METROPOLITAN LIFE SEPARATE ACCOUNT UL (Form Type: 485BPOS, Filing Date: 04/29/2003)

As filed with the Securities and Exchange Commission on April 29, 2003 Registration No. 333-40161 811-06025 -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-6 Registration Statement Under the Securities Act of 1933 Post-Effective Amendment No. 7 [X] Registration Statement Under the Investment Company Act of 1940 Amendment No. 6 [X] Metropolitan Life Separate Account UL (Exact Name of Registrant) Metropolitan Life Insurance Company (Name of Depositor) One Madison Avenue New York, NY 10010 (Address of depositor's principal executive offices) --------------------- Gary A. Beller, Esq. Senior Executive Vice President and General Counsel Metropolitan Life Insurance Company One Madison Avenue New York, NY 10010 (Name and address of agent for service) Copies to: Gary O. Cohen, Esq. and Thomas C. Lauerman, Esq. Foley & Lardner 3000 K Street, N.W. Washington, D.C. 20007 It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) [X] on May 1, 2003 pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities Being Registered: Interests in Metropolitan Life Separate Account UL under Variable Additional Insurance Options.

E Q U I T Y O P T I O N S PROSPECTUS FOR THE EQUITY OPTIONS ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") MAY 1, 2003 MetLife issues the Equity Options as optional benefits to a fixed benefit life insurance policy (the "base policy"). We also offer other optional benefits as additions to the base policy. For ease of reference, we refer to the base policy and all of the optional benefits that are added to the base policy as the "Policy." The Equity Options allow you to experience the potential growth of the equity markets while maintaining your base policy. There are two different Equity Options, and you may elect to include either or both as optional benefits to your base policy: - Equity Additions (also known as Variable Additional Insurance) - Equity Enricher (also known as Variable Additional Benefits). This prospectus provides you with important information about the Equity Options. However, this prospectus is not the Policy. The Policy, rather, is a separate written agreement (including all applicable optional benefits) that MetLife issues to you. You allocate premium payments for the Equity Options to the available investment divisions of Metropolitan Life Separate Account UL ("Separate Account"). Each available investment division (sometimes referred to in this prospectus as "variable investment option") invests in a corresponding "Portfolio" of the Metropolitan Series Fund, Inc.: MetLife Stock Index Janus Mid Cap* ------------------- *This Portfolio is not available for Equity Additions. A separate prospectus for Metropolitan Series Fund, Inc. ("Fund") is attached to this prospectus. It describes in greater detail an investment in the Portfolios listed above. Before purchasing an Equity Option, read the information in this prospectus and in the prospectus for the Fund. Keep these prospectuses for future reference. Policies issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus. Your actual Policy and any endorsements are the controlling documents. You should read the Policy carefully for any variations in your state. Neither the Securities and Exchange Commission ("SEC") nor any state securities authority has approved or disapproved these securities, nor have they determined if this Prospectus is accurate or complete. Interests in the Separate Account and the Portfolios are not deposits or obligations of, or insured or guaranteed by, the U.S. Government, any bank or other depository institution including the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any other agency or entity or person. We do not authorize any representations about this offering other than as contained in this prospectus or its supplements or in our authorized supplemental sales material.

