) 41,290 (71,475) 9,864 (86,998) 45,678 Change in unrealized gains (losses) on investments (850,302) (55,561) (717,596) 117,468 (1,454,221) 130,975 -------------- -------------- -------------- -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations (1,073,022) (45,116) (829,779) 85,467 (1,583,608) 107,908 -------------- -------------- -------------- -------------- -------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners -- 1,285,240 1,166,525 194,853 598,393 1,267,188 Net transfers (including fixed account) (62,772) (77,888) 3,728,592 372,838 2,574,157 168,409 Contract charges (7,084) (4,448) (24,398) (12,657) (40,469) (19,318) Transfers for contract benefits and terminations (77,414) (22,002) (1,090,329) (25,797) (175,914) (54,591) -------------- -------------- -------------- -------------- -------------- --------------- Net increase (decrease) in net assets resulting from contract transactions (147,270) 1,180,902 3,780,390 529,237 2,956,167 1,361,688 -------------- -------------- -------------- -------------- -------------- --------------- Net increase (decrease) in net assets (1,220,292) 1,135,786 2,950,611 614,704 1,372,559 1,469,596 NET ASSETS: Beginning of period 2,403,475 1,267,689 2,702,849 2,088,145 4,529,792 3,060,196 -------------- -------------- -------------- -------------- -------------- --------------- End of period $ 1,183,183 $ 2,403,475 $ 5,653,460 $ 2,702,849 $ 5,902,351 $ 4,529,792 ============== ============== ============== ============== ============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 89 MSF MSF T. ROWE PRICE MSF MSF NEUBERGER MET/DIMENSIONAL MSF METLIFE MODERATE TO LARGE CAP LOOMIS SAYLES BERMAN INTERNATIONAL MSF METLIFE MODERATE ALLOCATION AGGRESSIVE ALLOCATION GROWTH SMALL CAP MID CAP VALUE SMALL COMPANY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ------------------------------- ---------------- ---------------- -------------- ---------------- 2008 2007 2008 2007 2008 (b) 2008 (e) 2008 (e) 2008 (c) --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- $ (397,247) $ (487,840) $ (644,268) $ (696,111) $ (9,589) $ (62) $ (28) $ (105) 19,479 232,501 (346,085) 106,108 (67,717) -- -- 414 (14,209,553) 582,917 (23,919,604) 572,440 (340,288) (3,170) 2,058 7,962 --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- (14,587,321) 327,578 (24,909,957) (17,563) (417,594) (3,232) 2,030 8,271 --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- 5,549,758 17,460,937 6,757,533 26,758,613 10,252 22,081 13,802 97,509 6,248,444 4,567,428 3,920,079 13,288,496 1,027,784 1,308 3,212 22,534 (291,306) (105,905) (456,563) (151,059) (305) -- -- -- (1,289,862) (265,457) (2,177,656) (763,441) (54,991) 5 (471) (175) --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- 10,217,034 21,657,003 8,043,393 39,132,609 982,740 23,394 16,543 119,868 --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- (4,370,287) 21,984,581 (16,866,564) 39,115,046 565,146 20,162 18,573 128,139 40,157,114 18,172,533 61,541,186 22,426,140 -- -- -- -- --------------- ------------------ --------------- --------------- ---------------- ---------------- -------------- ---------------- $ 35,786,827 $ 40,157,114 $ 44,674,622 $ 61,541,186 $ 565,146 $ 20,162 $ 18,573 $ 128,139 =============== ================== =============== =============== ================ ================ ============== ================
The accompanying notes are an integral part of these financial statements. 90 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 VAN KAMPEN LIT VAN KAMPEN LIT CAPITAL GROWTH VAN KAMPEN LIT ENTERPRISE GROWTH AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------- --------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 ------------- -------------- ------------- ------------- --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (31,663) $ (116,330) $ (141) $ (1,712) $ 21,774 $ (196,769) Net realized gains (losses) 757,973 30,962 1,217 6,611 (512,585) 1,024,830 Change in unrealized gains (losses) on investments (1,228,958) 1,037,575 (43,899) 11,304 (22,626,597) (1,228,849) ------------- -------------- ------------- ------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (502,648) 952,207 (42,823) 16,203 (23,117,408) (400,788) ------------- -------------- ------------- ------------- --------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners 263,608 3,066,220 -- -- 36,041,820 30,148,824 Net transfers (including fixed account) (8,223,119) 683,909 (25,915) (13,167) (355,994) 1,186,546 Contract charges (1,277) (2,622) -- -- (103,937) (4,619) Transfers for contract benefits and terminations (603,672) (508,334) (4,640) (35,966) (4,014,142) (2,213,799) ------------- -------------- ------------- ------------- --------------- --------------- Net increase (decrease) in net assets resulting from contract transactions (8,564,460) 3,239,173 (30,555) (49,133) 31,567,747 29,116,952 ------------- -------------- ------------- ------------- --------------- --------------- Net increase (decrease) in net assets (9,067,108) 4,191,380 (73,378) (32,930) 8,450,339 28,716,164 NET ASSETS: Beginning of period 9,156,031 4,964,651 122,997 155,927 49,067,204 20,351,040 ------------- -------------- ------------- ------------- --------------- --------------- End of period $ 88,923 $ 9,156,031 $ 49,619 $ 122,997 $ 57,517,543 $ 49,067,204 ============= ============== ============= ============= =============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 91 FEDERATED VAN KAMPEN LIT COMSTOCK FEDERATED EQUITY INCOME FEDERATED HIGH INCOME BOND MID CAP GROWTH STRATEGIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ----------------------- --------------------------- -------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- $ 409,246 $ (259,426) $ 566 $ 1,816 $ 8,822 $ 8,584 $ (1,563) $ (2,361) 1,480,884 975,563 621 15,960 (15,911) (533) 29,259 1,990 (34,943,157) (4,879,310) (9,945) (14,812) (22,836) (5,482) (86,498) 28,811 --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- (33,053,027) (4,163,173) (8,758) 2,964 (29,925) 2,569 (58,802) 28,440 --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- 22,035,737 48,255,261 -- -- -- -- -- -- 287,438 3,137,892 -- -- (397) -- -- (3,759) (105,022) (8,782) -- -- -- -- -- -- (5,946,190) (3,231,428) (3,647) (68,733) (44,818) (8,437) (8,401) (74,270) --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- 16,271,963 48,152,943 (3,647) (68,733) (45,215) (8,437) (8,401) (78,029) --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- (16,781,064) 43,989,770 (12,405) (65,769) (75,140) (5,868) (67,203) (49,589) 77,264,934 33,275,164 31,173 96,942 126,835 132,703 139,853 189,442 --------------- --------------- ----------- ----------- ------------ -------------- ------------ ------------- $ 60,483,870 $ 77,264,934 $ 18,768 $ 31,173 $ 51,695 $ 126,835 $ 72,650 $ 139,853 =============== =============== =========== =========== ============ ============== ============ =============
The accompanying notes are an integral part of these financial statements. 92 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 NEUBERGER BERMAN GENESIS ALGER AMERICAN SMALLCAP GROWTH T. ROWE PRICE GROWTH STOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- --------------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 ---------- ------------ --------------- ----------------- -------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 355 $ (110) $ (788,573) $ (1,062,450) $ (39,733) $ (30,954) Net realized gains (losses) (85) 3,031 (234,414) 229,835 (45,515) 558,926 Change in unrealized gains (losses) on investments (5,060) (201) (34,617,982) 12,066,768 (4,164,867) 401,349 ---------- ------------ --------------- ----------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations (4,790) 2,720 (35,640,969) 11,234,153 (4,250,115) 929,321 ---------- ------------ --------------- ----------------- -------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners -- -- 3,144,413 3,592,591 321,006 392,116 Net transfers (including fixed account) -- -- (4,407,593) (2,859,249) (757,448) (491,379) Contract charges -- -- (11,890) (8,607) (2,305) (1,679) Transfers for contract benefits and terminations (1,086) (1,865) (4,392,292) (7,003,107) (470,194) (747,825) ---------- ------------ --------------- ----------------- -------------- --------------- Net increase (decrease) in net assets resulting from contract transactions (1,086) (1,865) (5,667,362) (6,278,372) (908,941) (848,767) ---------- ------------ --------------- ----------------- -------------- --------------- Net increase (decrease) in net assets (5,876) 855 (41,308,331) 4,955,781 (5,159,056) 80,554 NET ASSETS: Beginning of period 14,022 13,167 79,134,670 74,178,889 10,486,221 10,405,667 ---------- ------------ --------------- ----------------- -------------- --------------- End of period $ 8,146 $ 14,022 $ 37,826,339 $ 79,134,670 $ 5,327,165 $ 10,486,221 ========== ============ =============== ================= ============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 93 AMERICAN FUNDS T. ROWE PRICE INTERNATIONAL STOCK T. ROWE PRICE PRIME RESERVE JANUS ASPEN WORLDWIDE GROWTH GLOBAL SMALL CAPITALIZATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------ ------------------------------ --------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 2008 2007 ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- $ 6,423 $ 10,041 $ 29,227 $ 67,794 $ 25 $ (14) $ (467,351) $ 450,594 (5,964) 192,846 (22) -- 215 259 3,936,749 3,464,752 (606,967) (42,947) 200 -- (4,434) 573 (29,905,104) (92,073) ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- (606,508) 159,940 29,405 67,794 (4,194) 818 (26,435,706) 3,823,273 ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- 43,498 50,756 4,842 6,591 -- -- 18,818,576 8,484,152 (137,333) (50,069) 1,136,744 598,123 -- -- 2,183,669 5,276,068 (297) (224) (374) (239) -- -- (38,107) (1,087) (53,471) (129,527) (702,555) (441,013) (720) (740) (2,136,178) (2,323,409) ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- (147,603) (129,064) 438,657 163,462 (720) (740) 18,827,960 11,435,724 ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- (754,111) 30,876 468,062 231,256 (4,914) 78 (7,607,746) 15,258,997 1,365,106 1,334,230 1,750,411 1,519,155 9,932 9,854 35,036,450 19,777,453 ------------ ----------------------- -------------- --------------- ---------- ---------------- --------------- --------------- $ 610,995 $ 1,365,106 $ 2,218,473 $ 1,750,411 $ 5,018 $ 9,932 $ 27,428,704 $ 35,036,450 ============ ======================= ============== =============== ========== ================ =============== ===============
The accompanying notes are an integral part of these financial statements. 94 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH - INCOME AMERICAN FUNDS GLOBAL GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ -------------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 --------------- -------------- --------------- ---------------- ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (1,337,463) $ (1,081,107) $ 656,303 $ 365,154 $ 636,786 $ 1,046,183 Net realized gains (losses) 25,599,744 12,136,447 9,232,482 4,125,017 8,980,545 2,396,791 Change in unrealized gains (losses) on investments (174,410,801) 2,531,680 (85,104,056) (3,416,856) (66,659,058) 3,316,954 --------------- -------------- --------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets resulting from operations (150,148,520) 13,587,020 (75,215,271) 1,073,315 (57,041,727) 6,759,928 --------------- -------------- --------------- ---------------- ---------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners 130,427,869 124,005,411 61,334,055 78,043,836 53,088,801 62,510,143 Net transfers (including fixed account) 22,308,695 10,465,902 6,294,058 9,306,823 8,047,145 6,440,655 Contract charges (654,595) (130,513) (385,213) (85,085) (331,809) (67,412) Transfers for contract benefits and terminations (16,595,294) (13,668,271) (11,440,194) (8,458,885) (7,159,482) (5,336,101) --------------- -------------- --------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions 135,486,675 120,672,529 55,802,706 78,806,689 53,644,655 63,547,285 --------------- -------------- --------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets (14,661,845) 134,259,549 (19,412,565) 79,880,004 (3,397,072) 70,307,213 NET ASSETS: Beginning of period 245,762,919 111,503,370 156,224,069 76,344,065 104,847,881 34,540,668 --------------- -------------- --------------- ---------------- ---------------- --------------- End of period $ 231,101,074 $ 245,762,919 $ 136,811,504 $ 156,224,069 $ 101,450,809 $ 104,847,881 =============== ============== =============== ================ ================ ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 95 FTVIPT FTVIPT FTVIPT AMERICAN FUNDS BOND MUTUAL SHARES SECURITIES TEMPLETON FOREIGN SECURITIES TEMPLETON GROWTH SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ----------------------------- ----------------------------- ----------------------------- 2008 2007 (d) 2008 2007 2008 2007 2008 2007 --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- $ 1,277,174 $ 218,036 $ 1,217,989 $ (128,578) $ 287,100 $ 2,587 $ 88,667 $ (89,613) (24,196) 799 1,876,128 1,812,038 5,010,780 1,945,321 1,467,301 1,219,928 (3,510,614) (187,750) (36,089,735) (2,198,007) (34,118,181) 2,747,346 (20,786,300) (1,451,628) --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- (2,257,636) 31,085 (32,995,618) (514,547) (28,820,301) 4,695,254 (19,230,332) (321,313) --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- 19,980,627 6,136,418 26,002,516 41,583,406 21,666,432 31,277,528 11,094,817 23,561,019 3,428,761 493,134 (992,434) 3,725,554 3,288,265 892,948 225,168 1,221,316 (45,038) -- (83,371) (6,385) (288,990) (80,942) (46,450) (4,615) (729,544) (20,696) (4,752,679) (2,926,018) (3,792,529) (4,423,865) (2,209,785) (1,543,001) --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- 22,634,806 6,608,856 20,174,032 42,376,557 20,873,178 27,665,669 9,063,750 23,234,719 --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- 20,377,170 6,639,941 (12,821,586) 41,862,010 (7,947,123) 32,360,923 (10,166,582) 22,913,406 6,639,941 -- 71,392,728 29,530,718 56,498,732 24,137,809 38,096,365 15,182,959 --------------- -------------- --------------- ------------- --------------- ------------- --------------- ------------- $ 27,017,111 $ 6,639,941 $ 58,571,142 $ 71,392,728 $ 48,551,609 $ 56,498,732 $ 27,929,783 $ 38,096,365 =============== ============== =============== ============= =============== ============= =============== =============
The accompanying notes are an integral part of these financial statements. 96 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 FTVIPT FTVIPT TEMPLETON FTVIPT FRANKLIN FRANKLIN INCOME SECURITIES GLOBAL INCOME SECURITIES SMALL CAP VALUE SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------ ----------------------------- 2008 2007 2008 2007 (d) 2008 2007 (d) --------------- --------------- --------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 3,699,656 $ 911,949 $ 255,021 $ (11,671) $ (9,839) $ (7,256) Net realized gains (losses) 440,385 500,496 (28,320) 248 197,482 (2,830) Change in unrealized gains (losses) on investments (38,217,481) (1,585,931) 289,110 76,020 (1,934,460) (107,802) --------------- --------------- --------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (34,077,440) (173,486) 515,811 64,597 (1,746,817) (117,888) --------------- --------------- --------------- -------------- -------------- -------------- CONTRACT TRANSACTIONS: Payments received from contract owners 35,487,751 54,696,663 14,726,091 3,828,978 4,625,563 2,233,558 Net transfers (including fixed account) (1,638,640) 7,988,180 500,732 198,065 9,949 98,702 Contract charges (145,377) (20,633) (29,321) -- (12,034) -- Transfers for contract benefits and terminations (5,696,055) (2,792,326) (218,307) (10,769) (119,562) (5,885) --------------- --------------- --------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 28,007,679 59,871,884 14,979,195 4,016,274 4,503,916 2,326,375 --------------- --------------- --------------- -------------- -------------- -------------- Net increase (decrease) in net assets (6,069,761) 59,698,398 15,495,006 4,080,871 2,757,099 2,208,487 NET ASSETS: Beginning of period 88,519,218 28,820,820 4,080,871 -- 2,208,487 -- --------------- --------------- --------------- -------------- -------------- -------------- End of period $ 82,449,457 $ 88,519,218 $ 19,575,877 $ 4,080,871 $ 4,965,586 $ 2,208,487 =============== =============== =============== ============== ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 97 PIONEER VCT PIONEER VCT UIF EQUITY AND INCOME UIF U.S. REAL ESTATE UIF U.S. MID CAP VALUE BOND CULLEN VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ----------------------------- -------------- --------------- 2008 2007 2008 2007 2008 2007 (d) 2008 (e) 2008 (e) --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- $ 1,600,653 $ 538,434 $ 922,883 $ 297,458 $ (32,127) $ (6,389) $ 706 $ (396) 1,431,873 2,896,435 17,075,264 3,779,804 1,834,014 (1,188) (509) (1,801) (50,294,653) (3,278,237) (39,422,041) (16,191,487) (5,269,797) (47,921) 444 3,133 --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- (47,262,127) 156,632 (21,423,894) (12,114,225) (3,467,910) (55,498) 641 936 --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- 66,377,368 98,691,170 11,412,894 40,976,775 7,780,640 2,680,461 77,337 132,197 (13,990,587) 6,568,747 (903,678) (1,236,489) 230,848 212,273 3,931 33,929 (239,699) (15,080) (65,125) (7,560) (16,162) -- -- -- (12,751,341) (7,673,247) (3,774,973) (2,516,185) (166,677) (3,567) 93 (10,496) --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- 39,395,741 97,571,590 6,669,118 37,216,541 7,828,649 2,889,167 81,361 155,630 --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- (7,866,386) 97,728,222 (14,754,776) 25,102,316 4,360,739 2,833,669 82,002 156,566 166,104,798 68,376,576 52,908,525 27,806,209 2,833,669 -- -- -- --------------- --------------- --------------- --------------- -------------- -------------- -------------- --------------- $158,238,412 $166,104,798 $ 38,153,749 $ 52,908,525 $ 7,194,408 $ 2,833,669 $ 82,002 $ 156,566 =============== =============== =============== =============== ============== ============== ============== ===============
The accompanying notes are an integral part of these financial statements. 98 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 PIONEER VCT PIONEER VCT PIONEER VCT IBBOTSON EMERGING PIONEER VCT PIONEER VCT GLOBAL PIONEER VCT AGGRESSIVE MARKETS EQUITY INCOME FUND HIGH YIELD HIGH YIELD ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- ---------------- -------------- -------------- -------------- -------------- 2008 (e) 2008 (e) 2008 (e) 2008 (e) 2008 (e) 2008 (e) -------------- ---------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (124) $ 116 $ 177 $ 108 $ 250 $ (11) Net realized gains (losses) (7) -- 36,059 -- -- -- Change in unrealized gains (losses) on investments (1,056) 3 (39,483) (200) (1,915) (113) -------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (1,187) 119 (3,247) (92) (1,665) (124) -------------- ---------------- -------------- -------------- -------------- -------------- CONTRACT TRANSACTIONS: Payments received from contract owners 42,099 28,440 45,062 -- 10,562 5,238 Net transfers (including fixed account) 4,027 4,509 461 3,431 1,255 -- Contract charges -- -- -- -- -- -- Transfers for contract benefits and terminations (1,135) (623) (2,603) (12) (6) (47) -------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 44,991 32,326 42,920 3,419 11,811 5,191 -------------- ---------------- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets 43,804 32,445 39,673 3,327 10,146 5,067 NET ASSETS: Beginning of period -- -- -- -- -- -- -------------- ---------------- -------------- -------------- -------------- -------------- End of period $ 43,804 $ 32,445 $ 39,673 $ 3,327 $ 10,146 $ 5,067 ============== ================ ============== ============== ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 99 PIONEER VCT PIONEER VCT PIONEER VCT IBBOTSON IBBOTSON PIONEER VCT OAK RIDGE PIONEER VCT PIONEER VCT GROWTH MODERATE INTERNATIONAL PIONEER VCT LARGE CAP REAL ESTATE SMALL CAP ALLOCATION ALLOCATION VALUE MID CAP VALUE GROWTH SHARES VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- -------------- ---------------- ------------------------------- -------------- -------------- -------------- 2008 (e) 2008 (e) 2008 (e) 2008 2007 2008 (e) 2008 (e) 2008 (e) -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- $ (4,020) $ (3,501) $ (6) $ (171,541) $ (188,314) $ (14) $ 439 $ (26) (544) (966) -- 1,709,181 1,586,469 -- (7) -- 65,380 (168,655) 30 (12,832,992) (1,953,012) 909 (3,723) (1,807) -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- 60,816 (173,122) 24 (11,295,352) (554,857) 895 (3,291) (1,833) -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- 3,354,004 1,235,817 2,619 10,293,285 17,737,711 13,264 33,721 11,947 160,785 70,006 770 130,601 2,118,162 1,078 3,431 705 -- -- -- (47,134) (3,033) -- -- -- 11,630 (5,540) (38) (1,918,388) (788,256) (782) (728) (471) -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- 3,526,419 1,300,283 3,351 8,458,364 19,064,584 13,560 36,424 12,181 -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- 3,587,235 1,127,161 3,375 (2,836,988) 18,509,727 14,455 33,133 10,348 -- -- -- 26,728,784 8,219,057 -- -- -- -------------- -------------- ---------------- --------------- --------------- -------------- -------------- -------------- $ 3,587,235 $ 1,127,161 $ 3,375 $ 23,891,796 $ 26,728,784 $ 14,455 $ 33,133 $ 10,348 ============== ============== ================ =============== =============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements. 100 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 PIONEER VCT STRATEGIC INCOME LMPVET SMALL CAP GROWTH LMPVET INVESTORS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------------------- ----------------------------- 2008 (e) 2008 2007 2008 2007 ------------------- --------------- --------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 325 $ (193,406) $ (120,139) $ (22,462) $ (11,812) Net realized gains (losses) (61) 308,553 718,029 (159,162) 216,616 Change in unrealized gains (losses) on investments 676 (6,234,277) (170,870) (1,122,112) (220,243) ------------------- --------------- --------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 940 (6,119,130) 427,020 (1,303,736) (15,439) ------------------- --------------- --------------- -------------- -------------- CONTRACT TRANSACTIONS: Payments received from contract owners 48,435 6,282,876 5,972,017 426,003 1,316,991 Net transfers (including fixed account) 5,847 230,633 657,704 (1,625,864) 1,683,578 Contract charges -- (42,556) (9,424) (8,079) (8,601) Transfers for contract benefits and terminations 388 (678,502) (425,523) (175,426) (404,812) ------------------- --------------- --------------- -------------- -------------- Net increase (decrease) in net assets resulting from contract transactions 54,670 5,792,451 6,194,774 (1,383,366) 2,587,156 ------------------- --------------- --------------- -------------- -------------- Net increase (decrease) in net assets 55,610 (326,679) 6,621,794 (2,687,102) 2,571,717 NET ASSETS: Beginning of period -- 10,904,358 4,282,564 4,699,165 2,127,448 ------------------- --------------- --------------- -------------- -------------- End of period $ 55,610 $ 10,577,679 $ 10,904,358 $ 2,012,063 $ 4,699,165 =================== =============== =============== ============== ==============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 101 LMPVET EQUITY INDEX LMPVET FUNDAMENTAL VALUE LMPVET APPRECIATION LMPVET AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- $ (477,077) $ (438,400) $ 216,892 $ (56,951) $ (93,176) $ (170,291) $ (1,791,540) $ (1,764,476) (37,403) 3,406,118 (1,448,547) 4,041,837 2,338,316 6,764,065 (890,539) 778,104 (24,324,125) (2,264,449) (33,402,986) (5,252,831) (31,109,184) (2,893,138) (53,980,569) (263,742) --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- (24,838,605) 703,269 (34,634,641) (1,267,945) (28,864,044) 3,700,636 (56,662,648) (1,250,114) --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- 1,398,164 28,958,701 18,092,203 43,728,640 25,300,175 38,382,840 25,083,289 56,918,833 (52,626) 124,568 (2,079,921) 2,751,442 (3,022,849) 7,759,071 218,797 5,338,346 (22,693) (10,688) (89,125) (16,660) (110,293) (24,224) (174,804) (61,018) (5,272,175) (4,690,330) (6,425,407) (4,151,502) (6,678,226) (4,532,695) (9,719,755) (6,928,890) --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- (3,949,330) 24,382,251 9,497,750 42,311,920 15,488,807 41,584,992 15,407,527 55,267,271 --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- (28,787,935) 25,085,520 (25,136,891) 41,043,975 (13,375,237) 45,285,628 (41,255,121) 54,017,157 66,117,281 41,031,761 84,463,307 43,419,332 83,497,462 38,211,834 127,959,661 73,942,504 --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------- $ 37,329,346 $ 66,117,281 $ 59,326,416 $ 84,463,307 $ 70,122,225 $ 83,497,462 $ 86,704,540 $ 127,959,661 =============== =============== =============== =============== =============== =============== =============== ================
The accompanying notes are an integral part of these financial statements. 102 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 LMPVET LARGE CAP GROWTH LMPVET SOCIAL AWARENESS LMPVET CAPITAL AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 -------------- -------------- ------------ ---------- --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (121,801) $ (145,514) $ 2,816 $ 798 $ (246,270) $ 158,572 Net realized gains (losses) (160,593) 135,272 (46,175) 97,920 (2,081,258) 9,551,295 Change in unrealized gains (losses) on investments (3,323,792) 250,277 (179,725) (63,896) (20,848,047) (9,641,183) -------------- -------------- ------------ ---------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (3,606,186) 240,035 (223,084) 34,822 (23,175,575) 68,684 -------------- -------------- ------------ ---------- --------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners 404,748 4,327,458 25,515 212,162 12,322,899 7,614,688 Net transfers (including fixed account) (244,960) 610,270 248,226 51,439 (1,556,121) 52,225,304 Contract charges (26,623) (17,705) (239) (65) (20,663) (10,082) Transfers for contract benefits and terminations (944,251) (1,184,051) (48,482) (13,902) (4,206,113) (2,193,424) -------------- -------------- ------------ ---------- --------------- --------------- Net increase (decrease) in net assets resulting from contract transactions (811,086) 3,735,972 225,020 249,634 6,540,002 57,636,486 -------------- -------------- ------------ ---------- --------------- --------------- Net increase (decrease) in net assets (4,417,272) 3,976,007 1,936 284,456 (16,635,573) 57,705,170 NET ASSETS: Beginning of period 9,921,012 5,945,005 565,965 281,509 59,957,587 2,252,417 -------------- -------------- ------------ ---------- --------------- --------------- End of period $ 5,503,740 $ 9,921,012 $ 567,901 $ 565,965 $ 43,322,014 $ 59,957,587 ============== ============== ============ ========== =============== ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 103 LMPVET LMPVET CAPITAL LMPVET GLOBAL EQUITY LMPVET DIVIDEND STRATEGY LIFESTYLE ALLOCATION 50% SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------- ----------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 2008 2007 -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ $ (123,893) $ (93,519) $ (92,836) $ (77,834) $ 78,630 $ 68,634 $ 160,063 $ 231,911 1,001,895 556,043 (8,407) 470,179 (240,972) 31,060 (98,473) 133,323 (4,421,596) (598,669) (2,901,842) (171,007) (2,364,206) 47,810 (2,836,929) (374,438) -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ (3,543,594) (136,145) (3,003,085) 221,338 (2,526,548) 147,504 (2,775,339) (9,204) -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ 42,916 5,276,317 43,001 1,518,943 1,197,960 4,756,217 906,766 6,331,338 (444,451) 140,677 (894,326) 1,056,116 (711,418) 612,655 (444,967) 587,867 (34,395) (16,135) (19,802) (16,770) (15,120) (5,197) (2,110) (432) (664,052) (1,011,067) (584,888) (263,668) (665,652) (299,906) (622,254) (295,310) -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ (1,099,982) 4,389,792 (1,456,015) 2,294,621 (194,230) 5,063,769 (162,565) 6,623,463 -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ (4,643,576) 4,253,647 (4,459,100) 2,515,959 (2,720,778) 5,211,273 (2,937,904) 6,614,259 8,963,789 4,710,142 7,705,323 5,189,364 8,243,529 3,032,256 9,409,255 2,794,996 -------------- -------------- -------------- -------------- -------------- -------------- -------------- ------------ $ 4,320,213 $ 8,963,789 $ 3,246,223 $ 7,705,323 $ 5,522,751 $ 8,243,529 $ 6,471,351 $ 9,409,255 ============== ============== ============== ============== ============== ============== ============== ============
The accompanying notes are an integral part of these financial statements. 104 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 LMPVET LIFESTYLE ALLOCATION 70% LMPVET LIFESTYLE ALLOCATION 85% LMPVIT ADJUSTABLE RATE INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ---------------------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 -------------- ---------------- --------------- ------------------ ------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 31,313 $ 65,129 $ 273,760 $ 196,021 $ 69,546 $ 105,856 Net realized gains (losses) (150,226) 49,152 (58,061) 104,353 (164,548) (3,665) Change in unrealized gains (losses) on investments (1,315,549) (194,902) (12,155,524) (650,821) (521,720) (117,934) -------------- ---------------- --------------- ------------------ ------------- --------------- Net increase (decrease) in net assets resulting from operations (1,434,462) (80,621) (11,939,825) (350,447) (616,722) (15,743) -------------- ---------------- --------------- ------------------ ------------- --------------- CONTRACT TRANSACTIONS: Payments received from contract owners 794,881 2,776,682 19,759,139 15,233,223 98,248 1,024,273 Net transfers (including fixed account) (101,697) 711,199 2,090,926 1,501,702 (636,990) 188,818 Contract charges (1,006) (274) (87,142) (253) (1,039) (1,053) Transfers for contract benefits and terminations (207,619) (74,936) (528,892) (123,496) (234,158) (237,909) -------------- ---------------- --------------- ------------------ ------------- --------------- Net increase (decrease) in net assets resulting from contract transactions 484,559 3,412,671 21,234,031 16,611,176 (773,939) 974,129 -------------- ---------------- --------------- ------------------ ------------- --------------- Net increase (decrease) in net assets (949,903) 3,332,050 9,294,206 16,260,729 (1,390,661) 958,386 NET ASSETS: Beginning of period 3,668,950 336,900 16,581,727 320,998 3,178,900 2,220,514 -------------- ---------------- --------------- ------------------ ------------- --------------- End of period $ 2,719,047 $ 3,668,950 $ 25,875,933 $ 16,581,727 $ 1,788,239 $ 3,178,900 ============== ================ =============== ================== ============= ===============
(a) For the period November 12, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 105 LMPVIT GLOBAL HIGH YIELD BOND LMPVIT MONEY MARKET SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2008 2007 2008 2007 --------------- ---------------- --------------- --------------- $ 3,663,471 $ 2,498,979 $ 629,570 $ 1,033,839 (1,351,968) 192,209 -- -- (16,334,758) (3,622,401) -- -- --------------- ---------------- --------------- --------------- (14,023,255) (931,213) 629,570 1,033,839 --------------- ---------------- --------------- --------------- 8,016,867 24,720,376 74,917,911 56,919,433 (2,081,044) 1,958,236 10,849,243 (24,059,265) (56,224) (13,699) (100,427) (27,274) (3,221,805) (1,989,860) (15,740,214) (9,895,971) --------------- ---------------- --------------- --------------- 2,657,794 24,675,053 69,926,513 22,936,923 --------------- ---------------- --------------- --------------- (11,365,461) 23,743,840 70,556,083 23,970,762 40,738,484 16,994,644 44,647,513 20,676,751 --------------- ---------------- --------------- --------------- $ 29,373,023 $ 40,738,484 $115,203,596 $ 44,647,513 =============== ================ =============== ===============
The accompanying notes are an integral part of these financial statements. 106 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION MetLife Investors USA Separate Account A (the "Separate Account"), a separate account of MetLife Investors USA Insurance Company (the "Company"), was established by the Company's Board of Directors on May 29, 1980 to support operations of the Company with respect to certain variable annuity contracts (the "Contracts"). The Company is an indirect 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 Delaware Department of Insurance. The Separate Account is divided into Sub-Accounts, each of which is treated as an individual accounting entity for financial reporting purposes. Each Sub-Account invests in shares of the corresponding portfolio, series, or fund (with the same name) of registered investment management companies (the "Trusts"), which are presented below: Met Investors Series Trust ("MIST")* AIM Variable Insurance Funds ("AIM V.I.") MFS Variable Insurance Trust ("MFS") Oppenheimer Variable Account Funds ("Oppenheimer") Fidelity Variable Insurance Products ("Fidelity VIP") DWS Variable Series II ("DWS") Metropolitan Series Fund, Inc. ("MSF")* Van Kampen Life Investment Trust ("Van Kampen LIT") Federated Insurance Series ("Federated") Neuberger Berman Mutual Funds ("Neuberger") Alger Variable Insurance Funds ("Alger") T. Rowe Price Funds ("T. Rowe Price") Janus Aspen Series ("Janus Aspen") American Funds Insurance Series ("American Funds") Franklin Templeton Variable Insurance Products Trust ("FTVIPT") The Universal Institutional Funds, Inc. ("UIF") Pioneer Variable Contracts Trust ("Pioneer VCT") Legg Mason Partners Variable Equity Trust ("LMPVET") Legg Mason Partners Variable Income Trust ("LMPVIT") * See Note 3 for discussion of additional information on related party transactions. The assets of each of the Sub-Accounts of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Contracts is not chargeable with liabilities arising out of any other business the Company may conduct. Purchase payments, less any applicable charges, applied to the Separate Account are invested in one or more Sub-Accounts in accordance with the selection made by the contract owner. The following Sub-Accounts were available for investment as of December 31, 2008: MIST Lord Abbett Growth and Income Sub-Account** MIST Lord Abbett Bond Debenture Sub-Account** MIST Van Kampen Mid Cap Growth Sub-Account MIST Lord Abbett Mid Cap Value Sub-Account MIST Lazard Mid Cap Sub-Account MIST Met/AIM Small Cap Growth Sub-Account** MIST Harris Oakmark International Sub-Account MIST Third Avenue Small Cap Value Sub-Account** MIST Oppenheimer Capital Appreciation Sub-Account** MIST Legg Mason Partners Aggressive Growth Sub-Account MIST PIMCO Total Return Sub-Account** MIST RCM Technology Sub-Account** MIST PIMCO Inflation Protected Bond Sub-Account MIST T. Rowe Price Mid Cap Growth Sub-Account MIST MFS Research International Sub-Account** MIST Clarion Global Real Estate Sub-Account MIST Turner Mid Cap Growth Sub-Account MIST Goldman Sachs Mid Cap Value Sub-Account MIST MetLife Defensive Strategy Sub-Account MIST MetLife Moderate Strategy Sub-Account MIST MetLife Balanced Strategy Sub-Account MIST MetLife Growth Strategy Sub-Account MIST MetLife Aggressive Strategy Sub-Account MIST Van Kampen Comstock Sub-Account MIST Legg Mason Value Equity Sub-Account MIST MFS Emerging Markets Equity Sub-Account MIST Loomis Sayles Global Markets Sub-Account MIST Met/AIM Capital Appreciation Sub-Account MIST Janus Forty Sub-Account MIST Dreman Small Cap Value Sub-Account** MIST Pioneer Fund Sub-Account MIST Pioneer Strategic Income Sub-Account 107 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 1. ORGANIZATION -- (CONTINUED) MIST BlackRock Large Cap Core Sub-Account MIST BlackRock High Yield Sub-Account** MIST Rainier Large Cap Equity Sub-Account MIST American Funds Balanced Allocation Sub-Account (a) MIST American Funds Bond Sub-Account (a) MIST American Funds Growth Sub-Account (a) MIST American Funds Growth Allocation Sub-Account (a) MIST American Funds International Sub-Account (a) MIST American Funds Moderate Allocation Sub-Account (a) MIST Met/Franklin Mutual Shares Sub-Account (a) MIST Met/Franklin Templeton Founding Strategy Sub-Account (a) MIST SSgA Growth ETF Sub-Account (a) MIST SSgA Growth and Income ETF Sub-Account (a) AIM V.I. Core Equity Sub-Account AIM V.I. Capital Appreciation Sub-Account AIM V.I. International Growth Sub-Account** AIM V.I. Basic Balanced Sub-Account AIM V.I. Global Real Estate Sub-Account MFS Research Sub-Account MFS Investors Trust Sub-Account MFS New Discovery Sub-Account Oppenheimer Main Street Sub-Account Oppenheimer Core Bond Sub-Account Oppenheimer Strategic Bond Sub-Account Oppenheimer Main Street Small Cap Sub-Account Oppenheimer Money Sub-Account Fidelity VIP Asset Manager Sub-Account Fidelity VIP Growth Sub-Account Fidelity VIP Contrafund Sub-Account** Fidelity VIP Overseas Sub-Account** Fidelity VIP Equity-Income Sub-Account Fidelity VIP Index 500 Sub-Account** Fidelity VIP Money Market Sub-Account** Fidelity VIP Mid Cap Sub-Account DWS International Sub-Account** MSF FI Mid Cap Opportunities Sub-Account** MSF FI Large Cap Sub-Account MSF FI Value Leaders Sub-Account MSF Russell 2000 Index Sub-Account** MSF Julius Baer International Stock Sub-Account** MSF MetLife Stock Index Sub-Account** MSF BlackRock Legacy Large Cap Growth Sub-Account MSF BlackRock Strategic Value Sub-Account MSF BlackRock Bond Income Sub-Account** MSF BlackRock Large Cap Value Sub-Account MSF Lehman Brothers Aggregate Bond Index Sub-Account MSF MFS Value Sub-Account MSF Morgan Stanley EAFE Index Sub-Account MSF MFS Total Return Sub-Account** MSF MetLife Mid Cap Stock Index Sub-Account MSF Davis Venture Value Sub-Account** MSF Harris Oakmark Focused Value Sub-Account** MSF Jennison Growth Sub-Account MSF BlackRock Money Market Sub-Account MSF T. Rowe Price Small Cap Growth Sub-Account** MSF Western Asset Management U.S. Government Sub-Account** MSF Oppenheimer Global Equity Sub-Account MSF MetLife Aggressive Allocation Sub-Account MSF MetLife Conservative Allocation Sub-Account MSF MetLife Conservative to Moderate Allocation Sub-Account MSF MetLife Moderate Allocation Sub-Account MSF MetLife Moderate to Aggressive Allocation Sub-Account MSF T. Rowe Price Large Cap Growth Sub-Account (a) MSF Loomis Sayles Small Cap Sub-Account (a) MSF Neuberger Berman Mid Cap Value Sub-Account (a) MSF Met/Dimensional International Small Company Sub-Account (a) Van Kampen LIT Capital Growth Sub-Account Van Kampen LIT Enterprise Sub-Account Van Kampen LIT Growth and Income Sub-Account** Van Kampen LIT Comstock Sub-Account Federated Equity Income Sub-Account Federated High Income Bond Sub-Account Federated Mid Cap Growth Strategies Sub-Account Neuberger Berman Genesis Sub-Account Alger American SmallCap Growth Sub-Account T. Rowe Price Growth Stock Sub-Account T. Rowe Price International Stock Sub-Account T. Rowe Price Prime Reserve Sub-Account Janus Aspen Worldwide Growth Sub-Account American Funds Global Small Capitalization Sub-Account** American Funds Growth Sub-Account** American Funds Growth - Income Sub-Account** American Funds Global Growth Sub-Account American Funds Bond Sub-Account FTVIPT Mutual Shares Securities Sub-Account FTVIPT Templeton Foreign Securities Sub-Account FTVIPT Templeton Growth Securities Sub-Account 108 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 1. ORGANIZATION -- (CONTINUED) FTVIPT Franklin Income Securities Sub-Account FTVIPT Templeton Global Income Securities Sub-Account FTVIPT Franklin Small Cap Value Securities Sub-Account UIF Equity and Income Sub-Account UIF U.S. Real Estate Sub-Account UIF U.S. Mid Cap Value Sub-Account Pioneer VCT Bond Sub-Account** (a) Pioneer VCT Cullen Value Sub-Account (a) Pioneer VCT Emerging Markets Sub-Account (a) Pioneer VCT Equity Income Sub-Account (a) Pioneer VCT Fund Sub-Account (a) Pioneer VCT Global High Yield Sub-Account (a) Pioneer VCT High Yield Sub-Account (a) Pioneer VCT Ibbotson Aggressive Allocation Sub-Account (a) Pioneer VCT Ibbotson Growth Allocation Sub-Account (a) Pioneer VCT Ibbotson Moderate Allocation Sub-Account (a) Pioneer VCT International Value Sub-Account (a) Pioneer VCT Mid Cap Value Sub-Account Pioneer VCT Oak Ridge Large Cap Growth Sub-Account (a) Pioneer VCT Real Estate Shares Sub-Account (a) Pioneer VCT Small Cap Value Sub-Account (a) Pioneer VCT Strategic Income Sub-Account (a) Pioneer VCT Independence Sub-Account* LMPVET Small Cap Growth Sub-Account LMPVET Investors Sub-Account LMPVET Equity Index Sub-Account** LMPVET Fundamental Value Sub-Account LMPVET Appreciation Sub-Account** LMPVET Aggressive Growth Sub-Account LMPVET Large Cap Growth Sub-Account LMPVET Social Awareness Sub-Account LMPVET Capital and Income Sub-Account** LMPVET Capital Sub-Account LMPVET Global Equity Sub-Account LMPVET Dividend Strategy Sub-Account LMPVET Lifestyle Allocation 50% Sub-Account LMPVET Lifestyle Allocation 70% Sub-Account LMPVET Lifestyle Allocation 85% Sub-Account LMPVIT Adjustable Rate Income Sub-Account LMPVIT Global High Yield Bond Sub-Account LMPVIT Money Market Sub-Account * This Sub-Account had no net assets as of December 31, 2008. ** This Sub-Account invests in two or more share classes within the underlying portfolio, series, or fund of the Trusts that may assess 12b-1 fees. (a) This Sub-Account began operations during the year ended December 31, 2008. The following Sub-Accounts ceased operations during the year ended December 31, 2008: Van Kampen LIT Strategic Growth Sub-Account AllianceBernstein Large Cap Growth Sub-Account FTVIPT Templeton Developing Markets Securities Sub-Account The operations of the Sub-Accounts were affected by the following changes that occurred during the year ended December 31, 2008: Name changes: OLD NAME Neuberger Berman Real Estate Portfolio FI International Stock Portfolio Harris Oakmark Large Cap Value Portfolio Van Kampen LIT Strategic Growth Portfolio Alger American Small Capitalization Portfolio NEW NAME Clarion Global Real Estate Portfolio Julius Baer International Stock Portfolio MFS Value Portfolio Van Kampen LIT Capital Growth Portfolio Alger American SmallCap Growth Portfolio 109 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 1. ORGANIZATION -- (CONCLUDED) Portfolio Reorganization: OLD NAME MIST MFS Value Portfolio NEW NAME MSF MFS Value Portfolio SUBSTITUTIONS: OLD NAME Van Kampen LIT Strategic Growth Portfolio AllianceBernstein Large Cap Growth Portfolio Templeton Developing Markets Securities Fund NEW NAME Jennison Growth Portfolio T. Rowe Price Large Cap Growth Portfolio MFS Emerging Markets Equity Portfolio This report is prepared for the general information of contract owners and is not an offer of units of the Separate Account or shares of the Separate Account's underlying investments. It should not be used in connection with any offer except in conjunction with the prospectus for the Separate Account products offered by the Company and the prospectus of the underlying portfolio, series, or fund, which collectively contain all the pertinent information, including additional information on charges and expenses. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to variable annuity separate accounts registered as unit investment trusts. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. SECURITY VALUATIONS The Sub-Accounts' investment in shares of the portfolio, series, or fund of the Trusts is valued at fair value based on the closing net asset value or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Sub-Accounts. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Contracts. Accordingly, no charge is being made to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Contracts. ANNUITY PAYOUTS Net assets allocated to Contracts in the payout period are computed according to industry standard mortality tables. The assumed investment return is 3.0 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Separate Account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. PURCHASE PAYMENTS Purchase payments received from contract owners by the Company are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus, and are reported as contract transactions on the statements of changes in net assets of the applicable Sub-Accounts. 110 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) NET TRANSFERS Funds transferred by the contract owner into or out of the Sub-Accounts 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 Sub-Acccounts. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS ("SFAS 157"). SFAS 157 defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Separate Account has categorized its assets based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. SFAS 157 defines the input levels as follows: Level 1 Unadjusted quoted prices in active markets for identical assets. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets.