TABLE OF CONTENTS <Table> <Caption> PAGE IN THIS SUBJECT PROSPECTUS ------- ---------- <S> <C> Summary of Benefits and Risks............................... 3 Benefits of the Equity Options............................ 3 Risks of the Equity Options............................... 4 Risks of Investment in the Portfolios..................... 5 Fee Tables.................................................. 6 Transaction Fees.......................................... 6 Periodic Charges Other Than Portfolio Operating Expenses............................................... 7 Annual Portfolio Operating Expenses....................... 8 MetLife..................................................... 8 Our Separate Account That Supports the Equity Options....... 8 The Portfolios.............................................. 9 Management of the Portfolios.............................. 9 The Portfolio Share Classes That We Offer................. 10 Purchase and Redemption of the Portfolio Shares by Our Separate Account....................................... 10 Voting Rights that You Will Have.......................... 10 The Base Policy and its Benefit Options..................... 11 Purchasing Equity Options................................... 12 Your Payment and Allocation of Equity Options Premiums...... 13 Paying Premiums........................................... 13 Maximum and Minimum Premium Payments...................... 14 Allocating Equity Enricher Premium........................ 15 Sending Communications and Payments To Us................... 15 Contacting Us............................................. 15 When Your Requests, Instructions and Notifications Become Effective.............................................. 16 Third Party Requests...................................... 17 Equity Options Insurance Proceeds Payable If the Insured Dies...................................................... 17 Equity Options Death Benefits............................. 17 Alternate Death Benefit That Automatically Applies in Some Cases.................................................. 18 Conditional Guaranteed Minimum Death Benefit.............. 18 Equity Options Cash Value................................... 19 Surrenders and Partial Withdrawals From Equity Options...... 19 Transferring Cash Value..................................... 20 Borrowing From Your Policy.................................. 21 Equity Options Termination and Reinstatement................ 22 Charges and Deductions You Pay for Equity Options........... 23 Deductions from Premiums -- Equity Enricher Only.......... 23 Charges Included in the Monthly Deduction................. 23 Charges and Expenses of the Separate Account and the Portfolios............................................. 24 Net Single Premium.......................................... 25 Federal Tax Matters......................................... 25 Rights We Reserve........................................... 27 Other Policy Provisions..................................... 28 Sales and Administration of the Policies.................... 29 Legal Proceedings........................................... 30 Restrictions on Financial Transactions...................... 30 Experts..................................................... 30 Financial Statements........................................ 30 </Table> 2

SUMMARY OF BENEFITS AND RISKS This summary describes important benefits and risks of the Equity Options. The sections of this prospectus following this summary discuss the Policy and the Equity Options in more detail. BENEFITS OF THE EQUITY OPTIONS Death Benefit. The Equity Options are designed to provide insurance protection. If the Equity Options are in force, and upon receipt of satisfactory proof of the death of the insured, we will pay insurance proceeds to the beneficiary of the Policy. Insurance proceeds generally equal the Equity Options cash value divided by an applicable "net single premium amount" that is specified in your rider. Premium Flexibility. The Equity Options allow some flexibility in making premium payments. For Equity Additions, you can make premium payments by allocating to Equity Additions any dividends or other credits we pay on the base policy or on certain other benefit options (known as credit options) that you may have elected under the base policy. For Equity Enricher, you can make planned and unplanned premium payments directly to Equity Enricher. Right to Examine the Policy. During the later of ten days following your receipt of the Policy (more in some states) or 45 days after you signed the application for the Policy, you have the right to return the Policy to us. Depending on state law, we will refund the premiums you paid, the Policy's cash value or any other amount required by state insurance law. Investment Options. For Equity Additions, your premium payments will be allocated to the MetLife Stock Index Portfolio. For Equity Enricher, you can allocate your net premiums and cash value among your choice of the MetLife Stock Index Portfolio and the Janus Mid Cap Portfolio. You may change your allocation of future premiums for Equity Enricher at any time. Surrender and Partial Withdrawals. You may surrender (turn in) the Equity Options for their cash value or take a partial withdrawal of the cash value at any time. We will deem your request for surrender of the base policy also to be a request for surrender of the Equity Options. Your cash value in an Equity Option reflects your Equity Option's premium payments, the charges we deduct from the cash value, any investment experience you have in our Separate Account, as well as your transfer, loan and withdrawals activity. A surrender or partial withdrawal may have tax consequences. Transfers. You may transfer cash value from each Equity Option to pay base policy premiums, charges or loan interest. You may also transfer cash value to or from certain other benefit options to an Equity Option, subject to certain limits. Finally, you may make transfers between the two investment options available under the Equity Enricher. Loans. You may borrow from the Policy, including the Equity Options. The maximum loan amount you may take is the Policy's loan value. The loan value equals the Policy cash value less the anticipated loan interest for the remainder of that base policy year. We charge you an initial annual interest rate that we will tell you when you request the loan. The loan interest rate is 3

set each year and we will mail you advance notices of any increases in the loan interest rate applicable to your loan. Loans may have tax consequences. Tax Advantages. If you meet certain requirements, generally you will pay income taxes on the cash value you receive from your Equity Options (through withdrawals or surrenders) only to the extent that those amounts, together with dividends, other credits and distributions under your Policy exceed the cumulative premiums you have paid on your Policy. The death benefit may be subject to Federal and state estate taxes, but your beneficiary will generally not be subject to income tax on the death benefit. Personalized Illustrations. You will receive personalized illustrations in connection with the purchase of the Equity Options that reflect your own particular circumstances. These hypothetical illustrations may help you to understand the long-term effects of different levels of investment performance, the possibility of termination, and the charges and deductions for the Equity Options. The personalized illustrations are based on hypothetical rates of return and are not a representation or guarantee of investment returns or cash value. RISKS OF THE EQUITY OPTIONS Investment Risk. MetLife does not guarantee the investment performance of the variable investment options and you should consider your risk tolerance before selecting any of these options. You will be subject to the risk that investment performance will be unfavorable and that your cash value will decrease. Your death benefit will also decrease unless the Conditional Guaranteed Minimum Death Benefit is in effect. In addition, we deduct Equity Options fees and charges from your Equity Options cash value, which can significantly reduce your Equity Options cash value. It is possible to lose your full investment in the Equity Options and they are not suitable as a short-term savings vehicle. Certain Tax Risks. We believe that the Policy should be deemed a life insurance contract under Federal tax law. Assuming that a Policy qualifies as a life insurance contract for Federal income tax purposes, you should not be deemed to be in receipt of any portion of your Policy's cash value (including any cash value in your Equity Options) until there is an actual distribution from the Policy (including those attributable to an Equity Option). Moreover, insurance proceeds payable under the Policy should be excludable from the gross income of the beneficiary. Although the beneficiary generally should not have to pay Federal income tax on the insurance proceeds, other taxes, such as estate taxes, may apply. If you pay more than a certain amount of premiums, you may cause your Policy to become a "modified endowment contract." If it does, you will pay income taxes on loans and other amounts we pay out to you (except for payment of insurance proceeds), to the extent of any gains in your Policy (which is generally the excess of cash value over the premiums paid). In this case, an additional 10% tax penalty may also apply. If the Policy is not a modified endowment contract, distributions generally will be treated first as a return of basis or investment in the contract and then as taxable income. Moreover, loans will generally not be treated as distributions. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. 4

As with any taxation matter, you should consult with and rely on the advice of your own tax advisor. Loan Risks. A policy loan that affects the Equity Options, will affect the cash value of your Equity Options over time even if it is repaid. This is true because we remove any amount of the loan that affects an Equity Option to the corresponding fixed benefit option under the base policy where it will earn a fixed return and will not participate in the investment experience of the investment divisions. Any unpaid loan (plus accrued interest) also reduces the Policy's insurance proceeds paid to your beneficiary. In addition, your Policy, including any Equity Option, may terminate if your outstanding loan and accrued loan interest equals or exceeds the cash value of your Policy. If you surrender your Policy or your Policy lapses while there is an outstanding loan, there will generally be Federal income tax payable on the amount by which loans from your Policy and partial withdrawals from your optional benefits exceed the premiums paid under your Policy. Since loans and partial withdrawals reduce your Policy's cash value, any remaining cash value may be insufficient to pay the income tax due. Equity Options Charge and Expense Increase. We have the right to increase certain Equity Options charges. Tax Law Changes. Tax laws, regulations, and interpretations have often been changed in the past and such changes continue to be proposed. To the extent that you purchase a Policy or an Equity Option based on expected tax benefits, relative to other financial or investment products or strategies, there is no certainty that such advantages will always continue to exist. RISKS OF INVESTMENT IN THE PORTFOLIOS A comprehensive discussion of the risks associated with investment in the Portfolios can be found in the Fund prospectus attached at the end of this prospectus. There is a possibility that fees and expenses of the Portfolios may increase (or decrease). There is no assurance that any of the Portfolios will achieve its stated investment objective. 5