Effective January 1, 2008, the Separate Account adopted SFAS 157 and applied the provisions of the statement prospectively to assets measured at fair value. The adoption of SFAS 157 had no impact on the fair value of items measured at fair value. Each Sub-Account invests in shares of open-end mutual funds which calculate a daily net asset value based on the value of the underlying securities in its portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily net asset values as reported by the Trusts at the close of each business day. On that basis, the fair value measurements of all shares held by the Separate Account are reported as Level 1. Effective January 1, 2007, the Company adopted FASB Interpretation ("FIN") No. 48. ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN INTERPRETATION OF FASB STATEMENT NO. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. The adoption of FIN 48 had no impact on the financial statements of each of the Sub-Accounts. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In December 2007, the FASB issued SFAS No. 160, NONCONTROLLING INTERESTS IN CONSOLIDATED FINANCIAL STATEMENTS --AN AMENDMENT OF ACCOUNTING RESEARCH BULLETIN NO. 51 ("SFAS 160"). SFAS 160 defines and establishes accounting and reporting standards for noncontrolling interests in a subsidiary. The pronouncement is effective for fiscal years beginning on or after December 15, 2008. The Separate Account believes the adoption of SFAS 160 will have no material impact on the financial statements of each of the Sub-Accounts. 111 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charges are asset-based charges and assessed through a daily reduction of unit values, which are recorded as expenses in the accompanying statements of operations of the applicable Sub-Accounts: MORTALITY AND EXPENSE RISK -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is where expenses incurred in issuing and administering the Contracts will exceed the amounts realized from the administrative charges assessed against the Contracts. In addition, the charge compensates the Company for the risk that the investor may live longer than estimated and the Company would be obligated to pay more in income payments than anticipated. ADMINISTRATIVE -- The Company has responsibility for the administration of the Contracts and the Separate Account. Generally, the administrative charge is related to the maintenance, including distribution, of each contract and the Separate Account. OPTIONAL DEATH BENEFIT RIDER -- For an additional charge, the total death benefit payable may be increased based on the earnings in the Contracts. DISTRIBUTION EXPENSE -- The risk that surrender charges will be insufficient to cover the actual costs of distribution which includes commissions, fees, registration costs, direct and indirect selling expenses. GUARANTEED MINIMUM ACCUMULATION BENEFIT -- For an additional charge, the Company will guarantee that the contract value will not be less than a guaranteed minimum amount at the end of a specified number of years. The table below represents the range of effective annual rates for each respective charge for the year ended December 31, 2008: Mortality and Expense Risk 0.74% - 1.60% --------------- Administrative 0.15% - 0.25% --------------- Optional Death Benefit Rider 0.10% - 0.35% --------------- Distribution Expense 0.10% --------------- Guaranteed Minimum Accumulation Benefit 1.50% ===============
The above referenced charges may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular contract. A contract maintenance fee ranging from $30 to $40 is assessed on an annual basis for Contracts with a value of less than $50,000. A transfer fee of $25 may be deducted after twelve transfers are made in a contract year or, if less, 2% of the amount transferred, from the contract value. An administrative charge is also assessed of $21.50 plus $2.50 for each Sub-Account in which the contract owner invests (waived if purchase payments equal or exceed $2,000 in the year, or if the account value is $10,000 or more at year end). In addition, most Contracts impose a surrender charge which ranges from 0% to 9% if the contract is partially or fully surrendered within the specified surrender charge period. A transaction charge of the lesser of $10 or 2% of the surrender is imposed on surrenders and a $10 charge is assessed for annuitizations. For those contract owners who choose optional living benefit riders or certain optional death benefit riders, these charges range from .35% to 1.50% of the account value and are charged at each contract anniversary date. These charges are assessed through the redemption of units and are recorded as contract charges in the accompanying statements of changes in net assets of the applicable Sub-Accounts. Certain investments in the various portfolios, series or funds of the MIST and MSF Trusts hold shares which are managed by Met Investors Advisory, LLC and MetLife Advisers, LLC, respectively. Both act in the capacity of investment advisor and are indirect affiliates of the Company. 112 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. STATEMENTS OF INVESTMENTS FOR THE YEAR ENDED AS OF DECEMBER 31, 2008 DECEMBER 31, 2008 ------------------------- ---------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ----------- ------------- ------------- -------------- MIST Lord Abbett Growth and Income Sub-Account 27,323,354 692,133,106 83,717,355 107,248,641 MIST Lord Abbett Bond Debenture Sub-Account 18,439,651 224,746,090 19,501,662 67,974,297 MIST Van Kampen Mid Cap Growth Sub-Account 4,888,308 46,379,887 25,760,095 1,238,451 MIST Lord Abbett Mid Cap Value Sub-Account 2,327,198 36,431,677 21,445,939 1,890,571 MIST Lazard Mid Cap Sub-Account 10,189,009 130,898,801 17,042,355 15,529,648 MIST Met/AIM Small Cap Growth Sub-Account 12,204,890 150,835,025 23,908,134 25,990,330 MIST Harris Oakmark International Sub-Account 22,335,527 327,997,652 67,587,998 65,670,795 MIST Third Avenue Small Cap Value Sub-Account 19,013,916 271,101,038 38,937,388 56,351,045 MIST Oppenheimer Capital Appreciation Sub-Account 40,898,919 321,114,343 86,318,953 58,405,661 MIST Legg Mason Partners Aggressive Growth Sub-Account 12,626,943 90,835,589 5,855,713 14,991,074 MIST PIMCO Total Return Sub-Account 47,213,648 544,593,013 155,771,250 55,048,681 MIST RCM Technology Sub-Account 15,968,784 71,189,715 36,527,082 20,759,000 MIST PIMCO Inflation Protected Bond Sub-Account 26,009,393 278,940,148 102,914,620 67,781,959 MIST T. Rowe Price Mid Cap Growth Sub-Account 26,795,382 198,432,302 41,981,500 32,058,938 MIST MFS Research International Sub-Account 27,839,697 329,591,675 72,468,381 28,341,402 MIST Clarion Global Real Estate Sub-Account 8,679,202 121,844,303 34,095,280 18,419,408 MIST Turner Mid Cap Growth Sub-Account 4,871,105 59,105,167 19,823,968 16,240,066 MIST Goldman Sachs Mid Cap Value Sub-Account 8,649,472 112,201,592 12,440,699 30,512,646 MIST MetLife Defensive Strategy Sub-Account 102,626,529 1,080,515,265 660,531,011 148,339,911 MIST MetLife Moderate Strategy Sub-Account 166,031,609 1,769,740,131 403,746,934 84,883,439 MIST MetLife Balanced Strategy Sub-Account 465,445,683 4,989,952,336 763,643,172 329,849,889 MIST MetLife Growth Strategy Sub-Account 556,766,897 6,355,710,947 1,011,691,877 368,495,122 MIST MetLife Aggressive Strategy Sub-Account 47,904,101 524,598,467 93,844,526 103,301,255 MIST Van Kampen Comstock Sub-Account 5,952,048 63,457,193 15,214,343 10,414,518 MIST Legg Mason Value Equity Sub-Account 9,722,079 86,477,973 36,449,375 6,633,311 MIST MFS Emerging Markets Equity Sub-Account 10,582,078 100,889,180 67,118,876 18,901,255 MIST Loomis Sayles Global Markets Sub-Account 6,263,925 72,369,950 39,203,430 14,464,039 MIST Met/AIM Capital Appreciation Sub-Account 360,309 3,867,913 2,172,653 495,547 MIST Janus Forty Sub-Account 254,117 18,192,528 12,515,942 1,713,245 MIST Dreman Small Cap Value Sub-Account 1,251,234 16,510,338 6,030,067 1,064,789 MIST Pioneer Fund Sub-Account 1,623,745 19,843,361 17,064,012 4,461,779 MIST Pioneer Strategic Income Sub-Account 15,436,827 146,979,130 70,800,376 16,512,236 MIST BlackRock Large Cap Core Sub-Account 543,747 5,539,478 1,877,945 633,581 MIST BlackRock High Yield Sub-Account 2,361,608 17,637,485 22,560,508 10,799,353 MIST Rainier Large Cap Equity Sub-Account 4,106,746 35,807,406 36,346,695 6,124,519 MIST American Funds Balanced Allocation Sub-Account (a) 48,807,226 412,768,025 425,392,162 11,436,639 MIST American Funds Bond Sub-Account (a) 3,283,420 31,253,317 32,046,076 749,999 MIST American Funds Growth Sub-Account (a) 9,850,652 74,645,792 74,810,363 132,647 MIST American Funds Growth Allocation Sub-Account (a) 77,398,552 645,630,913 645,706,607 51,542 MIST American Funds International Sub-Account (a) 8,022,946 62,783,016 63,825,718 748,518 MIST American Funds Moderate Allocation Sub-Account (a) 29,922,565 263,626,582 273,360,079 8,376,725 MIST Met/Franklin Mutual Shares Sub-Account (a) 2,015,376 16,233,709 16,815,964 478,015 MIST Met/Franklin Templeton Founding Strategy Sub-Account (a) 27,740,084 238,297,654 239,108,409 764,130 MIST SSgA Growth ETF Sub-Account (b) 191,259 1,421,486 1,421,486 -- MIST SSgA Growth and Income ETF Sub-Account (b) 313,414 2,493,308 2,533,850 42,945 AIM V.I. Core Equity Sub-Account 19,845 499,583 48,458 310,025 AIM V.I. Capital Appreciation Sub-Account 9,513 241,972 43,210 162,716 AIM V.I. International Growth Sub-Account 1,453,900 38,790,668 31,429,861 3,116,163 AIM V.I. Basic Balanced Sub-Account 42,441 465,382 68,972 220,029 AIM V.I. Global Real Estate Sub-Account 259,405 4,427,488 2,766,649 162,998 MFS Research Sub-Account 7,327 119,592 859 48,010 MFS Investors Trust Sub-Account 3,309 60,224 11,316 57,249 MFS New Discovery Sub-Account 5,432 81,784 14,535 23,253 Oppenheimer Main Street Sub-Account 7,448 153,041 14,416 66,348 Oppenheimer Core Bond Sub-Account 14,888 161,737 8,402 90,963
113 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. STATEMENTS OF INVESTMENTS -- (CONTINUED) FOR THE YEAR ENDED AS OF DECEMBER 31, 2008 DECEMBER 31, 2008 ----------------------- ---------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ---------- ------------ ------------- -------------- Oppenheimer Strategic Bond Sub-Account 2,959 14,271 1,544 31,213 Oppenheimer Main Street Small Cap Sub-Account 1,837,936 26,952,615 21,173,487 1,926,794 Oppenheimer Money Sub-Account 149,601 149,601 4,869 23,449 Fidelity VIP Asset Manager Sub-Account 8,588,358 132,202,478 16,833,975 17,604,189 Fidelity VIP Growth Sub-Account 4,734,957 178,187,772 2,666,277 23,829,760 Fidelity VIP Contrafund Sub-Account 14,478,742 346,260,528 52,079,169 33,045,582 Fidelity VIP Overseas Sub-Account 444,820 8,447,551 1,540,378 1,606,894 Fidelity VIP Equity-Income Sub-Account 464,323 10,846,360 434,089 2,657,053 Fidelity VIP Index 500 Sub-Account 646,885 82,868,654 3,013,726 17,605,456 Fidelity VIP Money Market Sub-Account 41,701,885 41,701,885 9,527,206 6,008,055 Fidelity VIP Mid Cap Sub-Account 2,565,369 71,453,866 38,826,355 3,764,145 DWS International Sub-Account 2,777,406 30,778,780 6,714,680 4,194,186 MSF FI Mid Cap Opportunities Sub-Account 299,273 5,302,552 1,062,821 1,174,777 MSF FI Large Cap Sub-Account 356,309 4,857,056 1,181,048 798,168 MSF FI Value Leaders Sub-Account 30,329 5,588,995 1,803,835 641,141 MSF Russell 2000 Index Sub-Account 595,964 8,083,908 4,718,332 4,137,879 MSF Julius Baer International Stock Sub-Account 459,732 6,576,269 1,759,091 958,258 MSF MetLife Stock Index Sub-Account 7,604,201 224,789,259 31,583,394 51,361,885 MSF BlackRock Legacy Large Cap Growth Sub-Account 61,018 1,418,228 747,254 275,749 MSF BlackRock Strategic Value Sub-Account 870,019 14,141,275 1,997,103 1,843,384 MSF BlackRock Bond Income Sub-Account 320,806 34,406,402 13,621,327 7,934,469 MSF BlackRock Large Cap Value Sub-Account 284,631 3,650,383 892,890 789,667 MSF Lehman Brothers Aggregate Bond Index Sub-Account 711,354 7,657,130 3,973,025 2,361,097 MSF MFS Value Sub-Account 2,395,693 32,514,949 17,677,682 8,131,066 MSF Morgan Stanley EAFE Index Sub-Account 1,194,292 16,901,288 3,765,441 2,099,561 MSF MFS Total Return Sub-Account 318,607 46,929,892 8,964,944 9,204,634 MSF MetLife Mid Cap Stock Index Sub-Account 1,233,193 16,871,631 4,754,870 1,879,845 MSF Davis Venture Value Sub-Account 15,727,851 419,080,497 35,738,961 64,049,437 MSF Harris Oakmark Focused Value Sub-Account 1,417,984 312,574,704 33,718,907 43,257,281 MSF Jennison Growth Sub-Account 14,485,418 154,604,972 36,167,234 24,164,082 MSF BlackRock Money Market Sub-Account 5,953,049 595,304,824 476,086,261 122,383,140 MSF T. Rowe Price Small Cap Growth Sub-Account 366,306 4,506,652 3,833,432 415,419 MSF Western Asset Management U.S. Government Sub-Account 7,185,973 86,888,055 64,266,606 20,678,220 MSF Oppenheimer Global Equity Sub-Account 801,266 12,651,880 4,404,053 1,134,306 MSF MetLife Aggressive Allocation Sub-Account 162,578 2,007,310 258,875 371,454 MSF MetLife Conservative Allocation Sub-Account 604,030 6,167,956 5,415,763 1,640,579 MSF MetLife Conservative to Moderate Allocation Sub-Account 666,964 7,035,624 4,112,683 1,135,364 MSF MetLife Moderate Allocation Sub-Account 4,275,620 48,324,389 13,360,378 3,017,942 MSF MetLife Moderate to Aggressive Allocation Sub-Account 5,676,604 66,628,193 14,385,218 6,016,313 MSF T. Rowe Price Large Cap Growth Sub-Account 62,730 905,485 1,148,953 175,751 MSF Loomis Sayles Small Cap Sub-Account (c) 153 23,398 23,399 1 MSF Neuberger Berman Mid Cap Value Sub-Account (c) 1,710 16,546 16,547 1 MSF Met/Dimensional International Small Company Sub-Account (b) 12,623 120,286 128,677 8,805 Van Kampen LIT Capital Growth Sub-Account 5,201 162,115 982,173 9,578,668 Van Kampen LIT Enterprise Sub-Account 5,030 75,961 29,308 59,971 Van Kampen LIT Growth and Income Sub-Account 4,195,300 79,674,153 40,747,599 7,501,810 Van Kampen LIT Comstock Sub-Account 7,358,177 97,733,861 24,990,216 4,556,364 Federated Equity Income Sub-Account 1,724 22,359 911 4,023 Federated High Income Bond Sub-Account 10,286 78,110 10,280 46,661 Federated Mid Cap Growth Strategies Sub-Account 5,706 148,024 31,625 9,918 Neuberger Berman Genesis Sub-Account 263 8,959 475 1,212 Alger American SmallCap Growth Sub-Account 2,151,669 62,618,473 1,454,249 7,097,473
114 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. STATEMENTS OF INVESTMENTS -- (CONCLUDED) FOR THE YEAR ENDED AS OF DECEMBER 31, 2008 DECEMBER 31, 2008 ----------------------- ---------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ----------- ----------- ------------- -------------- T. Rowe Price Growth Stock Sub-Account 276,880 7,730,334 363,233 1,292,682 T. Rowe Price International Stock Sub-Account 72,311 1,017,099 55,745 194,090 T. Rowe Price Prime Reserve Sub-Account 2,218,473 2,218,341 1,402,562 934,609 Janus Aspen Worldwide Growth Sub-Account 261 6,141 98 781 American Funds Global Small Capitalization Sub-Account 2,486,776 53,534,315 27,204,988 3,911,621 American Funds Growth Sub-Account 6,946,246 391,341,978 172,790,656 9,445,211 American Funds Growth--Income Sub-Account 5,674,499 218,520,517 71,936,706 5,092,163 American Funds Global Growth Sub-Account 7,309,179 161,743,096 66,686,558 2,568,170 American Funds Bond Sub-Account 2,883,401 30,715,829 24,703,656 754,218 FTVIPT Mutual Shares Securities Sub-Account 4,972,107 95,003,544 29,381,130 4,747,187 FTVIPT Templeton Foreign Securities Sub-Account 4,512,281 77,568,117 28,334,695 1,890,386 FTVIPT Templeton Growth Securities Sub-Account 3,406,105 49,058,066 14,554,437 2,957,291 FTVIPT Franklin Income Securities Sub-Account 7,270,705 120,675,223 39,397,409 5,547,265 FTVIPT Templeton Global Income Securities Sub-Account 1,144,804 19,210,978 16,220,073 986,022 FTVIPT Franklin Small Cap Value Securities Sub-Account 470,709 7,008,240 5,185,371 415,252 UIF Equity and Income Sub-Account 14,692,532 208,286,414 63,990,573 17,350,542 UIF U.S. Real Estate Sub-Account 4,647,259 91,013,993 30,135,308 3,816,189 UIF U.S. Mid Cap Value Sub-Account 941,725 12,512,495 10,168,754 399,974 Pioneer VCT Bond Sub-Account (c) 8,018 81,664 105,766 23,593 Pioneer VCT Cullen Value Sub-Account (c) 17,356 153,596 363,621 208,224 Pioneer VCT Emerging Markets Sub-Account (c) 2,809 44,935 44,997 55 Pioneer VCT Equity Income Sub-Account (c) 2,129 32,487 32,540 53 Pioneer VCT Fund Sub-Account (c) 2,494 79,211 79,312 36,161 Pioneer VCT Global High Yield Sub-Account (c) 595 3,533 3,533 -- Pioneer VCT High Yield Sub-Account (c) 1,577 12,087 12,087 -- Pioneer VCT Ibbotson Aggressive Allocation Sub-Account (c) 754 5,193 5,193 -- Pioneer VCT Ibbotson Growth Allocation Sub-Account (c) 486,801 3,522,341 3,532,199 9,314 Pioneer VCT Ibbotson Moderate Allocation Sub-Account (c) 148,926 1,296,023 1,302,004 5,015 Pioneer VCT International Value Sub-Account (c) 347 3,353 3,353 1 Pioneer VCT Mid Cap Value Sub-Account 2,049,065 38,799,974 12,079,944 1,634,739 Pioneer VCT Oak Ridge Large Cap Growth Sub-Account (c) 1,891 13,561 13,561 -- Pioneer VCT Real Estate Shares Sub-Account (c) 3,196 36,897 36,962 57 Pioneer VCT Small Cap Value Sub-Accont (c) 1,535 12,183 12,183 -- Pioneer VCT Strategic Income Sub-Account (c) 6,242 55,002 55,581 518 LMPVET Small Cap Growth Sub-Account 1,222,944 16,943,265 6,541,120 543,995 LMPVET Investors Sub-Account 198,091 3,251,826 570,167 1,893,501 LMPVET Equity Index Sub-Account 1,880,575 61,799,895 3,671,906 6,853,752 LMPVET Fundamental Value Sub-Account 4,420,788 96,645,203 14,547,596 4,774,933 LMPVET Appreciation Sub-Account 3,975,076 102,601,680 22,802,829 4,137,341 LMPVET Aggressive Growth Sub-Account 8,920,282 137,340,856 18,614,094 4,998,136 LMPVET Large Cap Growth Sub-Account 530,774 8,153,520 599,118 1,531,979 LMPVET Social Awareness Sub-Account 31,228 796,607 389,644 161,778 LMPVET Capital and Income Sub-Account 5,555,734 73,739,176 15,711,562 8,254,890 LMPVET Capital Sub-Account 594,321 9,211,860 1,830,794 1,413,371 LMPVET Global Equity Sub-Account 353,276 6,003,745 1,038,261 1,762,299 LMPVET Dividend Strategy Sub-Account 768,160 7,706,511 1,760,572 1,876,257 LMPVET Lifestyle Allocation 50% Sub-Account 781,580 9,629,371 2,236,894 1,928,484 LMPVET Lifestyle Allocation 70% Sub-Account 366,960 4,218,435 1,028,256 508,701 LMPVET Lifestyle Allocation 85% Sub-Account 3,155,644 38,667,634 22,504,615 826,018 LMPVIT Adjustable Rate Income Sub-Account 254,055 2,494,588 289,858 994,144 LMPVIT Global High Yield Bond Sub-Account 5,542,215 49,577,025 11,232,631 4,911,291 LMPVIT Money Market Sub-Account 115,203,985 115,203,985 109,559,550 39,003,532
(a) For the period April 28, 2008 to December 31, 2008. (b) For the period November 10, 2008 to December 31, 2008. (c) For the period July 14, 2008 to December 31, 2008. 115 This page is intentionally left blank. METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST LORD ABBETT MIST LORD ABBETT MIST VAN KAMPEN GROWTH AND INCOME BOND DEBENTURE MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ------------ ------------ Units beginning of year 18,116,672 20,191,907 15,162,946 16,856,041 1,845,571 612,842 Units issued and transferred from other funding options 1,373,138 1,683,824 1,475,904 2,435,310 2,890,857 1,574,624 Units redeemed and transferred to other funding options (3,771,797) (3,759,059) (4,969,819) (4,128,405) (705,321) (341,895) ------------- ------------- ------------- ------------- ------------ ------------ Units end of year 15,718,013 18,116,672 11,669,031 15,162,946 4,031,107 1,845,571 ============= ============= ============= ============= ============ ============
MIST HARRIS OAKMARK MIST THIRD AVENUE MIST OPPENHEIMER INTERNATIONAL SMALL CAP VALUE CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ------------- ------------- Units beginning of year 20,013,713 20,892,628 18,432,805 20,363,980 34,634,000 39,279,261 Units issued and transferred from other funding options 2,980,592 5,594,038 3,352,590 3,684,421 3,083,379 4,561,846 Units redeemed and transferred to other funding options (6,056,042) (6,472,953) (5,348,071) (5,615,596) (8,545,379) (9,207,107) ------------- ------------- ------------- ------------- ------------- ------------- Units end of year 16,938,263 20,013,713 16,437,324 18,432,805 29,172,000 34,634,000 ============= ============= ============= ============= ============= =============
MIST PIMCO INFLATION MIST T. ROWE PRICE MIST MFS RESEARCH PROTECTED BOND MID CAP GROWTH INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------- --------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 -------------- ------------- ------------- ------------- ------------- ------------- Units beginning of year 21,340,808 22,804,934 25,165,985 26,478,451 19,606,367 18,205,030 Units issued and transferred from other funding options 13,668,026 4,910,828 5,900,839 7,035,129 6,264,406 6,500,324 Units redeemed and transferred to other funding options (11,765,008) (6,374,954) (6,677,686) (8,347,595) (5,407,389) (5,098,987) -------------- ------------- ------------- ------------- ------------- ------------- Units end of year 23,243,826 21,340,808 24,389,138 25,165,985 20,463,384 19,606,367 ============== ============= ============= ============= ============= =============
MIST METLIFE MIST METLIFE MIST METLIFE DEFENSIVE STRATEGY MODERATE STRATEGY BALANCED STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ---------- -------------- ----------- ------------- ----------- ------------- Units beginning of year 51,959,475 35,961,422 132,930,004 106,444,385 407,763,369 324,915,762 Units issued and transferred from other funding options 81,757,732 41,020,218 58,616,625 51,227,514 81,261,505 133,626,233 Units redeemed and transferred to other funding options (35,356,143) (25,022,165) (34,398,720) (24,741,895) (82,956,608) (50,778,626) ------------------------- ------------------------- ------------------------- Units end of year 98,361,064 51,959,475 157,147,909 132,930,004 406,068,266 407,763,369 ========== ============== =========== ============= =========== =============
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 117 MIST LORD ABBETT MIST MET/AIM MID CAP VALUE MIST LAZARD MID CAP SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------ --------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ------------ ----------- ------------- ------------- ------------- ------------- 609,565 363,014 7,858,992 7,830,725 11,452,863 12,354,489 1,126,498 363,734 1,886,677 4,908,011 2,144,194 3,169,875 (246,360) (117,183) (2,243,288) (4,879,744) (3,061,159) (4,071,501) ------------ ----------- ------------- ------------- ------------- ------------- 1,489,703 609,565 7,502,381 7,858,992 10,535,898 11,452,863 ============ =========== ============= ============= ============= =============
MIST LEGG MASON PARTNERS AGGRESSIVE GROWTH MIST PIMCO TOTAL RETURN MIST RCM TECHNOLOGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- ---------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- -------------- ------------- ------------- ------------- 13,488,538 15,227,592 37,539,072 37,317,040 12,386,524 10,314,725 1,778,211 2,170,883 19,386,029 9,478,057 4,358,662 6,210,567 (3,027,670) (3,909,937) (13,360,666) (9,256,025) (5,895,904) (4,138,768) ------------- ------------- -------------- ------------- ------------- ------------- 12,239,079 13,488,538 43,564,435 37,539,072 10,849,282 12,386,524 ============= ============= ============== ============= ============= =============
MIST CLARION GLOBAL MIST TURNER MIST GOLDMAN SACHS REAL ESTATE MID CAP GROWTH MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ------------- ------------- 6,238,930 7,072,940 4,472,333 3,921,915 9,178,387 9,011,063 3,075,098 2,852,786 1,983,867 1,959,208 658,140 3,237,590 (2,401,497) (3,686,796) (1,985,853) (1,408,790) (2,651,705) (3,070,266) ------------- ------------- ------------- ------------- ------------- ------------- 6,912,531 6,238,930 4,470,347 4,472,333 7,184,822 9,178,387 ============= ============= ============= ============= ============= =============
MIST METLIFE MIST METLIFE MIST VAN KAMPEN GROWTH STRATEGY AGGRESSIVE STRATEGY COMSTOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ------------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ----------- ------------- ---------- -------------- ------------- ------------- 481,475,567 325,383,030 46,258,233 49,085,211 5,330,717 4,218,383 104,385,100 202,581,542 5,056,638 8,786,059 2,302,416 2,881,514 (91,422,564) (46,489,005) (11,749,144) (11,613,037) (1,994,932) (1,769,180) ------------------------- ------------------------- ------------- ------------- 494,438,103 481,475,567 39,565,727 46,258,233 5,638,201 5,330,717 =========== ============= ========== ============== ============= =============
118 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST LEGG MASON MIST MFS EMERGING MIST LOOMIS SAYLES VALUE EQUITY MARKETS EQUITY GLOBAL MARKETS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- -------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ------------- ------------ Units beginning of year 5,608,172 3,602,950 4,415,597 901,069 4,274,323 754,781 Units issued and transferred from other funding options 6,690,080 3,292,052 10,368,484 4,772,206 4,337,047 4,330,872 Units redeemed and transferred to other funding options (2,680,305) (1,286,830) (4,963,464) (1,257,678) (2,762,790) (811,330) ------------- ------------- ------------- ------------- ------------- ------------ Units end of year 9,617,947 5,608,172 9,820,617 4,415,597 5,848,580 4,274,323 ============= ============= ============= ============= ============= ============
MIST PIONEER MIST BLACKROCK MIST PIONEER FUND STRATEGIC INCOME LARGE CAP CORE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- -------------------------- ---------------------- 2008 2007 2008 2007 2008 2007 ------------ ---------- ------------- ------------ ---------- ----------- Units beginning of year 441,310 202,477 4,979,963 2,004,763 390,444 176,805 Units issued and transferred from other funding options 1,281,451 289,963 5,003,499 3,333,394 201,086 554,103 Units redeemed and transferred to other funding options (495,425) (51,130) (2,609,973) (358,194) (83,039) (340,464) ------------ ---------- ------------- ------------ ---------- ----------- Units end of year 1,227,336 441,310 7,373,489 4,979,963 508,491 390,444 ============ ========== ============= ============ ========== ===========
MIST MIST MIST MIST AMERICAN MIST AMERICAN MIST MET/FRANKLIN AMERICAN FUNDS AMERICAN FUNDS MET/FRANKLIN TEMPLETON FUNDS GROWTH FUNDS MODERATE MUTUAL FOUNDING GROWTH ALLOCATION INTERNATIONAL ALLOCATION SHARES STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- ---------------- -------------- --------------- --------------- 2008 (b) 2008 (b) 2008 (b) 2008 (b) 2008 (b) 2008 (b) ------------- ------------- ---------------- -------------- --------------- --------------- Units beginning of year -- -- -- -- -- -- Units issued and transferred from other funding options 10,103,447 79,248,191 8,298,666 32,435,807 2,247,261 29,284,754 Units redeemed and transferred to other funding options (546,689) (4,420,585) (722,420) (3,273,106) (268,926) (1,758,983) ------------- ------------- ---------------- -------------- --------------- --------------- Units end of year 9,556,758 74,827,606 7,576,246 29,162,701 1,978,335 27,525,771 ============= ============= ================ ============== =============== ===============
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 119 MIST MET/AIM CAPITAL MIST DREMAN APPRECIATION MIST JANUS FORTY SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- -------------------- ------------------------ 2008 2007 2008 2007 2008 2007 ---------- ------------ ---------- --------- ------------ ----------- 146,406 78,887 62,044 12,842 865,483 386,322 182,468 91,296 116,263 54,433 640,073 637,623 (58,478) (23,777) (35,233) (5,231) (250,641) (158,462) ---------- ------------ ---------- --------- ------------ ----------- 270,396 146,406 143,074 62,044 1,254,915 865,483 ========== ============ ========== ========= ============ ===========
MIST AMERICAN MIST FUNDS AMERICAN MIST BLACKROCK MIST RAINIER BALANCED FUNDS HIGH YIELD LARGE CAP EQUITY ALLOCATION BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------ ------------------------ -------------- -------------- 2008 2007 2008 2007 (a) 2008 (b) 2008 (b) ------------ ----------- ------------- ---------- -------------- -------------- 450,432 198,218 640,297 -- -- -- 1,633,985 378,633 4,895,834 673,551 52,186,330 3,840,133 (969,457) (126,419) (1,396,468) (33,254) (4,644,505) (688,612) ------------ ----------- ------------- ---------- -------------- -------------- 1,114,960 450,432 4,139,663 640,297 47,541,825 3,151,521 ============ =========== ============= ========== ============== ==============
MIST SSGA MIST SSGA GROWTH AND GROWTH ETF INCOME ETF AIM V.I. CORE EQUITY AIM V.I. CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- -------------- ----------------------- -------------------------------- 2008 (c) 2008 (c) 2008 2007 2008 2007 -------------- -------------- ---------- ------------ ---------- --------------------- -- 181,999 265,665 77,611 125,055 190,922 318,847 8,408 2,707 9,068 1,224 (29) (6,702) (69,873) (86,373) (35,956) (48,668) -------------- -------------- ---------- ------------ ---------- --------------------- 190,893 312,145 120,534 181,999 50,723 77,611 ============== ============== ========== ============ ========== =====================
120 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AIM V.I. INTERNATIONAL GROWTH AIM V.I. BASIC BALANCED AIM V.I. GLOBAL REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 (d) ------------ ------------------- ---------- --------------- ---------- ------------------- Units beginning of year 445,944 119,102 125,704 183,755 156,912 -- Units issued and transferred from other funding options 1,507,113 392,859 9,375 236 345,777 160,999 Units redeemed and transferred to other funding options (334,542) (66,017) (46,429) (58,287) (53,381) (4,087) ------------ ------------------- ---------- --------------- ---------- ------------------- Units end of year 1,618,515 445,944 88,650 125,704 449,308 156,912 ============ =================== ========== =============== ========== ===================
OPPENHEIMER MAIN STREET OPPENHEIMER CORE BOND OPPENHEIMER STRATEGIC BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------- ------------------------ ----------------------------- 2008 2007 2008 2007 2008 2007 ---------- --------------- ---------- ------------- --------- ------------------- Units beginning of year 45,428 59,121 37,290 47,067 5,661 6,741 Units issued and transferred from other funding options -- -- -- -- -- -- Units redeemed and transferred to other funding options (13,531) (13,693) (14,772) (9,777) (3,758) (1,080) ---------- --------------- ---------- ------------- --------- ------------------- Units end of year 31,897 45,428 22,518 37,290 1,903 5,661 ========== =============== ========== ============= ========= ===================
FIDELITY VIP GROWTH FIDELITY VIP CONTRAFUND FIDELITY VIP OVERSEAS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- ------------------------ 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ----------- ------------ Units beginning of year 14,370,091 16,167,140 16,613,759 17,625,464 826,076 951,985 Units issued and transferred from other funding options 877,342 1,000,957 2,372,910 1,515,129 33,271 27,810 Units redeemed and transferred to other funding options (2,408,753) (2,798,006) (2,872,632) (2,526,834) (146,148) (153,719) ------------- ------------- ------------- ------------- ----------- ------------ Units end of year 12,838,680 14,370,091 16,114,037 16,613,759 713,199 826,076 ============= ============= ============= ============= =========== ============
MSF FI MID CAP FIDELITY VIP MID CAP DWS INTERNATIONAL OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- ------------------------- ----------------------- 2008 2007 2008 2007 2008 2007 ------------ ---------- ------------ ------------ ----------- ----------- Units beginning of year 997,653 398,050 3,119,351 3,170,743 574,272 566,610 Units issued and transferred from other funding options 1,295,565 672,538 333,852 419,446 107,160 132,636 Units redeemed and transferred to other funding options (388,186) (72,935) (633,591) (470,838) (154,549) (124,974) ------------ ---------- ------------ ------------ ----------- ----------- Units end of year 1,905,032 997,653 2,819,612 3,119,351 526,883 574,272 ============ ========== ============ ============ =========== ===========
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 121 MFS RESEARCH MFS INVESTORS TRUST MFS NEW DISCOVERY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ---------------------- -------------------- 2008 2007 2008 2007 2008 2007 --------- ---------- ---------- ----------- --------- ---------- 34,862 54,023 23,909 33,624 13,583 28,494 -- 121 -- 1,572 117 2,014 (8,630) (19,282) (10,638) (11,287) (3,495) (16,925) --------- ---------- ---------- ----------- --------- ---------- 26,232 34,862 13,271 23,909 10,205 13,583 ========= ========== ========== =========== ========= ==========
OPPENHEIMER MAIN STREET SMALL CAP OPPENHEIMER MONEY FIDELITY VIP ASSET MANAGER SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------- -------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 ------------ ------------- --------- ---------- ------------- --------------- 492,857 17,793 28,881 33,346 11,728,296 13,137,764 1,731,240 488,574 -- -- 748,588 705,054 (360,551) (13,510) (3,548) (4,465) (2,154,253) (2,114,522) ------------ ------------- --------- ---------- ------------- --------------- 1,863,546 492,857 25,333 28,881 10,322,631 11,728,296 ============ ============= ========= ========== ============= ===============
FIDELITY VIP EQUITY-INCOME FIDELITY VIP INDEX 500 FIDELITY VIP MONEY MARKET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- --------------------------- ---------------------------- 2008 2007 2008 2007 2008 2007 ----------- ----------------- ------------- ------------- ------------- -------------- 942,455 1,227,074 7,211,573 8,294,641 5,148,515 4,981,073 26,214 12,045 43,419 34,197 2,094,500 1,687,022 (223,808) (296,664) (1,193,145) (1,117,265) (1,712,254) (1,519,580) ----------- ----------------- ------------- ------------- ------------- -------------- 744,861 942,455 6,061,847 7,211,573 5,530,761 5,148,515 =========== ================= ============= ============= ============= ==============
MSF FI LARGE CAP MSF FI VALUE LEADERS MSF RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------- ----------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ---------- ---------- ---------- ------------ ----------- ------------- 275,445 134,065 211,868 126,575 481,904 490,302 104,443 186,799 87,388 143,150 309,512 123,701 (73,092) (45,419) (47,990) (57,857) (313,363) (132,099) ---------- ---------- ---------- ------------ ----------- ------------- 306,796 275,445 251,266 211,868 478,053 481,904 ========== ========== ========== ============ =========== =============
122 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF JULIUS BAER MSF BLACKROCK LEGACY INTERNATIONAL STOCK MSF METLIFE STOCK INDEX LARGE CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------- --------------------------- ----------------------- 2008 2007 2008 2007 2008 2007 ----------- ---------- ------------- ------------- ---------- ------------ Units beginning of year 398,333 262,656 17,885,006 19,358,596 31,453 19,004 Units issued and transferred from other funding options 88,792 200,808 3,172,101 3,054,410 29,132 26,547 Units redeemed and transferred to other funding options (106,441) (65,131) (5,379,045) (4,528,000) (11,030) (14,098) ----------- ---------- ------------- ------------- ---------- ------------ Units end of year 380,684 398,333 15,678,062 17,885,006 49,555 31,453 =========== ========== ============= ============= ========== ============
MSF LEHMAN BROTHERS MSF MORGAN STANLEY AGGREGATE BOND INDEX MSF MFS VALUE EAFE INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- ------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ----------- ----------- ------------ ------------ ------------ ------------ Units beginning of year 436,992 340,120 1,601,257 807,102 1,079,041 910,003 Units issued and transferred from other funding options 318,058 191,771 1,297,898 1,014,357 333,667 476,312 Units redeemed and transferred to other funding options (227,247) (94,899) (818,704) (220,202) (283,149) (307,274) ----------- ----------- ------------ ------------ ------------ ------------ Units end of year 527,803 436,992 2,080,451 1,601,257 1,129,559 1,079,041 =========== =========== ============ ============ ============ ============
MSF HARRIS OAKMARK MSF BLACKROCK FOCUSED VALUE MSF JENNISON GROWTH MONEY MARKET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- --------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ---------- -------------- Units beginning of year 18,551,932 21,686,262 14,275,390 15,655,366 22,951,175 18,324,659 Units issued and transferred from other funding options 2,119,903 1,989,414 3,792,431 2,559,546 69,343,245 50,713,841 Units redeemed and transferred to other funding options (4,368,984) (5,123,744) (3,977,590) (3,939,522) (36,608,058) (46,087,325) ------------- ------------- ------------- ------------- ------------------------- Units end of year 16,302,851 18,551,932 14,090,231 14,275,390 55,686,362 22,951,175 ============= ============= ============= ============= ========== ==============
MSF METLIFE AGGRESSIVE MSF METLIFE CONSERVATIVE MSF METLIFE CONSERVATIVE TO ALLOCATION ALLOCATION MODERATE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- --------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 ------------- ----------- ------------- ------------- ----------- ------------------ Units beginning of year 189,794 101,305 242,633 194,471 392,909 273,176 Units issued and transferred from other funding options 16,800 112,949 529,339 56,267 394,182 159,500 Units redeemed and transferred to other funding options (47,541) (24,460) (169,201) (8,105) (122,124) (39,767) ------------- ----------- ------------- ------------- ----------- ------------------ Units end of year 159,053 189,794 602,771 242,633 664,967 392,909 ============= =========== ============= ============= =========== ==================
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 123 MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK STRATEGIC VALUE BOND INCOME LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- ----------------------- --------------------- 2008 2007 2008 2007 2008 2007 ----------- ----------- ----------- ----------- ---------- ---------- 625,394 613,247 654,278 261,942 251,656 154,904 134,687 125,586 397,850 500,255 94,130 167,767 (172,616) (113,439) (303,739) (107,919) (88,546) (71,015) ----------- ----------- ----------- ----------- ---------- ---------- 587,465 625,394 748,389 654,278 257,240 251,656 =========== =========== =========== =========== ========== ==========
MSF METLIFE MSF MFS TOTAL RETURN MID CAP STOCK INDEX MSF DAVIS VENTURE VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ----------------------- --------------------------- 2008 2007 2008 2007 2008 2007 ------------ ------------ ----------- ----------- ------------- ------------- 1,100,140 647,027 886,564 751,885 39,936,774 43,433,483 196,686 580,681 396,544 366,411 6,415,520 4,997,151 (319,386) (127,568) (283,386) (231,732) (8,892,899) (8,493,860) ------------ ------------ ----------- ----------- ------------- ------------- 977,440 1,100,140 999,722 886,564 37,459,395 39,936,774 ============ ============ =========== =========== ============= =============
MSF T. ROWE PRICE SMALL CAP MSF WESTERN ASSET MSF OPPENHEIMER GROWTH MANAGEMENT U.S. GOVERNMENT GLOBAL EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ----------------------------- ---------------------- 2008 2007 2008 2007 2008 2007 ---------- ------------------- ------------- --------------- ----------- ---------- 77,656 73,595 2,760,203 1,527,142 501,067 195,337 311,868 25,601 5,450,468 2,776,894 323,769 371,794 (57,258) (21,540) (2,854,078) (1,543,833) (153,050) (66,064) ---------- ------------------- ------------- --------------- ----------- ---------- 332,266 77,656 5,356,593 2,760,203 671,786 501,067 ========== =================== ============= =============== =========== ==========
MSF T. ROWE MSF LOOMIS MSF METLIFE MODERATE MSF METLIFE MODERATE TO PRICE LARGE SAYLES ALLOCATION AGGRESSIVE ALLOCATION CAP GROWTH SMALL CAP SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- -------------------------- -------------- -------------- 2008 2007 2008 2007 2008 (b) 2008 (e) ------------ ------------ ------------ ------------- -------------- -------------- 3,351,654 1,554,946 5,047,763 1,876,875 -- -- 1,411,802 2,054,507 1,499,244 3,325,776 34,583 926 (503,740) (257,799) (801,211) (154,888) (7,448) -- ------------ ------------ ------------ ------------- -------------- -------------- 4,259,716 3,351,654 5,745,796 5,047,763 27,135 926 ============ ============ ============ ============= ============== ==============
124 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF MET/ MSF DIMENSIONAL NEUBERGER INTERNATIONAL BERMAN MID SMALL VAN KAMPEN LIT VAN KAMPEN LIT CAP VALUE COMPANY CAPITAL GROWTH ENTERPRISE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ -------------------------- ------------------------ 2008 (e) 2008 (c) 2008 2007 2008 2007 ------------- ---------------- ------------- ------------ ------------- ---------- Units beginning of year -- -- 1,659,770 1,033,865 28,313 39,881 Units issued and transferred from other funding options 1,374 13,617 259,232 912,049 7,305 3,157 Units redeemed and transferred to other funding options -- (966) (1,885,623) (286,144) (15,312) (14,725) ------------- ---------------- ------------- ------------ ------------- ---------- Units end of year 1,374 12,651 33,379 1,659,770 20,306 28,313 ============= ================ ============= ============ ============= ==========
FEDERATED HIGH FEDERATED MID CAP INCOME BOND GROWTH STRATEGIES NEUBERGER BERMAN GENESIS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- --------------------------- 2008 2007 2008 2007 2008 2007 --------- --------- --------- ---------- ------- ------------------- Units beginning of year 18,999 20,273 20,874 32,906 927 1,051 Units issued and transferred from other funding options -- -- -- -- -- -- Units redeemed and transferred to other funding options (8,387) (1,274) (1,411) (12,032) (118) (124) --------- --------- --------- ---------- ------- ------------------- Units end of year 10,612 18,999 19,463 20,874 809 927 ========= ========= ========= ========== ======= ===================
JANUS ASPEN AMERICAN FUNDS GLOBAL T. ROWE PRICE PRIME RESERVE WORLDWIDE GROWTH SMALL CAPITALIZATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------- ------------------------ 2008 2007 2008 2007 2008 2007 ---------- ------------------- -------- ---------- ------------ ----------- Units beginning of year 96,955 87,463 1,182 1,276 985,561 666,735 Units issued and transferred from other funding options 91,506 58,164 -- 1 1,028,144 526,453 Units redeemed and transferred to other funding options (67,564) (48,672) (93) (95) (329,794) (207,627) ---------- ------------------- -------- ---------- ------------ ----------- Units end of year 120,897 96,955 1,089 1,182 1,683,911 985,561 ========== =================== ======== ========== ============ ===========
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 125 VAN KAMPEN LIT VAN KAMPEN LIT GROWTH AND INCOME COMSTOCK FEDERATED EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------- -------------------------- -------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------ ------------- ------------ -------- ----------------- 3,069,791 1,465,291 5,188,036 2,167,418 5,473 17,127 2,867,651 1,953,998 2,605,917 3,409,984 -- 1 (1,238,264) (349,498) (1,428,171) (389,366) (668) (11,655) ------------- ------------ ------------- ------------ -------- ----------------- 4,699,178 3,069,791 6,365,782 5,188,036 4,805 5,473 ============= ============ ============= ============ ======== =================
ALGER AMERICAN T. ROWE PRICE SMALLCAP GROWTH T. ROWE PRICE GROWTH STOCK INTERNATIONAL STOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- ----------------------------- ---------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ---------- ------------------ ---------- ----------- 7,147,895 7,749,990 118,255 128,359 87,971 96,658 546,355 609,066 6,545 10,390 3,988 8,261 (1,208,674) (1,211,161) (19,827) (20,494) (15,534) (16,948) ------------- ------------- ---------- ------------------ ---------- ----------- 6,485,576 7,147,895 104,973 118,255 76,425 87,971 ============= ============= ========== ================== ========== ===========
AMERICAN FUNDS AMERICAN FUNDS GLOBAL AMERICAN FUNDS GROWTH GROWTH-INCOME GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ------------ ------------ ------------ ------------ ------------ ------------ 1,458,315 729,519 1,369,874 687,630 3,676,314 1,374,016 1,337,483 881,482 878,730 816,095 3,109,432 2,671,069 (342,641) (152,686) (306,513) (133,851) (967,698) (368,771) ------------ ------------ ------------ ------------ ------------ ------------ 2,453,157 1,458,315 1,942,091 1,369,874 5,818,048 3,676,314 ============ ============ ============ ============ ============ ============
126 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 FTVIPT MUTUAL FTVIPT TEMPLETON AMERICAN FUNDS BOND SHARES SECURITIES FOREIGN SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------- ------------------------- ------------------------- 2008 2007 (d) 2008 2007 2008 2007 ------------ ---------- ------------ ------------ ------------ ------------ Units beginning of year 413,860 -- 3,006,411 1,273,727 1,778,828 946,611 Units issued and transferred from other funding options 1,810,476 430,306 1,713,297 1,973,226 1,067,946 1,134,445 Units redeemed and transferred to other funding options (336,915) (16,446) (774,854) (240,542) (361,514) (302,228) ------------ ---------- ------------ ------------ ------------ ------------ Units end of year 1,887,421 413,860 3,944,854 3,006,411 2,485,260 1,778,828 ============ ========== ============ ============ ============ ============
FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES UIF EQUITY AND INCOME UIF U.S. REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------- --------------------------- ------------------------- 2008 2007 (d) 2008 2007 2008 2007 ----------- ---------------- ------------- ------------- ------------ ------------ Units beginning of year 251,664 -- 10,934,412 4,592,861 2,043,530 928,174 Units issued and transferred from other funding options 763,928 257,280 6,407,051 7,104,292 685,573 1,498,555 Units redeemed and transferred to other funding options (159,339) (5,616) (3,716,051) (762,741) (480,151) (383,199) ----------- ---------------- ------------- ------------- ------------ ------------ Units end of year 856,253 251,664 13,625,412 10,934,412 2,248,952 2,043,530 =========== ================ ============= ============= ============ ============
PIONEER VCT PIONEER VCT PIONEER VCT PIONEER VCT IBBOTSON IBBOTSON IBBOTSON PIONEER VCT GLOBAL HIGH PIONEER VCT AGGRESSIVE GROWTH MODERATE FUND YIELD HIGH YIELD ALLOCATION ALLOCATION ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- -------------- -------------- -------------- -------------- -------------- 2008 (e) 2008 (e) 2008 (e) 2008 (e) 2008 (e) 2008 (e) -------------- -------------- -------------- -------------- -------------- -------------- Units beginning of year -- -- -- -- -- -- Units issued and transferred from other funding options 9,698 500 1,528 512 348,488 112,637 Units redeemed and transferred to other funding options (4,067) -- -- -- (1,604) (3,442) -------------- -------------- -------------- -------------- -------------- -------------- Units end of year 5,631 500 1,528 512 346,884 109,195 ============== ============== ============== ============== ============== ==============
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 127 FTVIPT TEMPLETON FTVIPT FRANKLIN FTVIPT TEMPLETON GLOBAL GROWTH SECURITIES INCOME SECURITIES INCOME SECURITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ------------------------- -------------------------- 2008 2007 2008 2007 2008 2007 (d) ------------ ------------ ------------ ------------ ------------ ------------- 2,063,301 784,417 1,974,360 664,025 318,925 -- 1,319,654 1,452,838 1,230,630 1,487,884 1,517,248 331,982 (554,827) (173,954) (591,418) (177,549) (373,574) (13,057) ------------ ------------ ------------ ------------ ------------ ------------- 2,828,128 2,063,301 2,613,572 1,974,360 1,462,599 318,925 ============ ============ ============ ============ ============ =============
PIONEER VCT PIONEER VCT PIONEER VCT EMERGING PIONEER VCT UIF U.S. MID CAP VALUE BOND CULLEN VALUE MARKETS EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- -------------- --------------- -------------- ---------------- 2008 2007 (d) 2008 (e) 2008 (e) 2008 (e) 2008 (e) ------------ ------------ -------------- --------------- -------------- ---------------- 257,428 -- -- -- -- -- 1,012,160 264,713 10,661 44,554 4,387 2,134 (138,736) (7,285) (2,394) (23,238) -- -- ------------ ------------ -------------- --------------- -------------- ---------------- 1,130,852 257,428 8,267 21,316 4,387 2,134 ============ ============ ============== =============== ============== ================
PIONEER VCT PIONEER VCT PIONEER VCT OAK RIDGE PIONEER VCT PIONEER VCT INTERNATIONAL MID CAP LARGE CAP REAL ESTATE SMALL CAP VALUE VALUE GROWTH SHARES VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------- ----------------------- -------------- -------------- -------------- 2008 (e) 2008 2007 2008 (e) 2008 (e) 2008 (e) ---------------- ------------ ---------- -------------- -------------- -------------- -- 813,072 262,287 -- -- -- 326 500,729 610,507 1,951 3,001 1,335 -- (208,578) (59,722) -- -- -- ---------------- ------------ ---------- -------------- -------------- -------------- 326 1,105,223 813,072 1,951 3,001 1,335 ================ ============ ========== ============== ============== ==============