FEE TABLES The following tables describe the fees and expenses that a Policy Owner will pay when buying and owning the Equity Options. In certain cases, we have the right to increase our charges for new Equity Options, as well as for Equity Options already outstanding. The maximum charges in such cases are shown in the far right-hand column of each of the next two tables below. TRANSACTION FEES This table describes the fees and expenses that a Policy Owner will pay at the time that he or she buys the Equity Options. <Table> <Caption> ------------------------------------------------------------------------------------------- WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT ------------------------------------------------------------------------------------------- <S> <C> <C> <C> Sales Charge* On payment of premium 2.00% of each Same As Current premium paid Amount ------------------------------------------------------------------------------------------- State Tax Imposed on 2.00% of each Same As Current Premiums* On payment of premium premium paid Amount ------------------------------------------------------------------------------------------- Federal Tax Imposed on 1.00% of each Same As Current Premiums* On payment of premium premium paid Amount ------------------------------------------------------------------------------------------- </Table> ------------ *These charges apply to Equity Enricher only. 6

PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that a Policy Owner will pay periodically during the time that he or she owns the Equity Options, not including fees and expenses for the Portfolios. <Table> <Caption> --------------------------------------------------------------------------------------- WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT --------------------------------------------------------------------------------------- <S> <C> <C> <C> Cost of Insurance* Monthly, on the monthly deduction date FOR EQUITY ADDITIONS: Lowest and Highest $.05 to $2.47 each $.50 to $2.75 each Charge Among All month per $1000 of month per $1000 of Possible Insureds cash value cash value Charge for a female $.05 each month per $.51 each month per insured, age 35, in $1000 of cash value $1000 of cash value the preferred nonsmoker underwriting class in the first policy year FOR EQUITY ENRICHER: Lowest and Highest $.05 to $2.47 each $.50 to $2.75 each Charge Among All month per $1000 of month per $1000 of Possible Insureds cash value cash value Charge for a male $.08 each month per $.61 each month per insured, age 40, in $1000 of cash value $1000 of cash value the preferred nonsmoker underwriting class in the first policy year --------------------------------------------------------------------------------------- Mortality and Expense Monthly, on the annual rate of .75% Same As Current Risk and monthly deduction of the cash value Rate Administrative date in the Separate Services Charge Account on each monthly anniversary** --------------------------------------------------------------------------------------- Interest Rate Annually (or on The greater of (a) Same As Current loan termination if a then-current rate Rate earlier) of a specified average and (b) a rate equal to 1% per annum more than the assumed interest rate of the base fixed life insurance policy to which the Equity Option is attached*** --------------------------------------------------------------------------------------- </Table> ------------ *The cost of insurance charge varies based on individual characteristics, including the insured's age, risk class and except for unisex policies, sex. The cost of insurance charges shown may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the cost of insurance or other charges that would apply for a particular insured by contacting your sales representative. **The Mortality and Expense Risk and Administrative Service Charge is 50% for riders to base policies that have a face amount of $250,000 or greater. ***This is the maximum interest rate on your loan. We transfer an amount of cash value equal to your loan amount to hold as collateral into the corresponding fixed options of your Equity Options. There it is eligible for dividends. Any such dividends would reduce the effective net cost of the loan. 7

ANNUAL PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that the Portfolios will pay and that therefore a Policy owner will indirectly pay periodically during the time that he or she owns an Equity Option. The table shows the lowest and highest fees and expenses charged by the Portfolio(s) offered with Equity Additions and Equity Enricher for the fiscal year ended December 31, 2002. More detail concerning each Portfolio's fees and expenses is contained in the table that follows this table and in the attached Fund prospectus. <Table> <Caption> --------------------------------------------------------------------------------------- LOWEST* HIGHEST* --------------------------------------------------------------------------------------- <S> <C> <C> EQUITY ADDITIONS Total Annual Portfolio Operating Expenses .31% .31% --------------------------------------------------------------------------------------- EQUITY ENRICHER Total Annual Portfolio Operating Expenses .31% .75% --------------------------------------------------------------------------------------- </Table> ------------ * The lowest and highest percentages have been selected after adjustment of the percentage for all Portfolios (on a consistent basis) to reflect any changes in expenses during the 12 months ended December 31, 2002 or expected to occur during the 12 months ended December 31, 2003. This table describes the annual operating expenses for each Portfolio for the year ended December 31, 2002, as a percentage of the Portfolio's average daily net assets for the year. The two columns furthest to the right show each Portfolio's total operating expenses both before and after any applicable expense subsidy or expense deferral arrangements. More detail concerning each Portfolio's fees and expenses is contained in the attached Fund prospectuses. <Table> <Caption> ----------------------------------------------------------------------------------------------------- TOTAL GROSS FEE WAIVERS NET TOTAL MANAGEMENT OTHER ANNUAL AND EXPENSE ANNUAL PORTFOLIO FEES EXPENSES EXPENSES REIMBURSEMENTS EXPENSES ----------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> MetLife Stock Index .25% .06% .31% .00% .31% ----------------------------------------------------------------------------------------------------- Janus Mid Cap* .69% .06% .75% .00% .75% ----------------------------------------------------------------------------------------------------- </Table> ------------ *This Portfolio is not available for Equity Additions. METLIFE MetLife is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our main office is located at One Madison Avenue, New York, New York 10010. We are obligated to pay all benefits under the Policies and the Equity Options. OUR SEPARATE ACCOUNT THAT SUPPORTS THE EQUITY OPTIONS The Separate Account receives premium payments from the Equity Options and other variable life insurance products that we issue. Income and realized and unrealized capital gains and losses of the Separate Account are credited to the Separate Account without regard to any of our other income or capital gains and losses. We will keep an amount in the Separate Account 8

that at least equals the value of our commitments to policy owners that are based on their investments in the Separate Account. We can also keep charges that we deducted and other excess amounts in the Separate Account or we can take the excess out of the Separate Account. The assets in the Separate Account legally belong to us, but they are held solely for the benefit of investors in the Separate Account and no one else, including our other creditors. This means that, except for excess assets that we would be free to withdraw, the assets of the Separate Account are not available to meet the claims of our general creditors, and must be used for the sole purpose of supporting the cash values of the variable life insurance products whose premiums the Separate Account receives. The Separate Account has subdivisions, called "investment divisions." Each investment division corresponds to one of our variable investment options and invests its assets exclusively in shares of a corresponding Portfolio of the Fund. Currently, only the MetLife Stock Index investment division is available for use with the Equity Additions. Only the MetLife Stock Index and Janus Mid Cap investment divisions are available for use with the Equity Enricher. Amounts you allocate to an investment division receive the investment experience of the investment division, and you bear this investment risk. THE PORTFOLIOS The Metropolitan Series Fund, Inc. (the "Fund") is a "series" type of mutual fund, which is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). The Fund is divided into Portfolios, each of which represents a different class of stock in which a corresponding investment division of the Separate Account invests. You should read the Fund prospectus attached to this prospectus. It contains information about the Fund, the MetLife Stock Index Portfolio and the Janus Mid Cap Portfolio, including the investment objectives, strategies, risks and sub-advisers associated with each Portfolio. It also contains information on the different separate accounts that invest in the Fund (which may or may not be related to MetLife) and certain risks that may arise when diverse separate accounts funding diverse types of insurance products all invest in the same Fund. MANAGEMENT OF THE PORTFOLIOS MetLife Advisers, LLC is the investment adviser who is responsible for overall management of the Fund. MetLife Advisers, LLC has contracted with sub-advisers to make day-to-day investment decisions for the Portfolios. The sub-advisers and the investment objective of each Portfolio are as follows: <Table> <Caption> --------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO SUB-ADVISER OBJECTIVE --------------------------------------------------------------------------------------- <S> <C> <C> MetLife Stock Index Metropolitan Life Insurance To equal the performance of Company the Standard & Poor's 500 Composite Stock Price Index --------------------------------------------------------------------------------------- Janus Mid Cap Janus Capital Management, LLC Long-Term Growth of Capital --------------------------------------------------------------------------------------- </Table> A Portfolio may have a name and/or objective that is very similar to that of a publicly available mutual fund that is managed by the same sub-investment manager. The Portfolios are not publicly available and will not have the EACH AVAILABLE INVESTMENT DIVISION INVESTS IN A CORRESPONDING PORTFOLIO OF THE FUND. YOU SHOULD CAREFULLY REVIEW THE INVESTMENT OBJECTIVES, PRACTICES AND RISKS OF EACH AVAILABLE PORTFOLIO, WHICH ARE DESCRIBED IN THE FUND PROSPECTUS ATTACHED TO THIS PROSPECTUS. 9