128 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 PIONEER VCT STRATEGIC INCOME LMPVET SMALL CAP GROWTH LMPVET INVESTORS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------- -------------------------- ---------------------- 2008 (e) 2008 2007 2008 2007 -------------- ------------ ------------- ----------- ---------- Units beginning of year -- 754,675 325,638 279,645 130,370 Units issued and transferred from other funding options 6,489 675,667 505,149 39,636 199,483 Units redeemed and transferred to other funding options (58) (215,481) (76,112) (130,392) (50,208) -------------- ------------ ------------- ----------- ---------- Units end of year 6,431 1,214,861 754,675 188,889 279,645 ============== ============ ============= =========== ==========
LMPVET AGGRESSIVE GROWTH LMPVET LARGE CAP GROWTH LMPVET SOCIAL AWARENESS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- -------------------------- -------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ----------- -------------- --------- ---------------- Units beginning of year 9,406,900 5,468,811 699,543 433,171 19,022 10,361 Units issued and transferred from other funding options 3,226,439 4,847,039 75,158 412,051 13,327 11,444 Units redeemed and transferred to other funding options (1,881,662) (908,950) (144,708) (145,679) (6,574) (2,783) ------------- ------------- ----------- -------------- --------- ---------------- Units end of year 10,751,677 9,406,900 629,993 699,543 25,775 19,022 ============= ============= =========== ============== ========= ================
LMPVET LIFESTYLE LMPVET LIFESTYLE LMPVET DIVIDEND STRATEGY ALLOCATION 50% ALLOCATION 70% SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------- ---------------------- --------------------- 2008 2007 2008 2007 2008 2007 ----------- --------------- ----------- ---------- ---------- ---------- Units beginning of year 834,706 321,925 590,437 177,614 250,067 23,381 Units issued and transferred from other funding options 213,173 570,841 143,953 480,382 75,459 236,512 Units redeemed and transferred to other funding options (249,294) (58,060) (166,517) (67,559) (45,169) (9,826) ----------- --------------- ----------- ---------- ---------- ---------- Units end of year 798,585 834,706 567,873 590,437 280,357 250,067 =========== =============== =========== ========== ========== ==========
LMPVIT MONEY MARKET SUB-ACCOUNT --------------------------- 2008 2007 ------------- ------------- Units beginning of year 3,326,218 1,600,672 Units issued and transferred from other funding options 12,920,053 7,003,664 Units redeemed and transferred to other funding options (7,815,783) (5,278,118) ------------- ------------- Units end of year 8,430,488 3,326,218 ============= =============
(a) For the period November 12, 2007 to December 31, 2007 (b) For the period April 28, 2008 to December 31, 2008. (c) For the period November 10, 2008 to December 31, 2008. (d) For the period June 1, 2007 to December 31, 2007. (e) For the period July 14, 2008 to December 31, 2008. 129 LMPVET EQUITY INDEX LMPVET FUNDAMENTAL VALUE LMPVET APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- --------------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ------------ ------------ ------------ -------------- ------------ ------------ 2,276,152 1,440,692 2,440,021 1,257,495 2,591,844 1,236,956 68,676 1,027,070 824,597 1,362,673 1,087,082 1,613,481 (235,910) (191,610) (539,766) (180,147) (608,444) (258,593) ------------ ------------ ------------ -------------- ------------ ------------ 2,108,918 2,276,152 2,724,852 2,440,021 3,070,482 2,591,844 ============ ============ ============ ============== ============ ============
LMPVET CAPITAL AND INCOME LMPVET CAPITAL LMPVET GLOBAL EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------- ---------------------- ----------------------- 2008 2007 2008 2007 2008 2007 ------------- -------------- ----------- ---------- ----------- ----------- 4,737,273 154,474 542,230 284,789 417,802 290,262 1,517,173 4,882,150 36,559 344,757 24,538 177,575 (1,118,143) (299,351) (119,054) (87,316) (137,204) (50,035) ------------- -------------- ----------- ---------- ----------- ----------- 5,136,303 4,737,273 459,735 542,230 305,136 417,802 ============= ============== =========== ========== =========== ===========
LMPVET LIFESTYLE LMPVIT ADJUSTABLE LMPVIT GLOBAL ALLOCATION 85% RATE INCOME HIGH YIELD BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------- ---------------------- ------------------------- 2008 2007 2008 2007 2008 2007 ------------ ------------ ----------- ---------- ------------ ------------ 1,057,927 21,392 310,564 216,326 2,527,054 1,039,676 1,873,046 1,075,411 39,305 159,464 866,029 1,746,715 (262,743) (38,876) (124,520) (65,226) (728,825) (259,337) ------------ ------------ ----------- ---------- ------------ ------------ 2,668,230 1,057,927 225,349 310,564 2,664,258 2,527,054 ============ ============ =========== ========== ============ ============
130 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS The following table is a summary of unit values and units outstanding for the Contracts, net investment income ratios, and expense ratios, excluding expenses for the underlying portfolio, series, or fund, for each of the five years in the period ended December 31, 2008: AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MIST Lord Abbett Growth and 2008 15,718,013 19.27 - 63.32 447,266,597 1.65 0.89 - 2.35 (37.82) - (36.76) Income Sub-Account 2007 18,116,672 30.63 - 100.12 822,332,309 0.94 0.89 - 2.35 1.30 - 7.97 2006 20,191,907 29.87 - 97.12 898,436,542 1.63 0.89 - 2.35 15.06 - 16.98 2005 21,638,608 47.57 - 83.02 824,030,188 0.89 0.89 - 2.35 1.00 - 2.76 2004 25,899,570 47.10 - 80.79 993,369,357 0.36 0.89 - 2.35 10.02 - 11.92 MIST Lord Abbett Bond 2008 11,669,031 5.38 - 16.97 178,177,257 4.35 0.89 - 2.35 (20.50) - (19.12) Debenture Sub-Account 2007 15,162,946 6.68 - 20.98 288,948,614 5.32 0.89 - 2.35 4.06 - 5.90 2006 16,856,041 6.34 - 19.81 306,513,652 6.67 0.89 - 2.35 6.62 - 8.39 2005 17,901,873 16.76 - 18.28 303,014,566 3.81 0.89 - 2.35 (0.86) - 0.91 2004 26,280,750 16.91 - 18.12 445,940,992 2.65 0.89 - 2.35 5.65 - 7.47 MIST Van Kampen Mid Cap 2008 4,031,107 6.40 - 7.12 27,227,267 1.21 0.95 - 2.30 (47.97) - (47.26) Growth Sub-Account 2007 1,845,571 12.30 - 13.50 23,676,085 -- 0.95 - 2.30 20.66 - 22.31 (Commenced 11/7/2005) 2006 612,842 10.20 - 10.75 6,430,532 -- 1.40 - 2.30 5.91 - 6.87 2005 30,352 9.63 - 10.06 299,552 -- 1.40 - 2.30 4.40 - 4.55 MIST Lord Abbett Mid Cap 2008 1,489,703 14.89 - 16.78 23,899,560 0.41 1.30 - 2.35 (40.20) - (39.57) Value Sub-Account 2007 609,565 25.04 - 27.45 16,075,069 0.60 1.55 - 2.30 (1.70) - (0.96) (Commenced 11/7/2005) 2006 363,014 25.47 - 27.96 9,728,623 0.36 1.40 - 2.30 9.63 - 10.62 2005 14,110 23.23 - 25.27 343,901 0.35 1.40 - 2.30 4.15 - 4.31 MIST Lazard Mid Cap 2008 7,502,381 8.94 - 9.61 70,201,744 0.96 1.30 - 2.35 (39.74) - (39.10) Sub-Account 2007 7,858,992 14.83 - 15.78 121,255,292 0.34 1.30 - 2.35 (4.98) - (3.97) 2006 7,830,725 15.64 - 16.43 126,365,450 0.31 1.30 - 2.35 12.02 - 13.20 2005 8,655,654 14.10 - 14.52 123,820,991 0.06 1.30 - 2.35 5.56 - 6.67 2004 10,260,770 13.35 - 13.61 138,065,930 -- 1.30 - 2.35 11.74 - 12.92 MIST Met/AIM Small Cap 2008 10,535,898 9.11 - 10.19 100,447,225 -- 0.89 - 2.35 (40.16) - (39.15) Growth Sub-Account 2007 11,452,863 15.20 - 16.74 181,044,517 -- 0.89 - 2.35 8.48 - 10.41 2006 12,354,489 14.00 - 15.16 178,634,572 -- 0.89 - 2.35 11.54 - 12.90 2005 13,246,176 12.68 - 13.43 170,469,329 -- 0.89 - 2.35 5.76 - 7.63 2004 18,324,234 11.99 - 12.48 221,300,303 -- 0.89 - 2.35 3.95 - 5.78 MIST Harris Oakmark 2008 16,938,263 10.69 - 11.45 189,181,455 1.67 1.30 - 2.35 (42.26) - (41.65) International Sub-Account 2007 20,013,713 18.49 - 19.62 384,273,575 0.80 1.30 - 2.35 (3.43) - (2.40) 2006 20,892,628 19.13 - 20.10 412,470,437 2.44 1.30 - 2.35 25.86 - 27.19 2005 18,995,708 15.34 - 15.81 295,833,789 -- 1.30 - 2.35 11.59 - 12.77 2004 22,456,213 13.75 - 14.02 311,119,427 -- 1.30 - 2.35 17.72 - 18.96 MIST Third Avenue Small Cap 2008 16,437,324 11.38 - 12.63 194,917,296 0.76 0.89 - 2.35 (31.46) - (30.31) Value Sub-Account 2007 18,432,805 16.58 - 18.13 316,501,402 1.00 0.89 - 2.35 (5.29) - (3.66) 2006 20,363,980 17.49 - 18.82 360,767,904 0.45 0.89 - 2.35 10.51 - 12.38 2005 20,097,482 15.9 - 16.74 324,830,876 -- 0.89 - 2.35 12.80 - 14.79 2004 22,647,378 14.1 - 14.58 322,139,879 0.30 0.89 - 2.35 23.56 - 25.68 MIST Oppenheimer Capital 2008 29,172,000 5.16 - 6.91 159,163,585 3.52 0.95 - 2.35 (47.20) - (46.42) Appreciation Sub-Account 2007 34,634,000 9.77 - 12.90 354,882,609 0.01 0.95 - 2.35 11.62 - 13.20 (Commenced 5/3/2004) 2006 39,279,261 8.75 - 11.41 357,893,449 0.10 1.15 - 2.35 5.12 - 6.58 2005 43,028,313 8.41 - 72.34 370,348,053 -- 1.15 - 2.35 2.29 - 3.92 2004 57,692,439 8.22 - 10.31 481,094,106 0.66 1.15 - 3.35 3.09 - 5.21
131 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MIST Legg Mason Partners 2008 12,239,079 4.43 - 4.76 56,694,512 -- 1.30 - 2.35 (40.47) - (39.84) Aggressive Growth 2007 13,488,538 7.44 - 7.91 104,186,821 -- 1.30 - 2.35 (0.12) - 0.94 Sub-Account 2006 15,227,592 7.44 - 7.84 116,887,678 -- 1.30 - 2.35 (4.01) - (3.00) 2005 16,090,265 7.84 - 8.08 127,810,334 -- 1.30 - 2.35 10.95 - 12.11 2004 25,135,863 7.06 - 7.21 178,656,657 -- 1.30 - 2.35 5.92 - 7.04 MIST PIMCO Total Return 2008 43,564,435 9.03 - 14.01 542,563,802 3.71 0.89 - 2.35 (1.93) - (0.26) Sub-Account 2007 37,539,072 9.10 - 14.05 469,985,360 3.32 0.89 - 2.35 5.05 - 6.89 2006 37,317,040 8.56 - 13.14 440,826,722 2.58 0.89 - 2.35 2.10 - 3.88 2005 36,618,285 11.89 - 12.65 418,753,068 0.01 0.89 - 2.35 (0.12) - 1.56 2004 42,299,943 11.9 - 12.46 483,702,554 7.16 0.89 - 2.35 2.54 - 4.31 MIST RCM Technology 2008 10,849,282 3.29 - 3.72 37,389,860 13.67 0.89 - 2.35 (45.75) - (44.75) Sub-Account 2007 12,386,524 6.06 - 6.72 78,045,995 -- 0.89 - 2.35 28.45 - 30.50 2006 10,314,725 4.71 - 5.15 50,206,487 -- 0.89 - 2.35 2.91 - 4.55 2005 10,443,953 4.63 - 4.93 49,054,494 -- 0.89 - 2.35 8.44 - 10.37 2004 14,758,131 4.27 - 4.47 63,448,988 -- 0.89 - 2.35 (6.54 ) - (5.13) MIST PIMCO Inflation 2008 23,243,826 10.55 - 11.26 254,891,679 3.71 1.20 - 2.35 (9.22) - (8.17) Protected Bond Sub-Account 2007 21,340,808 11.60 - 12.19 255,623,164 2.14 1.30 - 2.35 8.21 - 9.36 2006 22,804,934 10.72 - 11.14 250,682,193 3.75 1.30 - 2.35 (1.94) - (0.91) 2005 24,805,097 10.93 - 11.25 276,160,752 -- 1.30 - 2.35 (0.96) - 0.08 2004 32,840,848 11.04 - 11.24 366,675,258 4.84 1.30 - 2.35 6.47 - 7.60 MIST T. Rowe Price Mid Cap 2008 24,389,138 5.45 - 5.85 139,067,651 -- 1.30 - 2.35 (41.15) - (40.53) Growth Sub-Account 2007 25,165,985 9.25 - 9.83 242,043,730 -- 1.30 - 2.35 14.89 - 16.11 2006 26,478,451 8.04 - 8.47 220,015,833 -- 1.30 - 2.35 3.70 - 4.80 2005 27,249,715 7.84 - 8.08 216,790,477 -- 1.30 - 2.35 11.97 - 13.15 2004 27,535,906 7.00 - 7.14 194,196,541 -- 1.30 - 2.35 15.08 - 16.30 MIST MFS Research International 2008 20,463,384 9.48 - 10.55 204,675,511 1.89 0.95 - 2.35 (43.71) - (42.91) Sub-Account 2007 19,606,367 16.84 - 18.48 345,568,972 1.22 0.95 - 2.35 10.65 - 12.21 (Commenced 5/3/2004) 2006 18,205,030 15.21 - 17.35 287,904,765 1.63 0.89 - 2.35 23.63 - 25.79 2005 16,139,182 12.53 - 13.79 204,989,567 0.35 0.89 - 2.35 13.73 - 15.91 2004 20,959,982 10.01 - 11.90 232,369,176 -- 0.89 - 2.35 16.78 - 19.72 MIST Clarion Global Real Estate 2008 6,912,531 8.97 - 9.42 63,965,106 1.66 1.30 - 2.35 (43.03) - (42.43) Sub-Account 2007 6,238,930 15.74 - 16.36 100,668,094 0.98 1.30 - 2.35 (16.99) - (16.11) (Commenced 5/3/2004) 2006 7,072,940 18.97 - 19.50 136,595,815 0.95 1.30 - 2.35 34.40 - 35.81 2005 5,060,098 14.11 - 14.36 72,233,498 -- 1.30 - 2.35 10.66 - 11.83 2004 6,453,896 12.75 - 12.84 82,681,769 3.24 1.30 - 2.35 27.55 - 28.44 MIST Turner Mid Cap Growth 2008 4,470,347 7.62 - 8.01 35,217,413 -- 1.30 - 2.35 (49.50) - (48.97) Sub-Account 2007 4,472,333 15.09 - 15.69 69,239,590 -- 1.30 - 2.35 21.25 - 22.54 (Commenced 5/3/2004) 2006 3,921,915 12.45 - 12.80 49,712,120 -- 1.30 - 2.35 3.61 - 4.71 2005 3,230,076 12.01 - 12.23 39,253,598 -- 1.30 - 2.35 8.78 - 9.92 2004 5,202,742 11.04 - 11.12 57,720,296 -- 1.30 - 2.35 10.47 - 11.24 MIST Goldman Sachs Mid Cap 2008 7,184,822 9.29 - 9.76 68,935,462 0.79 1.30 - 2.35 (37.57) - (36.90) Value Sub-Account 2007 9,178,387 14.88 - 15.47 140,073,719 0.49 1.30 - 2.35 0.69 - 1.76 (Commenced 5/3/2004) 2006 9,011,063 14.78 - 15.20 135,606,841 -- 1.30 - 2.35 13.01 - 14.20 2005 7,266,539 13.08 - 13.31 96,096,991 0.76 1.30 - 2.35 9.93 - 11.09 2004 6,316,125 11.90 - 11.98 75,475,209 0.97 1.30 - 2.35 18.98 - 19.81
132 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ----------- --------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- ------------- ------------- ------------- ---------------- ------------------- MIST MetLife Defensive 2008 98,361,064 8.77 - 9.21 887,719,339 1.41 1.15 - 2.35 (22.50) - (21.56) Strategy Sub-Account 2007 51,959,475 11.31 - 11.75 600,410,325 1.89 1.15 - 2.35 3.45 - 4.70 (Commenced 11/22/2004) 2006 35,961,422 10.93 - 11.18 399,117,450 0.01 1.30 - 2.35 6.11 - 7.23 2005 26,019,030 10.3 - 10.43 270,290,202 1.17 1.30 - 2.35 2.06 - 3.13 2004 10,259,110 10.10 - 10.11 103,691,358 1.71 1.30 - 2.35 1.71 - 1.59 MIST MetLife Moderate Strategy 2008 157,147,909 8.48 - 8.91 1,371,420,955 1.75 1.15 - 2.35 (28.14) - (27.26) Sub-Account 2007 132,930,004 11.79 - 12.25 1,602,068,224 1.93 1.15 - 2.35 3.73 - 4.99 (Commenced 11/22/2004) 2006 106,444,385 11.37 - 11.63 1,227,960,101 0.01 1.30 - 2.35 7.68 - 8.81 2005 81,402,093 10.56 - 10.69 866,351,374 1.28 1.30 - 2.35 3.36 - 4.45 2004 36,400,671 10.22 - 10.23 372,285,715 1.34 1.30 - 2.35 2.02 - 2.20 MIST MetLife Balanced Strategy 2008 406,068,266 8.09 - 8.50 3,383,789,930 4.75 1.15 - 2.35 (33.52) - (32.72) Sub-Account 2007 407,763,369 12.17 - 12.64 5,073,218,651 1.64 1.15 - 2.35 2.43 - 3.68 (Commenced 11/22/2004) 2006 324,915,762 11.88 - 12.15 3,917,704,428 0.01 1.30 - 2.35 9.38 - 10.54 2005 244,234,395 10.86 - 10.99 2,673,665,820 1.27 1.30 - 2.35 4.64 - 5.74 2004 114,542,772 10.38 - 10.40 1,190,221,359 0.99 1.30 - 2.35 2.79 - 2.91 MIST MetLife Growth Strategy 2008 494,438,103 7.77 - 8.17 3,958,612,323 3.49 1.15 - 2.35 (39.32) - (38.58) Sub-Account 2007 481,475,567 12.81 - 13.30 6,304,660,461 1.10 1.15 - 2.35 2.26 - 3.50 (Commenced 11/22/2004) 2006 325,383,030 12.53 - 12.81 4,136,759,495 0.01 1.30 - 2.35 10.96 - 12.13 2005 203,679,869 11.29 - 11.43 2,317,496,022 1.16 1.30 - 2.35 6.60 - 7.72 2004 91,629,337 10.59 - 10.61 971,459,771 0.62 1.30 - 2.35 3.45 - 3.56 MIST MetLife Aggressive 2008 39,565,727 7.42 - 7.80 302,274,534 3.60 1.15 - 2.35 (42.19) - (41.49) Strategy Sub-Account 2007 46,258,233 12.84 - 13.34 607,023,915 1.29 1.15 - 2.35 0.48 - 1.70 (Commenced 11/22/2004) 2006 49,085,211 12.78 - 13.07 636,476,170 0.01 1.30 - 2.35 11.02 - 12.18 2005 42,330,798 11.51 - 11.65 491,059,239 0.93 1.30 - 2.35 7.82 - 8.96 2004 20,464,973 10.68 - 10.69 218,707,527 0.22 1.30 - 2.35 3.67 - 3.79 MIST Van Kampen Comstock 2008 5,638,201 7.03 - 7.31 40,651,730 1.74 1.30 - 2.35 (37.41) - (36.74) Sub-Account 2007 5,330,717 11.24 - 11.56 60,993,695 1.34 1.30 - 2.35 (4.77) - (3.76) (Commenced 5/2/2005) 2006 4,218,383 11.80 - 12.01 50,349,650 -- 1.30 - 2.35 13.36 - 14.56 2005 1,605,458 10.41 - 10.48 16,786,051 1.82 1.30 - 2.35 4.11 - 4.84 MIST Legg Mason Value Equity 2008 9,617,947 4.51 - 4.70 44,429,063 0.02 0.95 - 2.35 (55.68) - (55.05) Sub-Account 2007 5,608,172 10.15 - 10.46 57,822,803 -- 0.95 - 2.35 (8.10) - (6.80) (Commenced 11/7/2005) 2006 3,602,950 11.05 - 11.18 40,088,253 -- 1.30 - 2.35 4.11 - 5.21 2005 125,789 10.61 - 10.63 1,335,710 -- 1.30 - 2.35 6.10 - 6.28 MIST MFS Emerging Markets 2008 9,820,617 6.03 - 7.28 60,422,758 1.29 0.95 - 2.35 (56.57) - (52.63) Equity Sub-Account 2007 4,415,597 13.89 - 14.22 62,075,247 0.04 0.95 - 2.35 33.43 - 35.32 (Commenced 5/1/2006) 2006 901,069 10.41 - 10.49 9,424,659 1.65 1.30 - 2.35 4.12 - 4.86 MIST Loomis Sayles Global 2008 5,848,580 7.61 - 7.83 45,350,255 4.63 1.30 - 2.35 (40.68) - (40.05) Markets Sub-Account 2007 4,274,323 12.83 - 13.06 55,474,222 -- 1.30 - 2.35 24.87 - 26.19 (Commenced 5/1/2006) 2006 754,781 10.27 - 10.35 7,786,909 1.55 1.30 - 2.35 2.74 - 3.46 MIST Met/AIM Capital 2008 270,396 8.35 - 9.78 2,452,766 1.86 0.95 - 2.15 (43.87) - (33.47) Appreciation Sub-Account 2007 146,406 14.96 - 16.91 2,334,027 0.08 1.10 - 2.10 9.58 - 10.69 (Commenced 5/1/2006) 2006 78,887 13.35 - 14.77 1,133,847 0.04 1.40 - 2.30 4.46 - 5.40
133 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MIST Janus Forty Sub-Account 2008 143,074 70.85 - 85.85 11,490,581 4.86 1.55 - 2.30 (43.18) - (42.75) (Commenced 5/1/2006) 2007 62,044 124.70 - 149.97 8,715,091 0.08 1.55 - 2.30 27.48 - 28.45 2006 12,842 97.82 - 120.96 1,410,409 -- 1.40 - 2.30 0.74 - 1.65 MIST Dreman Small Cap Value 2008 1,254,915 9.59 - 9.92 12,261,677 0.72 1.20 - 2.30 (26.93) - (21.55) Sub-Account 2007 865,483 13.13 - 13.40 11,511,054 -- 1.55 - 2.30 (3.24) - (2.50) (Commenced 5/1/2006) 2006 386,322 13.57 - 13.78 5,287,629 0.53 1.40 - 2.30 21.42 - 22.51 MIST Pioneer Fund Sub-Account 2008 1,227,336 11.81 - 14.44 16,447,869 0.83 0.95 - 2.30 (34.37) - (33.47) (Commenced 5/1/2006) 2007 441,310 17.99 - 21.26 8,679,759 0.78 1.10 - 2.30 2.60 - 3.85 2006 202,477 17.53 - 19.69 3,839,197 -- 1.40 - 2.30 13.30 - 14.32 MIST Pioneer Strategic Income 2008 7,373,489 16.54 - 18.61 129,051,542 6.27 0.95 - 1.90 (12.43) - (11.59) Sub-Account 2007 4,979,963 18.89 - 21.05 98,174,413 0.56 0.95 - 1.90 4.63 - 5.63 (Commenced 5/1/2006) 2006 2,004,763 17.28 - 19.22 37,439,194 8.40 1.40 - 2.25 3.95 - 4.83 MIST BlackRock Large Cap 2008 508,491 6.71 - 7.28 3,599,088 0.57 1.55 - 2.30 (38.73) - (38.27) Core Sub-Account 2007 390,444 10.96 - 11.80 4,467,216 0.64 1.55 - 2.30 0.28 - 4.87 (Commenced 5/1/2006) 2006 176,805 10.53 - 11.40 1,947,743 -- 1.40 - 2.30 11.66 - 12.66 MIST BlackRock High Yield 2008 1,114,960 11.47 - 12.73 13,709,683 5.00 1.30 - 2.30 (25.93) - (25.14) Sub-Account 2007 450,432 15.68 - 16.78 7,452,180 8.47 1.70 - 2.30 0.35 - 0.96 (Commenced 5/1/2006) 2006 198,218 15.62 - 16.62 3,246,398 -- 1.70 - 2.30 7.32 - 7.97 MIST Rainer Large Cap Equity 2008 4,139,663 5.67 - 5.74 23,654,112 -- 1.30 - 2.35 (43.16) - (42.56) Sub-Account 2007 640,297 9.97 - 9.99 6,390,092 0.09 1.30 - 2.20 1.90 - 2.03 (Commenced 11/12/2007) MIST American Funds Balanced Allocation Sub-Account (Commenced 4/28/2008) 2008 47,541,825 6.97 - 7.02 332,865,017 6.67 1.15 - 2.35 (30.39) - (29.82) MIST American Funds Bond Sub-Account (Commenced 4/28/2008) 2008 3,151,521 8.89 - 8.96 28,171,025 9.47 1.30 - 2.35 (11.39) - (10.76) MIST American Funds Growth Sub-Account (Commenced 4/28/2008) 2008 9,556,758 5.72 - 5.76 54,966,248 7.34 1.30 - 2.35 (42.71) - (42.30) MIST American Funds Growth Allocation Sub-Account (Commenced 4/28/2008) 2008 74,827,606 6.32 - 6.37 475,226,821 6.95 1.15 - 2.35 (36.80) - (36.28) MIST American Funds International Sub-Account (Commenced 4/28/2008) 2008 7,576,246 6.02 - 6.06 45,810,468 11.18 1.30 - 2.20 (40.31) - (39.94) MIST American Funds Moderate Allocation Sub-Account (Commenced 4/28/2008) 2008 29,162,701 7.64 - 7.70 223,820,453 6.96 1.15 - 2.35 (23.78) - (23.16)
134 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MIST Met/Franklin Mutual Shares Sub-Account (Commenced 4/28/2008) 2008 1,978,335 6.56 - 6.60 13,038,845 5.28 1.30 - 2.20 (34.35) - (33.94) MIST Met/Franklin Templeton Founding Strategy Sub-Account (Commenced 4/28/2008) 2008 27,525,771 6.99 - 7.05 193,348,119 3.15 1.15 - 2.20 (30.03) - (29.53) MIST SSgA Growth ETF Sub-Account (Commenced 11/10/2008) 2008 190,893 7.69 - 7.88 1,489,531 -- 1.30 - 2.05 0.88 - 0.99 MIST SSgA Growth and Income ETF Sub-Account (Commenced 11/10/2008) 2008 312,145 8.39 - 8.60 2,651,130 -- 1.30 - 2.05 1.88 - 1.99 AIM V.I. Core Equity 2008 120,534 3.25 391,928 1.79 1.40 (31.12) Sub-Account 2007 181,999 4.72 859,118 0.99 1.40 6.61 (Commenced 5/1/2006) 2006 265,665 4.43 1,176,358 0.53 1.40 13.65 AIM V.I. Capital Appreciation 2008 50,723 3.17 160,644 -- 1.40 (43.30) Sub-Account 2007 77,611 5.59 433,487 -- 1.40 10.45 2006 125,055 5.06 632,398 0.05 1.40 4.83 2005 146,864 4.82 708,491 0.06 1.40 7.33 2004 160,011 4.49 719,218 -- 1.40 5.14 AIM V.I. International 2008 1,618,515 5.02 - 18.70 27,961,110 0.80 0.95 - 1.75 (41.56) - (41.09) Growth Sub-Account 2007 445,944 8.54 - 31.74 11,954,057 1.05 0.95 - 1.75 0.37 - 13.15 2006 119,102 7.56 899,842 0.95 1.40 26.46 2005 140,508 5.97 839,474 0.66 1.40 16.29 2004 149,241 5.14 766,725 0.64 1.40 22.28 AIM V.I. Basic Balanced 2008 88,650 3.26 288,999 3.82 1.40 (39.18) Sub-Account 2007 125,704 5.36 673,813 2.71 1.40 0.77 2006 183,755 5.32 977,412 1.83 1.40 9.02 2005 210,112 4.88 1,025,135 1.37 1.40 3.83 2004 248,074 4.70 1,165,729 1.39 1.40 6.02 AIM V.I. Global Real Estate 2008 449,308 5.21 - 5.29 2,360,062 9.45 0.95 - 1.75 (45.68) - (45.25) Sub-Account 2007 156,912 9.58 - 9.67 1,510,684 9.59 0.95 - 1.75 (13.59) - (6.80) (Commenced 6/1/2007) MFS Research Sub-Account 2008 26,232 3.60 94,515 0.58 1.40 (36.98) 2007 34,862 5.72 199,317 0.70 1.40 11.62 2006 54,023 5.12 276,705 0.51 1.40 8.95 2005 71,636 4.70 336,793 0.48 1.40 6.31 2004 78,859 4.42 348,759 1.14 1.40 14.24 MFS Investors Trust 2008 13,271 3.65 48,391 0.96 1.40 (34.01) Sub-Account 2007 23,909 5.53 132,122 0.85 1.40 8.76 2006 33,624 5.08 170,831 0.49 1.40 11.43 2005 36,118 4.56 164,685 0.56 1.40 5.83 2004 39,372 4.31 169,641 0.66 1.40 9.80
135 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MFS New Discovery 2008 10,205 4.38 44,654 -- 1.40 (40.18) Sub-Account 2007 13,583 7.31 99,354 -- 1.40 1.08 2006 28,494 7.24 206,180 -- 1.40 11.65 2005 32,199 6.48 208,682 -- 1.40 3.79 2004 37,742 6.24 235,687 -- 1.40 5.03 Oppenheimer Main Street 2008 31,897 3.40 108,399 1.52 1.40 (39.33) Sub-Account 2007 45,428 5.60 254,460 1.11 1.40 2.96 2006 59,121 5.44 321,623 1.13 1.40 13.43 2005 61,558 4.80 295,228 1.38 1.40 4.51 2004 68,507 4.59 314,388 1.66 1.40 7.93 Oppenheimer Core Bond 2008 22,518 4.26 96,005 4.53 1.40 (39.90) Sub-Account 2007 37,290 7.09 264,529 5.54 1.40 2.93 2006 47,067 6.89 324,377 5.59 1.40 3.82 2005 56,108 6.64 372,459 5.19 1.40 1.16 2004 61,376 6.56 402,738 4.89 1.40 4.02 Oppenheimer Strategic Bond 2008 1,903 6.97 13,254 5.21 1.40 (15.40) Sub-Account 2007 5,661 8.23 46,614 3.59 1.40 8.16 2006 6,741 7.61 51,318 4.20 1.40 6.00 2005 6,741 7.18 48,414 5.03 1.40 1.24 2004 15,760 7.09 111,803 7.67 1.40 7.16 Oppenheimer Main Street 2008 1,863,546 6.29 - 10.72 19,372,328 0.18 0.95 - 1.75 (39.08) - (38.59) Small Cap Sub-Account 2007 492,857 10.26 - 17.46 8,314,186 0.03 0.95 - 1.75 (13.41) - (2.47) 2006 17,793 10.53 187,405 0.15 1.40 13.40 2005 20,466 9.29 190,080 -- 1.40 8.40 2004 22,744 8.57 194,871 -- 1.40 17.76 Oppenheimer Money 2008 25,333 5.91 149,653 2.83 1.40 1.34 Sub-Account 2007 28,881 5.83 168,352 4.98 1.40 3.52 2006 33,346 5.63 187,777 4.54 1.40 3.26 2005 35,829 5.45 195,378 2.77 1.40 1.44 2004 55,454 5.38 297,947 0.82 1.40 (0.42) Fidelity VIP Asset Manager 2008 10,322,631 8.51 - 8.77 88,545,973 2.51 0.89 - 1.40 (29.71) - (29.35) Sub-Account 2007 11,728,296 12.10 - 12.42 143,069,941 6.10 0.89 - 1.40 12.69 - 14.48 2006 13,137,764 10.62 - 10.85 140,644,002 2.76 0.89 - 1.40 5.83 - 6.37 2005 14,833,146 10.10 - 10.20 149,964,735 2.76 0.89 - 1.40 2.60 - 3.12 2004 16,742,417 9.84 - 9.89 165,013,843 2.75 0.89 - 1.40 4.00 - 4.53 Fidelity VIP Growth 2008 12,838,680 8.64 - 8.83 111,413,507 0.78 0.89 - 1.40 (47.91) - (47.64) Sub-Account 2007 14,370,091 16.58 - 16.86 239,237,615 0.83 0.89 - 1.40 24.72 - 25.83 2006 16,167,140 13.24 - 13.40 214,865,663 0.40 0.89 - 1.40 5.37 - 5.91 2005 18,327,783 12.57 - 12.65 231,030,576 0.51 0.89 - 1.40 4.33 - 4.86 2004 20,811,605 12.05 - 12.06 251,467,598 0.27 0.89 - 1.40 1.94 - 2.46 Fidelity VIP Contrafund 2008 16,114,037 7.13 - 28.60 222,674,108 1.01 0.89 - 2.25 (43.90) - (43.03) Sub-Account 2007 16,613,759 12.51 - 50.32 377,396,997 0.95 0.89 - 2.25 14.88 - 16.54 2006 17,625,464 10.73 - 40.96 338,418,167 1.29 0.89 - 2.25 9.11 - 10.73 2005 18,309,411 9.69 - 33.90 316,067,973 0.29 0.89 - 2.25 4.82 - 15.90 2004 18,632,563 8.36 - 14.91 278,932,413 0.33 0.89 - 1.40 13.87 - 14.45
136 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- Fidelity VIP Overseas 2008 713,199 7.04 - 8.09 5,413,449 2.46 1.15 - 1.40 (44.59) - (44.45) Sub-Account 2007 826,076 12.67 - 14.58 11,327,734 3.29 1.15 - 1.40 15.67 - 15.96 2006 951,985 10.93 - 12.59 11,259,345 0.91 1.15 - 1.40 16.44 - 16.73 2005 1,115,424 9.36 - 10.71 11,307,291 0.67 1.15 - 1.40 17.40 - 17.69 2004 1,305,755 7.95 - 9.12 11,248,151 1.22 1.15 - 1.40 12.05 - 12.33 Fidelity VIP Equity-Income 2008 744,861 8.22 6,119,783 2.23 1.40 (43.46) Sub-Account 2007 942,455 14.53 13,694,030 1.64 1.40 0.11 2006 1,227,074 14.51 17,809,782 3.26 1.40 18.53 2005 1,681,844 12.25 20,594,607 1.71 1.40 4.40 2004 2,015,346 11.73 23,638,817 1.61 1.40 9.98 Fidelity VIP Index 500 2008 6,061,847 10.58 - 10.89 64,164,439 2.01 0.89 - 1.35 (37.85) - (37.56) Sub-Account 2007 7,211,573 17.03 - 17.44 122,812,705 3.57 0.89 - 1.35 4.02 - 4.50 2006 8,294,641 16.29 - 16.69 135,796,690 1.77 0.89 - 1.40 14.12 - 14.71 2005 9,738,122 14.28 - 14.55 139,624,446 1.84 0.89 - 1.40 3.37 - 3.90 2004 11,319,391 13.81 - 14.01 157,054,492 1.34 0.89 - 1.40 9.07 - 9.63 Fidelity VIP Money Market 2008 5,530,761 7.46 - 8.02 41,701,796 2.97 0.89 - 1.40 1.58 - 2.11 Sub-Account 2007 5,148,515 7.35 - 7.86 38,182,657 5.08 0.89 - 1.40 3.69 - 4.22 2006 4,981,073 7.08 - 7.54 35,607,299 4.77 0.89 - 1.40 3.43 - 3.96 2005 4,560,029 6.85 - 7.25 31,496,514 3.00 0.89 - 1.40 1.61 - 2.12 2004 4,311,139 6.74 - 7.10 29,307,345 1.21 0.89 - 1.40 (0.21) - 0.30 Fidelity VIP Mid Cap 2008 1,905,032 23.33 - 25.66 46,484,098 0.26 0.95 - 1.90 (40.75) - (40.18) Sub-Account 2007 997,653 39.38 - 42.90 40,496,316 0.51 0.95 - 1.90 13.16 - 14.24 (Commenced 11/7/2005) 2006 398,050 34.80 - 35.93 14,145,793 -- 1.50 - 1.90 10.29 - 10.73 2005 -- 31.55 - 32.45 -- -- 1.50 - 1.90 6.98 - 7.04 DWS International Sub-Account 2008 2,819,612 6.39 - 6.42 18,108,679 1.39 1.35 - 1.40 (48.94) - (48.91) 2007 3,119,351 12.50 - 12.57 39,213,025 2.39 1.35 - 1.40 12.99 - 13.04 2006 3,170,743 11.07 - 11.12 35,260,353 1.83 1.35 - 1.40 24.17 - 24.23 2005 3,098,930 8.91 - 8.95 27,740,668 1.56 1.35 - 1.40 14.56 - 14.61 2004 3,067,352 7.78 - 7.81 23,975,184 1.27 1.35 - 1.40 14.91 - 14.96 MSF FI Mid Cap Opportunities 2008 526,883 1.22 - 10.60 2,819,031 0.41 0.89 - 1.40 (55.91) - (55.68) Sub-Account 2007 574,272 2.76 - 23.91 6,518,918 0.13 0.89 - 1.40 6.82 - 7.37 2006 566,610 2.58 - 22.27 5,260,407 0.01 0.89 - 1.40 10.30 - 10.87 2005 579,118 2.34 - 20.09 4,104,050 -- 0.89 - 1.40 5.43 - 6.13 2004 614,837 2.22 - 18.93 3,336,741 0.76 0.89 - 1.40 15.56 - 17.19 MSF FI Large Cap Sub-Account 2008 306,796 8.85 - 9.77 2,882,121 -- 1.50 - 2.30 (46.08) - (45.64) (Commenced 5/1/2006) 2007 275,445 16.41 - 17.97 4,767,365 0.15 1.50 - 2.30 1.57 - 2.39 2006 134,065 16.16 - 17.74 2,286,045 -- 1.40 - 2.30 3.73 - 4.67 MSF FI Value Leaders 2008 251,266 12.02 - 13.27 3,223,563 1.80 1.50 - 2.30 (40.40) - (39.92) Sub-Account 2007 211,868 20.17 - 22.08 4,542,761 0.69 1.50 - 2.30 1.71 - 2.53 (Commenced 5/1/2006) 2006 126,575 19.83 - 21.76 2,662,087 -- 1.40 - 2.30 7.04 - 8.00 MSF Russell 2000 Index 2008 478,053 4.57 - 12.68 5,298,056 1.35 0.89 - 1.40 (34.43) - (34.05) Sub-Account 2007 481,904 6.97 - 19.23 8,015,832 0.93 0.89 - 1.40 (2.89) - (2.39) 2006 490,302 7.17 - 19.71 8,227,895 0.92 0.89 - 1.40 16.33 - 16.92 2005 508,847 6.17 - 16.85 7,123,561 0.67 0.89 - 1.40 3.05 - 3.58 2004 476,600 5.98 - 16.27 6,154,751 0.33 0.89 - 1.40 16.12 - 16.72
137 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MSF Julius Baer International 2008 380,684 3.34 - 11.48 3,539,311 2.93 1.40 - 1.90 (45.29) - (44.91) Stock Sub-Account 2007 398,333 6.06 - 20.94 6,422,071 0.76 1.40 - 1.90 7.99 - 8.79 2006 262,656 5.57 - 19.34 3,232,921 0.70 1.40 - 1.90 14.05 - 14.87 2005 140,779 4.85 - 14.55 683,055 0.67 1.40 - 1.90 8.23 - 16.37 2004 120,078 4.17 500,667 1.24 1.40 16.55 MSF MetLife Stock Index 2008 15,678,062 8.00 - 32.13 164,166,647 1.80 0.89 - 2.35 (38.72) - (37.66) Sub-Account 2007 17,885,006 13.05 - 51.54 299,989,839 0.90 0.89 - 2.35 2.52 - 4.30 2006 19,358,596 12.71 - 49.42 313,093,531 1.81 0.89 - 2.35 12.52 - 14.44 2005 21,140,946 11.41 - 43.18 301,690,699 1.44 0.89 - 2.35 1.96 - 3.71 2004 20,771,866 11.19 - 41.64 289,969,197 0.76 0.89 - 2.35 7.71 - 9.55 MSF BlackRock Legacy 2008 49,555 20.78 - 22.18 1,031,800 0.43 0.89 - 1.35 (37.36) - (37.07) Large Cap Growth 2007 31,453 33.18 - 35.25 1,046,603 0.17 0.89 - 1.35 17.12 - 17.66 Sub-Account 2006 19,004 28.33 - 29.96 538,656 0.12 0.89 - 1.35 2.74 - 3.21 2005 16,067 27.57 - 29.03 443,189 0.38 0.89 - 1.35 5.57 - 6.06 2004 11,623 26.12 - 27.37 303,907 -- 0.89 - 1.35 7.35 - 7.85 MSF BlackRock Strategic Value 2008 587,465 12.56 - 13.06 7,377,709 0.53 0.89 - 1.35 (39.23) - (38.95) Sub-Account 2007 625,394 20.66 - 21.39 12,924,658 0.30 0.89 - 1.35 (4.75) - (4.31) 2006 613,247 21.69 - 22.35 13,305,490 0.31 0.89 - 1.35 15.17 - 15.70 2005 598,942 18.84 - 19.32 11,283,336 -- 0.89 - 1.35 2.76 - 3.23 2004 500,254 18.33 - 18.71 9,178,131 -- 0.89 - 1.35 13.79 - 14.32 MSF BlackRock Bond 2008 748,389 37.59 - 55.83 32,695,795 5.04 0.89 - 2.30 (5.77) - (4.29) Income Sub-Account 2007 654,278 39.89 - 58.33 30,160,113 2.44 0.89 - 2.30 3.70 - 5.35 2006 261,942 38.47 - 55.36 11,911,372 2.91 0.89 - 2.30 1.90 - 3.49 2005 69,533 47.73 - 53.56 3,363,782 3.39 0.89 - 1.40 0.99 - 1.51 2004 41,397 47.26 - 52.70 1,980,546 3.19 0.89 - 1.40 2.98 - 3.50 MSF BlackRock Large Cap 2008 257,240 9.58 - 9.88 2,464,834 0.86 0.89 - 1.35 (35.78) - (35.48) Value Sub-Account 2007 251,656 14.92 - 15.31 3,754,451 0.91 0.89 - 1.35 2.00 - 2.47 2006 154,904 14.62 - 14.94 2,265,770 1.04 0.89 - 1.35 17.73 - 18.27 2005 77,212 12.42 - 12.63 959,195 0.83 0.89 - 1.35 4.57 - 5.05 2004 51,124 11.88 - 12.03 607,734 -- 0.89 - 1.35 11.88 - 12.40 MSF Lehman Brothers 2008 527,803 14.94 - 15.65 7,896,020 4.75 0.89 - 1.35 4.56 - 5.05 Aggregate Bond Index 2007 436,992 14.29 - 14.90 6,246,008 4.31 0.89 - 1.35 5.43 - 5.92 Sub-Account 2006 340,120 13.55 - 14.07 4,610,137 4.38 0.89 - 1.35 2.73 - 3.20 2005 300,648 13.19 - 13.63 3,972,358 3.46 0.89 - 1.35 0.70 - 1.16 2004 175,612 13.10 - 13.48 2,302,498 2.68 0.89 - 1.35 2.80 - 3.17 MSF MFS Value Sub-Account 2008 2,080,451 9.41 - 11.38 22,207,620 1.81 0.89 - 2.30 (30.55) - (21.82) 2007 1,601,257 14.33 - 17.03 25,634,063 0.27 0.89 - 2.30 (5.09) - 6.03 2006 807,102 15.02 - 16.20 12,448,890 2.01 0.89 - 2.30 16.43 - 19.64 2005 423,013 12.96 - 13.39 5,483,921 0.69 0.89 - 1.35 (2.70) - (2.24) 2004 333,624 13.32 - 13.70 4,447,364 0.44 0.89 - 1.35 10.03 - 10.43 MSF Morgan Stanley EAFE Index 2008 1,129,559 9.89 - 10.36 11,178,515 2.94 0.89 - 1.35 (42.86) - (42.60) Sub-Account 2007 1,079,041 17.30 - 18.05 18,684,621 1.93 0.89 - 1.35 9.32 - 9.83 2006 910,003 15.83 - 16.43 14,411,542 1.63 0.89 - 1.35 24.04 - 24.61 2005 636,754 12.76 - 13.19 8,127,890 1.48 0.89 - 1.35 11.73 - 12.24 2004 350,801 11.42 - 11.75 4,010,502 0.56 0.89 - 1.35 18.04 - 18.58
138 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MSF MFS Total Return 2008 977,440 30.49 - 41.85 34,110,264 3.52 0.89 - 2.30 (24.08) - (15.13) Sub-Account 2007 1,100,140 38.88 - 54.24 50,198,332 1.84 0.89 - 2.30 1.79 - 3.45 2006 647,027 38.20 - 52.44 29,037,432 1.84 0.89 - 2.30 9.43 - 11.22 2005 183,329 42.86 - 47.15 7,938,057 1.60 0.89 - 1.40 1.69 - 2.21 2004 97,363 42.15 - 46.13 4,141,052 2.14 0.89 - 1.40 9.70 - 10.27 MSF MetLife Mid Cap Stock 2008 999,722 10.67 - 11.09 10,679,425 1.39 0.89 - 1.35 (37.03) - (36.74) Index Sub-Account 2007 886,564 16.94 - 17.54 15,036,423 0.79 0.89 - 1.35 6.33 - 6.82 2006 751,885 15.93 - 16.42 11,992,134 1.17 0.89 - 1.35 8.62 - 9.12 2005 538,128 14.67 - 15.04 7,899,398 0.64 0.89 - 1.35 10.77 - 11.28 2004 364,852 13.24 - 13.52 4,837,054 0.39 0.89 - 1.35 14.49 - 15.02 MSF Davis Venture Value 2008 37,459,395 8.43 - 25.67 339,962,645 1.19 0.89 - 2.35 (40.87) - (38.31) Sub-Account 2007 39,936,774 14.23 - 42.70 599,873,294 0.67 0.89 - 2.35 1.99 - 3.65 2006 43,433,483 13.94 - 41.19 632,598,729 0.71 0.89 - 2.35 11.76 - 13.57 2005 44,607,893 12.62 - 36.27 574,773,194 0.51 0.89 - 2.35 7.59 - 9.32 2004 54,052,906 11.73 - 33.18 639,730,420 0.45 0.89 - 2.35 9.53 - 11.37 MSF Harris Oakmark Focused 2008 16,302,851 8.27 - 21.61 146,716,944 0.06 0.89 - 2.35 (47.39) - (46.49) Value Sub-Account 2007 18,551,932 15.69 - 40.39 316,048,072 0.35 0.89 - 2.35 (9.25) - (7.67) 2006 21,686,262 17.28 - 43.74 402,048,625 0.11 0.89 - 2.35 9.58 - 11.46 2005 23,942,954 15.94 - 39.25 399,066,263 -- 0.89 - 2.35 7.17 - 9.01 2004 27,909,852 14.88 - 36.00 424,832,489 -- 0.89 - 2.35 7.10 - 8.96 MSF Jennison Growth 2008 14,090,231 1.69 - 8.21 112,407,198 2.13 1.30 - 2.35 (38.03) - (37.13) Sub-Account 2007 14,275,390 2.70 - 13.10 182,244,421 0.19 1.30 - 2.35 8.79 - 10.11 2006 15,655,366 2.45 - 11.92 182,151,002 -- 1.30 - 2.35 0.15 - 1.20 2005 15,959,598 2.42 - 11.44 184,124,042 -- 1.40 - 2.35 10.91 - 20.37 2004 22,012,332 10.31 - 10.51 229,058,863 0.01 1.30 - 2.35 6.40 - 7.53 MSF BlackRock Money Market 2008 55,686,362 10.19 - 26.67 595,304,545 2.42 1.15 - 2.35 0.21 - 1.42 Sub-Account 2007 22,951,175 10.16 - 25.09 241,601,183 4.74 1.15 - 2.35 2.37 - 3.61 (Commenced 5/3/2004) 2006 18,324,659 9.91 - 24.22 187,577,920 4.50 1.30 - 2.35 2.13 - 3.20 2005 12,431,418 9.82 - 23.43 123,785,657 2.01 1.30 - 2.35 0.42 - 1.47 2004 1,856 23.09 42,787 0.70 1.40 (0.42) MSF T. Rowe Price Small Cap 2008 332,266 8.98 - 11.66 3,243,702 -- 0.89 - 2.30 (37.08) - (34.32) Growth Sub-Account 2007 77,656 16.25 - 18.44 1,279,290 -- 0.89 - 1.40 8.32 - 8.88 (Commenced 5/3/2004) 2006 73,595 15.00 - 16.94 1,115,539 -- 0.89 - 1.40 2.46 - 2.98 2005 63,311 14.64 - 16.45 932,545 -- 0.89 - 1.40 9.47 - 10.19 2004 31,008 13.38 - 14.93 418,893 -- 0.89 - 1.40 9.54 - 11.08 MSF Western Asset Management 2008 5,356,593 14.23 - 17.35 85,351,962 3.54 0.95 - 2.35 (2.85) - (1.48) U. S. Government 2007 2,760,203 14.93 - 17.61 44,641,935 2.32 0.95 - 2.30 1.76 - 3.04 Sub-Account 2006 1,527,142 14.41 - 16.38 24,039,423 1.66 1.30 - 2.35 1.51 - 2.58 (Commenced 5/2/2005) 2005 391,235 14.20 - 15.96 6,040,783 -- 1.30 - 2.35 (0.73) - (0.04) MSF Oppenheimer Global 2008 671,786 11.17 - 12.50 7,900,093 1.77 0.95 - 1.90 (41.68) - (41.12) Equity Sub-Account 2007 501,067 19.16 - 21.24 9,987,034 0.71 0.95 - 1.90 4.25 - 5.25 (Commenced 11/7/2005) 2006 195,337 18.38 - 19.12 3,691,502 0.20 1.50 - 1.90 14.17 - 14.62 2005 -- 16.10 - 16.68 -- -- 1.50 - 1.90 6.63 - 6.70 MSF MetLife Aggressive 2008 159,053 7.35 - 7.47 1,183,183 0.50 1.55 - 2.25 (41.78) - (41.37) Allocation Sub-Account 2007 189,794 12.50 - 12.74 2,403,475 0.05 1.55 - 2.25 0.96 - 1.67 (Commenced 5/1/2006) 2006 101,305 12.39 - 12.57 1,267,689 -- 1.40 - 2.25 11.82 - 12.78
139 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------- ----------------- ---------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) --------- ----------------- ---------- ------------- ---------------- ------------------- MSF MetLife Conservative 2008 602,771 9.24 - 9.44 5,653,460 0.85 1.55 - 2.15 (16.21) - (15.71) Allocation Sub-Account 2007 242,633 11.07 - 11.20 2,702,849 -- 1.55 - 2.00 3.47 - 3.94 (Commenced 5/1/2006) 2006 194,471 10.65 - 10.81 2,088,145 -- 1.40 - 2.25 3.88 - 4.76 MSF MetLife Conservative to 2008 664,967 8.77 - 8.95 5,902,351 1.05 1.55 - 2.10 (23.23) - (22.81) Moderate Allocation 2007 392,909 11.42 - 11.59 4,529,792 -- 1.55 - 2.10 2.62 - 3.19 Sub-Account 2006 273,176 11.10 - 11.26 3,060,196 -- 1.40 - 2.25 6.08 - 6.98 (Commenced 5/1/2006) MSF MetLife Moderate 2008 4,259,716 8.24 - 8.46 35,786,827 0.77 1.55 - 2.25 (30.23) - (29.73) Allocation Sub-Account 2007 3,351,654 11.81 - 12.04 40,157,114 0.01 1.55 - 2.25 2.01 - 2.73 (Commenced 5/1/2006) 2006 1,554,946 11.58 - 11.75 18,172,533 -- 1.40 - 2.25 8.31 - 9.23 MSF MetLife Moderate to 2008 5,745,796 7.65 - 7.83 44,674,622 0.61 1.55 - 2.25 (36.57) - (36.12) Aggressive Allocation 2007 5,047,763 12.02 - 12.25 61,541,186 0.02 1.55 - 2.25 1.53 - 2.24 Sub-Account 2006 1,876,875 11.84 - 12.01 22,426,140 -- 1.40 - 2.25 9.59 - 10.53 (Commenced 5/1/2006) MSF T. Rowe Price Large Cap Growth Sub-Account (Commenced 4/28/2008) 2008 27,135 19.86 - 21.22 565,146 -- 1.50 - 1.90 (44.05) - (43.82) MSF Loomis Sayles Small-Cap Sub-Account (Commenced 7/14/2008) 2008 926 21.12 - 22.90 20,162 -- 1.20 - 1.75 (25.82) - (25.62) MSF Neuberger Berman Mid Cap Value Sub-Account (Commenced 7/14/2008) 2008 1,374 13.33 - 14.09 18,573 -- 1.20 - 1.75 (40.64) - (40.49) MSF Met/Dimensional International Small Company Sub-Account (Commenced 11/10/2008) 2008 12,651 10.12 - 10.14 128,139 -- 1.30 - 2.05 0.61 - 0.71 Van Kampen LIT Capital 2008 33,379 2.66 88,923 0.55 1.40 (49.70) Growth Sub-Account 2007 1,659,770 5.28 - 5.59 9,156,031 -- 1.50 - 2.30 13.98 - 15.33 2006 1,033,865 4.59 - 4.87 4,964,651 -- 1.40 - 2.30 0.30 - 1.43 2005 88,859 4.53 - 4.61 402,324 0.27 1.40 - 2.30 4.67 - 6.44 2004 108,230 4.25 460,401 -- 1.40 5.54 Van Kampen LIT Enterprise 2008 20,306 2.44 49,619 1.23 1.40 (43.75) Sub-Account 2007 28,313 4.34 122,997 0.39 1.40 11.11 2006 39,881 3.91 155,927 0.42 1.40 5.59 2005 43,297 3.70 160,313 0.71 1.40 6.65 2004 46,381 3.47 161,022 0.40 1.40 2.60 Van Kampen LIT Growth and 2008 4,699,178 4.87 - 18.34 57,517,543 1.50 0.95 - 1.90 (33.49) - (32.85) Income Sub-Account 2007 3,069,791 7.27 - 27.31 49,067,204 1.01 0.95 - 1.90 0.58 - 1.55 2006 1,465,291 7.17 - 14.19 20,351,040 2.60 1.40 - 1.90 13.80 - 14.62 2005 43,633 6.26 - 12.16 272,973 1.17 1.40 - 1.90 2.34 - 8.46 2004 54,075 5.77 311,904 1.01 1.40 12.78
140 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------- ----------------- ---------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) --------- ----------------- ---------- ------------- ---------------- ------------------- Van Kampen LIT Comstock 2008 6,365,782 9.11 - 10.18 60,483,870 2.08 0.95 - 1.90 (37.02) - (36.41) Sub-Account 2007 5,188,036 14.46 - 16.01 77,264,934 1.17 0.95 - 1.90 (4.18) - (3.26) (Commenced 11/7/2005) 2006 2,167,418 15.09 - 15.48 33,275,164 0.01 1.50 - 1.90 13.87 - 14.32 2005 -- 13.26 - 13.54 -- -- 1.50 - 1.90 4.60 - 4.67 Federated Equity Income 2008 4,805 3.91 18,768 3.71 1.40 (31.42) Sub-Account 2007 5,473 5.70 31,173 4.43 1.40 0.63 2006 17,127 5.66 96,942 2.18 1.40 21.43 2005 18,507 4.66 86,264 2.24 1.40 1.90 2004 20,644 4.57 94,430 3.43 1.40 11.27 Federated High Income 2008 10,612 4.87 51,695 10.07 1.40 (27.03) Bond Sub-Account 2007 18,999 6.68 126,835 7.93 1.40 1.98 2006 20,273 6.55 132,703 8.52 1.40 9.27 2005 22,143 5.99 132,652 8.76 1.40 1.23 2004 31,469 5.92 186,227 8.60 1.40 8.92 Federated Mid Cap Growth 2008 19,463 3.73 72,650 -- 1.40 (44.28) Strategies Sub-Account 2007 20,874 6.70 139,853 -- 1.40 16.37 2006 32,906 5.76 189,442 -- 1.40 6.73 2005 35,001 5.39 188,801 -- 1.40 11.14 2004 38,902 4.85 188,806 -- 1.40 13.82 Neuberger Berman Genesis 2008 809 10.07 8,146 3.68 0.89 (33.45) Sub-Account 2007 927 15.13 14,022 0.14 0.89 20.72 2006 1,051 12.53 13,167 1.05 0.89 6.31 2005 1,183 11.79 13,953 -- 0.89 15.27 2004 1,371 10.23 14,030 0.15 0.89 17.62 Alger American SmallCap 2008 6,485,576 5.80 - 5.87 37,826,339 -- 1.25 - 1.40 (47.35) - (47.27) Growth Sub-Account 2007 7,147,895 11.01 - 11.13 79,134,670 -- 1.25 - 1.40 15.60 - 15.78 2006 7,749,990 9.53 - 9.61 74,178,889 -- 1.25 - 1.40 18.35 - 18.53 2005 8,307,133 8.05 - 8.11 67,142,470 -- 1.25 - 1.40 15.26 - 15.43 2004 9,017,916 6.98 - 7.03 63,245,357 -- 1.25 - 1.40 14.95 - 15.12 T. Rowe Price Growth Stock 2008 104,973 50.75 5,327,165 0.40 0.89 (42.77) Sub-Account 2007 118,255 88.67 10,486,221 0.60 0.89 9.38 2006 128,359 81.07 10,405,667 0.62 0.89 5.62 2005 142,212 71.72 10,198,928 0.07 0.89 5.62 2004 162,635 67.90 11,049,157 0.59 1.25 9.26 T. Rowe Price International 2008 76,425 7.99 610,995 1.51 0.89 (48.48) Stock Sub-Account 2007 87,971 15.52 1,365,106 1.62 0.89 12.42 2006 96,658 13.80 1,334,230 1.20 0.89 18.21 2005 102,719 11.68 1,199,507 1.45 0.89 15.24 2004 107,931 10.13 1,094,227 1.20 0.89 12.88 T. Rowe Price Prime Reserve 2008 120,897 18.35 2,218,473 2.47 0.89 1.64 Sub-Account 2007 96,955 18.05 1,750,411 4.77 0.89 3.94 2006 87,463 17.37 1,519,155 4.55 0.89 3.64 2005 82,793 16.76 1,387,505 2.70 0.89 1.81 2004 69,819 16.46 1,149,982 0.81 0.89 (0.10)
141 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------- ----------------- ----------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) --------- ----------------- ----------- ------------- ---------------- ------------------- Janus Aspen Worldwide Growth 2008 1,089 4.61 5,018 1.21 0.89 (45.15) Sub-Account 2007 1,182 8.40 9,932 0.76 0.89 8.65 2006 1,276 7.73 9,873 1.77 0.89 17.16 2005 1,375 6.60 9,075 1.36 0.89 4.93 2004 1,477 6.29 9,304 1.00 0.89 3.85 American Funds Global Small 2008 1,683,911 15.35 - 17.10 27,428,704 -- 0.89 - 1.90 (54.33) - (49.46) Capitalization Sub-Account 2007 985,561 34.16 - 37.13 35,036,450 2.98 0.89 - 1.75 19.31 - 20.35 2006 666,735 29.64 - 30.85 19,777,453 0.46 0.89 - 1.35 22.39 - 22.96 2005 470,780 24.22 - 25.09 11,408,824 0.90 0.89 - 1.35 23.68 - 24.24 2004 282,816 19.58 - 20.19 5,545,295 -- 0.89 - 1.35 19.26 - 19.81 American Funds Growth 2008 2,453,157 77.98 - 110.79 231,101,074 1.04 0.89 - 2.30 (45.25) - (44.47) Sub-Account 2007 1,458,315 142.42 - 199.51 245,762,919 0.98 0.89 - 2.30 9.78 - 11.35 2006 729,519 129.74 - 179.18 111,503,370 1.17 0.89 - 2.30 7.72 - 9.24 2005 208,063 120.44 - 164.02 30,740,407 0.78 0.89 - 2.30 6.63 - 15.16 2004 132,705 129.36 - 142.42 17,199,760 0.21 0.89 - 1.35 10.98 - 11.50 American Funds 2008 1,942,091 58.79 - 83.53 136,811,504 2.00 0.89 - 2.30 (39.27) - (38.40) Growth--Income 2007 1,369,874 96.80 - 135.60 156,224,069 1.92 0.89 - 2.30 2.64 - 4.11 Sub-Account 2006 687,630 94.31 - 130.25 76,344,065 2.27 0.89 - 2.30 12.59 - 14.18 2005 199,680 83.76 - 114.07 20,563,346 1.49 0.89 - 2.30 4.51 - 4.90 2004 137,919 98.77 - 108.74 13,647,442 1.15 0.89 - 1.35 8.89 - 9.39 American Funds Global 2008 5,818,048 16.04 - 18.78 101,450,809 2.17 0.95 - 2.30 (39.80) - (38.97) Growth Sub-Account 2007 3,676,314 26.64 - 30.77 104,847,881 3.27 0.95 - 2.30 12.22 - 13.76 (Commenced 11/7/2005) 2006 1,374,016 23.74 - 25.90 34,540,668 0.78 1.40 - 2.30 17.70 - 18.76 2005 22,386 20.17 - 21.81 473,459 -- 1.40 - 2.30 7.09 - 7.25 American Funds Bond 2008 1,887,421 13.37 - 14.94 27,017,111 9.06 0.95 - 1.90 (11.06) - (10.21) Sub-Account 2007 413,860 15.27 - 16.64 6,639,941 8.01 0.95 - 1.75 0.28 - 2.19 (Commenced 6/1/2007) FTVIPT Mutual Shares 2008 3,944,854 14.13 - 15.86 58,571,142 3.27 0.95 - 1.90 (38.30) - (37.71) Securities Sub-Account 2007 3,006,411 22.90 - 25.46 71,392,728 1.37 0.95 - 1.90 1.52 - 2.50 (Commenced 11/7/2005) 2006 1,273,727 22.56 - 23.49 29,530,718 0.99 1.50 - 1.90 16.16 - 16.62 2005 11,181 18.72 - 20.33 217,513 -- 1.40 - 2.30 4.64 - 4.79 FTVIPT Templeton Foreign 2008 2,485,260 9.21 - 21.55 48,551,609 2.33 1.55 - 2.30 (41.74) - (41.30) Securities Sub-Account 2007 1,778,828 15.73 - 36.77 56,498,732 1.81 1.55 - 2.30 12.82 - 13.67 (Commenced 11/7/2005) 2006 946,611 13.88 - 32.88 24,137,809 1.33 1.40 - 2.30 18.69 - 19.76 2005 33,847 11.86 - 25.00 813,751 -- 1.40 - 2.30 4.87 - 5.02 FTVIPT Templeton Growth 2008 2,828,128 7.79 - 11.26 27,929,783 1.79 0.95 - 1.90 (43.41) - (42.87) Securities Sub-Account 2007 2,063,301 13.72 - 19.85 38,096,365 1.31 0.95 - 1.90 0.41 - 1.37 (Commenced 11/7/2005) 2006 784,417 18.41 - 19.72 15,182,959 0.76 1.50 - 1.90 19.52 - 20 2005 -- 15.41 - 15.57 -- -- 1.50 - 1.90 4.78 - 4.84 FTVIPT Franklin Income Securities 2008 2,613,572 27.09 - 35.10 82,449,457 5.48 0.95 - 2.25 (31.23) - (30.32) Sub-Account 2007 1,974,360 39.38 - 50.37 88,519,218 3.16 0.95 - 2.25 1.44 - 2.77 (Commenced 11/7/2005) 2006 664,025 38.83 - 45.21 28,820,820 2.35 1.40 - 2.25 15.62 - 16.60 2005 4,136 33.58 - 38.78 150,925 -- 1.40 - 2.25 0.82 - 0.96
142 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- FTVIPT Templeton Global Income 2008 1,462,599 12.80 - 13.87 19,575,877 3.50 0.95 - 1.75 4.36 - 5.20 Securities Sub-Account 2007 318,925 12.27 - 13.18 4,080,871 0.01 0.95 - 1.75 3.66 - 9.78 (Commenced 6/1/2007) FTVIPT Franklin Small Cap Value 2008 856,253 5.76 - 5.83 4,965,586 1.04 0.95 - 1.75 (34.18) - (33.65) Securities Sub-Account 2007 251,664 8.75 - 8.79 2,208,487 -- 0.95 - 1.75 (14.60) - (3.45) (Commenced 6/1/2007) UIF Equity and Income 2008 13,625,412 11.34 - 11.97 158,238,412 2.44 0.95 - 1.90 (24.14) - (23.41) Sub-Account 2007 10,934,412 14.95 - 15.63 166,104,798 2.06 0.95 - 1.90 1.41 - 2.38 (Commenced 11/7/2005) 2006 4,592,861 14.74 - 14.96 68,376,576 0.79 1.50 - 1.90 10.46 - 10.91 2005 -- 13.34 - 13.49 -- -- 1.50 - 1.90 2.16 - 2.22 UIF U.S Real Estate 2008 2,248,952 14.64 - 30.26 38,153,749 3.39 0.95 - 1.90 (39.07) - (38.49) Sub-Account 2007 2,043,530 24.02 - 49.19 52,908,525 2.27 0.95 - 1.90 (18.64) - (17.86) (Commenced 11/7/2005) 2006 928,174 29.52 - 30.20 27,806,209 0.66 1.50 - 1.90 35.46 - 36.00 2005 -- 21.8 - 22.20 -- -- 1.50 - 1.90 7.52 - 7.59 UIF U.S. Mid Cap Value 2008 1,130,852 6.31 - 6.41 7,194,408 0.78 0.95 - 1.75 (42.44) - (41.98) Sub-Account 2007 257,428 10.95 - 11.05 2,833,669 0.17 0.95 - 1.75 (6.13) - (6.63) (Commenced 6/1/2007) Pioneer VCT Bond Sub-Account (Commenced 7/14/2008) 2008 8,267 9.87 - 9.94 82,002 1.64 1.20 - 1.75 (3.38) - (3.13) Pioneer VCT Cullen Value Sub-Account (Commenced 7/14/2008) 2008 21,316 7.29 - 7.38 156,566 -- 1.20 - 1.75 (21.91) - (21.71) Pioneer VCT Emerging Markets Sub-Account (Commenced 7/14/2008) 2008 4,387 9.83 - 10.32 43,804 -- 1.20 - 1.75 (50.82) - (50.69) Pioneer VCT Equity Income Sub-Account (Commenced 7/14/2008) 2008 2,134 15.01 - 15.22 32,445 0.69 1.60 - 1.75 (22.10) - (22.05) Pioneer VCT Fund Sub-Account (Commenced 7/14/2008) 2008 5,631 6.72 - 7.05 39,673 0.69 1.20 - 1.75 (24.80) - (24.61) Pioneer VCT Global High Yield Sub-Account (Commenced 7/14/2008) 2008 500 6.65 - 6.66 3,327 4.67 1.60 - 1.75 (33.36) - (33.31) Pioneer VCT High Yield Sub-Account (Commenced 7/14/2008) 2008 1,528 6.63 - 6.64 10,146 2.82 1.20 - 1.60 (33.23) - (33.11) Pioneer VCT Ibbotson Aggressive Allocation Sub-Account (Commenced 7/14/2008) 2008 512 9.89 5,067 -- 1.20 (30.47) Pioneer VCT Ibbotson Growth Allocation Sub-Account (Commenced 7/14/2008) 2008 346,884 10.21 - 10.51 3,587,235 -- 1.20 - 1.95 (27.48) - (27.22)
143 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) --------- ----------------- ---------- ------------- ---------------- ------------------- Pioneer VCT Ibbotson Moderate Allocation Sub-Account (Commenced 7/14/2008) 2008 109,195 10.23 - 10.47 1,127,161 -- 1.20 - 1.80 (24.71) - (24.50) Pioneer VCT International Value Sub-Account (Commenced 7/14/2008) 2008 326 10.18 - 10.41 3,375 -- 1.20 - 1.60 (34.35) - (34.22) Pioneer VCT Mid Cap Value 2008 1,105,223 20.42 - 23.30 23,891,796 0.87 0.95 - 1.90 (35.01) - (34.39) Sub-Account 2007 813,072 31.43 - 35.50 26,728,784 0.54 0.95 - 1.90 3.35 - 4.34 (Commenced 11/7/2005) 2006 262,287 30.41 - 31.88 8,219,057 -- 1.50 - 1.90 10.16 - 10.60 2005 -- 27.60 - 28.83 -- -- 1.50 - 1.90 6.23 - 6.29 Pioneer VCT Oak Ridge Large Cap Growth Sub-Account (Commenced 7/14/2008) 2008 1,951 7.40 - 7.44 14,455 -- 1.50 - 1.60 (26.78) - (26.75) Pioneer VCT Real Estate Shares Sub-Account (Commenced 7/14/2008) 2008 3,001 10.87 - 11.38 33,133 1.71 1.20 - 1.75 (32.64) - (32.47) Pioneer VCT Small Cap Value Sub-Accont (Commenced 7/14/2008) 2008 1,335 7.56 - 7.77 10,348 -- 1.20 - 1.60 (28.92) - (28.79) Pioneer VCT Strategic Income Sub-Account (Commenced 7/14/2008) 2008 6,431 8.63 - 8.65 55,610 1.09 1.20 - 1.75 (13.53) - (13.31) LMPVET Small Cap Growth 2008 1,214,861 7.98 - 10.42 10,577,679 -- 0.95 - 2.30 (42.06) - (41.27) Sub-Account 2007 754,675 13.77 - 17.53 10,904,358 -- 1.10 - 2.30 7.50 - 8.80 (Commenced 11/7/2005) 2006 325,638 12.81 - 13.36 4,282,564 0.46 1.40 - 2.30 10.21 - 11.20 2005 15,787 11.63 - 12.01 187,061 -- 1.40 - 2.30 5.33 - 5.49 LMPVET Investors Sub-Account 2008 188,889 10.05 - 10.97 2,012,063 1.09 1.50 - 2.30 (37.09) - (36.59) (Commenced 11/7/2005) 2007 279,645 15.98 - 17.30 4,699,165 1.52 1.50 - 2.30 1.53 - 2.35 2006 130,370 15.74 - 17.05 2,127,448 2.98 1.40 - 2.30 15.58 - 16.62 2005 6,750 13.62 - 14.62 95,594 1.12 1.40 - 2.30 3.58 - 3.73 LMPVET Equity Index 2008 2,108,918 6.05 - 17.90 37,329,346 1.99 1.55 - 2.90 (39.14) - (38.46) Sub-Account 2007 2,276,152 9.89 - 29.42 66,117,281 2.15 1.55 - 2.90 2.17 - 3.30 (Commenced 11/7/2005) 2006 1,440,692 9.61 - 10.25 41,031,761 3.98 1.40 - 2.90 12.51 - 13.52 2005 2,224 25.69 - 9.03 19,773 1.22 1.40 - 2.90 3.64 - 3.83 LMPVET Fundamental Value 2008 2,724,852 19.41 - 23.70 59,326,416 1.83 0.95 - 2.30 (38.03) - (37.18) Sub-Account 2007 2,440,021 31.33 - 37.72 84,463,307 1.55 0.95 - 2.30 (1.05) - (0.31) (Commenced 11/7/2005) 2006 1,257,495 31.66 - 35.61 43,419,332 3.96 1.40 - 2.30 14.15 - 15.18 2005 1,160 27.73 - 30.92 34,376 0.96 1.40 - 2.30 3.30 - 3.45 LMPVET Appreciation 2008 3,070,482 11.00 - 25.50 70,122,225 1.44 0.95 - 2.30 (31.05) - (29.98) Sub-Account 2007 2,591,844 15.95 - 36.42 83,497,462 1.37 0.95 - 2.30 1.22 - 7.39 (Commenced 11/7/2005) 2006 1,236,956 27.95 - 32.05 38,211,834 2.66 1.40 - 2.30 12.19 - 13.21 2005 1,722 24.91 - 28.31 47,007 0.48 1.40 - 2.30 2.32 - 2.47