same performance as those publicly available mutual funds. Different performance will result from differences in implementation of investment policies, cash flows, fees and size of the Portfolio. THE PORTFOLIO SHARE CLASS THAT WE OFFER The Fund offers various classes of shares, each of which has a different level of expenses. The Fund prospectus may provide information for share classes or Portfolios that are not available through the Equity Options or through both Equity Options. When you consult the Fund prospectus, you should be careful to refer only to the information regarding the Portfolio and class of shares that is available through the Equity Option that you choose. Class A shares of the MetLife Stock Index Portfolio and of the Janus Mid Cap Portfolio are available through the Equity Enricher. Class A shares of the MetLife Stock Index Portfolio only are available through the Equity Additions. PURCHASE AND REDEMPTION OF THE PORTFOLIO SHARES BY OUR SEPARATE ACCOUNT As of the end of each Valuation Period (see "Sending Communications and Payments to Us -- When Your Requests, Instructions and Notifications Become Effective"), we purchase and redeem Portfolio shares for the Separate Account at their net asset value without any sales or redemption charges. These purchases and redemptions reflect the amount of any of the following transactions that take effect at the end of the Valuation Period: - The allocation of Equity Options premiums (less any applicable charges) to the Separate Account. - Dividends and distributions on Fund shares, which are reinvested as of the dates paid (which reduces the value of each share of the Fund and increases the number of Fund shares outstanding, but has no affect on the cash value in the Separate Account). - Policy loans and loan repayments allocated to the Separate Account. - Transfers to or from the Separate Account from other parts of the Policy. - Withdrawals or surrenders taken from the Separate Account. - Transfers between the Equity Enricher's available investment options. VOTING RIGHTS THAT YOU WILL HAVE The Fund has shareholder meetings from time to time to, for example, elect directors or trustees and approve some changes in investment management arrangements. We will vote the shares of each Portfolio that are attributed to your Equity Options based on your instructions. Should we determine that the 1940 Act no longer requires us to do this, we may decide to vote Fund shares in our own right, without input from you or any other owners of variable life insurance policies or variable annuity contracts that participate in the Fund. If you are eligible to give us voting instructions, we will send you informational material and a form to send back to us. We are entitled to disregard voting instructions in certain limited circumstances prescribed by the SEC. If we do so, we will give you our reasons in the next semi-annual report to Equity Option owners. If we do not receive timely voting instructions from you and other insurance and annuity owners that are entitled to give us voting instructions, we will YOU CAN GIVE US VOTING INSTRUCTIONS ON SHARES OF THE FUND PORTFOLIO THAT ARE ATTRIBUTABLE TO YOUR EQUITY OPTION. 10

vote those shares in the same proportion as the shares held in the same separate account for which we did receive voting instructions. Also, we will vote Fund shares that are not attributable to insurance or annuity owners (including shares that we hold in our general account) or that are held in separate accounts that are not registered under the 1940 Act in the same proportion as the aggregate of the shares for which we received voting instructions from all insurance and annuity owners. THE BASE POLICY AND ITS BENEFIT OPTIONS The base policy and all of its benefit options form the entire Policy. In this prospectus, we refer to each such portion of the Policy as a "part" of the Policy. The base policy provides a fixed amount of life insurance. Benefit options may be added to the base policy. CREDIT OPTIONS In this prospectus, we refer to some of the benefit options as "credit options." Credit options are methods under which credits (such as dividends) that become payable under your Policy, as well as any cash value that you transfer from another credit option that you have in effect, are applied to accumulate additional cash value and purchase additional death benefits. The amount of dividends or other credits on your Policy changes annually, is not guaranteed, and is based on a variety of factors. These factors may include the base policy face amount, the death benefit and credit class of the base policy, as well as the amount of our earnings. Any credits due from any part of the Policy are paid on the last day of a base policy year, as set forth in the benefit option. Credit options include: - Equity Additions: a benefit option described in this Prospectus where cash value varies based on the investment experience in one of our separate account investment divisions. - Fixed Additional Insurance: a benefit option that is similar to Equity Additions, except that it accumulates a guaranteed cash value that is eligible for a dividend. - Dividends with Interest ("DWI"): a benefit option where cash value accumulates with currently taxable interest that we declare periodically. OTHER BENEFIT OPTIONS Other benefit options which are not credit options include: - Equity Enricher: a benefit option described in this Prospectus where cash value varies based on the investment experience in one or both of the available separate account investment divisions. - Enricher: a paid-up additional insurance benefit option that is similar to Equity Enricher, except that it accumulates a guaranteed cash value that is eligible for a dividend. - Flexible Additional Insurance Rider ("FLAIR"): a benefit rider that provides additional fixed benefit insurance and has a fixed benefit term insurance element. This rider is no longer available for Policies issued after May 1, 2003. Subject to certain limits and conditions, we guarantee the cash value in the base policy as well as all of the benefit options, other than the Equity Options. We make this guarantee because these parts of the Policy provide THE POLICY INCLUDES THE BASE POLICY AND ITS BENEFIT OPTIONS. 11