144 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- LMPVET Aggressive Growth 2008 10,751,677 7.58 - 9.01 86,704,540 -- 0.95 - 2.30 (41.77) - (40.97) Sub-Account 2007 9,406,900 13.02 - 15.26 127,959,661 -- 0.95 - 2.30 (0.82) - 0.54 (Commenced 11/7/2005) 2006 5,468,811 13.12 - 13.68 73,942,504 -- 1.40 - 2.30 6.32 - 7.28 2005 15,934 12.34 - 12.75 200,186 -- 1.40 - 2.30 3.53 - 3.68 LMPVET Large Cap Growth 2008 629,993 8.27 - 9.01 5,503,740 0.26 1.50 - 2.30 (38.72) - (38.23) Sub-Account 2007 699,543 13.49 - 14.58 9,921,012 0.05 1.50 - 2.30 2.90 - 3.73 (Commenced 11/7/2005) 2006 433,171 13.11 - 14.18 5,945,005 0.30 1.40 - 2.30 2.22 - 3.15 2005 15,016 12.83 - 13.74 201,094 0.12 1.40 - 2.30 4.17 - 4.33 LMPVET Social Awareness 2008 25,775 20.97 - 22.41 567,901 2.05 1.50 - 1.90 (26.61) - (26.32) Sub-Account 2007 19,022 28.57 - 30.42 565,965 1.84 1.50 - 1.90 8.80 - 9.24 (Commenced 11/7/2005) 2006 10,361 26.26 - 27.85 281,509 1.25 1.50 - 1.90 5.67 - 6.09 2005 -- 24.85 - 26.25 -- -- 1.50 - 1.90 3.13 - 3.20 LMPVET Capital and Income 2008 5,136,303 7.74 - 9.92 43,322,014 1.13 0.95 - 1.90 (36.25) - (35.58) Sub-Account 2007 4,737,273 12.15 - 15.28 59,957,587 1.99 1.10 - 1.90 0.27 - 5.14 (Commenced 11/7/2005) 2006 154,474 14.18 - 14.70 2,252,417 2.55 1.40 - 2.25 9.67 - 10.61 2005 2,660 12.93 - 13.29 35,068 0.84 1.40 - 2.25 2.63 - 2.77 LMPVET Capital Sub-Account 2008 459,735 9.11 - 9.58 4,320,213 0.05 1.50 - 2.30 (43.46) - (43.00) (Commenced 11/7/2005) 2007 542,230 16.11 - 16.80 8,963,789 0.52 1.50 - 2.30 (0.48) - 0.32 2006 284,789 16.19 - 16.82 4,710,142 0.93 1.40 - 2.30 11.04 - 12.04 2005 9,633 14.58 - 15.01 142,551 0.35 1.40 - 2.30 3.40 - 3.55 LMPVET Global Equity 2008 305,136 10.43 - 10.76 3,246,223 0.08 1.50 - 2.00 (42.48) - (42.19) Sub-Account 2007 417,802 18.13 - 18.61 7,705,323 0.61 1.50 - 2.00 2.82 - 3.34 (Commenced 11/7/2005) 2006 290,262 17.41 - 18.08 5,189,364 1.84 1.40 - 2.30 12.59 - 13.60 2005 10,041 15.46 - 15.92 159,052 0.46 1.40 - 2.30 3.79 - 3.94 LMPVET Dividend Strategy 2008 798,585 6.57 - 7.07 5,522,751 2.77 1.50 - 2.30 (30.21) - (29.65) Sub-Account 2007 834,706 9.41 - 10.05 8,243,529 2.90 1.50 - 2.30 4.02 - 4.86 (Commenced 11/7/2005) 2006 321,925 9.04 - 9.59 3,032,256 5.84 1.50 - 2.30 15.26 - 16.18 2005 3,967 7.85 - 8.25 31,996 1.35 1.50 - 2.30 1.96 - 2.09 LMPVET Lifestyle 2008 567,873 11.02 - 11.55 6,471,351 3.50 1.50 - 1.90 (28.71) - (28.42) Allocation 50% Sub-Account 2007 590,437 15.45 - 16.14 9,409,255 5.14 1.50 - 1.90 1.26 - 1.67 (Commenced 11/7/2005) 2006 177,614 13.97 - 15.88 2,794,996 5.99 1.50 - 1.90 6.19 - 6.61 2005 -- 14.37 - 14.89 -- -- 1.50 - 1.90 2.97 - 3.03 LMPVET Lifestyle 2008 280,357 9.39 - 9.84 2,719,047 2.51 1.50 - 1.90 (34.04) - (33.77) Allocation 70% Sub-Account 2007 250,067 14.23 - 14.86 3,668,950 4.65 1.50 - 1.90 1.87 - 2.28 (Commenced 11/7/2005) 2006 23,381 13.97 - 14.53 336,900 3.81 1.50 - 1.90 6.81 - 7.24 2005 -- 13.08 - 13.55 -- -- 1.50 - 1.90 3.86 - 3.93 LMPVET Lifestyle 2008 2,668,230 9.09 - 10.18 25,875,933 2.50 0.95 - 1.90 (38.60) - (38.01) Allocation 85% Sub-Account 2007 1,057,927 14.80 - 16.41 16,581,727 5.12 0.95 - 1.90 1.41 - 2.38 (Commenced 11/7/2005) 2006 21,392 14.59 - 15.18 320,998 1.97 1.50 - 1.90 7.41 - 7.84 2005 -- 13.59 - 14.08 -- -- 1.50 - 1.90 3.84 - 3.90 LMPVIT Adjustable Rate 2008 225,349 7.73 - 7.98 1,788,239 4.30 1.50 - 2.10 (22.82) - (22.35) Income Sub-Account 2007 310,564 10.02 - 10.28 3,178,900 5.20 1.50 - 2.10 (0.76) - (0.16) (Commenced 11/7/2005) 2006 216,326 10.04 - 10.33 2,220,514 11.96 1.40 - 2.25 1.79 - 2.66 2005 351 9.87 - 10.06 3,504 3.00 1.40 - 2.25 0.29 - 0.42
145 METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INVESTORS USA INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONCLUDED) 6. FINANCIAL HIGHLIGHTS -- (CONCLUDED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) --------- ----------------- ----------- ------------- ---------------- ------------------- LMPVIT Global High Yield 2008 2,664,258 10.21 - 11.80 29,373,023 11.01 0.95 - 2.30 (32.40) - (31.48) Bond Sub-Account 2007 2,527,054 15.11 - 16.97 40,738,484 9.95 1.10 - 2.30 (2.35) - (1.17) (Commenced 11/7/2005) 2006 1,039,676 15.48 - 16.73 16,994,644 15.93 1.40 - 2.30 8.13 - 9.11 2005 3,458 14.31 - 15.33 51,516 6.03 1.40 - 2.30 1.28 - 1.42 LMPVIT Money Market 2008 8,430,488 12.26 - 14.84 115,203,596 2.37 0.95 - 2.30 0.26 - 1.63 Sub-Account 2007 3,326,218 12.23 - 14.61 44,647,513 4.76 0.95 - 2.30 2.51 - 3.91 (Commenced 11/7/2005) 2006 1,600,672 11.93 - 13.35 20,676,751 4.63 1.40 - 2.30 2.26 - 3.18 2005 15,276 11.66 - 12.94 190,202 0.15 1.40 - 2.30 0.25 - 0.40
(1) The Company sells a number of variable annuity products which have unique combinations of features and fees that are charged against the contract owner's account balance. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the underlying portfolio, series, or fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against the contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the underlying portfolio, series, or fund in which the Sub-Account invests. (3) These amounts represent annualized contract expenses of each of the applicable Sub-Accounts, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying portfolio, series, or fund have been excluded. (4) These amounts represent the total return for the period indicated, including changes in the value of the underlying portfolio, series, or fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on minimum and maximum returns within each product grouping of the applicable Sub-Account. 146 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of MetLife Investors USA Insurance Company: We have audited the accompanying balance sheets of MetLife Investors USA Insurance Company (the "Company") as of December 31, 2008 and 2007, and the related statements of income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of MetLife Investors USA Insurance Company as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, the Company changed its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida April 2, 2009 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) BALANCE SHEETS DECEMBER 31, 2008 AND 2007 (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
2008 2007 ------- ------- ASSETS Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $4,697 and $4,322, respectively)..... $ 4,325 $ 4,328 Equity securities available-for-sale, at estimated fair value (cost: $11 and $11, respectively)........................... 7 10 Mortgage loans on real estate.................................. 376 405 Policy loans................................................... 41 39 Real estate joint ventures held-for-investment................. 29 13 Other limited partnership interests............................ 271 200 Short-term investments......................................... 1,581 483 Other invested assets.......................................... 129 26 ------- ------- Total investments........................................... 6,759 5,504 Cash and cash equivalents........................................ 525 91 Accrued investment income........................................ 54 54 Premiums and other receivables................................... 6,604 2,948 Deferred policy acquisition costs................................ 2,082 1,806 Current income tax recoverable................................... 133 14 Other assets..................................................... 616 567 Separate account assets.......................................... 18,517 23,842 ------- ------- Total assets................................................ $35,290 $34,826 ======= ======= LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES: Future policy benefits......................................... $ 890 $ 444 Policyholder account balances.................................. 8,706 5,489 Other policyholder funds....................................... 1,666 1,374 Long-term debt -- affiliated................................... -- 435 Deferred income tax liability.................................. 464 327 Payables for collateral under securities loaned and other transactions................................................ 888 928 Other liabilities.............................................. 1,518 412 Separate account liabilities................................... 18,517 23,842 ------- ------- Total liabilities........................................... 32,649 33,251 ------- ------- CONTINGENCIES, COMMITMENTS AND GUARANTEES (NOTE 9) STOCKHOLDER'S EQUITY: Preferred stock, par value $1.00 per share; 200,000 shares authorized, issued and outstanding at December 31, 2008 and 2007........................................................... -- -- Common stock, par value $200.00 per share; 15,000 shares authorized; 11,000 shares issued and outstanding at December 31, 2008 and 2007.............................................. 2 2 Additional paid-in capital....................................... 1,945 960 Retained earnings................................................ 968 621 Accumulated other comprehensive income (loss).................... (274) (8) ------- ------- Total stockholder's equity.................................. 2,641 1,575 ------- ------- Total liabilities and stockholder's equity.................. $35,290 $34,826 ======= =======
See accompanying notes to the financial statements. F-2 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
2008 2007 2006 ------ ------ ----- REVENUES Premiums.................................................. $ 144 $ 154 $ 89 Universal life and investment-type product policy fees.... 634 568 417 Net investment income..................................... 253 244 242 Other revenues............................................ 127 140 102 Net investment gains (losses)............................. 783 239 (107) ------ ------ ----- Total revenues....................................... 1,941 1,345 743 ------ ------ ----- EXPENSES Policyholder benefits and claims.......................... 384 192 87 Interest credited to policyholder account balances........ 249 247 235 Other expenses............................................ 812 537 358 ------ ------ ----- Total expenses....................................... 1,445 976 680 ------ ------ ----- Income before provision for income tax.................... 496 369 63 Provision for income tax.................................. 149 104 3 ------ ------ ----- Net income................................................ $ 347 $ 265 $ 60 ====== ====== =====
See accompanying notes to the financial statements. F-3 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) STATEMENTS OF STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
ACCUMULATED ADDITIONAL OTHER PREFERRED COMMON PAID-IN RETAINED COMPREHENSIVE STOCK STOCK CAPITAL EARNINGS INCOME (LOSS) TOTAL --------- ------ ---------- -------- ------------- ------ Balance at January 1, 2006................ $-- $2 $ 398 $296 $ (44) $ 652 Contribution of intangible assets from MetLife, Inc., net of income tax........ 162 162 Capital contribution from MetLife Insurance Company of Connecticut........ 150 150 Comprehensive income (loss): Net income.............................. 60 60 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... 1 1 Unrealized investment gains (losses), net of related offsets and income tax................................ 42 42 ------ Other comprehensive income (loss).... 43 ------ Comprehensive income (loss)............. 103 --- -- ------ ---- ----- ------ Balance at December 31, 2006.............. -- 2 710 356 (1) 1,067 Capital contribution from MetLife Insurance Company of Connecticut........ 250 250 Comprehensive income (loss): Net income.............................. 265 265 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... (1) (1) Unrealized investment gains (losses), net of related offsets and income tax................................ (6) (6) ------ Other comprehensive income (loss):... (7) ------ Comprehensive income (loss)............. 258 --- -- ------ ---- ----- ------ Balance at December 31, 2007.............. -- 2 960 621 (8) 1,575 Capital contribution from MetLife Insurance Company of Connecticut........ 985 985 Comprehensive income (loss): Net income.............................. 347 347 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... 1 1 Unrealized investment gains (losses), net of related offsets and income tax................................ (267) (267) ------ Other comprehensive income (loss).... (266) ------ Comprehensive income (loss)............. 81 --- -- ------ ---- ----- ------ Balance at December 31, 2008.............. $-- $2 $1,945 $968 $(274) $2,641 === == ====== ==== ===== ======
See accompanying notes to the financial statements. F-4 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
2008 2007 2006 ------- ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES Net income.................................................. $ 347 $ 265 $ 60 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization expenses................. 13 9 4 Amortization of premiums and accretion of discounts associated with investments, net..................... (10) (1) 6 (Gains) losses from sales of investments, net.......... (783) (239) 107 Gain from recapture of ceded reinsurance............... -- (22) -- Undistributed equity earnings of real estate joint ventures and other limited partnership interests..... 23 4 -- Interest credited to policyholder account balances..... 249 247 235 Universal life and investment-type product policy fees................................................. (634) (568) (417) Change in accrued investment income.................... -- 1 (2) Change in premiums and other receivables............... (2,050) (331) (287) Change in deferred policy acquisition costs, net....... (208) (268) (324) Change in insurance-related liabilities................ 805 243 169 Change in income tax recoverable....................... 161 191 11 Change in other assets................................. 250 288 193 Change in other liabilities............................ 1,140 248 (7) Other, net............................................. 1 -- -- ------- ------- ------- Net cash (used in) provided by operating activities......... (696) 67 (252) ------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Sales, maturities and repayments of: Fixed maturity securities.............................. 1,899 1,463 2,213 Equity securities...................................... 3 7 -- Real estate joint ventures............................. 1 -- -- Mortgage loans on real estate.......................... 72 105 111 Other limited partnership interests.................... 20 7 -- Purchases of: Fixed maturity securities.............................. (2,313) (1,756) (1,936) Mortgage loans on real estate.......................... (49) (33) (141) Real estate joint ventures............................. (16) (13) -- Other limited partnership interests.................... (118) (178) (29) Net change in short-term investments...................... (1,198) (128) (71) Net change in other invested assets....................... (72) (21) (73) Other, net............................................. (2) -- -- ------- ------- ------- Net cash (used in) provided by investing activities......... (1,773) (547) 74 ------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Policyholder account balances: Deposits............................................... 3,683 7,737 6,119 Withdrawals............................................ (1,290) (7,481) (6,017) Long-term debt repaid -- affiliated....................... (435) -- -- Net change in payables for collateral under securities loaned and other transactions.......................... (40) 27 (86) Capital contribution from MetLife Insurance Company of Connecticut............................................ 985 250 150 ------- ------- ------- Net cash provided by financing activities................... 2,903 533 166 ------- ------- ------- Change in cash and cash equivalents......................... 434 53 (12) Cash and cash equivalents, beginning of year................ 91 38 50 ------- ------- ------- CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 525 $ 91 $ 38 ======= ======= ======= Supplemental disclosures of cash flow information: Net cash paid (received) during the year for: Interest............................................... $ 20 $ 31 $ 31 ======= ======= ======= Income tax............................................. $ (12) $ (87) $ (9) ======= ======= ======= Non-cash transactions during the year: Contribution of intangible assets from MetLife, Inc., net of income tax (see Notes 5 and 10)............... $ -- $ -- $ 162 ======= ======= =======
-------- See Note 6 for non-cash reinsurance transactions. See accompanying notes to the financial statements. F-5 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS 1. BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS MetLife Investors USA Insurance Company (the "Company"), a Delaware domiciled life insurance company is a wholly-owned subsidiary of MetLife Insurance Company of Connecticut ("MICC"). MICC is a subsidiary of MetLife, Inc. ("MetLife"). On October 11, 2006, the Company was transferred from MetLife Investors Group, Inc. ("MLIG") to MICC. Prior to October 11, 2006, the Company was a wholly-owned subsidiary of MLIG. The Company markets, administers and insures a broad range of term life and universal and variable life insurance policies and variable and fixed annuity contracts. BASIS OF PRESENTATION The Company has invested in certain structured transactions that are variable interest entities ("VIEs") under Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46(r), Consolidation of Variable Interest Entities -- An Interpretation of Accounting Research Bulletin No. 51 ("FIN 46(r)"). These structured transactions include trust preferred securities and other limited partnership interests. The Company is required to consolidate those VIEs for which it is deemed to be the primary beneficiary. The Company reconsiders whether it is the primary beneficiary for investments designated as VIEs on an annual basis. The Company uses the equity method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint venture's or partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint venture's or the partnership's operations. Certain amounts in the prior year periods' financial statements have been reclassified to conform with the 2008 presentation. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the financial statements. The most critical estimates include those used in determining: (i) the estimated fair value of investments in the absence of quoted market values; (ii) investment impairments; (iii) the recognition of income on certain investment entities; (iv) the application of the consolidation rules to certain investments; (v) the existence and estimated fair value of embedded derivatives requiring bifurcation; (vi) the estimated fair value of and accounting for derivatives; (vii) the capitalization and amortization of deferred policy acquisition costs ("DAC"); (viii) the liability for future policyholder benefits; (ix) accounting for income taxes and the valuation of deferred tax assets; F-6 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) (x) accounting for reinsurance transactions; and (xi) the liability for litigation and regulatory matters. A description of such critical estimates is incorporated within the discussion of the related accounting policies which follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's businesses and operations. Actual results could differ from these estimates. Fair Value As described below, certain assets and liabilities are measured at estimated fair value on the Company's balance sheets. In addition, the footnotes to the financial statements include disclosures of estimated fair values. Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In many cases, the exit price and the transaction (or entry) price will be the same at initial recognition. However, in certain cases, the transaction price may not represent fair value. Under SFAS 157, fair value of a liability is based on the amount that would be paid to transfer a liability to a third party with the same credit standing. SFAS 157 requires that fair value be a market-based measurement in which the fair value is determined based on a hypothetical transaction at the measurement date, considered from the perspective of a market participant. When quoted prices are not used to determine fair value, SFAS 157 requires consideration of three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The approaches are not new, but SFAS 157 requires that entities determine the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs. SFAS 157 prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Company has categorized its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. SFAS 157 defines the input levels as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities other than quoted prices in Level 1; quoted prices in markets that are not active; or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of estimated fair value requires significant management judgment or estimation. F-7 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The measurement and disclosures under SFAS 157 in the accompanying financial statements and footnotes exclude certain items such as nonfinancial assets and nonfinancial liabilities recorded at fair value on a nonrecurring basis. The effective date for these items was deferred to January 1, 2009. Prior to adoption of SFAS 157, estimated fair value was determined based solely upon the perspective of the reporting entity. Therefore, methodologies used to determine the estimated fair value of certain financial instruments prior to January 1, 2008, while being deemed appropriate under existing accounting guidance, may not have produced an exit value as defined in SFAS 157. Investments The Company's principal investments are in fixed maturity securities, mortgage loans on real estate and short-term investments. The accounting policies related to each of the Company's investments are as follows: Fixed Maturity and Equity Securities. The Company's fixed maturity and equity securities are classified as available-for-sale and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss), net of policyholder related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales of securities are determined on a specific identification basis. Interest income on fixed maturity securities is recorded when earned using an effective yield method giving effect to amortization of premiums and accretion of discounts. Dividends on equity securities are recorded when declared. These dividends and interest income are recorded in net investment income. Included within fixed maturity securities are loan-backed securities including mortgage-backed and asset-backed securities. Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and asset-backed securities are estimated by management using inputs obtained from third party specialists, including broker-dealers, and based on management's knowledge of the current market. For credit-sensitive mortgage-backed and asset-backed securities and certain prepayment- sensitive securities, the effective yield is recalculated on a prospective basis. For all other mortgage-backed and asset-backed securities, the effective yield is recalculated on a retrospective basis. The cost or amortized cost of fixed maturity and equity securities is adjusted for impairments in value deemed to be other-than-temporary in the period in which the determination is made. These impairments are included within net investment gains (losses) and the cost basis of the fixed maturity and equity securities is reduced accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value. The Company's review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%; (ii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for less than six months; and (iii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for six months or greater. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company's evaluation of recoverability of all contractual cash flows, as well as the Company's ability and intent to hold the security, including holding the security until the earlier of a recovery in value, or until maturity. In contrast, for certain F-8 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) equity securities, greater weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will recover. See also Note 2. Additionally, management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the market value has been below cost or amortized cost; (ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; (vi) the Company's ability and intent to hold the security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost or amortized cost (See also Note 2); (vii) unfavorable changes in forecasted cash flows on mortgage-backed and asset-backed securities; and (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies. In periods subsequent to the recognition of an other-than-temporary impairment on a debt security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted into net investment income over the remaining term of the debt security in a prospective manner based on the amount and timing of estimated future cash flows. Securities Lending. Securities loaned transactions, whereby blocks of securities, which are included in fixed maturity securities and short term investments, are loaned to third parties, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. The Company monitors the estimated fair value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company's securities loaned transactions are with large brokerage firms and commercial banks. Income and expenses associated with securities loaned transactions are reported as investment income and investment expense, respectively, within net investment income. Mortgage Loans on Real Estate. Mortgage loans on real estate held- for-investment are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts, and prepayment fees are reported in net investment income. Loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Based on the facts and circumstances of the individual loans being impaired, valuation allowances are established for the excess carrying value of the loan over either: (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's estimated fair value. The Company also establishes allowances for loan losses when a loss contingency exists for pools of loans with similar characteristics, such as mortgage loans based on similar property types or loan to value risk factors. A loss contingency exists when the likelihood that a future event will occur is probable based on past events. Interest income earned on impaired loans is accrued on the principal amount of the loan based on the loan's contractual interest rate. However, interest ceases to be accrued for loans on which interest is generally more than 60 days past due and/or when the collection of interest is not considered F-9 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) probable. Cash receipts on such impaired loans are recorded as a reduction of the recorded investment. Gains and losses from the sale of loans and changes in valuation allowances are reported in net investment gains (losses). Policy Loans. Policy loans are stated at unpaid principal balances. Interest income on such loans is recorded as earned using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy's anniversary date. Real Estate Joint Ventures and Other Limited Partnership Interests. The Company uses the equity method of accounting for investments in real estate joint ventures and other limited partnership interests consisting of leveraged buy-out funds, hedge funds and other private equity funds in which it has more than a minor equity interest or more than a minor influence over the joint ventures or partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint ventures or the partnership's operations. The Company reports the distributions from real estate joint ventures and other limited partnership interests accounted for under the cost method and equity in earnings from real estate joint ventures and other limited partnership interests accounted for under the equity method in net investment income. In addition to the investees performing regular evaluations for the impairment of underlying investments, the Company routinely evaluates its investments in real estate joint ventures and other limited partnerships for impairments. The Company considers its cost method investments for other-than-temporary impairment when the carrying value of real estate joint ventures and other limited partnership interests exceeds the net asset value. The Company takes into consideration the severity and duration of this excess when deciding if the cost method investment is other-than-temporarily impaired. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. When an other-than- temporary impairment is deemed to have occurred, the Company records a realized capital loss within net investment gains (losses) to record the investment at its estimated fair value. Short-term Investments. Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition and are stated at amortized cost, which approximates estimated fair value, or stated at estimated fair value, if available. Short-term investments also include investments in affiliated money market pools. Other Invested Assets. Other invested assets consist principally of freestanding derivatives with positive estimated fair values, which are more fully described in the derivatives accounting policy which follows. Estimates and Uncertainties. The Company's investments are exposed to four primary sources of risk: credit, interest rate, liquidity risk, and market valuation. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments, and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the financial statements. When available, the estimated fair value of the Company's fixed maturity and equity securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The assumptions and inputs in F-10 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated duration and management's assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management's judgments about financial instruments. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and observable yields and spreads in the market. When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. The determination of the amount of allowances and impairments, as applicable, is described previously by investment type. The determination of such allowances and impairments is highly subjective and is based upon the Company's periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. Management updates its evaluations regularly and reflects changes in allowances and impairments in operations as such evaluations are revised. The recognition of income on certain investments (e.g., loan-backed securities including mortgage-backed and asset-backed securities) is dependent upon market conditions, which could result in prepayments and changes in amounts to be earned. The accounting rules under FIN 46(r) for the determination of when an entity is a VIE and when to consolidate a VIE are complex. The determination of the VIE's primary beneficiary requires an evaluation of the contractual rights and obligations associated with each party involved in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. FIN 46(r) defines the primary beneficiary as the entity that will absorb a majority of a VIE's expected losses, receive a majority of a VIE's expected residual returns if no single entity absorbs a majority of expected losses, or both. When determining the primary beneficiary for structured investment products such as asset-backed securitizations, the Company uses historical default probabilities based on the credit rating of each issuer and other inputs including maturity dates, industry classifications and geographic location. Using computational algorithms, the analysis simulates default scenarios resulting in a range of expected losses and the probability associated with each occurrence. For other investment structures such as joint ventures and other limited partnerships, the Company gains an understanding of the design of the VIE and generally uses a qualitative approach to determine if it is the primary beneficiary. This approach includes an analysis of all contractual rights and obligations held by all parties including profit and loss allocations, repayment or residual value F-11 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) guarantees, put and call options and other derivative instruments. If the primary beneficiary of a VIE can not be identified using this qualitative approach, the Company calculates the expected losses and expected residual returns of the VIE using a probability-weighted cash flow model. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect on the amounts presented within the financial statements. Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts to manage the risk associated with variability in cash flows or changes in estimated fair values related to the Company's financial instruments. To a lesser extent, the Company uses credit derivatives, such as credit default swaps, to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance contracts that have embedded derivatives. Freestanding derivatives are carried on the Company's balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value as determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models. The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such instruments. Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity as well as the use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter derivatives after taking into account the effects of netting agreements and collateral arrangements. Credit risk is monitored and consideration of any potential credit adjustment is based on a net exposure by counterparty. This is due to the existence of netting agreements and collateral arrangements which effectively serve to mitigate credit risk. The Company values its derivative positions using the standard swap curve which includes a credit risk adjustment. This credit risk adjustment is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The need for such additional credit risk adjustments is monitored by the Company. F-12 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported in net investment gains (losses). The fluctuations in estimated fair value of derivatives which have not been designated for hedge accounting can result in significant volatility in net income. To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either: (i) a hedge of the estimated fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value hedge"); or (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"). In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The accounting for derivatives is complex and interpretations of the primary accounting standards continue to evolve in practice. Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under these accounting standards. If it was determined that hedge accounting designations were not appropriately applied, reported net income could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the appropriate accounting treatment may result in a differing impact on the financial statements of the Company from that previously reported. Under a fair value hedge, changes in the estimated fair value of the hedging derivative, including amounts measured as ineffectiveness, and changes in the estimated fair value of the hedged item related to the designated risk being hedged, are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the statement of income within interest income or interest expense to match the location of the hedged item. However, balances that are not scheduled to settle until maturity are included in the estimated fair value of derivatives. Under a cash flow hedge, changes in the estimated fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of stockholder's equity, and the deferred gains or losses on the derivative are reclassified into the statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the statement of income within interest income or interest expense to match the location of the hedged item. However, balances that are not scheduled to settle until maturity are included in the estimated fair value of derivatives. 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 F-13 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) transaction will occur; (iv) a hedged firm commitment no longer meets the definition of a firm commitment; or (v) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur by the end of the specified time period or the hedged item no longer meets the definition of a firm commitment, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). Any asset or liability associated with a recognized firm commitment is derecognized from the balance sheet, and recorded currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income (loss) pursuant to the cash flow hedge of a forecasted transaction are recognized immediately in net investment gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net investment gains (losses). The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. If the instrument would not be accounted for in its entirety at estimated fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are reported currently in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses). Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) if that contract contains an embedded derivative that requires bifurcation. There is a risk that embedded derivatives requiring bifurcation may not be identified and reported at estimated fair value in the financial statements and that their related changes in estimated fair value could materially affect reported net income. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Computer Software 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 F-14 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 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 $49 million at both December 31, 2008 and 2007. Accumulated amortization of capitalized software was $15 million and $6 million at December 31, 2008 and 2007, respectively. Related amortization expense was $9 million, $6 million and $3 million for the years ended December 31, 2008, 2007 and 2006, respectively. Deferred Policy Acquisition Costs The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that vary with and relate to the production of new business are deferred as DAC. Such costs consist principally of commissions and agency and policy issuance expenses. The recovery of DAC is dependent upon the future profitability of the related business. DAC on life insurance or investment-type contracts are amortized in proportion to gross premiums or gross profits, depending on the type of contract as described below. The Company amortizes DAC related to non-participating and non-dividend- paying traditional contracts (primarily term insurance) over the entire premium paying period in proportion to the present value of actual historic and expected future gross premiums. The present value of expected premiums is based upon the premium requirement of each policy and assumptions for mortality, persistency, and investment returns at policy issuance that include provisions for adverse deviation and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised after policy issuance unless the DAC balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance is caused only by variability in premium volumes. The Company amortizes DAC related to fixed and variable universal life contracts and fixed and variable deferred annuity contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception 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 amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC 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 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 amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Total DAC amortization during a particular period may increase or decrease depending upon the relative size of the amortization change resulting from the adjustment to DAC for the update of actual gross profits and the re-estimation of expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC balances. Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period which can result in significant fluctuations in amortization of DAC. 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 F-15 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these changes and only changes the assumption when its long-term expectation changes. The Company also reviews periodically other long-term assumptions underlying the projections of estimated gross profits. These include investment returns, interest crediting rates, mortality, persistency, and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross profits which may have significantly changed. If the update of assumptions causes expected future gross profits to increase, DAC amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross profits to decrease. Prior to 2007, DAC related to any internally replaced contract was generally expensed at the date of replacement. As described more fully in "Adoption of New Accounting Pronouncements," effective January 1, 2007, the Company adopted Statement of Position ("SOP") 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts ("SOP 05-1"). Under SOP 05-1, an internal replacement is defined as a modification in product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If the modification substantially changes the contract, the DAC is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Sales Inducements The Company has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in interest credited to policyholder account balances. Each year the Company reviews the deferred sales inducements to determine the recoverability of these balances. Value of Distribution Agreements Value of distribution agreements ("VODA") is reported in other assets and represents the present value of future profits associated with the expected future business derived from the distribution agreements. Each year the Company reviews VODA to determine the recoverability of these balances. Liability for Future Policy Benefits and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and traditional annuities. 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, policy lapse, renewal, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. Utilizing these assumptions, liabilities are established on a block of business basis. F-16 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Future policy benefit liabilities for non-participating traditional life insurance policies are equal to the aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for future policy benefit liabilities on non- participating traditional life insurance range from 5% to 7%. Future policy benefit liabilities for traditional fixed annuities after annuitization are equal to the present value of expected future payments. Interest rate assumptions used in establishing such liabilities range from 4% to 9%. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. The Company establishes future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts and secondary guarantees relating to certain life policies as follows: - Guaranteed minimum death benefit ("GMDB") liabilities are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the GMDB liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility are consistent with the historical experience of the Standard & Poor's ("S&P") 500 Index. The benefit assumptions used in calculating the liabilities are based on the average benefits payable over a range of scenarios. - Guaranteed minimum income benefit ("GMIB") liabilities are determined by estimating the expected value of the income benefits in excess of the projected account balance at any future date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for estimating the GMIB liabilities are consistent with those used for estimating the GMDB liabilities. In addition, the calculation of guaranteed annuitization benefit liabilities incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. Certain GMIBs have settlement features that result in a portion of that guarantee being accounted for as an embedded derivative and are recorded in policyholder account balances as described below. Liabilities for universal and variable life secondary guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balances, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the secondary guarantee liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility for variable products are consistent with historical S&P experience. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company establishes policyholder account balances for guaranteed minimum benefit riders relating to certain variable annuity products as follows: - Guaranteed minimum withdrawal benefit riders ("GMWB") guarantee the contractholder a return of their purchase payment via partial withdrawals, even if the account value is reduced to zero, provided that the F-17 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) contractholder's cumulative withdrawals in a contract year do not exceed a certain limit. The initial guaranteed withdrawal amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMWB is an embedded derivative, which is measured at estimated fair value separately from the host variable annuity product. - Guaranteed minimum accumulation benefit riders ("GMAB") provide the contractholder, after a specified period of time determined at the time of issuance of the variable annuity contract, with a minimum accumulation of their purchase payments even if the account value is reduced to zero. The initial guaranteed accumulation amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMAB is an embedded derivative, which is measured at estimated fair value separately from the host variable annuity product. For GMWB, GMAB and certain GMIB, the initial benefit base is increased by additional purchase payments made within a certain time period and decreases by benefits paid and/or withdrawal amounts. After a specified period of time, the benefit base may also increase as a result of an optional reset as defined in the contract. At the inception, the GMWB, GMAB and certain GMIB are accounted for as embedded derivatives with changes in estimated fair value reported in net investment gains (losses). The Company attributes to the embedded derivative a portion of the expected future rider fees to be collected from the policyholder equal to the present value of expected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable risk free rates. Beginning in 2008, the valuation of these embedded derivatives now includes an adjustment for the Company's own credit and risk margins for non capital market inputs. The Company's own credit adjustment is determined taking into consideration publicly available information relating to the Company's claims paying ability. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in the Company's own credit standing; and variations in actuarial assumptions regarding policyholder behavior, and risk margins related to non- capital market inputs may result in significant fluctuations in the estimated fair value of the riders that could materially affect net income. The Company cedes the risks associated with certain of the GMIB, GMAB and GMWB riders described in the preceding paragraphs to an affiliated reinsurance company. These reinsurance contracts contain embedded derivatives which are included in premiums and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on the ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. In addition to ceding risks associated with riders that are accounted for as embedded derivatives, the Company also cedes to the same affiliated reinsurance company certain directly written GMIB riders that are accounted for as insurance (i.e. not as embedded derivatives) but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included in premiums and other receivables with changes in estimated fair value F-18 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) reported in net investment gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. The Company periodically reviews its estimates of actuarial liabilities for future policy benefits and compares them with its actual experience. Differences between actual experience and the assumptions used in pricing these policies, guarantees and riders and in the establishment of the related liabilities result in variances in profit and could result in losses. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. Policyholder account balances relate to investment-type contracts, universal life-type policies and certain guaranteed minimum benefit riders. Investment-type contracts principally include traditional individual fixed annuities in the accumulation phase and non-variable group annuity contracts. Policyholder account balances for these contracts are equal to (i) policy account values, which consist of an accumulation of gross premium payments; plus (ii) credited interest, ranging from 2% to 12%, less expenses, mortality charges, and withdrawals. Other Policyholder Funds Other policyholder funds include policy and contract claims, and unearned revenue liabilities. The liability for policy and contract claims generally relates to incurred but not reported death claims as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from actuarial analyses of historical patterns of claims and claims development for each line of business. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits, similar to DAC. Such amortization is recorded in universal life and investment-type product policy fees. Recognition of Insurance Revenue and Related Benefits Premiums related to traditional life and annuity policies with life contingencies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided against such revenues to recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of amounts assessed against policyholder account balances for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged to operations include interest credited and benefit claims incurred in excess of related policyholder account balances. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. The portion of fees allocated to embedded derivatives described previously is recognized within net investment gains (losses) as part of the estimated fair value of the embedded derivative. F-19 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Other Revenues Other revenues include fees on reinsurance financing agreements and advisory fees. Such fees are recognized in the period in which services are performed. Income Taxes Effective October 11, 2006, the Company joined MICC's includable subsidiaries in filing a federal income tax return. Prior to the transfer of the Company to MICC, the Company joined MetLife's includable subsidiaries in filing a federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Pursuant to Internal Revenue Service ("IRS") rules, MICC and its subsidiaries, including the Company, are excluded from MetLife's life/non-life consolidated federal tax return for the five years subsequent to MetLife's July 2005 acquisition of MICC. In 2011, MICC and its subsidiaries, including the Company, are expected to join the consolidated return and become a party to the MetLife tax sharing agreement. Accordingly, the Company's losses will be eligible to be included in the consolidated return and the resulting tax savings to MetLife will generate a payment to the Company for the losses used. The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established as well as the amount of such allowances. When making such determination, consideration is given to, among other things, the following: (i) future taxable income exclusive of reversing temporary differences and carryforwards; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. The Company may be required to change its provision for income taxes in certain circumstances. Examples of such circumstances include when the ultimate deductibility of certain items is challenged by taxing authorities (See also Note 8) or when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations, could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts reported in the financial statements in the year these changes occur. As described more fully in "Adoption of New Accounting Pronouncements," the Company adopted FIN No. 48, Accounting for Uncertainty in Income Taxes -- An Interpretation of FASB Statement No. 109 ("FIN 48") effective January 1, 2007. Under FIN 48, the Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent F-20 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its life insurance products and also as a provider of reinsurance for some insurance products issued by third parties. For each of its reinsurance agreements, the Company determines if the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. 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. The assumptions used to account for long-duration reinsurance agreements are consistent with those used for the underlying contracts. Ceded policyholder and contract related liabilities, other than those currently due, are reported gross on the balance sheet. Amounts currently recoverable under reinsurance agreements are included in premiums and other receivables and amounts currently payable are included in other liabilities. Such assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within other assets. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed previously. F-21 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Foreign Currency The Company participated in reinsurance transactions with a foreign company. Balance sheet accounts are translated at the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing during the year. Translation adjustments are charged or credited directly to other comprehensive income (loss). Gains and losses from foreign currency transactions are reported as net investment gains (losses) in the period in which they occur. Translation adjustments and gains and losses from foreign currency transactions were less than $1 million for each of the years ended December 31, 2008, 2007 and 2006. Litigation Contingencies The Company is a party to legal actions and is involved in regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. On an 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 financial statements. It is possible that an adverse outcome in certain of the Company's litigation and regulatory investigations or the use of different assumptions in the determination of amounts recorded, could have a material effect upon the Company's net income or cash flows in particular annual periods. Separate Accounts Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Assets within the Company's separate accounts are comprised of actively traded mutual funds. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: (i) such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; (iii) investments are directed by the contractholder; and (iv) all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets meeting such criteria at their fair value which is based on the estimated fair values of the underlying assets comprising the portfolios of an individual separate account. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the statements of income. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Fair Value Effective January 1, 2008, the Company adopted SFAS 157 which defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements and applied the provisions of the statement prospectively to assets and liabilities measured at fair value. The adoption of SFAS 157 changed the valuation of certain freestanding derivatives by moving from a mid to bid pricing convention as it relates to certain volatility inputs as well as the addition of liquidity adjustments and adjustments for risks inherent in a particular input or valuation technique. The adoption of SFAS 157 also changed the valuation of the Company's embedded F-22 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) derivatives, most significantly the valuation of embedded derivatives associated with certain riders on variable annuity contracts. The change in valuation of embedded derivatives associated with riders on annuity contracts resulted from the incorporation of risk margins associated with non-capital market inputs and the inclusion of the Company's own credit standing in their valuation. At January 1, 2008, the impact of adopting SFAS 157 on assets and liabilities measured at estimated fair value was $63 million ($41 million, net of income tax) and was recognized as a change in estimate in the accompanying statement of income where it was presented in the respective income statement caption to which the item measured at estimated fair value is presented. There were no significant changes in estimated fair value of items measured at fair value and reflected in accumulated other comprehensive income (loss). The addition of risk margins and the Company's own credit spread in the valuation of embedded derivatives associated with annuity contracts may result in significant volatility in the Company's net income in future periods. Note 12 presents the estimated fair value of all assets and liabilities required to be measured at estimated fair value as well as the expanded fair value disclosures required by SFAS 157. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to recognize related unrealized gains and losses in earnings. The fair value option is applied on an instrument-by-instrument basis upon adoption of the standard, upon the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election is an irrevocable election. Effective January 1, 2008, the Company did not elect the fair value option for any instruments. Effective January 1, 2008, the Company adopted FASB Staff Position ("FSP") No. FAS 157-2, Effective Date of FASB Statement No. 157 which delays the effective date of SFAS 157 for certain nonfinancial assets and liabilities that are recorded at fair value on a nonrecurring basis. The effective date is delayed until January 1, 2009. Effective September 30, 2008, the Company adopted FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active ("FSP 157-3"). FSP 157-3 provides guidance on how a company's internal cash flow and discount rate assumptions should be considered in the measurement of fair value when relevant market data does not exist, how observable market information in an inactive market affects fair value measurement and how the use of market quotes should be considered when assessing the relevance of observable and unobservable data available to measure fair value. The adoption of FSP 157-3 did not have a material impact on the Company's financial statements. Investments Effective December 31, 2008, the Company adopted FSP No. FAS 140-4 and FIN 46(r)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities ("FSP 140-4 and FIN 46(r)-8"). FSP 140-4 and FIN 46(r)-8 requires additional qualitative and quantitative disclosures about a transferors' continuing involvement in transferred financial assets and involvement in a VIE. The exact nature of the additional required VIE disclosures vary and depend on whether or not the VIE is a qualifying special-purpose entity ("QSPE"). For VIEs that are QSPEs, the additional disclosures are only required for a non-transferor sponsor holding a variable interest or a non-transferor servicer holding a significant variable interest. For VIEs that are not QSPEs, the additional disclosures are only required if the Company is the primary beneficiary, and if not the primary beneficiary, only if the Company holds a significant variable interest or is the sponsor. The Company provided all of the material required disclosures in its financial statements. Effective December 31, 2008, the Company adopted FSP No. EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 ("FSP EITF 99-20- 1"). FSP EITF 99-20-1 amends the guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to more closely align the guidance to determine whether an other-than-temporary impairment has occurred for a beneficial interest in a F-23 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) securitized financial asset with the guidance in SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, for debt securities classified as available-for-sale or held-to-maturity. The adoption of FSP EITF 99-20-1 did not have an impact on the Company's financial statements. Derivative Financial Instruments Effective December 31, 2008, the Company adopted FSP No. FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees -- An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1 and FIN 45-4"). FSP 133-1 and FIN 45-4 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133") to require certain enhanced disclosures by sellers of credit derivatives by requiring additional information about the potential adverse effects of changes in their credit risk, financial performance, and cash flows. It also amends FIN No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others -- An Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34 ("FIN 45"), to require an additional disclosure about the current status of the payment/performance risk of a guarantee. The Company provided all of the material required disclosures in its financial statements. Effective January 1, 2008, the Company adopted SFAS 133 Implementation Issue No. E-23, Clarification of the Application of the Shortcut Method ("Issue E-23"). Issue E-23 amended SFAS 133 by permitting interest rate swaps to have a non-zero fair value at inception when applying the shortcut method of assessing hedge effectiveness, as long as the difference between the transaction price (zero) and the fair value (exit price), as defined by SFAS 157, is solely attributable to a bid-ask spread. In addition, entities are not precluded from applying the shortcut method of assessing hedge effectiveness in a hedging relationship of interest rate risk involving an interest bearing asset or liability in situations where the hedged item is not recognized for accounting purposes until settlement date as long as the period between trade date and settlement date of the hedged item is consistent with generally established conventions in the marketplace. The adoption of Issue E-23 did not have an impact on the Company's financial statements. Effective January 1, 2006, the Company adopted prospectively SFAS No. 155, Accounting for Certain Hybrid Instruments ("SFAS 155"). SFAS 155 amends SFAS 133 and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS 140"). SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole, eliminating the need to bifurcate the derivative from its host, if the holder elects to account for the whole instrument on a fair value basis. In addition, among other changes, SFAS 155: (i) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (ii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (iii) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (iv) amends SFAS 140 to eliminate the prohibition on a QSPE from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial interest. The adoption of SFAS 155 did not have a material impact on the Company's financial statements. Effective October 1, 2006, the Company adopted SFAS 133 Implementation Issue No. B40, Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets ("Issue B40"). F-24 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Issue B40 clarifies that a securitized interest in prepayable financial assets is not subject to the conditions in paragraph 13(b) of SFAS 133, if it meets both of the following criteria: (i) the right to accelerate the settlement if the securitized interest cannot be controlled by the investor; and (ii) the securitized interest itself does not contain an embedded derivative (including an interest rate-related derivative) for which bifurcation would be required other than an embedded derivative that results solely from the embedded call options in the underlying financial assets. The adoption of Issue B40 did not have a material impact on the Company's financial statements. Effective January 1, 2006, the Company adopted prospectively SFAS 133 Implementation Issue No. B38, Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option ("Issue B38") and SFAS 133 Implementation Issue No. B39, Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor ("Issue B39"). Issue B38 clarifies that the potential settlement of a debtor's obligation to a creditor occurring upon exercise of a put or call option meets the net settlement criteria of SFAS 133. Issue B39 clarifies that an embedded call option, in which the underlying is an interest rate or interest rate index, that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower) and the investor will recover substantially all of its initial net investment. The adoption of Issues B38 and B39 did not have a material impact on the Company's financial statements. Income Taxes Effective January 1, 2007, the Company adopted FIN 48. FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. The adoption of FIN 48 did not have an impact on the Company's financial statements. Insurance Contracts Effective January 1, 2007, the Company adopted SOP 05-1 which provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long- Duration Contracts and for Realized Gains and Losses from the Sale of Investments. SOP 05-1 defines an internal replacement and is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. In addition, in February 2007, the American Institute of Certified Public Accountants ("AICPA") issued related Technical Practice Aids ("TPAs") to provide further clarification of SOP 05-1. The TPAs became effective concurrently with the adoption of SOP 05-1. As a result of the adoption of SOP 05-1 and the related TPAs, if an internal replacement modification substantially changes a contract, then the DAC is written off immediately through income and any new deferrable costs associated with the new replacement are deferred. If a contract modification does not substantially change the contract, the DAC amortization on the original contract will continue and any acquisition costs associated with the related modification are immediately expensed. The adoption of SOP 05-1 did not have a material impact on the Company's financial statements. F-25 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Other Pronouncements Effective January 1, 2008, the Company adopted FSP No. FIN 39-1, Amendment of FASB Interpretation No. 39 ("FSP 39-1"). FSP 39-1 amends FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts ("FIN 39"), to permit a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement that have been offset in accordance with FIN 39. FSP 39-1 also amends FIN 39 for certain terminology modifications. Upon adoption of FSP 39-1, the Company did not change its accounting policy of not offsetting fair value amounts recognized for derivative instruments under master netting arrangements. The adoption of FSP 39-1 did not have an impact on the Company's financial statements. Effective January 1, 2008, the Company adopted Emerging Issues Task Force ("EITF") Issue No. 07-6, Accounting for the Sale of Real Estate When the Agreement Includes a Buy-Sell Clause ("EITF 07-6") prospectively. EITF 07-6 addresses whether the existence of a buy-sell arrangement would preclude partial sales treatment when real estate is sold to a jointly owned entity. EITF 07-6 concludes that the existence of a buy-sell clause does not necessarily preclude partial sale treatment under current guidance. The adoption of EITF 07-6 did not have a material impact on the Company's financial statements. Effective January 1, 2007, the Company adopted SFAS No. 156, Accounting for Servicing of Financial Assets -- an amendment of FASB Statement No. 140 ("SFAS 156"). Among other requirements, SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations. The adoption of SFAS 156 did not have an impact on the Company's financial statements. Effective November 15, 2006, the Company adopted U.S. Securities and Exchange Commission Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108"). SAB 108 provides guidance on how prior year misstatements should be considered when quantifying misstatements in current year financial statements for purposes of assessing materiality. SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when relevant quantitative and qualitative factors are considered, is material. SAB 108 permits companies to initially apply its provisions by either restating prior financial statements or recording a cumulative effect adjustment to the carrying values of assets and liabilities at January 1, 2006 with an offsetting adjustment to retained earnings for errors that were previously deemed immaterial but are material under the guidance in SAB 108. The adoption of SAB 108 did not have a material impact on the Company's financial statements. Effective January 1, 2006, the Company adopted SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"). SFAS 154 requires retrospective application to prior periods' financial statements for a voluntary change in accounting principle unless it is deemed impracticable. It also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non- financial assets be accounted for as a change in accounting estimate rather than a change in accounting principle. The adoption of SFAS 154 did not have a material impact on the Company's financial statements. F-26 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Business Combinations In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations -- A Replacement of FASB Statement No. 141 ("SFAS 141(r)") and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements -- An Amendment of ARB No. 51 ("SFAS 160"). In April 2009, the FASB also issued FSP 141(r)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies ("FSP 141(r)-1"). Under these pronouncements: - All business combinations (whether full, partial or "step" acquisitions) result in all assets and liabilities of an acquired business being recorded at fair value, with limited exceptions. - Acquisition costs are generally expensed as incurred; restructuring costs associated with a business combination are generally expensed as incurred subsequent to the acquisition date. - The fair value of the purchase price, including the issuance of equity securities, is determined on the acquisition date. - Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if the acquisition- date fair value can be reasonably determined. If the fair value is not estimable, an asset or liability is recorded if existence or incurrence at the acquisition date is probable and its amount is reasonably estimable. - Certain acquired contingent liabilities are recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies. - Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. - Noncontrolling interests (formerly known as "minority interests") are valued at fair value at the acquisition date and are presented as equity rather than liabilities. - When control is attained on previously noncontrolling interests, the previously held equity interests are remeasured at fair value and a gain or loss is recognized. - Purchases or sales of equity interests that do not result in a change in control are accounted for as equity transactions. - When control is lost in a partial disposition, realized gains or losses are recorded on equity ownership sold and the remaining ownership interest is remeasured and holding gains or losses are recognized. The pronouncements are effective for fiscal years beginning on or after December 15, 2008 and apply prospectively to business combinations after that date. Presentation and disclosure requirements related to noncontrolling interests must be retrospectively applied. The Company will apply the guidance in SFAS 141(r) and FSP 141(r)-1 prospectively on its accounting for future acquisitions and does not expect the adoption of SFAS 160 to have a material impact on the Company's financial statements. In November 2008, the FASB ratified the consensus on EITF Issue No. 08-6, Equity Method Investment Accounting Considerations ("EITF 08-6"). EITF 08-6 addresses a number of issues associated with the impact that SFAS 141(r) and SFAS 160 might have on the accounting for equity method investments, including how an equity method investment should initially be measured, how it should be tested for impairment, and how changes in classification from equity method to cost method should be treated. EITF 08-6 is effective prospectively for fiscal F-27 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) years beginning on or after December 15, 2008. The Company does not expect the adoption of EITF 08-6 to have a material impact on the Company's financial statements. In November 2008, the FASB ratified the consensus on EITF Issue No. 08-7, Accounting for Defensive Intangible Assets ("EITF 08-7"). EITF 08-7 requires that an acquired defensive intangible asset (i.e., an asset an entity does not intend to actively use, but rather, intends to prevent others from using) be accounted for as a separate unit of accounting at time of acquisition, not combined with the acquirer's existing intangible assets. In addition, the EITF concludes that a defensive intangible asset may not be considered immediately abandoned following its acquisition or have indefinite life. The Company will apply the guidance of EITF 08-7 prospectively to its intangible assets acquired after fiscal years beginning on or after December 15, 2008. In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). This change is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(r) and other GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The requirement for determining useful lives and related disclosures will be applied prospectively to intangible assets acquired as of, and subsequent to, the effective date. Derivative Financial Instruments In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities -- An Amendment of FASB Statement No. 133 ("SFAS 161"). SFAS 161 requires enhanced qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company will provide all of the material required disclosures in the appropriate future annual periods. Other Pronouncements In September 2008, the FASB ratified the consensus on EITF Issue No. 08-5, Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement ("EITF 08-5"). EITF 08-5 concludes that an issuer of a liability with a third-party credit enhancement should not include the effect of the credit enhancement in the fair value measurement of the liability. In addition, EITF 08-5 requires disclosures about the existence of any third-party credit enhancement related to liabilities that are measured at fair value. EITF 08-5 is effective in the first reporting period beginning after December 15, 2008 and will be applied prospectively, with the effect of initial application included in the change in fair value of the liability in the period of adoption. The Company does not expect the adoption of EITF 08-5 to have a material impact on the Company's financial statements. In February 2008, the FASB issued FSP No. FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions ("FSP 140- 3"). FSP 140-3 provides guidance for evaluating whether to account for a transfer of a financial asset and repurchase financing as a single transaction or as two separate transactions. FSP 140-3 is effective prospectively for financial statements issued for fiscal years beginning after November 15, 2008. The Company does not expect the adoption of FSP 140-3 to have a material impact on its financial statements. F-28 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. INVESTMENTS FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company's fixed maturity and equity securities and the percentage that each sector represents by the respective total holdings at:
DECEMBER 31, 2008 ------------------------------------------------ GROSS COST OR UNREALIZED AMORTIZED ------------ ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ---- ---- ---------- ----- (IN MILLIONS) U.S. corporate securities.............. $1,708 $ 25 $202 $1,531 35.4% Residential mortgage-backed securities........................... 979 19 92 906 20.9 U.S. Treasury/agency securities........ 458 131 -- 589 13.6 Foreign corporate securities........... 468 6 54 420 9.7 Commercial mortgage-backed securities.. 521 -- 116 405 9.4 Asset-backed securities................ 404 -- 85 319 7.4 Foreign government securities.......... 68 16 2 82 1.9 State and political subdivision securities........................... 91 -- 18 73 1.7 ------ ---- ---- ------ ----- Total fixed maturity securities(1),(2)................. $4,697 $197 $569 $4,325 100.0% ====== ==== ==== ====== ===== Non-redeemable preferred stock(1)...... $ 11 $ -- $ 4 $ 7 100.0% ------ ---- ---- ------ ----- Total equity securities.............. $ 11 $ -- $ 4 $ 7 100.0% ====== ==== ==== ====== =====
DECEMBER 31, 2007 -------------------------------------------- GROSS COST OR UNREALIZED AMORTIZED ----------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ---- ---- ---------- ----- (IN MILLIONS) U.S. corporate securities................ $1,736 $25 $49 $1,712 39.6% Residential mortgage-backed securities... 953 10 7 956 22.1 U.S. Treasury/agency securities.......... 413 17 -- 430 9.9 Foreign corporate securities............. 509 16 7 518 12.0 Commercial mortgage-backed securities.... 406 4 6 404 9.3 Asset-backed securities.................. 213 1 9 205 4.7 Foreign government securities............ 71 11 -- 82 1.9 State and political subdivision securities............................. 21 -- -- 21 0.5 ------ --- --- ------ ----- Total fixed maturity securities(1),(2)................... $4,322 $84 $78 $4,328 100.0% ====== === === ====== ===== Non-redeemable preferred stock(1)........ $ 11 $-- $ 1 $ 10 100.0% ------ --- --- ------ ----- Total equity securities................ $ 11 $-- $ 1 $ 10 100.0% ====== === === ====== =====
-------- (1) The Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has a punitive interest rate step-up feature as it believes in most instances this feature will compel the issuer to redeem the security at the specified call date. Perpetual securities that do not have a punitive interest rate step-up feature are classified as non-redeemable preferred stock. Many of such securities F-29 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as "perpetual hybrid securities." Perpetual hybrid securities classified as non-redeemable preferred stock held by the Company at December 31, 2008 and 2007 had an estimated fair value of $7 million and $10 million, respectively. Perpetual hybrid securities held by the Company and included within fixed maturity securities (primarily within foreign corporate securities) at December 31, 2008 and 2007 had an estimated fair value of $25 million and $45 million, respectively. (2) At December 31, 2008 and 2007 the Company also held $35 million and $53 million at estimated fair value, respectively, of redeemable preferred stock which have stated maturity dates which are included within fixed maturity securities. These securities are primarily issued by U.S. financial institutions, have cumulative interest deferral features and are commonly referred to as "capital securities" within U.S. corporate securities. The Company held foreign currency derivatives with notional amounts of $40 million and $26 million to hedge the exchange rate risk associated with foreign denominated fixed maturity securities at December 31, 2008 and 2007, respectively. Below Investment Grade or Non Rated Fixed Maturity Securities. The Company held fixed maturity securities at estimated fair values that were below investment grade or not rated by an independent rating agency that totaled $167 million and $184 million at December 31, 2008 and 2007, respectively. These securities had net unrealized gains (losses) of ($45) million and $4 million at December 31, 2008 and 2007, respectively. Fixed Maturity Securities Credit Enhanced by Financial Guarantee Insurers. At December 31, 2008, $87 million of the estimated fair value of the Company's fixed maturity securities were credit enhanced by financial guarantee insurers of which $42 million, $32 million and $13 million, are included within U.S. corporate securities, state and political subdivision securities and asset- backed securities, respectively, and 10% and 76% were guaranteed by financial guarantee insurers who were Aa and Baa rated, respectively. Approximately 10% the asset-backed securities that are credit enhanced by financial guarantee insurers are asset-backed securities which are backed by sub-prime mortgage loans. Concentrations of Credit Risk (Fixed Maturity Securities). The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings. The Company is not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company's stockholder's equity, other than securities of the U.S. government and certain U.S. government agencies. At December 31, 2008 and 2007, the Company's holdings in U.S. Treasury and agency fixed maturity securities at estimated fair value were $589 million and $430 million, respectively. As shown in the sector table above, at December 31, 2008, the Company's three largest exposures in its fixed maturity security portfolio were U.S. corporate fixed maturity securities (35.4%), residential mortgage- backed securities (20.9%), and U.S. Treasury and agency securities (13.6%); and at December 31, 2007 were U.S. corporate fixed maturity securities (39.6%), residential mortgage-backed securities (22.1%), and foreign corporate securities (12.0%). F-30 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Concentrations of Credit Risk (Fixed Maturity Securities) -- U.S. and Foreign Corporate Securities. At December 31, 2008 and 2007, the Company's holdings in U.S. corporate and foreign corporate fixed maturity securities at estimated fair value were $2.0 billion and $2.2 billion, respectively. The Company maintains a diversified portfolio of corporate securities across industries and issuers. The portfolio does not have exposure to any single issuer in excess of 1% of total invested assets. The exposure to the largest single issuer of corporate fixed maturity securities held at December 31, 2008 and 2007 was $36 million and $43 million, respectively. At December 31, 2008 and 2007, the Company's combined holdings in the ten issuers to which it had the greatest exposure totaled $301 million and $316 million, respectively, the total of these ten issuers being less than 6% of the Company's total invested assets at such dates. The table below shows the major industry types that comprise the corporate fixed maturity holdings at:
DECEMBER 31, --------------------------------------- 2008 2007 ------------------ ------------------ ESTIMATED % OF ESTIMATED % OF FAIR VALUE TOTAL FAIR VALUE TOTAL ---------- ----- ---------- ----- (IN MILLIONS) Foreign(1).................................. $ 420 21.5% $ 518 23.2% Utility..................................... 388 19.9 368 16.5 Consumer.................................... 304 15.6 327 14.7 Finance..................................... 301 15.4 483 21.6 Industrial.................................. 268 13.7 372 16.7 Communications.............................. 154 7.9 147 6.6 Other....................................... 116 6.0 15 0.7 ------ ----- ------ ----- Total..................................... $1,951 100.0% $2,230 100.0% ====== ===== ====== =====
-------- (1) Includes U.S. dollar-denominated debt obligations of foreign obligors and other fixed maturity foreign investments. Concentrations of Credit Risk (Fixed Maturity Securities) -- Residential Mortgage-Backed Securities. The Company's residential mortgage-backed securities consist of the following holdings at:
DECEMBER 31, --------------------------------------- 2008 2007 ------------------ ------------------ ESTIMATED % OF ESTIMATED % OF FAIR VALUE TOTAL FAIR VALUE TOTAL ---------- ----- ---------- ----- (IN MILLIONS) Residential mortgage-backed securities: Collateralized mortgage obligations......... $709 78.3% $674 70.5% Pass-through securities..................... 197 21.7 282 29.5 ---- ----- ---- ----- Total residential mortgage-backed securities............................. $906 100.0% $956 100.0% ==== ===== ==== =====
Collateralized mortgage obligations are a type of mortgage-backed security that creates separate pools or tranches of pass-through cash flows for different classes of bondholders with varying maturities. Pass-through mortgage-backed securities are a type of asset-backed security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for a fee, remits or passes these payments through to the holders of the pass-through securities. At December 31, 2008, the exposures in the Company's residential mortgage- backed securities portfolio consist of agency, prime, and alternative residential mortgage loans ("Alt-A") securities of 72%, 18% and 10% of F-31 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) the total holdings, respectively. At December 31, 2008 and 2007, $828 million and $956 million, respectively, of estimated fair value or 91% and 100% respectively, of the residential mortgage-backed securities were rated Aaa/AAA by Moody's Investors Service ("Moody's"), S&P or Fitch Ratings ("Fitch"). The majority of the residential mortgage-backed securities are guaranteed or otherwise supported by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Government National Mortgage Association. Prime residential mortgage lending includes the origination of residential mortgage loans to the most credit worthy customers with high quality credit profiles. Alt-A residential mortgage loans are a classification of mortgage loans where the risk profile of the borrower falls between prime and sub-prime. At December 31, 2008 and 2007, the Company's Alt-A residential mortgage-backed securities exposure at estimated fair market value was $89 million and $100 million, respectively, with an unrealized loss of $38 million and $3 million, respectively. At December 31, 2008 and 2007, $72 million and $100 million, respectively, or 81% and 100%, respectively, of the Company's Alt-A residential mortgage-backed securities were rated Aa/AA or better by Moody's, S&P or Fitch. In December 2008, certain Alt-A residential mortgage-backed securities experienced ratings downgrades from investment grade to below investment grade, contributing to the decrease year over year cited above in those securities rated Aa/AA or better. At December 31, 2008, the Company's Alt-A holdings are distributed as follows: 13% 2007 vintage year; 34% 2006 vintage year; and 53% in the 2005 and prior vintage years. In January 2009, Moody's revised its loss projections for Alt-A residential mortgage-backed securities, and the Company anticipates that Moody's will be downgrading virtually all 2006 and 2007 vintage year Alt-A securities to below investment grade, which will increase the percentage of the Company's Alt-A residential mortgage-backed securities portfolio that will be rated below investment grade. Vintage year refers to the year of origination and not to the year of purchase. Concentrations of Credit Risk (Fixed Maturity Securities) -- Commercial Mortgage-Backed Securities. At December 31, 2008 and 2007, the Company's holdings in commercial mortgage-backed securities was $405 million and $404 million, respectively, at estimated fair value. At December 31, 2008 and 2007, $391 million and $357 million, respectively, of the estimated fair value, or 97% and 88%, respectively, of the commercial mortgage-backed securities were rated Aaa/AAA by Moody's, S&P or Fitch. At December 31, 2008, the rating distribution of the Company's commercial mortgage-backed securities holdings was as follows: 97% Aaa, 2% A and 1% Baa. At December 31, 2008, 91% of the holdings are in the 2005 and prior vintage years. At December 31, 2008, the Company had no exposure to CMBX securities and its holdings of commercial real estate collateralized debt obligations securities was less than $1 million at estimated fair value. Concentrations of Credit Risk (Fixed Maturity Securities) -- Asset-Backed Securities. At December 31, 2008 and 2007, the Company's holdings in asset- backed securities was $319 million and $205 million, respectively, at estimated fair value. The Company's asset-backed securities are diversified both by sector and by issuer. At December 31, 2008 and 2007, $281 million and $116 million, respectively, or 88% and 57%, respectively, of total asset-backed securities were rated Aaa/AAA by Moody's, S&P or Fitch. At December 31, 2008, the largest exposures in the Company's asset-backed securities portfolio were credit card receivables, automobile receivables, student loan receivables and residential mortgage-backed securities backed by sub-prime mortgage loans of 51%, 13%, 11% and 7% of the total holdings, respectively. Sub-prime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles. At December 31, 2008 and 2007, the Company had exposure to fixed maturity securities backed by sub-prime mortgage loans with estimated fair values of $23 million and $32 million, respectively, and unrealized losses of $11 million and $4 million, respectively. At December 31, 2008, 6% of the asset- backed securities backed by sub-prime mortgage loans have been guaranteed by financial guarantee insurers, all of which were guaranteed by financial guarantee insurers who were Baa rated. Concentrations of Credit Risk (Equity Securities). The Company is not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company's stockholder's equity in its equity securities holdings. F-32 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), are as follows:
DECEMBER 31, ----------------------------------------------- 2008 2007 ---------------------- ---------------------- AMORTIZED ESTIMATED AMORTIZED ESTIMATED COST FAIR VALUE COST FAIR VALUE --------- ---------- --------- ---------- (IN MILLIONS) Due in one year or less................. $ 201 $ 195 $ 152 $ 153 Due after one year through five years... 462 431 795 805 Due after five years through ten years.. 724 664 658 660 Due after ten years..................... 1,406 1,405 1,145 1,145 ------ ------ ------ ------ Subtotal.............................. 2,793 2,695 2,750 2,763 Mortgage-backed and asset-backed securities............................ 1,904 1,630 1,572 1,565 ------ ------ ------ ------ Total fixed maturity securities....... $4,697 $4,325 $4,322 $4,328 ====== ====== ====== ======
Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity. Actual maturities may differ from contractual maturities due to the exercise of prepayment options. NET UNREALIZED INVESTMENT GAINS (LOSSES) The components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss), are as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ---- ---- (IN MILLIONS) Fixed maturity securities............................ $(372) $ 6 $ 21 Equity securities.................................... (4) (1) -- Derivatives.......................................... 1 (3) (2) Short-term investments............................... (100) -- -- ----- ---- ---- Subtotal........................................... (475) 2 19 ----- ---- ---- Amounts allocated from: DAC.................................................. 53 (15) (21) Deferred income tax.................................. 148 5 1 ----- ---- ---- Subtotal........................................... 201 (10) (20) ----- ---- ---- Net unrealized investment gains (losses)............. $(274) $ (8) $ (1) ===== ==== ====
F-33 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The changes in net unrealized investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ---- ---- (IN MILLIONS) Balance, beginning of period......................... $ (8) $ (1) $(44) Unrealized investment gains (losses) during the year............................................... (477) (17) (20) Unrealized investment gains (losses) relating to: Insurance liability gain (loss) recognition.......... -- -- 78 DAC.................................................. 68 6 8 Deferred income tax.................................. 143 4 (23) ----- ---- ---- Balance, end of period............................... $(274) $ (8) $ (1) ===== ==== ==== Change in net unrealized investment gains (losses)... $(266) $ (7) $ 43 ===== ==== ====
UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the estimated fair value and gross unrealized loss of the Company's fixed maturity (aggregated by sector) and equity securities in an unrealized loss position, aggregated by length of time that the securities have been in a continuous unrealized loss position at:
DECEMBER 31, 2008 --------------------------------------------------------------------------- EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ----------------------- ----------------------- ----------------------- GROSS GROSS GROSS ESTIMATED UNREALIZED ESTIMATED UNREALIZED ESTIMATED UNREALIZED FAIR VALUE LOSS FAIR VALUE LOSS FAIR VALUE LOSS ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities....... $ 637 $ 70 $544 $132 $1,181 $202 Residential mortgage-backed securities.................... 235 68 60 24 295 92 U.S. Treasury/agency securities.................... -- -- -- -- -- -- Foreign corporate securities.... 211 31 62 23 273 54 Commercial mortgage-backed securities.................... 307 56 98 60 405 116 Asset-backed securities......... 250 45 64 40 314 85 Foreign government securities... 32 2 -- -- 32 2 State and political subdivision securities.................... 55 16 2 2 57 18 ------ ---- ---- ---- ------ ---- Total fixed maturity securities................. $1,727 $288 $830 $281 $2,557 $569 ====== ==== ==== ==== ====== ==== Equity securities............... $ 4 $ 3 $ 2 $ 1 $ 6 $ 4 ====== ==== ==== ==== ====== ==== Total number of securities in an unrealized loss position...... 393 263 ====== ====
F-34 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2007 --------------------------------------------------------------------------- EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ----------------------- ----------------------- ----------------------- GROSS GROSS GROSS ESTIMATED UNREALIZED ESTIMATED UNREALIZED ESTIMATED UNREALIZED FAIR VALUE LOSS FAIR VALUE LOSS FAIR VALUE LOSS ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities....... $ 693 $28 $322 $21 $1,015 $49 Residential mortgage-backed securities.................... 240 6 54 1 294 7 U.S. Treasury/agency securities.................... 7 -- 5 -- 12 -- Foreign corporate securities.... 149 3 93 4 242 7 Commercial mortgage-backed securities.................... 36 1 149 5 185 6 Asset-backed securities......... 107 5 50 4 157 9 Foreign government securities... -- -- -- -- -- -- State and political subdivision securities.................... 10 -- -- -- 10 -- ------ --- ---- --- ------ --- Total fixed maturity securities................. $1,242 $43 $673 $35 $1,915 $78 ====== === ==== === ====== === Equity securities............... $ 8 $-- $ 2 $ 1 $ 10 $ 1 ====== === ==== === ====== === Total number of securities in an unrealized loss position...... 273 157 ====== ====
AGING OF GROSS UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized loss and number of securities for fixed maturity and equity securities, where the estimated fair value had declined and remained below cost or amortized cost by less than 20% or 20% or more at:
DECEMBER 31, 2008 ------------------------------------------------------------ COST OR AMORTIZED GROSS UNREALIZED NUMBER OF COST LOSS SECURITIES ------------------ ------------------ ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------ --------- ------ --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) FIXED MATURITY SECURITIES: Less than six months.................. $ 782 $821 $ 63 $284 172 4 Six months or greater but less than nine months........................ 338 35 29 23 81 12 Nine months or greater but less than twelve months...................... 469 79 64 42 56 16 Twelve months or greater.............. 597 5 60 4 130 -- ------ ---- ---- ---- Total.............................. $2,186 $940 $216 $353 ====== ==== ==== ==== EQUITY SECURITIES: Less than six months.................. $ -- $ 10 $ -- $ 4 -- 193 Six months or greater but less than nine months........................ -- -- -- -- -- -- Nine months or greater but less than twelve months...................... -- -- -- -- -- -- Twelve months or greater.............. -- -- -- -- -- -- ------ ---- ---- ---- Total.............................. $ -- $ 10 $ -- $ 4 ====== ==== ==== ====
F-35 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2007 ------------------------------------------------------------ COST OR AMORTIZED GROSS UNREALIZED NUMBER OF COST LOSS SECURITIES ------------------ ------------------ ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------ --------- ------ --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) FIXED MATURITY SECURITIES: Less than six months.................. $ 712 $34 $ 9 $ 8 148 10 Six months or greater but less than nine months........................ 360 -- 17 -- 81 -- Nine months or greater but less than twelve months...................... 178 -- 9 -- 38 -- Twelve months or greater.............. 709 -- 35 -- 156 -- ------ --- --- --- Total.............................. $1,959 $34 $70 $ 8 ====== === === === EQUITY SECURITIES: Less than six months.................. $ 8 $-- $-- $-- 2 -- Six months or greater but less than nine months........................ -- -- -- -- -- -- Nine months or greater but less than twelve months...................... -- -- -- -- -- -- Twelve months or greater.............. 3 -- 1 -- 1 -- ------ --- --- --- Total.............................. $ 11 $-- $ 1 $-- ====== === === ===
As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its investment holdings in accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. One of the criteria which the Company considers in its other-than-temporary impairment analysis is its intent and ability to hold securities for a period of time sufficient to allow for the recovery of their value to an amount equal to or greater than cost or amortized cost. The Company's intent and ability to hold securities considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security and that security is not expected to recover prior to the expected time of sale, the security will be deemed other-than- temporarily impaired in the period that the sale decision was made and an other- than-temporary impairment loss will be recognized. At December 31, 2008 and 2007, $216 million and $70 million, respectively, of unrealized losses related to fixed maturity securities with an unrealized loss position of less than 20% of cost or amortized cost, which represented 10% and 4%, respectively, of the cost or amortized cost of such securities. At December 31, 2008, there were no unrealized losses related to equity securities with an unrealized loss position of less than 20% of cost. At December 31, 2007, $1 million of unrealized losses related to equity securities with an unrealized loss position of less than 20% of cost, which represented 9% of the cost of such securities. At December 31, 2008, $353 million and $4 million of unrealized losses related to fixed maturity securities and equity securities, respectively, with an unrealized loss position of 20% or more of cost or amortized cost, which represented 38% and 40% of the cost or amortized cost of such fixed maturity securities and equity securities, respectively. Of such unrealized losses of $353 million and $4 million, $284 million and $4 million related to fixed maturity securities and equity securities, respectively, that were in an unrealized loss position for a period of less F-36 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) than six months. At December 31, 2007, $8 million of unrealized losses related to fixed maturity securities, with an unrealized loss position of 20% or more of cost or amortized cost, which represented 24% of the cost or amortized cost of such fixed maturity securities, all of which were in an unrealized loss position for a period of less than six months. At December 31, 2007 there were no equity securities with an unrealized loss of 20% or more. The Company held one fixed maturity security, with a gross unrealized loss of greater than $10 million at December 31, 2008. The fixed maturity security represented 2%, or $12 million in the aggregate, of the gross unrealized loss on fixed maturity securities. There were no equity securities with an unrealized loss of over $10 million at December 31, 2008. The Company held no fixed maturity or equity securities with a gross unrealized loss of greater than $10 million at December 31, 2007. The one fixed maturity security with a gross unrealized loss greater than $10 million was included in the regular evaluation of whether such security is other-than-temporarily impaired. Based upon the Company's current evaluation of that security in accordance with its impairment policy, the cause of the decline being primarily attributable to a rise in market yields caused principally by an extensive widening of credit spreads which resulted from a lack of market liquidity and a short-term market dislocation versus a long-term deterioration in credit quality, and the Company's current intent and ability to hold the fixed maturity security with an unrealized loss for a period of time sufficient for it to recover, the Company has concluded that the one security is not other-than-temporarily impaired. At December 31, 2008, $4 million of unrealized losses related to equity securities with an unrealized loss of 20% or more for less than six months. Of such losses, $1 million related to financial services investment grade non- redeemable preferred securities that are rated A or higher and $3 million were on consumer industry holdings. There were no equity securities with an unrealized loss of 20% or more for six months or greater. In connection with the equity securities impairment review process during 2008, the Company evaluated its holdings in non-redeemable preferred securities, particularly those of financial services industry companies. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred securities with a severe or an extended unrealized loss. Also, the Company believes the unrealized loss position is not necessarily predictive of the ultimate performance of these securities, and with respect to fixed maturity securities, it has the ability and intent to hold until the earlier of the recovery in value, or until maturity, and with respect to equity securities, it has the ability and intent to hold until the recovery in value. Future other-than-temporary impairments will depend primarily on economic fundamentals, issuer performance, changes in collateral valuation, changes in interest rates, and changes in credit spreads. If economic fundamentals and other of the above factors continue to deteriorate, additional other-than- temporary impairments may be incurred in upcoming periods. F-37 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2008 and 2007, the Company's gross unrealized losses related to its fixed maturity and equity securities of $573 billion and $79 million, respectively, were concentrated, calculated as a percentage of gross unrealized loss, as follows:
DECEMBER 31, ------------- 2008 2007 ----- ----- SECTOR: U.S. corporate securities.................................. 35% 62% Commercial mortgage-backed securities...................... 20 8 Residential mortgage-backed securities..................... 16 9 Asset-backed securities.................................... 15 11 Foreign corporate securities............................... 9 9 Other...................................................... 5 1 --- --- Total................................................... 100% 100% === === INDUSTRY: Mortgage-backed............................................ 36% 17% Finance.................................................... 19 38 Asset-backed............................................... 15 11 Utility.................................................... 10 9 Consumer................................................... 7 1 Industrial................................................. 4 22 Other...................................................... 9 2 --- --- Total................................................... 100% 100% === ===
NET INVESTMENT GAINS (LOSSES) The components of net investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, ------------------- 2008 2007 2006 ---- ---- ----- (IN MILLIONS) Fixed maturity securities............................. $(30) $(13) $ (25) Mortgage loans on real estate......................... (5) (1) 1 Freestanding derivatives.............................. 79 4 (13) Embedded derivatives.................................. 740 249 (70) Other................................................. (1) -- -- ---- ---- ----- Net investment gains (losses)......................... $783 $239 $(107) ==== ==== =====
See Note 6 for discussion of affiliated net investment gains (losses) included in embedded derivatives in the table above. F-38 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) Proceeds............................................. $1,202 $958 $1,759 ====== ==== ====== Gross investment gains............................... 15 24 7 ------ ---- ------ Gross investment losses.............................. (28) (37) (32) ------ ---- ------ Writedowns Credit-related..................................... (15) -- -- Other than credit-related(1)....................... (2) -- -- ------ ---- ------ Total writedowns................................... (17) -- -- ------ ---- ------ Net investment gains (losses)........................ $ (30) $(13) $ (25) ====== ==== ======
-------- (1) Other-than credit-related writedowns include fixed maturity securities where an interest-rate related writedown was taken. There were no proceeds from the sale or disposal of equity securities for the years ended December 31, 2008 and 2007. There was $1 million in proceeds from the sale or disposal of equity securities for the year ended December 31, 2006. The Company periodically disposes of fixed maturity and equity securities at a loss. Generally, such losses are insignificant in amount or in relation to the cost basis of the investment, are attributable to declines in fair value occurring in the period of the disposition or are as a result of management's decision to sell securities based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives. Losses from fixed maturity securities deemed other-than-temporarily impaired, included within net investment gains (losses), were $17 million for the year ended December 31, 2008. Overall, of the $17 million of fixed maturity securities writedowns in 2008; $14 million were on financial services industry securities holdings; $1 million on communication industry holdings; and $2 million in fixed maturity security holdings that the Company either lacked the intent to hold, or due to extensive credit spread widening, the Company was uncertain of its intent to hold these fixed maturity securities for a period of time sufficient to allow for recovery of the market value decline. There were no writedowns recorded during 2007 and 2006 for other-than-temporarily impaired fixed maturity securities. There were no writedowns on equity securities during 2008, 2007 and 2006. F-39 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) NET INVESTMENT INCOME The components of net investment income are as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ----- ----- (IN MILLIONS) Fixed maturity securities............................ $268 $251 $244 Equity securities.................................... 1 1 -- Mortgage loans on real estate........................ 23 29 32 Policy loans......................................... 2 3 2 Other limited partnership interests.................. (23) (3) 1 Cash, cash equivalents and short-term investments.... 9 14 13 ---- ---- ---- Total investment income.............................. 280 295 292 Less: Investment expenses............................ 27 51 50 ---- ---- ---- Net investment income................................ $253 $244 $242 ==== ==== ====
Net investment income from other limited partnership interests, including hedge funds, represents distributions from other limited partnership interests accounted for under the cost method and equity in earnings from other limited partnership interests accounted for under the equity method. Overall for 2008, the net amount recognized by the Company was a loss of $23 million resulting principally from losses on equity method investments. Such earnings and losses recognized for other limited partnership interests are impacted by volatility in the equity and credit markets. Affiliated investment expenses, included in the table above, were $2 million for each of the years ended December 31, 2008, 2007 and 2006. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income related to short-term investments included in the table above. SECURITIES LENDING The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, primarily major brokerage firms and commercial banks. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. Securities with a cost or amortized cost of $636 million and $881 million and an estimated fair value of $750 million and $893 million were on loan under the program at December 31, 2008 and 2007, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $772 million and $917 million at December 31, 2008 and 2007, respectively. Of this $772 million of cash collateral at December 31, 2008, $199 million was on open terms, meaning that the related loaned security could be returned to the Company on the next business day requiring return of cash collateral, and $437 million and $136 million, respectively, were due within 30 days and 60 days. Of the $190 million of estimated fair value of the securities related to the cash collateral on open at December 31, 2008, $89 million were U.S. Treasury and agency securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan are primarily U.S. Treasury and agency securities, and very liquid residential mortgage -- backed securities. The estimated fair value of the reinvestment portfolio acquired with the cash collateral was $687 million at December 31, 2008, and consisted principally of fixed maturity securities (including residential mortgage-backed, asset-backed, U.S. corporate and foreign corporate securities). F-40 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Security collateral of $15 million on deposit from counterparties in connection with the securities lending transactions at December 31, 2008, may not be sold or repledged and is not reflected in the financial statements. There was no security collateral on deposit at December 31, 2007. ASSETS ON DEPOSIT AND ASSETS PLEDGED AS COLLATERAL The Company had investment assets on deposit with regulatory agencies with an estimated fair value of $7 million and $6 million at December 31, 2008 and 2007, respectively, consisting primarily of fixed maturity securities. Certain of the Company's fixed maturity securities are pledged as collateral for various derivative transactions as described in Note 3. MORTGAGE LOANS ON REAL ESTATE Mortgage loans on real estate are categorized as follows:
DECEMBER 31, ----------------------------------- 2008 2007 ---------------- ---------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- (IN MILLIONS) Commercial mortgage loans..................... $240 63% $286 70% Agricultural mortgage loans................... 140 37 121 30 ---- --- ---- --- Total....................................... 380 100% 407 100% ==== === ==== === Less: Valuation allowances.................... 4 2 ---- ---- Total mortgage loans on real estate......... $376 $405 ==== ====
Mortgage loans on real estate are collateralized by properties primarily located in the United States. At December 31, 2008, 29%, 11% and 7% of the value of the Company's mortgage loans on real estate were located in California, Rhode Island and Georgia, respectively. Generally, the Company, as the lender, only loans up to 75% of the purchase price of the underlying real estate. Information regarding loan valuation allowances for mortgage loans on real estate is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Balance at January 1,................................. $ 2 $ 1 $ 2 Additions............................................. 5 2 -- Deductions............................................ (3) (1) (1) --- --- --- Balance at December 31,............................... $ 4 $ 2 $ 1 === === ===
The Company had no impaired mortgage loans at December 31, 2008. The Company had $18 million of impaired mortgage loans, net of $1 million of valuation allowances, at December 31, 2007. The average investment on impaired mortgage loans was $9 million and $4 million for the years ended December 31, 2008 and 2007, respectively. There was no interest income on impaired mortgage loans for the year ended December 31, 2008. Interest income on impaired mortgage loans was $1 million for the year ended December 31, 2007. There were no investments in impaired mortgage loans for the year ended December 31, 2006. There was no investment in restructured loans at December 31, 2008 and 2007. F-41 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) There were no mortgage loans with scheduled payments of 90 days or more past due on which interest is still accruing at both December 31, 2008 and 2007. There were no mortgage loans on which interest no longer accrued at both December 31, 2008 and 2007. There were no mortgage loans in foreclosure at both December 31, 2008 and 2007. REAL ESTATE JOINT VENTURES Real estate joint ventures held-for-investment were categorized as follows:
DECEMBER 31, ----------------------------------- 2008 2007 ---------------- ---------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- (IN MILLIONS) Office........................................ $21 72.4% $ 8 61.5% Real estate investment funds.................. 6 20.7 2 15.4 Retail........................................ 2 6.9 3 23.1 --- ---- --- ---- Total real estate joint ventures............ $29 100% $13 100% === ==== === ====
The Company's real estate joint ventures are located in the United States. At December 31, 2008, 76% and 3% of the Company's real estate joint ventures were located in California and Florida, respectively. OTHER LIMITED PARTNERSHIP INTERESTS The carrying value of other limited partnership interests (which primarily represent ownership interests in pooled investment funds that principally make private equity investments in companies in the United States and overseas) was $271 million and $200 million at December 31, 2008 and 2007, respectively. Included within other limited partnership interests at December 31, 2008 and 2007 were $71 million and $86 million, respectively, of hedge funds. For the years ended December 31, 2008, 2007, and 2006, net investment income (loss) from other limited partnership interests was ($23) million, ($3) million and $1 million and included ($21) million, ($4) million and $1 million, respectively, related to hedge funds. Net investment income (loss) from other limited partnership interests, including hedge funds, decreased by $20 million for the year ended 2008, due to volatility in the equity and credit markets. OTHER INVESTED ASSETS The following table presents the carrying value of the Company's other invested assets at:
DECEMBER 31, ----------------------------------- 2008 2007 ---------------- ---------------- CARRYING % OF CARRYING % OF VALUE TOTAL VALUE TOTAL -------- ----- -------- ----- (IN MILLIONS) Freestanding derivatives with positive fair values...................................... $125 96.9% $26 100.0% Tax credit partnerships....................... 4 3.1 -- -- ---- ----- --- ----- Total....................................... $129 100.0% $26 100.0% ==== ===== === =====
See Note 3 regarding the freestanding derivatives with positive estimated fair values. Tax credit partnerships are established for the purpose of investing in low-income housing and other social causes, where the primary return on investment is in the form of tax credits, and are accounted for under the equity method. F-42 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) VARIABLE INTEREST ENTITIES The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds significant variable interests but is not the primary beneficiary and which have not been consolidated at December 31, 2008:
DECEMBER 31, 2008 ----------------------- MAXIMUM CARRYING EXPOSURE TO AMOUNT(1) LOSS(2) --------- ----------- (IN MILLIONS) Fixed maturity securities, available-for-sale: (3) Foreign corporate securities........................ $ 22 $ 22 Other limited partnership interests (4)............... 168 288 ---- ---- Total............................................... $190 $310 ==== ====
-------- (1) See Note 1 for further discussion of the Company's significant accounting policies with regards to the carrying amounts of these investments. (2) The maximum exposure to loss relating to the fixed maturity securities available-for-sale is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (3) These assets are reflected at estimated fair value within fixed maturity securities available-for-sale. (4) Other limited partnership interests include partnerships established for the purpose of investing in public and private debt and equity securities. As discussed in Note 9, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended December 31, 2008, 2007 and 2006. RELATED PARTY INVESTMENT TRANSACTIONS At December 31, 2008 and 2007, the Company held $1,562 million and $480 million, respectively, of its total invested assets in the Metropolitan Money Market Pool and the MetLife Intermediate Income Pool which are affiliated partnerships. These amounts are included in short-term investments. Net investment income from these invested assets was $8 million, $12 million and $9 million for the years ended December 31, 2008, 2007 and 2006, respectively. In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. The Company did not transfer any invested assets to or from affiliates during the year ended December 31, 2008. Assets transferred to and from affiliates, inclusive of amounts related to reinsurance agreements, for 2007 and 2006 are as follows:
YEARS ENDED DECEMBER 31, -------------- 2007 2006 ---- ---- (IN MILLIONS) Estimated fair value of assets transferred to affiliates..... $265 $65 Amortized cost of assets transferred to affiliates........... $265 $66 Net investment gains (losses) recognized on transfers........ $ -- $(1) Estimated fair value of assets transferred from affiliates... $255 $43
F-43 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. DERIVATIVE FINANCIAL INSTRUMENTS TYPES OF DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the notional amount and current market or estimated fair value of derivative financial instruments, excluding embedded derivatives, held at:
DECEMBER 31, 2008 DECEMBER 31, 2007 ------------------------------- ------------------------------- CURRENT MARKET CURRENT MARKET OR FAIR VALUE OR FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Interest rate swaps............. $ -- $ -- $-- $ 10 $-- $-- Interest rate floors............ 2,000 114 -- 2,000 26 -- Interest rate caps.............. -- -- -- 1,000 -- -- Financial futures............... 100 2 -- 150 -- 2 Foreign currency swaps.......... 40 9 2 26 -- 5 Financial forwards.............. -- -- -- 20 -- -- Credit default swaps............ 62 -- 1 48 -- -- ------ ---- --- ------ --- --- Total......................... $2,202 $125 $ 3 $3,254 $26 $ 7 ====== ==== === ====== === ===
The following table presents the notional amount of derivative financial instruments by maturity at December 31, 2008:
REMAINING LIFE ---------------------------------------------------------------------- ONE YEAR AFTER ONE YEAR AFTER FIVE YEARS AFTER OR LESS THROUGH FIVE YEARS THROUGH TEN YEARS TEN YEARS TOTAL -------- ------------------ ----------------- --------- ------ (IN MILLIONS) Interest rate swaps...... $ -- $-- $ -- $-- $ -- Interest rate floors..... -- -- 2,000 -- 2,000 Interest rate caps....... -- -- -- -- -- Financial futures........ 100 -- -- -- 100 Foreign currency swaps... -- 13 3 24 40 Financial forwards....... -- -- -- -- -- Credit default swaps..... -- 40 22 -- 62 ---- --- ------ --- ------ Total.................. $100 $53 $2,025 $24 $2,202 ==== === ====== === ======
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate caps and floors are used by the Company primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate F-44 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury curve performance. The value of interest rate futures is substantially impacted by changes in interest rates and they can be used to modify or hedge existing interest rate risk. Foreign currency swaps are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets 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 principal amount. The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. Equity variance swaps are included in financial forwards in the preceding table. Swap spread locks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spread locks are forward transactions between two parties whose underlying reference index is a forward starting interest rate swap where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. Swap spread locks are included in financial forwards in the preceding table. Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified intervals, to pay a premium to insure credit risk. If a credit event, as defined by the contract, occurs, generally the contract will require the swap to be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury or agency security. F-45 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) HEDGING The following table presents the notional amount and the estimated fair value of derivatives by type of hedge designation at:
DECEMBER 31, 2008 DECEMBER 31, 2007 ------------------------------- ------------------------------- FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Fair value...................... $ -- $ -- $-- $ 4 $-- $-- Cash flow....................... 4 1 -- 4 -- -- Non-qualifying.................. 2,198 124 3 3,246 26 7 ------ ---- --- ------ --- --- Total......................... $2,202 $125 $ 3 $3,254 $26 $ 7 ====== ==== === ====== === ===
The Company recognized insignificant net investment income from qualifying hedge settlement payments for the years ended December 31, 2008, 2007 and 2006. The Company recognized insignificant net investment gains (losses) from non-qualifying hedge settlement payments for the year ended December 31, 2008. The Company recognized $1 million of net investment losses from non-qualifying hedge settlement payments for both the years ended December 31, 2007 and 2006. FAIR VALUE HEDGES The Company designates and accounts for the following as fair value hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert fixed rate investments to floating rate investments; and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments and liabilities. The Company recognized insignificant amounts in net investment gains (losses) representing the ineffective portion of all fair value hedges for the years ended December 31, 2008, 2007 and 2006. Changes in the fair value of the derivatives and the hedged items were insignificant for the years ended December 31, 2008, 2007 and 2006. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. There were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge. CASH FLOW HEDGES The Company utilizes foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments. The Company designates and accounts for these foreign currency swaps as cash flow hedges when they have met the requirements of SFAS 133. For the years ended December 31, 2008, 2007 and 2006, the Company did not recognize any net investment gains (losses) which represented the ineffective portion of all cash flow hedges. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. For the years ended December 31, 2008, 2007 and 2006, there were no instances in which the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or in the additional time period permitted by SFAS 133. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments for the years ended December 31, 2008, 2007 and 2006. F-46 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the components of other comprehensive income (loss), before income tax, related to cash flow hedges:
YEARS ENDED DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Other comprehensive income (loss) balance at January 1,.. $(3) $(2) $(3) Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges.... 1 (1) 2 Amounts reclassified to net investment gains (losses).... -- -- (1) --- --- --- Other comprehensive income (loss) balance at December 31,.................................................... $(2) $(3) $(2) === === ===
At December 31, 2008, an insignificant portion of the deferred net loss on derivatives accumulated in other comprehensive income (loss) is expected to be reclassified to earnings during the year ending December 31, 2009. NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING The Company enters into the following derivatives that do not qualify for hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest rate swaps, purchased caps and floors, and interest rate futures to economically hedge its exposure to interest rates; (ii) foreign currency swaps to economically hedge its exposure to adverse movements in exchange rates; (iii) credit default swaps to economically hedge its exposure to adverse movements in credit; (iv) credit default swaps to synthetically create investments; (v) equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; and (vi) swap spread locks to economically hedge invested assets against the risk of changes in credit spreads. The following table presents changes in estimated fair value related to derivatives that do not qualify for hedge accounting:
YEARS ENDED DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Net investment gains (losses), excluding embedded derivatives........................................... $79 $5 $(12)
EMBEDDED DERIVATIVES The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts principally include variable annuities with guaranteed minimum withdrawal, guaranteed minimum accumulation and certain guaranteed minimum income riders; affiliated reinsurance contracts related to guaranteed minimum withdrawal, guaranteed minimum accumulation, and certain guaranteed minimum income riders and ceded reinsurance written on a funds withheld basis. F-47 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the estimated fair value of the Company's embedded derivatives at:
DECEMBER 31, ------------- 2008 2007 ------ ---- (IN MILLIONS) Net embedded derivatives within asset host contracts: Ceded guaranteed minimum benefit riders.................... $2,038 $376 Call options in equity securities.......................... (4) -- ------ ---- Net embedded derivatives within asset host contracts....... $2,034 $376 ====== ==== Net embedded derivatives within liability host contracts: Direct guaranteed minimum benefit riders................... $1,102 $201 Other...................................................... (27) -- ------ ---- Net embedded derivatives within liability host contracts... $1,075 $201 ====== ====
The following table presents changes in the estimated fair value related to embedded derivatives:
YEARS ENDED DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Net investment gains (losses)(1),(2)................... $740 $249 $(70)
-------- (1) Effective January 1, 2008, upon adoption of SFAS 157, the valuation of the Company's guaranteed minimum benefit riders includes an adjustment for the Company's own credit. Included in net investment gains (losses) for the year ended December 31, 2008 are gains of $585 million in connection with this adjustment. (2) See Note 6 for discussion of affiliated net investment gains (losses) included in the table above. CREDIT RISK The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company's derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to credit support annexes. The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. See Note 12 for a description of the impact of credit risk on the valuation of derivative instruments. The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. At December 31, 2008 and 2007, the Company was obligated to return cash collateral under its control of $116 million and $11 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents or in short-term investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the balance sheets. The Company has exchange-traded futures which require the pledging of collateral. At December 31, 2008, the Company did not pledge any securities collateral for exchange-traded futures. At December 31, 2007, the Company pledged securities collateral for exchange-traded futures of $3 million, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. At December 31, F-48 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2008 the Company provided cash collateral for exchange-traded futures of $2 million which is included in premiums and other receivables. At December 31, 2007, the Company did not provide any cash collateral. In connection with synthetically created investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. If a credit event, as defined by the contract, occurs generally the contract will require the Company to pay the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $32 million at December 31, 2008. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At December 31, 2008, the Company would have paid an insignificant amount 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, 2008:
DECEMBER 31, 2008 --------------------------------------------------------- RATING AGENCY DESIGNATION OF FAIR VALUE OF MAXIMUM AMOUNT OF WEIGHTED REFERENCED CREDIT DEFAULT FUTURE PAYMENTS UNDER AVERAGE YEARS CREDIT OBLIGATIONS(1) SWAPS CREDIT DEFAULT SWAPS(2) TO MATURITY(3) ---------------------------- -------------- ----------------------- -------------- (IN MILLIONS) Aaa/Aa/A Single name credit default swaps (corporate)...................... $-- $ 3 5.0 Credit default swaps referencing indices.......................... -- 29 4.0 --- --- Subtotal......................... -- 32 4.1 Baa Single name credit default swaps (corporate)...................... -- -- -- Credit default swaps referencing indices.......................... -- -- -- --- --- Subtotal......................... -- -- -- Ba Single name credit default swaps (corporate)...................... -- -- -- Credit default swaps referencing indices.......................... -- -- -- --- --- Subtotal......................... -- -- -- B Single name credit default swaps (corporate)...................... -- -- -- Credit default swaps referencing indices.......................... -- -- -- --- --- Subtotal......................... -- -- -- Caa and lower Single name credit default swaps (corporate)...................... -- -- -- Credit default swaps referencing indices.......................... -- -- -- --- --- Subtotal......................... -- -- -- In or near default Single name credit default swaps (corporate)...................... -- -- -- Credit default swaps referencing indices.......................... -- -- -- --- --- Subtotal......................... -- -- -- --- --- $-- $32 4.1 === ===
F-49 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) -------- (1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's, S&P and Fitch. If no rating is available from a rating agency, then the MetLife rating is used. (2) Assumes the value of the referenced credit obligations is zero. (3) The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. 4. DEFERRED POLICY ACQUISITION COSTS Information regarding DAC is as follows:
DAC ------------- (IN MILLIONS) Balance at January 1, 2006.................................... $1,200 Capitalizations............................................. 472 ------ Subtotal................................................. 1,672 ------ Less: Amortization related to: Net investment gains (losses)............................ (34) Other expenses........................................... 181 ------ Total amortization..................................... 147 ------ Less: Unrealized investment gains (losses).................. (8) ------ Balance at December 31, 2006.................................. 1,533 Capitalizations............................................. 556 ------ Subtotal................................................. 2,089 ------ Less: Amortization related to: Net investment gains (losses)............................ 77 Other expenses........................................... 212 ------ Total amortization..................................... 289 ------ Less: Unrealized investment gains (losses).................. (6) ------ Balance at December 31, 2007.................................. 1,806 Capitalizations............................................. 717 ------ Subtotal................................................. 2,523 ------ Less: Amortization related to: Net investment gains (losses)............................ 115 Other expenses........................................... 394 ------ Total amortization..................................... 509 ------ Less: Unrealized investment gains (losses).................. (68) ------ Balance at December 31, 2008.................................. $2,082 ======
Amortization of DAC is attributed to investment gains and losses and to other expenses for the amount of gross profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses provide information regarding the amount of DAC that would have been amortized if such gains and losses had been recognized. F-50 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Information regarding DAC by reporting unit is as follows:
DECEMBER 31, --------------- 2008 2007 ------ ------ (IN MILLIONS) Traditional life.......................................... $ 160 $ 99 Variable & universal life................................. 730 574 Annuities................................................. 1,192 1,133 ------ ------ Total................................................... $2,082 $1,806 ====== ======
5. INSURANCE INSURANCE LIABILITIES Insurance liabilities are as follows:
DECEMBER 31, ----------------------------------------------- FUTURE POLICYHOLDER OTHER POLICY ACCOUNT POLICYHOLDER BENEFITS BALANCES FUNDS ----------- --------------- --------------- 2008 2007 2008 2007 2008 2007 ---- ---- ------ ------ ------ ------ (IN MILLIONS) Traditional life................... $217 $140 $ -- $ -- $ 23 $ 12 Variable & universal life.......... 106 40 1,149 695 1,643 1,362 Annuities.......................... 567 264 7,557 4,794 -- -- ---- ---- ------ ------ ------ ------ Total............................ $890 $444 $8,706 $5,489 $1,666 $1,374 ==== ==== ====== ====== ====== ======
Affiliated insurance liabilities included in the table above include reinsurance assumed and ceded. Affiliated future policy benefits, included in the table above, were $25 million and $29 million at December 31, 2008 and 2007, respectively. Affiliated policyholder account balances, included in the table above, were $0 and $97 million at December 31, 2008 and 2007, respectively. Affiliated other policyholder funds, included in the table above, were $1.5 billion and $1.3 billion at December 31, 2008 and 2007, respectively. VALUE OF DISTRIBUTION AGREEMENTS Information regarding the VODA, which is reported in other assets, is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Balance at January 1,................................ $164 $166 $ -- Contribution of VODA from MetLife.................... -- -- 167 Amortization......................................... (4) (2) (1) ---- ---- ---- Balance at December 31,.............................. $160 $164 $166 ==== ==== ====
The estimated future amortization expense allocated to other expenses for the next five years for VODA is $5 million in 2009, $7 million in 2010, $8 million in 2011, $10 million in 2012 and $11 million in 2013. On September 30, 2006, the Company received a capital contribution from MetLife in the form of intangible assets related to VODA of $167 million, for which the Company receives the benefit. The VODA originated through MetLife's acquisition of Travelers Insurance Company, excluding certain assets, most significantly, Primerica, from Citigroup Inc. ("Citigroup"), and substantially all of Citigroup's international insurance business (collectively, F-51 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) "Travelers"). The VODA reflects the estimated fair value of the Citigroup/Travelers distribution agreements acquired at July 1, 2005 and will be amortized in relation to the expected economic benefits of the agreement. The weighted average amortization period of the VODA is 16 years. If actual experience under the distribution agreements differs from expectations, the amortization will be adjusted to reflect actual experience. The use of discount rates was necessary to establish the fair value of the VODA. In selecting the appropriate discount rates, management considered its weighted average cost of capital as well as the weighted average cost of capital required by market participants. A discount rate of 11.5% was used to value the VODA. SALES INDUCEMENTS Information regarding deferred sales inducements, which are reported in other assets, is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Balance at January 1,................................ $355 $276 $191 Capitalization....................................... 106 112 108 Amortization......................................... (83) (33) (23) ---- ---- ---- Balance at December 31,.............................. $378 $355 $276 ==== ==== ====
SEPARATE ACCOUNTS Separate account assets and liabilities consist of pass-through separate accounts totaling $18.5 billion and $23.8 billion at December 31, 2008 and 2007, respectively, for which the policyholder assumes all investment risk. Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges) are reflected in the Company's revenues as universal life and investment-type product policy fees and totaled $469 million, $423 million and $288 million for the years ended December 31, 2008, 2007 and 2006, respectively. For the years ended December 31, 2008, 2007 and 2006, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. GUARANTEES The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than total deposits made to the contract less any partial withdrawals ("return of net deposits"); and (ii) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial withdrawals plus a minimum return ("anniversary contract value" or "minimum return"). The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee. F-52 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts is as follows:
DECEMBER 31, --------------------------------------------------------------- 2008 2007 ------------------------------ ------------------------------ IN THE AT IN THE AT EVENT OF DEATH ANNUITIZATION EVENT OF DEATH ANNUITIZATION -------------- ------------- -------------- ------------- (IN MILLIONS) ANNUITY CONTRACTS(1) RETURN OF NET DEPOSITS Separate account value............. $ 9,721 N/A $ 11,337 N/A Net amount at risk(2).............. $ 2,813(3) N/A $ 33(3) N/A Average attained age of contractholders.................. 62 years N/A 62 years N/A ANNIVERSARY CONTRACT VALUE OR MINIMUM RETURN Separate account value............. $ 10,095 $ 13,217 $ 12,796 $ 16,143 Net amount at risk(2).............. $ 4,044(3) $ 6,323(4) $ 269(3) $ 245(4) Average attained age of contractholders.................. 63 years 61 years 62 years 61 years
DECEMBER 31, ----------------------- 2008 2007 ---------- ---------- SECONDARY SECONDARY GUARANTEES GUARANTEES ---------- ---------- (IN MILLIONS) UNIVERSAL AND VARIABLE LIFE CONTRACTS(1) Account value (general and separate account)........ $ 795 $ 449 Net amount at risk(2)............................... $ 18,728(3) $ 10,224(3) Average attained age of policyholders............... 54 years 57 years
-------- (1) The Company's annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) The net amount at risk is based on the direct amount at risk (excluding reinsurance). (3) The net amount at risk for guarantees of amounts in the event of death is defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (4) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. F-53 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life contracts is as follows:
UNIVERSAL AND ANNUITY VARIABLE LIFE CONTRACTS CONTRACTS ------------- ------------- GUARANTEED ANNUITIZATION SECONDARY BENEFITS GUARANTEES TOTAL ------------- ------------- ----- (IN MILLIONS) Balance at January 1, 2006..................... $ -- $ 3 $ 3 Incurred guaranteed benefits................... -- 6 6 Paid guaranteed benefits....................... -- -- -- ---- --- ---- Balance at December 31, 2006................... -- 9 9 ---- --- ---- Incurred guaranteed benefits................... 28 19 47 Paid guaranteed benefits....................... -- -- -- ---- --- ---- Balance at December 31, 2007................... 28 28 56 ---- --- ---- Incurred guaranteed benefits................... 121 24 145 Paid guaranteed benefits....................... -- -- -- ---- --- ---- Balance at December 31, 2008................... $149 $52 $201 ==== === ====
Excluded from the table above are guaranteed death and annuitization benefit liabilities on the Company's annuity contracts of $145 million, $45 million and $38 million at December 31, 2008, 2007 and 2006, respectively, which were reinsured 100% to an affiliate and had corresponding recoverables from affiliated reinsurers related to such guarantee liabilities. Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) Mutual Fund Groupings Equity................................................ $11,222 $20,429 Balanced.............................................. 4,875 605 Money Market.......................................... 712 301 Bond.................................................. 611 624 Specialty............................................. 99 144 ------- ------- Total.............................................. $17,519 $22,103 ======= =======
6. REINSURANCE The Company's life insurance operations participate in reinsurance activities in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. The Company has historically reinsured the mortality risk on new individual life insurance policies primarily on an excess of retention basis or a quota share basis. Starting in 2004, the Company reinsured up to 75% of the mortality risk for all new individual life insurance policies. During 2005, the Company changed its retention practices for certain individual life insurance policies. Amounts reinsured in prior years remain reinsured under the original reinsurance; however, under the new retention F-54 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) guidelines, the Company retains up to $100,000 per life and reinsures 100% of amounts in excess of the Company's retention limits for most new individual life insurance policies and for certain individual life policies the Company reinsures up to 90% of the mortality risk. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specific characteristics. The Company reinsures 90% of its new production of fixed annuities to an affiliated reinsurer. The Company reinsures 100% of the living and death benefit riders associated with variable annuities issued since 2001 to an affiliated reinsurer. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on the rider fees collected from policyholders and receives reimbursements for benefits paid or accrued in excess of account values, subject to certain limitations. The Company enters into similar agreements for new or in-force business depending on market conditions. In addition to reinsuring mortality risk, as described previously, the Company reinsures other risks, as well as specific coverages. The Company routinely reinsures certain classes of risks in order to limit its exposure to particular travel, avocation and lifestyle hazards. The Company has exposure to catastrophes, which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance arrangements to provide greater diversification of risk and minimize exposure to larger risks. The Company reinsures its business through a diversified group of reinsurers. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance balances recoverable could become uncollectible. Cessions under reinsurance arrangements do not discharge the Company's obligations as the primary insurer. The amounts in the statements of income are presented net of reinsurance ceded. Information regarding the effect of reinsurance is as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ----- ----- (IN MILLIONS) PREMIUMS: Direct premiums.................................... $ 259 $ 188 $ 87 Reinsurance assumed................................ 15 17 20 Reinsurance ceded.................................. (130) (51) (18) ----- ----- ----- Net premiums.................................... $ 144 $ 154 $ 89 ===== ===== ===== UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES: Direct universal life and investment-type product policy fees..................................... $ 746 $ 627 $ 406 Reinsurance assumed................................ 196 119 120 Reinsurance ceded.................................. (308) (178) (109) ----- ----- ----- Net universal life and investment-type product policy fees................................... $ 634 $ 568 $ 417 ===== ===== ===== POLICYHOLDER BENEFITS AND CLAIMS: Direct policyholder benefits and claims............ $ 677 $ 267 $ 116 Reinsurance assumed................................ 19 18 11 Reinsurance ceded.................................. (312) (93) (40) ----- ----- ----- Net policyholder benefits and claims............ $ 384 $ 192 $ 87 ===== ===== =====
F-55 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Information regarding ceded reinsurance recoverable balances, included in premiums and other receivables is as follows:
DECEMBER 31, --------------- 2008 2007 ------ ------ (IN MILLIONS) UNAFFILIATED RECOVERABLES: Deposit recoverables.................................... $ 98 $ 73 Future policy benefit recoverables...................... 75 49 Claim recoverables...................................... 14 -- All other recoverables.................................. 1 1 ------ ------ Total................................................ $ 188 $ 123 ====== ====== AFFILIATED RECOVERABLES: Deposit recoverables.................................... $3,018 $1,885 Future policy benefit recoverables...................... 2,961 779 Claim recoverables...................................... 11 6 All other recoverables.................................. 197 19 ------ ------ Total................................................ $6,187 $2,689 ====== ======
The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company also monitors ratings and evaluates the financial strength of the Company's reinsurers by analyzing their financial statements. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company has secured certain reinsurance recoverable balances with funds withheld accounts. At December 31, 2008, the Company has $98 million of unaffiliated recoverable balances secured by funds withheld accounts. All of the affiliated reinsurance recoverable balances are secured by funds withheld accounts, funds held in trust as collateral or irrevocable letters of credit issued by various financial institutions. The Company's five largest unaffiliated reinsurers account for $137 million, or 73%, of its total unaffiliated reinsurance recoverable balance of $188 million at December 31, 2008. Of these reinsurance recoverable balances, $98 million were secured by funds withheld accounts. Reinsurance balances payable to unaffiliated reinsurers, included in other liabilities, were $114 million and $77 million at December 31, 2008 and 2007, respectively. Reinsurance balances payable to affiliated reinsurers, included in liabilities, were $2.5 billion and $1.6 billion at December 31, 2008 and 2007, respectively. The Company has reinsurance agreements with MetLife and certain of its subsidiaries, including Metropolitan Life Insurance Company ("MLIC"), Exeter Reassurance Company, Ltd. ("Exeter"), General American Life Insurance Company ("GALIC"), and MetLife Reinsurance Company of Vermont ("MRV"). The Company had reinsurance agreements with Mitsui Sumitomo MetLife Insurance Co., Ltd., an affiliate; however, effective December 31, 2008, this arrangement was modified via a novation as explained in detail below. The Company also has reinsurance agreements with Reinsurance Group of America, Incorporated, ("RGA"), a former affiliate, which was split-off from MetLife. in September 2008. The table below includes amounts related to transactions with RGA through the date of the split- off. F-56 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) The following table reflects related party reinsurance information:
YEARS ENDED DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Assumed premiums........................................ $ 15 $ 17 $20 Assumed fees, included in universal life and investment- type product policy fees.............................. $196 $119 $96 Assumed benefits, included in policyholder benefits and claims................................................ $ 19 $ 18 $11 Assumed benefits, included in interest credited to policyholder account balances......................... $ 57 $ 53 $49 Assumed acquisition costs, included in other expenses... $ 97 $ 39 $58 Ceded premiums.......................................... $117 $ 43 $12 Ceded fees, included in universal life and investment- type product policy fees.............................. $312 $161 $80 Amortization of unearned revenue associated with experience refund, included in universal life and investment-type product policy fees................... $ 38 $ -- $-- Income from deposit contracts, included in other revenues.............................................. $ 83 $ 85 $68 Ceded benefits, included in policyholder benefits and claims................................................ $264 $ 74 $32 Ceded benefits, included in interest credited to policyholder account balances......................... $ 22 $ -- $-- Interest costs on ceded reinsurance, included in other expenses.............................................. $ 15 $(19) $33
The Company had assumed, under a reinsurance contract, risks related to guaranteed minimum benefit riders issued in connection with certain variable annuity products from a joint venture owned by an affiliate of the Company. These risks were retroceded in full to another affiliate under a retrocessional agreement resulting in no impact on net investment gains (losses). Effective December 31, 2008, the retrocession was recaptured by the Company and a novation agreement was executed whereby, the affiliated retrocessionaire assumed the business directly from the joint venture. As a result of this recapture and the related novation, the Company no longer assumes from the joint venture or cedes to the affiliate any risks related to these guaranteed minimum benefit riders. Upon the recapture and simultaneous novation, the embedded derivative asset of approximately $626 million associated with the retrocession was settled by transferring the embedded derivative liability associated with the assumption from the joint venture to the new reinsurer. As per the terms of the recapture and novation agreement, the amounts were offset resulting in no net gain or loss. The embedded derivatives assumed are included within policyholder account balances and were liabilities of $97 million at December 31, 2007. For the years ended December 31, 2008, 2007 and 2006 net investment gains (losses) included $170 million, ($113) million, and $57 million, respectively, in changes in fair value of such embedded derivatives. The embedded derivatives associated with the retrocession are included within premiums and other receivables at December 31, 2007. The assumption was offset by the retrocession resulting in no net impact on net investment gains (losses). The Company has also ceded risks to another affiliate related to guaranteed minimum benefit riders written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are also included within net investment gains (losses). The embedded derivatives associated with the cessions are included within premiums and other receivables and were assets of $2,038 million and $279 million at December 31, 2008 and 2007, respectively. For the years ended December 31, 2008, 2007 and 2006 net investment gains (losses) included $1,759 million, $363 million and ($101) million, respectively, in changes in fair value of such embedded derivatives. F-57 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Effective December 20, 2007, the Company recaptured two ceded blocks of business (the "Recaptured Business") from Exeter. The Recaptured Business consisted of two blocks of universal life secondary guarantee risk, one assumed from GALIC, and the other written by the Company. As a result of the recapture, the Company received $258 million of assets from Exeter, reduced receivables from affiliates, included in premiums and other receivables, by $112 million and reduced other assets by $124 million. The recapture resulted in a pre-tax gain of $22 million for the year ended December 31, 2007. Concurrent with the recapture, the same business was ceded to MRV. The cession does not transfer risk to MRV and is therefore accounted for under the deposit method. The Company transferred $258 million of assets to MRV as a result of this cession, and recorded a receivable from affiliates, included in premiums and other receivables, of $258 million at December 31, 2007. Effective December 31, 2007, the Company entered into a reinsurance agreement to cede two blocks of business to MRV, on a 90% coinsurance funds withheld basis. This agreement covered certain term and certain universal life policies issued in 2007 and 2008 by the Company. This agreement transfers risk to MRV, and therefore, is accounted for as reinsurance. As a result of the agreement, DAC decreased $136 million, affiliated reinsurance recoverables, included in premiums and other receivables, increased $326 million, the Company recorded a funds withheld liability for $223 million, included in other liabilities, and unearned revenue, included in other policyholder funds, was reduced by $33 million at December 31, 2007. Certain contractual features of this agreement qualify as embedded derivatives, which are separately accounted for at fair value on the Company's balance sheet. The embedded derivative related to the funds withheld associated with this reinsurance agreement is included within other liabilities and reduced the funds withheld balance by $27 million at December 31, 2008. The change in fair value of the embedded derivative, included in net investment gains (losses), was $27 million for the year ended December 31, 2008. The reinsurance agreement also includes an experience refund provision whereby some or all of the profits on the underlying reinsurance agreement are returned to the Company from MRV during the first several years of the reinsurance agreement. During 2008, the experience refund reduced the funds withheld by the Company from MRV by $259 million and are considered unearned revenue and amortized over the life of the contract using the same assumption basis as the deferred acquisition cost in the underlying policies. During 2008, the amortization of the unearned revenue associated with the experience refund was $38 million and is included in universal life and investment-type product policy fees in the statement of income. At December 31, 2008 the unearned revenue relating to the experience refund was $221 million and is included in other policy holder funds in the balance sheet. 7. LONG-TERM DEBT -- AFFILIATED At December 31, 2008, the Company had no outstanding long-term debt. At December 31, 2007, MetLife was the holder of a surplus note issued by the Company in the amount of $400 million with a fixed interest rate of 7.349% and due in 2035. At December 31, 2007, MLIG was the holder of two surplus notes issued by the Company in the amounts of $25 million and $10 million, with fixed interest rates of 5.0% and LIBOR plus 0.75%, respectively. These surplus notes could be redeemed in whole or in part, at the election of the Company at any time, subject to the prior approval of the Delaware Commissioner of Insurance (the "Delaware Commissioner"). In June 2008, the Company, with prior approval of the Delaware Commissioner, repaid each of these surplus notes totaling $435 million with total accrued interest of $5 million to the respective holder. Interest expense related to the Company's indebtedness, included in other expenses, was $13 million, $31 million and $31 million for the years ended December 31, 2008, 2007 and 2006, respectively. F-58 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. INCOME TAXES The provision for income tax is as follows:
YEARS ENDED DECEMBER 31, ------------------- 2008 2007 2006 ----- ---- ---- (IN MILLIONS) Current: Federal.............................................. $(131) $ 20 $(90) State and local...................................... -- (1) -- ----- ---- ---- Subtotal............................................. (131) 19 (90) ----- ---- ---- Deferred: Federal.............................................. 280 85 95 State and local...................................... -- -- (2) ----- ---- ---- Subtotal............................................. 280 85 93 ----- ---- ---- Provision for income tax............................... $ 149 $104 $ 3 ===== ==== ====
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported is as follows:
YEARS ENDED DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Tax provision at U.S. statutory rate................... $174 $129 $ 22 Tax effect of: Tax-exempt investment income......................... (21) (19) (13) Prior year tax....................................... (2) 1 (5) State tax, net of federal benefit.................... -- -- (1) Assignment fee....................................... -- (6) -- Other, net........................................... (2) (1) -- ---- ---- ---- Provision for income tax............................... $149 $104 $ 3 ==== ==== ====
F-59 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following:
DECEMBER 31, ------------- 2008 2007 ---- ---- (IN MILLIONS) Deferred income tax assets: Net unrealized investment losses.......................... $148 $ 5 Loss and credit carryforwards............................. 88 6 Policyholder liabilities and receivables.................. -- 220 Other..................................................... 2 -- ---- ---- 238 231 ---- ---- Deferred income tax liabilities: DAC....................................................... 617 549 Policyholder liabilities and receivables.................. 64 -- Investments, including derivatives........................ 21 9 ---- ---- 702 558 ---- ---- Net deferred income tax liability........................... $464 $327 ==== ====
The Company has net operating loss carryovers of $171 million at December 31, 2008 which will begin expiring in 2023. The Company has capital loss carryovers of $57 million at December 31, 2008 which will begin expiring in 2011. The Company has tax credit carryovers of $8 million at December 31, 2008 which begin expiring in 2017. The Company has not recorded a valuation allowance against the deferred tax asset of $148 million recognized in connection with unrealized losses at December 31, 2008. The Company has the intent and ability to hold such securities until their recovery or maturity and the Company has available to it tax-planning strategies that include sources of future taxable income against which such losses could be offset. On September 25, 2007, the IRS issued Revenue Ruling 2007-61, which announced its intention to issue regulations with respect to certain computational aspects of the Dividends Received Deduction ("DRD") on separate account assets held in connection with variable annuity contracts. Revenue Ruling 2007-61 suspended a revenue ruling issued in August 2007 that would have changed accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2008 and 2007, the Company recognized an income tax benefit of $21 million and $19 million, respectively, related to the separate account DRD. The Company joined MICC's includable affiliates in filing a consolidated federal income tax return beginning October 11, 2006. Prior to this date the Company joined MetLife's includable affiliates in filing a consolidated federal income tax return. The consolidating companies have executed tax allocation agreements. Under these agreements, current federal income tax expense (benefit) is computed on a separate return basis and the agreements provide that members shall make payments or receive reimbursements to the extent that their income (loss) contributes to or reduces federal tax expense. Pursuant to these tax allocation agreements, the amounts due from affiliates include $137 million and $17 million from MICC for 2008 and 2007, respectively, and $90 million from MICC and $34 million from MetLife, respectively, for 2006. F-60 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) All years through and including 2002 are closed and no longer subject to IRS audit. The years 2003 and forward are open and subject to audit. The Company believes that any adjustments that might be required for the open years will not have a material effect on the Company's financial statements. 9. CONTINGENCIES, COMMITMENTS AND GUARANTEES CONTINGENCIES LITIGATION The Company and certain of its affiliates have faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Additional litigation relating to the Company's marketing and sales of individual life insurance, annuities, mutual funds or other products may be commenced in the future. Various litigation, claims and assessments against the Company, in addition to those discussed above and those otherwise provided for in the Company's financial statements, have arisen in the course of the Company's business. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses, except as noted above in connection with specific matters. In some of the matters, large and/or indeterminate amounts, including punitive and treble damages, may be sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts that may be sought in certain matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's net income or cash flows in particular 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. Assessments levied against the Company were less than $1 million for each of the years ended December 31, 2008, 2007 and 2006. At both December 31, 2008 and 2007, the Company maintained a liability of $1 million. The related asset for premium tax offsets was $1 million at both December 31, 2008 and 2007, for undiscounted future assessments in respect of currently impaired, insolvent or failed insurers. At both December 31, 2008 and 2007, the Company maintained an asset related to paid assessments representing currently available premium tax offsets of less than $1 million. F-61 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) COMMITMENTS 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 $452 million and $291 million at December 31, 2008 and 2007, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years. MORTGAGE LOAN COMMITMENTS The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3 million and $8 million at December 31, 2008 and 2007, respectively. COMMITMENTS TO FUND PRIVATE CORPORATE BOND INVESTMENTS The Company commits to lend funds under private corporate bond investments. The amounts of these unfunded commitments were $12 million and $1 million at December 31, 2008 and 2007, respectively. GUARANTEES In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities, and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation, 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 liability at December 31, 2008 and 2007 for indemnities, guarantees and commitments was insignificant. In connection with synthetically created investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. If a credit event, as defined by the contract, occurs generally the contract will require the Company to pay the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $32 million at December 31, 2008. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. As of December 31, 2008, the Company would have paid an insignificant amount to terminate all of these contracts. F-62 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) See Note 3 for disclosures related to credit default swap obligations. 10. EQUITY CAPITAL CONTRIBUTIONS The Company received cash contributions of $985 million, $250 million and $150 million from MICC during the years ended December 31, 2008, 2007 and 2006, respectively. On February 18, 2009, the Company received a cash contribution of $25 million from MICC. On March 30, 2009, the Company received an additional cash contribution of $550 million from MICC. On September 30, 2006, the Company received a capital contribution from MetLife of $162 million in the form of intangible assets related to VODA, and the associated deferred income tax liability, which is more fully described in Note 5. STATUTORY EQUITY AND INCOME The Company's state of domicile imposes minimum risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The Company exceeded the minimum RBC requirements for all periods presented herein. The NAIC adopted the Codification of Statutory Accounting Principles ("Codification") in 2001. Codification was intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. The Delaware Department of Insurance has adopted Codification with certain modifications for the preparation of statutory financial statements of insurance companies domiciled in Delaware. Modifications by state insurance departments may impact the effect of Codification on the statutory capital and surplus of the Company. 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 transactions and valuing securities on a different basis. In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within a year. The Company, domiciled in Delaware, applied to its state insurance regulator and was permitted to admit the lesser of the amount of deferred tax asset expected to be realized within three years of the balance sheet date or 15% of statutory capital and surplus for the most recently filed statement with the domiciliary state commissioner. The NAIC statutory accounting principles currently admit the lesser of the amount of deferred tax asset expected to be realized within one year of the balance sheet date or 10% of the statutory capital and surplus for the most recently filed statement with the domiciliary state commissioner. As a result of the relief, the Company's minimum statutory capital requirement was reduced by $17 million as of December 31, 2008. Statutory net loss of the Company, a Delaware domiciled insurer, was $482 million, $1.1 billion and $116 million for the years ended December 31, 2008, 2007 and 2006, respectively. Statutory capital and surplus, as filed with the Delaware Insurance Department, was $761 million and $584 million at December 31, 2008 and 2007, respectively. F-63 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) DIVIDEND RESTRICTIONS Under Delaware State Insurance Law, the Company is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to MICC 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 realized capital gains). The Company will be permitted to pay a cash dividend to MICC 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 Delaware Commissioner and the Delaware Commissioner does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as unassigned funds) as of the last filed annual statutory statement requires insurance regulatory approval. Under Delaware State Insurance Law, the Delaware 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. The Company did not pay dividends for the years ended December 31, 2008, 2007 and 2006. Because the Company's statutory unassigned funds surplus is negative, the Company cannot pay any dividends without prior approval of the Delaware Commissioner in 2009. OTHER COMPREHENSIVE INCOME (LOSS) The following table sets forth the reclassification adjustments required for the years ended December 31, 2008, 2007 and 2006 in other comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other comprehensive income (loss) in the current or prior years:
YEARS ENDED DECEMBER 31, ------------------- 2008 2007 2006 ----- ---- ---- (IN MILLIONS) Holding gains (losses) on investments arising during the year............................................. $(494) $(27) $(43) Income tax effect of holding gains (losses)............ 173 9 15 Reclassification adjustments: Recognized holding (gains) losses included in current year income....................................... 28 12 24 Amortization of premiums and accretion of discounts associated with investments....................... (11) (2) (1) Income tax effect.................................... (6) (3) (8) Allocation of holding gains (losses) on investments relating to other policyholder amounts............... 68 6 86 Income tax effect of allocation of holding gains (losses) to other policyholder amounts............... (24) (2) (30) ----- ---- ---- Other comprehensive income (loss)...................... $(266) $ (7) $ 43 ===== ==== ====
F-64 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 11. OTHER EXPENSES Information on other expenses is as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ----- ----- (IN MILLIONS) Compensation......................................... $ 74 $ 66 $ 46 Commissions.......................................... 546 432 418 Affiliated interest expense on debt.................. 13 31 31 Amortization of DAC.................................. 509 289 147 Capitalization of DAC................................ (717) (556) (472) Insurance tax........................................ 24 20 12 Other................................................ 363 255 176 ----- ----- ----- Total other expenses............................... $ 812 $ 537 $ 358 ===== ===== =====
AMORTIZATION AND CAPITALIZATION OF DAC See Note 4 for a rollforward of deferred acquisition costs including impacts of amortization and capitalization. AFFILIATED EXPENSES For the years ended December 31, 2008, 2007 and 2006, commissions and capitalization of DAC include the impact of affiliated reinsurance transactions. See Notes 6, 7 and 13 for discussion of affiliated expenses included in the table above. 12. FAIR VALUE FAIR VALUE OF FINANCIAL INSTRUMENTS As described in Note 1, the Company prospectively adopted the provisions of SFAS 157 effective January 1, 2008. As a result, the methodologies used to determine the estimated fair value for certain financial instruments at December 31, 2008 may have been modified from those utilized at December 31, 2007, which, while being deemed appropriate under existing accounting guidance, may not have produced an exit value as defined in SFAS 157. Accordingly, the estimated fair value of financial instruments, and the description of the methodologies used to derive those estimated fair values, are presented separately at December 31, 2007 and December 31, 2008. Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. F-65 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Amounts related to the Company's financial instruments are as follows:
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- DECEMBER 31, 2007 (IN MILLIONS) ASSETS: Fixed maturity securities...................... $4,328 $4,328 Equity securities.............................. $ 10 $ 10 Mortgage loans on real estate.................. $ 405 $ 413 Policy loans................................... $ 39 $ 39 Short-term investments......................... $ 483 $ 483 Cash and cash equivalents...................... $ 91 $ 91 Accrued investment income...................... $ 54 $ 54 LIABILITIES: Policyholder account balances(1)............... $4,794 $4,630 Long-term debt -- affiliated................... $ 435 $ 409 Payables for collateral under securities loaned and other transactions...................... $ 928 $ 928 COMMITMENTS:(2) Mortgage loan commitments...................... $8 $ -- $ (1) Commitments to fund private corporate bond investments................................. $1 $ -- $ --
-------- (1) Carrying values presented herein differ from those presented on the balance sheet because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions omitted from the table above are not considered financial instruments. (2) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows: Fixed Maturity Securities and Equity Securities -- The estimated fair values of publicly held fixed maturity securities and publicly held equity securities are based on quoted market prices or estimates from independent pricing services. However, in cases where quoted market prices are not available, such as for private fixed maturity securities, fair values are estimated using present value or valuation techniques. The determination of estimated fair values is based on: (i) market standard valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the circumstances. The fair value estimates are based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Factors considered in estimating fair value include; coupon rate, maturity, estimated duration, call provisions, sinking fund requirements, credit rating, industry sector of the issuer, and quoted market prices of comparable securities. Mortgage Loans on Real Estate, Mortgage Loan Commitments and Commitments to Fund Private Corporate Bond Investments-- Fair values for mortgage loans on real estate are estimated by discounting expected future cash flows, using current interest rates for similar loans with similar credit risk. For mortgage loan commitments and commitments to fund private corporate bond investments, the estimated fair value is the net premium or discount of the commitments. Policy Loans -- The estimated fair values for policy loans approximate carrying values. F-66 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Cash and Cash Equivalents and Short-term Investments -- The estimated fair values for cash and cash equivalents and short-term investments approximate carrying values due to the short-term maturities of these instruments. Accrued Investment Income -- The estimated fair value for accrued investment income approximates carrying value. Policyholder Account Balances -- The fair value of policyholder account balances which have final contractual maturities are estimated by discounting expected future cash flows based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the agreements being valued. The estimated fair value of policyholder account balances without final contractual maturities are assumed to equal their current net surrender value. Affiliated Long-term Debt -- The estimated fair value of affiliated long- term debt is determined by discounting expected future cash flows using risk rates currently available for debt with similar terms and remaining maturities. Payables for Collateral Under Securities Loaned and Other Transactions -- The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. Derivative Financial Instruments -- The estimated fair value of derivative financial instruments, including financial futures, interest rate, credit default and foreign currency swaps, interest rate caps and floors, are based upon quotations obtained from dealers or other reliable sources. See Note 3 for derivative fair value disclosures.
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- DECEMBER 31, 2008 (IN MILLIONS) ASSETS: Fixed maturity securities...................... $ 4,325 $ 4,325 Equity securities.............................. $ 7 $ 7 Mortgage loans on real estate.................. $ 376 $ 373 Policy loans................................... $ 41 $ 42 Real estate joint ventures held for investment(1)............................... $ 6 $ 5 Other limited partnership interests(1)......... $ 11 $ 11 Short-term investments......................... $ 1,581 $ 1,581 Other invested assets(2)....................... $2,146 $ 125 $ 125 Cash and cash equivalents...................... $ 525 $ 525 Accrued investment income...................... $ 54 $ 54 Premiums and other receivables(1).............. $ 3,118 $ 2,742 Net embedded derivatives within asset host contracts(3)................................ $ 2,038 $ 2,038 Separate account assets........................ $18,517 $18,517 LIABILITIES: Policyholder account balances(1)............... $ 5,142 $ 4,403 Payables for collateral under securities loaned and other transactions...................... $ 888 $ 888 Other liabilities:(1).......................... Derivative liabilities...................... $ 56 $ 3 $ 3 Other....................................... $ 98 $ 98 Separate account liabilities(1)................ $ 892 $ 892 Net embedded derivatives within liability host contracts(3)................................ $ 1,075 $ 1,075 COMMITMENTS:(4) Mortgage loan commitments...................... $ 3 $ -- $ (1) Commitments to fund private corporate bond investments................................. $ 12 $ -- $ --
F-67 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) -------- (1) Carrying values presented herein differ from those presented on the balance sheet because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions omitted from the table above are not considered financial instruments. (2) Other invested assets is comprised of freestanding derivatives with positive estimated fair values. (3) Net embedded derivatives within asset host contracts are presented within premiums and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. Equity securities also include embedded derivatives of ($4) million. (4) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows: Fixed Maturity Securities and Equity Securities -- When available, the estimated fair value of the Company's fixed maturity and equity securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The assumptions and inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated duration and management's assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management's judgments about financial instruments. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and observable yields and spreads in the market. When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's securities holdings. Mortgage Loans on Real Estate -- The Company originates mortgage loans on real estate principally for investment purposes. These loans are primarily carried at amortized cost within the financial statements. The fair value for mortgage loans on real estate is primarily determined by estimating expected future cash flows and discounting those using current interest rates for similar loans with similar credit risk. Policy Loans -- For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying F-68 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) insurance liabilities. Cash flow estimates are developed applying a weighted- average interest rate to the outstanding principal balance of the respective group of loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. The estimated fair value for policy loans with variable interest rates approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. Real Estate Joint Ventures Held-for-Investment and Other Limited Partnership Interests -- Other limited partnerships and real estate joint ventures held-for-investment included in the preceding table consist of those investments accounted for using the cost method. The remaining carrying value recognized in the balance sheet represents investments in real estate joint ventures held-for-investment and other limited partnerships accounted for using the equity method, which do not satisfy the definition of financial instruments for which fair value is required to be disclosed. The estimated fair values for other limited partnership interests and real estate joint ventures held-for-investment accounted for under the cost method are generally based on the Company's share of the net asset value ("NAV") as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Short-term Investments -- Certain short-term investments do not qualify as securities and are recognized at amortized cost in the balance sheet. For these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required. Short-term investments that meet the definition of a security are recognized at fair value in the balance sheet in the same manner described above for similar instruments that are classified within captions of other major investment classes. Other Invested Assets -- Other invested assets in the balance sheet is principally comprised of freestanding derivatives with positive estimated fair values -- which are more fully described in the respectively labeled section which follows -- and investments in tax credit partnerships. Investments in tax credit partnerships are not financial instruments subject to fair value disclosure and have been excluded from the preceding table. Cash and Cash Equivalents -- Due to the short-term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient solvency in the case of depository institutions, and the Company has determined additional adjustment is not required. Accrued Investment Income -- Due to the short-term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the credit quality of the issuers and has determined additional adjustment is not required. Premiums and Other Receivables -- Premiums and other receivables in the balance sheet is principally comprised of premiums due and unpaid for insurance contracts, amounts recoverable under reinsurance contracts, amounts receivable for securities sold but not yet settled, fees and general operating receivables, and embedded derivatives related to the ceded reinsurance of certain variable annuity riders. F-69 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding table. Amounts recoverable under ceded reinsurance contracts which the Company has determined do not transfer sufficient risk such that they are accounted for using the deposit method of accounting have been included in the preceding table with the estimated fair value determined as the present value of expected future cash flows under the related contracts discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty. Embedded derivatives recognized in connection with ceded reinsurance of certain variable annuity riders are included in this caption in the financial statements but excluded from this caption in the preceding table as they are separately presented. The estimated fair value of these embedded derivatives is described in the respectively labeled section which follows. Separate Account Assets -- Separate account assets are carried at estimated fair value and reported as a summarized total on the balance sheet in accordance with SOP 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). The estimated fair value of separate account assets is based on the estimated fair value of the underlying assets owned by the separate account. Assets within the Company's separate accounts are comprised of actively traded mutual funds. The estimated fair value of mutual funds is based upon quoted prices or reported NAVs provided by the fund manager and are reviewed by management to determine whether such values require adjustment to represent exit value. Policyholder Account Balances -- Policyholder account balances in the table above include investment contracts. Embedded derivatives on investment contracts and certain variable annuity riders accounted for as embedded derivatives are included in this caption in the financial statements but excluded from this caption in the table above as they are separately presented therein. The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the balance sheet represents those amounts due under contracts that satisfy the definition of insurance contracts and are not considered financial instruments. The investment contracts primarily include fixed deferred annuities, fixed term payout annuities, and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate future cash flows using current market risk-free interest rates and adding a spread for the Company's own credit determined using market standard swap valuation models and observable market inputs that take into consideration publicly available information relating to the Company's claims paying ability. Payables for Collateral Under Securities Loaned and Other Transactions -- The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in its own credit are necessary. Other Liabilities -- Other liabilities in the balance sheet is principally comprised of freestanding derivatives with negative fair value; taxes payable; obligations for employee-related benefits; funds withheld under ceded reinsurance contracts and, when applicable, their associated embedded derivatives; and general operating accruals and payables. The estimated fair values of derivatives -- with positive and negative estimated fair values - and embedded derivatives within asset and liability host contracts are described in the respectively labeled sections which follow. The remaining other amounts included in the table above consist of funds withheld under reinsurance contracts that are recognized using the deposit method of accounting, which satisfy the definition of financial instruments F-70 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) subject to disclosure. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from the recognized carrying values. Separate Account Liabilities -- Separate account liabilities included in the table above represent those balances due to policyholders under contracts that are classified as investment contracts. The difference between the separate account liabilities reflected above and the amounts presented in the balance sheet represents those contracts classified as insurance contracts which do not satisfy the criteria of financial instruments for which estimated fair value is to be disclosed. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding under Institutional retirement and savings products. Separate account liabilities -- whether related to investment or insurance contracts -- are recognized in the balance sheet at an equivalent summary total of the separate account assets as prescribed by SOP 03-1. Separate account assets, which equal net deposits, net investment income and realized and unrealized capital gains and losses, are fully offset by corresponding amounts credited to the contractholders' liability which is reflected in separate account liabilities. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described above, the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities. Derivatives -- The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models. The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such instruments. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter derivatives after taking into account the effects of netting agreements and collateral arrangements. Credit risk is monitored and consideration of any potential credit adjustment is based on a net exposure by counterparty. This is due to the existence of netting agreements and collateral arrangements which effectively serve to mitigate risk. The Company values its derivative positions using the standard swap curve which includes a credit risk adjustment. This credit risk adjustment is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The need for such additional credit risk adjustments is monitored by the Company. The F-71 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity as well as the use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. Embedded Derivatives within Asset and Liability Host Contracts -- Embedded derivatives principally include certain direct, and ceded variable annuity riders and embedded derivatives related to funds withheld on ceded reinsurance. Embedded derivatives are recorded in the financial statements at estimated fair value with changes in estimated fair value adjusted through net income. The Company issues certain variable annuity products with guaranteed minimum benefit riders. GMWB, GMAB and certain GMIB riders are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). These embedded derivatives are classified within policyholder account balances. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable risk free rates. Effective January 1, 2008, upon adoption of SFAS 157, the valuation of these riders now includes an adjustment for the Company's own credit and risk margins for non-capital market inputs. The Company's own credit adjustment is determined taking into consideration publicly available information relating to the Company's claims paying ability. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in the Company's own credit standing; and variations in actuarial assumptions regarding policyholder behavior and risk margins related to non-capital market inputs may result in significant fluctuations in the estimated fair value of the riders that could materially affect net income. The Company cedes the risks associated with certain of the GMIB, GMAB and GMWB riders described in the preceding paragraph. These reinsurance contracts contain embedded derivatives which are included in premiums and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on the ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. In addition to ceding risks associated with riders that are accounted for as embedded derivatives, the Company also cedes to the same affiliated reinsurance company certain directly written GMIB riders that are accounted for as insurance (i.e., not as embedded derivatives) but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included in premiums and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. Because the direct rider is not accounted for at fair value, significant fluctuations in net income may occur as the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding and offsetting change in fair value of the direct rider. The Company had assumed risks related to guaranteed minimum benefit riders from an affiliated joint venture under a reinsurance contract. These risks were fully retroceded to the same affiliated reinsurance company. F-72 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) Effective December 31, 2008, this arrangement was modified via a novation to the affiliate that served as retrocessionaire. As a result of this novation, the Company is no longer assuming or ceding any liabilities related to this block of business. The estimated fair value of the embedded derivatives within funds withheld at interest related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described above in ''-- Fixed Maturity and Equity Securities", and "Short-term Investments." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities with changes in estimated fair value recorded in net investment gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The accounting for embedded derivatives is complex and interpretations of the primary accounting standards continue to evolve in practice. If interpretations change, there is a risk that features previously not bifurcated may require bifurcation and reporting at estimated fair value in the financial statements and respective changes in estimated fair value could materially affect net income. Mortgage Loan Commitments and Commitments to Fund Private Corporate Bond Investments -- The estimated fair values for mortgage loan commitments and commitments to fund private corporate bond investments reflected in the above table represent the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the original commitments. F-73 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) ASSETS AND LIABILITIES MEASURED AT FAIR VALUE RECURRING FAIR VALUE MEASUREMENTS The assets and liabilities measured at estimated fair value on a recurring basis are determined as described in the preceding section. These estimated fair values and their corresponding fair value hierarchy are summarized as follows:
DECEMBER 31, 2008 ------------------------------------------------------------------ FAIR VALUE MEASUREMENTS AT REPORTING DATE USING ----------------------------------------------------- QUOTED PRICES IN ACTIVE MARKETS FOR SIGNIFICANT IDENTICAL ASSETS SIGNIFICANT OTHER UNOBSERVABLE TOTAL AND LIABILITIES OBSERVABLE INPUTS INPUTS ESTIMATED (LEVEL 1) (LEVEL 2) (LEVEL 3) FAIR VALUE ------------------ ----------------- ------------ ---------- (IN MILLIONS) ASSETS Fixed maturity securities: U.S. corporate securities......... $ -- $1,466 $ 65 $ 1,531 Residential mortgage-backed securities..................... -- 904 2 906 U.S. Treasury/agency securities... 365 224 -- 589 Foreign corporate securities...... -- 372 48 420 Commercial mortgage-backed securities..................... -- 405 -- 405 Asset-backed securities........... -- 270 49 319 Foreign government securities..... -- 82 -- 82 State and political subdivision securities..................... -- 73 -- 73 ------- ------ ------ ------- Total fixed maturity securities................... 365 3,796 164 4,325 ------- ------ ------ ------- Equity securities: Non-redeemable preferred stock.... -- -- 7 7 ------- ------ ------ ------- Total equity securities........ -- -- 7 7 ------- ------ ------ ------- Short-term investments.............. 19 1,562 -- 1,581 Derivative assets(1)................ 1 124 -- 125 Net embedded derivatives within asset host contracts(2)........... -- -- 2,038 2,038 Separate account assets(3).......... 18,517 -- -- 18,517 ------- ------ ------ ------- Total assets................... $18,902 $5,482 $2,209 $26,593 ======= ====== ====== ======= LIABILITIES Derivative liabilities(1)........... $ -- $ 3 $ -- $ 3 Net embedded derivatives within liability host contracts(2)....... -- -- 1,075 1,075 ------- ------ ------ ------- Total liabilities.............. $ -- $ 3 $1,075 $ 1,078 ======= ====== ====== =======
-------- (1) Derivative assets are presented within other invested assets and derivatives liabilities are presented within other liabilities. The amounts are presented gross in the table above to reflect the presentation in the balance sheet, but are presented net for purposes of the rollforward in the following tables. F-74 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) (2) Net embedded derivatives within asset host contracts are presented within premiums and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. Equity securities also includes embedded derivatives of ($4) million. (3) Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets as prescribed by SOP 03-1. The Company has categorized its assets and liabilities into the three-level fair value hierarchy, as defined in Note 1, based upon the priority of the inputs to the respective valuation technique. The following summarizes the types of assets and liabilities included within the three-level fair value hierarchy presented in the preceding table. Level 1 This category includes certain U.S. Treasury and agency fixed maturity securities and certain short-term money market securities. As it relates to derivatives, this level includes financial futures including exchange-traded interest rate futures. Separate account assets classified within this level principally include mutual funds. Level 2 This category includes fixed maturity securities priced principally by independent pricing services using observable inputs. These fixed maturity securities include certain U.S. Treasury and agency securities as well as the majority of U.S. and foreign corporate securities, residential mortgage-backed securities, commercial mortgage-backed securities, state and political subdivision securities, foreign government securities and asset-backed securities. Short-term investments included within Level 2 are of a similar nature to these fixed maturity securities. As it relates to derivatives, this level includes derivative instruments utilized by the Company for which the inputs used are observable, including interest rate floors, foreign currency swaps and credit default swaps. Level 3 This category includes fixed maturity securities priced principally through independent broker quotations or market standard valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. This level consists of less liquid fixed maturity securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies and primarily include: U.S. and foreign corporate securities -- including below investment grade private placements; residential mortgage-backed securities; and asset- backed securities -- including all of those supported by sub-prime mortgage loans. Equity securities classified as Level 3 securities consist of non-redeemable preferred stock where there has been very limited trading activity or where less price transparency exists around the inputs to the valuation. Embedded derivatives classified within this level include embedded derivatives associated with certain variable annuity riders and embedded derivatives related to funds withheld on ceded reinsurance. A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs for year ended December 31, 2008 is as follows:
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) ----------------------------------------------------------------------------------------------- TOTAL REALIZED/UNREALIZED GAINS (LOSSES) INCLUDED IN: ---------------------- PURCHASES, BALANCE, IMPACT OF BALANCE, OTHER SALES, TRANSFER IN BALANCE, DECEMBER 31, SFAS 157 BEGINNING EARNINGS COMPREHENSIVE ISSUANCES AND AND/OR OUT END OF 2007 ADOPTION(1) OF PERIOD (2, 3) INCOME (LOSS) SETTLEMENTS(4) OF LEVEL 3(5) PERIOD ------------ ----------- --------- -------- ------------- -------------- ------------- -------- (IN MILLIONS) Fixed maturity securities............ $262 $-- $262 $(13) $(54) $(32) $ 1 $164 Equity securities....... 4 -- 4 -- (3) -- 6 7 Net embedded derivatives(6)........ 175 95 270 647 -- 46 -- 963
F-75 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) -------- (1) Impact of SFAS 157 adoption represents the amount recognized in earnings as a change in estimate upon the adoption of SFAS 157 associated with Level 3 financial instruments held at January 1, 2008. Such amount was offset by a reduction to DAC of $31 million resulting in a net impact of $64 million. This net impact of $64 million along with a $1 million reduction in the estimated fair value of Level 2 freestanding derivatives results in a total impact of adoption of SFAS 157 of $63 million. (2) Amortization of premium/discount is included within net investment income which is reported within the earnings caption of total gains/(losses). Impairments are included within net investment gains (losses) which is reported within the earnings caption of total gains/(losses). Lapses associated with embedded derivatives are included with the earnings caption of total gains/(losses). (3) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (4) The amount reported within purchases, sales, issuances and settlements is the purchase/issuance price (for purchases and issuances) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased/issued or sold/settled. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For embedded derivatives, attributed fees are included within this caption along with settlements, if any. (5) Total gains and (losses) (in earnings and other comprehensive income (loss)) are calculated assuming transfers in (out) of Level 3 occurred at the beginning of the period. Items transferred in and out in the same period are excluded from the rollforward. (6) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (7) Amounts presented do not reflect any associated hedging activities. Actual earnings associated with Level 3, inclusive of hedging activities, could differ materially. The table below summarizes both realized and unrealized gains and losses for the year ended December 31, 2008 due to changes in estimated fair value recorded in earnings for Level 3 assets and liabilities:
TOTAL GAINS AND LOSSES ----------------------------------------- CLASSIFICATION OF REALIZED/UNREALIZED GAINS (LOSSES) INCLUDED IN EARNINGS ----------------------------------------- NET NET INVESTMENT INVESTMENT INCOME GAINS (LOSSES) TOTAL ---------- -------------- ----- (IN MILLIONS) Fixed maturity securities......................... $-- $(13) $(13) Equity securities................................. -- -- -- Net embedded derivatives.......................... -- 647 647
The table below summarizes the portion of unrealized gains and losses recorded in earnings for the year ended December 31, 2008 for Level 3 assets and liabilities that are still held at December 31, 2008.
CHANGE IN UNREALIZED GAINS (LOSSES) RELATING TO ASSETS AND LIABILITIES HELD AT DECEMBER 31, 2008 ----------------------------------------- NET NET INVESTMENT INVESTMENT INCOME GAINS (LOSSES) TOTAL ---------- -------------- ----- (IN MILLIONS) Fixed maturity securities......................... $-- $(12) $(12) Equity securities................................. -- -- -- Net embedded derivatives.......................... -- 649 649
F-76 METLIFE INVESTORS USA INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife Insurance Company of Connecticut) NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) NON-RECURRING FAIR VALUE MEASUREMENTS During the year ended December 31, 2008, the Company recorded impairments on certain mortgage loans using estimated fair value based on independent broker quotations, or, if the loans were in foreclosure or were otherwise determined to be collateral dependent, on the value of the underlying collateral. All such mortgage loans were sold during the year and at December 31, 2008, the Company did not have mortgage loans carried at estimated fair value. Included within net investment gains (losses) are net impairments for mortgage loans of $1 million for the year ended December 31, 2008. 13. RELATED PARTY TRANSACTIONS SERVICE AGREEMENTS The Company has entered into a master service agreement with MLIC which provides administrative, accounting, legal and similar services to the Company. MLIC charged the Company $133 million, $149 million and $95 million, included in other expenses, for services performed under the master service agreement for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into a service agreement with MetLife Group, Inc. ("MetLife Group"), a wholly owned subsidiary of MetLife, under which MetLife Group provides personnel services, as needed, to support the activities of the Company. MetLife Group charged the Company $83 million, $76 million and $62 million, included in other expenses, for services performed under the service agreement for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into marketing agreements with several affiliates ("Distributors"), in which the Distributors agree to sell, on the Company's behalf, insurance products through authorized retailers. The Company agrees to compensate the Distributors for the sale and servicing of such insurance products in accordance with the terms of the agreements. The Distributors charged the Company $152 million, $121 million and $96 million, included in other expenses, for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into a distribution service agreement with MetLife Investors Distribution Company ("MDC"), in which MDC agrees to sell, on the Company's behalf, insurance products through authorized retailers. The Company agrees to compensate MDC for the sale and servicing of such insurance products in accordance with the terms of the agreement. MDC charged the Company $307 million, $379 million and $286 million, included in other expenses, for the years ended December 31, 2008, 2007 and 2006, respectively. In addition, the Company has entered into service agreements with MDC, in which the Company agrees to provide certain administrative services to MDC. MDC agrees to compensate the Company for the administrative services provided in accordance with the terms of the agreements. The Company received fee revenue of $32 million, $36 million and $33 million, included in other revenues, for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into an investment service agreement with several affiliates ("Advisors"), in which the Advisors provide investment advisory and administrative services to registered investment companies which serve as investment vehicles for certain insurance contracts issued by the Company. Per the agreement, the net profit or loss of the Advisors is allocated to the Company resulting in revenue of $60 million, $62 million and $45 million, included in universal life and investment-type product policy fees, for the years ended December 31, 2008, 2007 and 2006, respectively. The Company had net receivables from affiliates of $108 million and $27 million at December 31, 2008 and 2007, respectively, related to the items discussed above. These receivables exclude affiliated reinsurance balances discussed in Note 6. See Notes 2, 7 and 8 for additional related party transactions. 14. SUBSEQUENT EVENTS See Note 10 for information regarding subsequent events. F-77 PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS a. Financial Statements ----------------------------------------------------------------------------------------- The following financial statements of the Separate Account are included in Part B hereof: 1. Report of Independent Registered Public Accounting Firm. 2. Statement of Assets and Liabilities as of December 31, 2008. 3. Statement of Operations for the year ended December 31, 2008. 4. Statements of Changes in Net Assets for the years ended December 31, 2008 and 2007. 5. Notes to Financial Statements. The following financial statements of the Company are included in Part B hereof: 1. Report of Independent Registered Public Accounting Firm. 2. Balance Sheets as of December 31, 2008 and 2007. 3. Statements of Income for the years ended December 31, 2008, 2007 and 2006. 4. Statements of Stockholder's Equity for the years ended December 31, 2008, 2007 and 2006. 5. Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006. 6. Notes to Financial Statements.
b. Exhibits -------------------------------------------------------------------------------------------------------- 1. Certification of Restated Resolution of Board of Directors of the Company authorizing the establishment of the Separate Account (adopted May 18, 2004)(3) 2. Not Applicable. 3. (i) Principal Underwriter's and Selling Agreement (effective January 1, 2001)(3) (ii) Amendment to Principal Underwriter's and Selling Agreement (effective January 1, 2002)(3) (iii) Form of Retail Sales Agreement (MLIDC 7-1-05 (LTC))(6) (iv) Agreement and Plan of Merger (12-01-04) (MLIDC into GAD)(7) 4. (i) Individual Flexible Purchase Payment Deferred Variable Annuity Contract(1) (ii) Death Benefit Rider - Principal Protection (1) (iii) Waiver of Withdrawal Charge for Nursing Home or Hospital Confinement Rider(1) (iv) Terminal Illness Rider(1) (v) Unisex Annuity Rates Rider(1) (vi) Individual Retirement Annuity Endorsement 8023.1 (9/02)(3) (vii) Roth Individual Retirement Annuity Endorsement 9024.1 (9/02)(3) (viii) 401(a)/403(a) Plan Endorsement 8025.1 (9/02)(3) (ix) Tax Sheltered Annuity Endorsement 8026.1 (9/02)(3) (x) Simple Individual Retirement Annuity Endorsement 8276 (9/02)(3) (xi) Form of Guaranteed Minimum Income Benefit Rider [GMIB Plus or GMIB III] 8018-2(05/05)(3) (xii) Form of Contract Schedule [GMIB II, GMIB III, GWB I, GWB Enhanced, GWB II, GWB III, GMAB] 8028-4 (11/05) (4) (xiii) Designated Beneficiary Non-Qualified Annuity Endorsement MLIU-NQ-1 (11/05)-I (4) (xiv) Lifetime Guaranteed Withdrawal Benefit MLIU-690-3 (6/06)(6) (xv) Form of Contract Schedule 8028-5 (6/06)(LGWB)(6) (xvi) Form of Contract Schedule 8028-6 (2/07)-VA(8) (xvii) Form of Contract Schedule 8028-6 (2/07)-L(8)
(xviii) Fixed Account Rider 8028-5 (6-06)(7) (xvix) Guaranteed Minimum Death Benefit (GMDB) Rider MLIU-640-1 (4/08)(9) (xx) Form of Contract Schedule Guaranteed Minimum Death Benefit (GMDB) Rider MLIU-EDB (4/08)(9) (xxi) Guaranteed Minimum Income Benefit Rider Living Benefit MLIU-560-4 (4/08) (9) (xxii) Lifetime Guaranteed Withdrawal Benefit Rider MLIU-690-4 (4/08) (LWG II)(9) (xxiii) Form of Contract Schedule Lifetime Guaranteed Withdrawal Benefit MLIU-EGWB (4/08) (LWG II) (13) 5. (i) Form of Variable Annuity Application APPVAUSAS-207(8) (ii) Form of Variable Annuity Application 8406 (10/07) APPS April 2008 (11) 6. (i) Copy of Restated Articles of Incorporation of the Company(3) (ii) Copy of the Bylaws of the Company(3) (iii) Certificate of Amendment of Certificate of Incorporation filed 10/01/79 and signed 9/27/79 (4) (iv) Certificate of Change of Location of Registered Office and/or Registered Agent filed 2/26/80 and effective 2/8/80 (3) (v) Certificate of Amendment of Certification of Incorporation signed 4/26/83 and certified 2/12/85 (3) (vi) Certificate of Amendment of Certificate of Incorporation filed 10/22/84 and signed 10/19/84 (3) (vii) Certificate of Amendment of Certificate of Incorporation certified 8/31/94 and adopted 6/13/94 (3) (viii) Certificate of Amendment of Certificate of Incorporation of Security First Life Insurance Company (name change to MetLife Investors USA Insurance Company) filed 1/8/01 and signed 12/18/00 (3) 7. (i) Reinsurance Agreement between MetLife Investors USA Insurance Company and Metropolitan Life Insurance Company(2) (ii) Automatic Reinsurance Agreement between MetLife Investors USA Insurance Company and Exeter Reassurance Company, Ltd.(2) (iii) Reinsurance Agreement and Administrative Services Agreement between MetLife Investors USA Insurance Company and Metropolitan Life Insurance Company (effective January 1, 2006) (10) 8. (i) Participation Agreement Among Met Investors Series Trust, Met Investors Advisory Corp., MetLife Investors Distribution Company and MetLife Investors USA Insurance Company (effective 2-12-01) (3) (ii) Participation Agreement Among Metropolitan Series Fund, Inc., MetLife Advisors, LLC, Metropolitan Life Insurance Company and MetLife Investors USA Insurance Company (effective 07-01-04) (5) (iii) Participation Agreement Among Metropolitan Series Fund, Inc., MetLife Advisors, LLC, MetLife Investors Distribution Company and MetLife Investors USA Insurance Company (effective 08-31-07) (12) (iv) First Amendment to Participation Agreement (effective 12-01-01) Among Met Investors Series Trust, Met Investors Advisory Corp., MetLife Investors Distribution Company and MetLife Investors USA Insurance Company (effective 02-01-08); and Second Amendment to the Participation Agreement (effective 12-01-01) Among Met Investors Series Trust, MetLife Advisers, LLC, MetLife Investors Distribution Company, and MetLife Investors USA Insurance Company (effective 05-01-09)(14) 9. Opinion and Consent of Counsel (8) 10. Consent of Independent Registered Public Accounting Firm (filed herewith) 11. Not Applicable. 12. Not Applicable. 13. Powers of Attorney for Michael K. Farrell, Jay S. Kaduson, Susan A. Buffum, Bennett D. Kleinberg, Paul A. Sylvester, Richard C. Pearson, Elizabeth M. Forget, George Foulke, James J. Reilly and Jeffrey A. Tupper. (filed herewith) (1) incorporated herein by reference to Registrant's Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on January 26, 2001. (2) incorporated herein by reference to Registrant's Post-Effective Amendment No. 4 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on April 30, 2003. (3) incorporated herein by reference to Registrant's Post-Effective Amendment No. 6 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on July 15, 2004.
(4) incorporated herein by reference to Registrant's Pre-Effective Amendment No. 1 to Form N-4/A (File Nos. 333-127553 and 811-03365) filed electronically on September 15, 2005. (5) incorporated herein by reference to Registrant's Post-Effective Amendment No. 14 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on October 7, 2005. (6) incorporated herein by reference to Registrant's Post-Effective Amendment No. 19 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on April 24, 2006. (7) incorporated herein by reference to Registrant's Post-Effective Amendment No. 18 to Form N-4 (File Nos. 333-54466 and 811-03365) filed electronically on April 16, 2007. (8) incorporated herein by reference to Registrant's Pre-Effective Amendment No. 1 to Form N-4/A (File Nos. 333-137369 and 811-03365) filed electronically on April, 17, 2007. (9) incorporated herein by reference to Registrant's Post-Effective Amendment No. 27 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on December 21, 2007. (10) incorporated herein by reference to Registrant's Post-Effective Amendment No. 31 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on April 15, 2008. (11) incorporated herein by reference to Registrant's Post-Effective Amendment No. 1 to Form N-4 (File Nos. 333-137369 and 811-03365) filed electronically on April 15, 2008. (12) incorporated herein by reference to Registrant's Post-Effective Amendment No. 26 to Form N-4 (File Nos. 333-54464 and 811-03365) filed electronically on October 31, 2007. (13) incorporated herein by reference to Registrant's Pre-Effective Amendment No. 1 to Form N-4/A (File Nos. 333-152385 and 811-03365) filed electronically on October 28, 2008. (14) incorporated herein by reference to Registrant's Post-Effective Amendment No. 33 to Form N-4 (File Nos. 333-54466 and 811-03365) filed electronically on April 22, 2009.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR The following are the Officers and Directors who are engaged directly or indirectly in activities relating to the Registrant or the variable annuity contracts offered by the Registrant and the executive officers of the Company:
Name and Principal Business Address Positions and Offices with Depositor Michael K. Farrell Chairman of the Board, President and 10 Park Avenue Chief Executive Officer Morristown, NJ 07962 Susan A. Buffum Director 10 Park Avenue Morristown, NJ 07962 James J. Reilly Vice President-Finance 501 Boylston Street Boston, MA 02116 Jay S. Kaduson Director and Vice President 10 Park Avenue Morristown, NY 07962 Bennett D. Kleinberg Director and Vice President 1300 Hall Boulevard Bloomfield, CT 06002-2910 Elizabeth M. Forget Director and Executive Vice President 1095 Avenue of the Americas New York, NY 10036 George Foulke Director 334 Madison Avenue Covenant Station, NJ 07961 Paul A. Sylvester Director 10 Park Avenue Morristown, NJ 07962 Kevin J. Paulson Senior Vice President 4700 Westown Parkway Suite 200 West Des Moines, IA 50266
Name and Principal Business Address Positions and Offices with Depositor Richard C. Pearson Director, Vice President, Associate General 5 Park Plaza Counsel and Secretary Suite 1900 Irvine, CA 92614 Jeffrey A. Tupper Director and Assistant Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Debora L. Buffington Vice President, Director of Compliance 5 Park Plaza Suite 1900 Irvine, CA 92614 Betty E. Davis Vice President 1125 17th Street Suite 800 Denver, CO 80202 Thomas G. Hogan, Jr. Vice President 400 Atrium Drive Somerset, NJ 08837 Enid M. Reichert Vice President, Appointed Actuary 501 Route 22 Bridgewater, NJ 08807 Jonathan L. Rosenthal Vice President, Chief Hedging Officer 10 Park Avenue Morristown, NJ 07962 Christopher A. Kremer Vice President 501 Boylston Street Boston, MA 02116 Marian J. Zeldin Vice President 300 Davidson Avenue Somerset, NJ 08873 Karen A. Johnson Vice President 501 Boylston Street Boston, MA 02116 Deron J. Richens Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Jeffrey N. Altman Vice President 1095 Avenue of the Americas New York, NY 10036 Roberto Baron Vice President 1095 Avenue of the Americas New York, NY 10036 Paul L. LeClair Vice President 501 Boylston Street Boston, MA 02116 Gregory E. Illson Vice President 501 Boylston Street Boston, MA 02116 George Luecke Vice President, Annuity Finance 1095 Avenue of the Americas New York, NY 10036 Lisa S. Kuklinski Vice President 1095 Avenue of the Americas New York, NY 10036
Name and Principal Business Address Positions and Offices with Depositor Jeffrey P. Halperin Vice President 1095 Avenue of the Americas New York, NY 10036 Eric T. Steigerwalt Treasurer 1095 Avenue of the Americas New York, NY 10036 Mark S. Reilly Vice President 1300 Hall Boulevard Bloomfield, CT 06002-2910 Gene L. Lunman Vice President 1300 Hall Boulevard Bloomfield, CT 06002-2910 Robert L. Staffier Vice President 501 Boylston Street Boston, MA 02116
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT The Registrant is a separate account of MetLife Investors USA Insurance Company under Delaware insurance law. MetLife Investors USA Insurance Company is a wholly-owned direct subsidiary of MetLife Insurance Company of Connecticut which in turn is a direct subsidiary of MetLife, Inc., a publicly traded company. The following outline indicates those entities that are controlled by MetLife, Inc. or are under the common control of MetLife, Inc. No person is controlled by the Registrant. ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 2008 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2008. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, (if any)) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Bank National Association (USA) C. Exeter Reassurance Company, Ltd. (Bermuda) D. MetLife Taiwan Insurance Company Limited (Taiwan) E. Metropolitan Tower Life Insurance Company (DE) 1. TH Tower NGP, LLC (DE) 2. Partners Tower, L.P. (DE) - a 99% limited partnership interest of Partners Tower, L.P. is held by Metropolitan Tower Life Insurance Company and 1% general partnership interest is held by TH Tower NGP, LLC (DE) 3. TH Tower Leasing, LLC (DE) 4. MetLife Reinsurance Company of Vermont (VT) 5. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 6. Plaza Drive Properties, LLC (DE) 7. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. F. MetLife Pensiones Mexico S.A. (Mexico)- 97.4738% is owned by MetLife, Inc. and 2.5262% is owned by MetLife International Holdings, Inc. G. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by MetLife, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Seguros de Vida S.A. (Chile)- 99.99% is owned by MetLife Chile Inversiones Limitada and 0.01% is owned by MetLife International Holdings, Inc. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile)- 99.99% is owned by MetLife Chile Seguros de Vida S.A. and 0.01% is owned by MetLife Chile Inversiones Limitada. H. MetLife Mexico S.A. (Mexico)- 98.70541% is owned by MetLife, Inc., 1.29459% is owned by MetLife International Holdings, Inc. 1. MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. a) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. b) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. c) MetA SIEFORE Adicional, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. d) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. e) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. f) Met5 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. 2. ML Capacitacion Comercial S.A. de C.V. (Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. I. MetLife Mexico Servicios, S.A. de C.V. (Mexico)- 98% is owned by MetLife, Inc. and 2% is owned by MetLife International Holdings, Inc. J. Metropolitan Life Seguros de Vida S.A. (Uruguay) K. MetLife Securities, Inc. (DE) L. Enterprise General Insurance Agency, Inc. (DE) 1. MetLife General Insurance Agency of Texas, Inc. (DE) 2. MetLife General Insurance Agency of Massachusetts, Inc. (MA) 1 M. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. Met P&C Managing General Agency, Inc. (TX) 5. MetLife Auto & Home Insurance Agency, Inc. (RI) 6. Metropolitan Group Property and Casualty Insurance Company (RI) a) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) 7. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 8. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) N. Cova Corporation (MO) 1. Texas Life Insurance Company (TX) O. MetLife Investors Insurance Company (MO) P. First MetLife Investors Insurance Company (NY) Q. Walnut Street Securities, Inc. (MO) R. Newbury Insurance Company, Limited (BERMUDA) S. MetLife Investors Group, Inc. (DE) 1. MetLife Investors Distribution Company (MO) 2. Met Investors Advisory, LLC (DE) 3. MetLife Investors Financial Agency, Inc. (TX) 2 T. MetLife International Holdings, Inc. (DE) 1. MetLife Mexico Cares, S.A. de C.V. (Mexico) a) Fundacion MetLife Mexico, A.C. (Mexico) 2. Natiloportem Holdings, Inc. (DE) a) Servicios Administrativos Gen, S.A. de C.V. (Mexico) i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. 3. MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, Inc. and 74% is owned by third parties. 4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99924% is owned by MetLife International Holdings, Inc. and 0.00076% is owned by Natiloporterm Holdings, Inc. 5. MetLife Seguros de Vida S.A. (Argentina)- 95.2499% is owned by MetLife International Holdings, Inc. and 4.7473% is owned by Natiloportem Holdings, Inc. 6. MetLife Insurance Company of Korea Limited (South Korea)- 14.64% of MetLife Insurance Company of Korea Limited is owned by MetLife, Mexico, S.A. and 85.36% is owned by Metlife International Holdings, Inc. 7. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)- 66.6617540% is owned by MetLife International Holdings, Inc. and 33.3382457% is owned by MetLife Worldwide Holdings, Inc. and 0.0000003% is owned by Natiloportem Holdings, Inc. 8. MetLife Global, Inc. (DE) 9. MetLife Administradora de Fundos Multipatrocinados Ltda (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. 10. MetLife Insurance Limited (United Kingdom) 11. MetLife General Insurance Limited (Australia) 12. MetLife Limited (United Kingdom) 13. MetLife Insurance S.A./NV (Belgium) 14. MetLife Services Limited (United Kingdom) 15. MetLife Insurance Limited (Australia) a) MetLife Investments Pty Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investment Pty Limited. MetLife Investments Pty Limited is a wholly owned subsidiary of MetLife Insurance Limited. b) MetLife Services (Singapore) PTE Limited (Australia) 16. MetLife Seguros de Retiro S.A. (Argentina) - 96.8819% is owned by MetLife International Holdings, Inc. and 3.1180% is owned by Natiloportem Holdings, Inc. 17. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, Inc. and 94.9999% is owned by MetLife International Holdings Inc. 18. Compania Previsional MetLife S.A. (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. (a) Met AFJP S.A. (Argentina) - 75.4088% of the shares of Met AFJP S.A. are held by Compania Previsional MetLife SA, 19.5912% is owned by MetLife Seguros de Vida SA, 3.9689% is held by Natiloportem Holdings, Inc. and 1.0310% is held by MetLife Seguros de Retiro SA. 19. MetLife Worldwide Holdings, Inc. (DE) a) MetLife Towarzystwo Ubezpieczen na Zycie Spolka Akcyjna. (Poland) b) MetLife Direct Co., Ltd. (Japan) c) MetLife Limited (Hong Kong) U. Metropolitan Life Insurance Company (NY) 1. 334 Madison Euro Investments, Inc. (DE) a) Park Twenty Three Investments Company (United Kingdom)- 1% voting control of Park Twenty Three Investments Company is held by St. James Fleet Investments Two Limited. 1% of the shares of Park Twenty Three Investments Company is held by Metropolitan Life Insurance Company. 99% is owned by 334 Madison Euro Investment, Inc. i) Convent Station Euro Investments Four Company (United Kingdom)- 1% voting control of Convent Station Euro Investments Four Company is held by 334 Madison Euro Investments, Inc. as nominee for Park Twenty Three Investments Company. 99% is owned by Park Twenty Three Investments Company. 2. St. James Fleet Investments Two Limited (Cayman Islands)- 34% of the shares of St. James Fleet Investments Two Limited is held by Metropolitan Life Insurance Company. 3. One Madison Investments (Cayco) Limited (Cayman Islands)- 10.1% voting control of One Madison Investments (Cayco) Limited is held by Convent Station Euro Investments Four Company. 89.9% of the shares of One Madison Investments (Cayco) Limited is held by Metropolitan Life Insurance Company. 4. CRB Co, Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000 preferred non-voting shares and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 5. GA Holding Corp. (MA) 3 6. Thorngate, LLC (DE) 7. Alternative Fuel I, LLC (DE) 8. Transmountain Land & Livestock Company (MT) 9. MetPark Funding, Inc. (DE) 10. HPZ Assets LLC (DE) 11. Missouri Reinsurance (Barbados), Inc. (Barbados) 12. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 13. MetLife Real Estate Cayman Company (Cayman Islands) 14. Metropolitan Marine Way Investments Limited (Canada) 15. MetLife Private Equity Holdings, LLC (DE) 16. 23rd Street Investments, Inc. (DE) a) Mezzanine Investment Limited Partnership-BDR (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. b) Mezzanine Investment Limited Partnership-LG (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. c) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. d) MetLife Capital Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. 17. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 18. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 4 19. Bond Trust Account A (MA) 20. MetLife Investments Asia Limited (Hong Kong). 21. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 22. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 23. New England Life Insurance Company (MA) a) MetLife Advisers, LLC (MA) b) New England Securities Corporation (MA) 24. GenAmerica Financial, LLC (MO) a) GenAmerica Capital I (DE) b) General American Life Insurance Company (MO) i) GenAmerica Management Corporation (MO) 5 25. Corporate Real Estate Holdings, LLC (DE) 26. Ten Park SPC (CAYMAN ISLANDS ) - 1% voting control of Ten Park SPC is held by 23rd Street Investments, Inc. 27. MetLife Tower Resources Group, Inc. (DE) 28. Headland - Pacific Palisades, LLC (CA) 29. Headland Properties Associates (CA) - 1% is owned by Headland - Pacific Palisades, LLC and 99% is owned by Metropolitan Life Insurance Company. 30. Krisman, Inc. (MO) 31. Special Multi-Asset Receivables Trust (DE) 32. White Oak Royalty Company (OK) 33. 500 Grant Street GP LLC (DE) 34. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC 35. MetLife Canada/MetVie Canada (Canada) 36. MetLife Retirement Services LLC (NJ) a) MetLife Investment Funds Services LLC (NJ) (i) MetLife Investment Funds Management LLC (NJ) (ii) MetLife Associates LLC (DE) 37. Euro CL Investments LLC (DE) 38. MEX DF Properties, LLC (DE) 39. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company 40. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (UK) 41. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 42. MLIC Asset Holdings, LLC (DE) 43. 85 Brood Street LLC (CT) 44. The Building at 575 LLC (DE) V. MetLife Capital Trust III (DE) W. MetLife Capital Trust IV (DE) X. MetLife Insurance Company of Connecticut (CT) 1. MetLife Property Ventures Canada ULC (Canada) 2. Pilgrim Alternative Investments Opportunity Fund I, LLC (DE) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party. 3. Pilgrim Alternative Investments Opportunity Fund III Associates, LLC (CT) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party. 4. Pilgrim Investments Highland Park, LLC (DE) 5. Metropolitan Connecticut Properties Ventures, LLC (DE) 6. MetLife Canadian Property Ventures LLC (NY) 7. Euro TI Investments LLC (DE) 8. Greenwich Street Investments, LLC (DE) a) Greenwich Street Capital Offshore Fund, Ltd. (Virgin Islands) b) Greenwich Street Investments, L.P. (DE) 9. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company of Connecticut. 10. Plaza LLC (CT) a) Tower Square Securities, Inc. (CT) 11. TIC European Real Estate LP, LLC (DE) 12. MetLife European Holdings, Inc. (UK) a) MetLife Europe Limited (IRELAND) i) MetLife Pensions Trustees Limited (UK) b) MetLife Assurance Limited (UK) 13. Travelers International Investments Ltd. (Cayman Islands) 14. Euro TL Investments LLC (DE) 15. Corrigan TLP LLC (DE) 16. TLA Holdings LLC (DE) a) The Prospect Company (DE) i) Panther Valley, Inc. (NJ) 17. TRAL & Co. (CT) - TRAL & Co. is a general partnership. Its partners are MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company. 18. Tribeca Distressed Securities, L.L.C. (DE) 19. MetLife Investors USA Insurance Comapny (DE) Y. MetLife Reinsurance Company of South Carolina (SC) Z. MetLife Investment Advisors Company, LLC (DE) AA. MetLife Standby I, LLC (DE) 1. MetLife Exchange Trust I (DE) BB. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) i) MetLife Services East Private Limited (India) ii) MetLife Global Operations Support Center Private Limited - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, Inc. CC. SafeGuard Health Enterprises, Inc. (DE) 1. SafeGuard Dental Services, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) DD. MetLife Capital Trust X (DE) EE. Cova Life Management Company (DE) FF. MetLife Reinsurance Company of Charleston (SC) GG. Federal Flood Certification Corp (TX) HH. MetLife Planos Odontologicos Ltda. (Brazil) II. Metropolitan Realty Management, Inc. (DE) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. In addition to the entities shown on the organizational chart, MetLife, Inc. (or where indicated, a subsidiary) also owns interests in the following entities: 1) Metropolitan Life Insurance Company owns varying interests in certain mutual funds distributed by its affiliates. These ownership interests are generally expected to decrease as shares of the funds are purchased by unaffiliated investors. 2) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited partnerships, are investment vehicles through which investments in certain entities are held. A wholly owned subsidiary of Metropolitan Life Insurance Company serves as the general partner of the limited partnerships and Metropolitan Life Insurance Company directly owns a 99% limited partnership interest in each MILP. The MILPs have various ownership and/or debt interests in certain companies. 3) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. NOTE: THE METLIFE, INC. ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE JOINT ---- VENTURES AND PARTNERSHIPS OF WHICH METLIFE, INC. AND/OR ITS SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE SUBSIDIARIES HAVE ALSO BEEN OMITTED. 6 ITEM 27. NUMBER OF CONTRACT OWNERS As of January 31, 2009, there were 537 qualified contract owners and 271 non-qualified contract owners of Series S contracts; and 81 qualified contract owners and 48 non-qualified contract owners of Series S-L Share Option contracts. ITEM 28. INDEMNIFICATION The Depositor's parent, 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 under which the Depositor and MetLife Investors Distribution Company, the Registrant's underwriter (the "underwriter"), as well as certain other subsidiaries of MetLife are covered. A provision in Metlife, Inc.'s by-laws provides for the indemnification (under certain circumstances) of individuals serving as directors or officers of certain organizations, including the Depositor and the Underwriter. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which would involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. The foregoing sentence notwithstanding, if the Delaware General Corporation Law hereafter is amended to authorized further limitations of the liability of a director of a corporation, then a director of the corporation, in addition to the circumstances in which a director is not personally liable as set forth in the preceding sentence, shall be held free from liability to the fullest extent permitted by the Delaware General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article 7 by the stockholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors and officers or controlling persons of the Company pursuant to the foregoing, or otherwise, the 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 the Company of expenses incurred or paid by a director, officer or controlling person of the 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, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 29. PRINCIPAL UNDERWRITERS (a) MetLife Investors Distribution Company is the principal underwriter for the following investment companies (other than Registrant): Met Investors Series Trust MetLife Investors USA Variable Life Account A MetLife Investors Variable Annuity Account One MetLife Investors Variable Annuity Account Five MetLife Investors Variable Life Account One MetLife Investors Variable Life Account Five First MetLife Investors Variable Annuity Account One General American Separate Account Eleven General American Separate Acocunt Twenty-Eight General American Separate Account Twenty-Nine General American Separate Account Two Security Equity Separate Account Twenty-Six Security Equity Separate Account Twenty-Seven MetLife of CT Separate Account QPN for Variable Annuities MetLife of CT Fund UL for Variable Life Insurance MetLife of CT Fund UL III for Variable Life Insurance Metropolitan Life Variable Annuity Separate Account I Metropolitan Life Variable Annuity Separate Account II MetLife of CT Separate Account Eleven for Variable Annuities Metropolitan Life Separate Account E Metropolitan Life Separate Account UL Paragon Separate Account A Paragon Separate Account B Paragon Separate Account C Paragon Separate Account D Metropolitan Series Fund, Inc. Metropolitan Tower Life Separate Account One Metropolitan Tower Life Separate Account Two (b) MetLife Investors Distribution Company is the principal underwriter for the Contracts. The following persons are the officers and directors of MetLife Investors Distribution Company. The principal business address for MetLife Investors Distribution Company is 5 Park Plaza, Suite 1900, Irvine, CA 92614.
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH UNDERWRITER ------------------------------------- ----------------------------------------------------------------- Michael K. Farrell Director 10 Park Avenue Morristown, NJ 07962 Craig W. Markham Director and Vice President 13045 Tesson Ferry Road St. Louis, MO 63128 William J. Toppeta Director 1095 Avenue of the Americas New York, NY 10036 Paul A. Sylvester President, National Sales Manager-Annuities & LTC 10 Park Avenue Morristown, NJ 07962 Elizabeth M. Forget Executive Vice President, Investment Fund Management & Marketing 1095 Avenue of the Americas New York, NY 10036 Paul A. LaPiana Executive Vice President, National Sales Manager-Life 5 Park Plaza, Suite 1900 Irvine, CA 92614
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH UNDERWRITER ------------------------------------- -------------------------------------------------------------------- Richard C. Pearson Executive Vice President, General Counsel and Secretary 5 Park Plaza, Suite 1900 Irvine, CA 92614 Peter Gruppuso Vice President, Chief Financial Officer 485-E US Highway 1 South Iselin, NJ 08830 John C. Kennedy Senior Vice President, National Sales Manager, Bank and 1 MetLife Plaza Broker/Dealer 27-01 Queens Plaza North Long Island City, NY 11101 Douglas P. Rodgers Senior Vice President, Channel Head-LTC 10 Park Avenue Morristown, NJ 07962 Curtis Wohlers Senior Vice President, National Sales Manager, Independent Planners 1 MetLife Plaza and Insurance Advisors 27-01 Queens Plaza North Long Island City, NY 11101 Jeffrey A. Barker Senior Vice President, Channel Head-Independent Accounts 1 MetLife Plaza 27-01 Queens Plaza North Long Island City, NY 11101 Andrew Aiello Senior Vice President, Channel Head-National Accounts 5 Park Plaza, Suite 1900 Irvine, CA 92614 Jay S. Kaduson Senior Vice President 10 Park Avenue Morristown, NJ 07962 Eric T. Steigerwalt Treasurer 1095 Avenue of the Americas New York, NY 10036 Debora L. Buffington Vice President, Director of Compliance 5 Park Plaza, Suite 1900 Irvine, CA 92614 David DeCarlo Vice President 5 Park Plaza, Suite 1900 Irvine, CA 92614 Paul M. Kos Vice President 5 Park Plaza, Suite 1900 Irvine, CA 92614 Deron J. Richens Vice President 5 Park Plaza, Suite 1900 Irvine, CA 92614 Cathy Sturdivant Vice President 5 Park Plaza, Suite 1900 Irvine, CA 92614 Paulina Vakouros Vice President 1095 Avenue of the Americas New York, NY 10036
(c) Compensation from the Registrant. The following commissions and other compensation were received by the Distributor, directly or indirectly, from the Registrant during the Registrant's last fiscal year:
(1) (2) (3) (4) (5) Net Underwriting Discounts And Compensation Brokerage Other Name of Principal Underwriter Commissions On Redemption Commissions Compensation ----------------------------------------- ----------------- --------------- ------------- ------------- MetLife Investors Distribution Company $357,776,663 $0 $0 $0
ITEM 30. 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) MetLife Annuity Operations, 27000 Westown Parkway, Bldg. 4, Suite 200, West Des Moines, IA 50266 (c) State Street Bank & Trust Company, 225 Franklin Street, Boston, MA 02110 (d) MetLife Investors Distribution Company, 5 Park Plaza, Suite 1900, Irvine, CA 92614 (e) MetLife Investors Insurance Company, 5 Park Plaza, Suite 1900, Irvine, CA 92614 (f) MetLife, 4010 Boy Scout Blvd., Tampa, FL 33607 (g) MetLife, 501 Boylston Street, Boston, MA 02116 (h) MetLife, 200 Park Avenue, New York, NY 10166 (i) MetLife, 1125 17th Street, Denver, CO 80202 ITEM 31. MANAGEMENT SERVICES Not Applicable. ITEM 32. UNDERTAKINGS a. Registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen (16) months old for so long as payment under the variable annuity contracts may be accepted. b. Registrant hereby undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. c. Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statement required to be made available under this Form promptly upon written or oral request. REPRESENTATIONS MetLife Investors USA Insurance Company ("Company") hereby represents that the fees and charges deducted under the Contracts described in the Prospectus, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred and the risks assumed by the Company. The Company hereby represents that it is relying upon the Securities and Exchange Commission No-Action Letter issued to the American Council of Life Insurance dated November 28, 1988 (Commission ref. IP-6-88) and that the following provisions have been complied with: 1. Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in each registration statement, including the prospectus, used in connection with the offer of the contract; 2. Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract; 3. Instruct sales representatives who solicit participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential participants; 4. Obtain from each plan participant who purchases a Section 403(b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the participant's understanding of (1) the restrictions on redemption imposed by Section 403(b)(11), and (2) other investment alternatives available under the employer's Section 403(b) arrangement to which the participant may elect to transfer his contract value. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the City of Irvine, and State of California, on this 22nd day of April 2009. METLIFE INVESTORS USA SEPARATE ACCOUNT A (Registrant) By: METLIFE INVESTORS USA INSURANCE COMPANY By: /s/ Richard C. Pearson ---------------------------------------- Richard C. Pearson Vice President and Associate General Counsel METLIFE INVESTORS USA INSURANCE COMPANY (Depositor) By: /s/ Richard C. Pearson ---------------------------------------- Richard C. Pearson Vice President and Associate General Counsel
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on April 22, 2009.
/s/ Michael K. Farrell* -------------------------------- Chairman of the Board, President and Chief Executive Michael K. Farrell Officer /s/ James. J. Reilly* -------------------------------- Vice President-Finance (principal financial officer and James J. Reilly principal accounting officer) /s/ Susan A. Buffum* -------------------------------- Susan A. Buffum Director /s/ Jay S. Kaduson* -------------------------------- Jay S. Kaduson Director and Vice President /s/ Bennett D. Kleinberg* -------------------------------- Bennett D. Kleinberg Director and Vice President /s/ Elizabeth M. Forget* -------------------------------- Elizabeth M. Forget Director and Executive Vice President /s/ George Foulke* -------------------------------- George Foulke Director /s/ Paul A. Sylvester* -------------------------------- Paul A. Sylvester Director /s/ Richard C. Pearson* -------------------------------- Director, Vice President, Associate General Counsel and Richard C. Pearson Secretary /s/ Jeffrey A. Tupper* -------------------------------- Jeffrey A. Tupper Director and Assistant Vice President
*By: /s/ Michele H. Abate ---------------------------------------- Michele H. Abate, Attorney-In-Fact April 22, 2009
*MetLife Investors USA Insurance Company. Executed by Michele H. Abate, Esquire on behalf of those indicated pursuant to powers of attorney filed herewith. INDEX TO EXHIBITS 10 Consent of Independent Registered Public Accounting Firm (Deloitte & Touche LLP) 13 Powers of Attorney