fixed benefits. Since these fixed benefits are not registered under the federal securities laws, this Prospectus contains only limited information about them. The Policy gives you more information on the operation of these fixed benefits. PURCHASING EQUITY OPTIONS If you want an Equity Option, then you must complete an application. We will issue an Equity Option to you only if you are also the owner of the base policy. Your completed application must be received by the Designated Office. The Equity Options are available to base policies meeting the minimum face amount and eligibility requirements that we establish. You may not add the Equity Additions while any term insurance is in effect under FLAIR. Once FLAIR becomes fully funded, or you discontinue the term insurance provided by FLAIR, you may add the Equity Additions. We reserve the right to reject an application for any reason permitted by law, and our acceptance of an application is subject to our underwriting rules. The Date of Policy is usually the date the base policy application is approved. We use the Date of Policy to calculate base policy years and months. The insured will be the same individual as the insured in the base policy. An "insured" is the person upon whose life we issue the Policy. You do not have to be the insured. The beneficiary is named in the application as the person who will receive the insurance proceeds upon the death of the insured. The beneficiary has no rights under the Policy or the Equity Options until the death of the insured (unless the beneficiary has been designated an irrevocable beneficiary) and must survive the insured in order to receive the insurance proceeds. For the purpose of computing the insured's age under the Policy, we start with the insured's age on the Date of Policy, which is set forth in the base policy. Age under the Policy at any other time is then computed using that issue age and adding the number of full base policy years completed. To elect the Equity Enricher you must complete the Equity Enricher application. You can elect the Equity Enricher only at the time the base policy is issued. It is not available if the base policy is submitted without an advance payment of the initial premium or if we have refunded an advance payment prior to the issuance of the base policy. We will not require evidence of insurability other than that required in connection with the issuance of the base policy, unless: - the amount of premiums you actually pay for the Equity Enricher during the first year is greater than the cumulative voluntary planned periodic premium payments indicated in the application; or - you exceed certain other premium limitations described below after the first year. To elect the Equity Additions, you may complete the Equity Additions application either at the same time as the application for the base policy or after the base policy has been issued. If you decide to add Equity Additions after you own the base policy, it may reduce the amount of premiums that you could pay to your Policy before it would become a modified endowment contract. If you contact us, we will tell you what these premium limits are. We will not require additional evidence of insurability for the Equity Additions, unless you desire to make a payment that is derived from another credit option that does not itself have a death benefit. WE WILL ISSUE AN EQUITY OPTION TO YOU AS OWNER. YOU WILL HAVE ALL THE RIGHTS UNDER THE OPTION. 12

Insurance coverage under Equity Additions commences on its Investment Start Date (see "Sending Communications and Payments To Us -- When Your Requests, Instructions and Notifications Become Effective"), assuming coverage under the base policy is then in effect. Insurance coverage under Equity Enricher commences at the later of delivery of the option to you and our Date of Receipt of your first premium payment for that option. For coverage under Equity Enricher to be effective, the insured's health must be the same as stated in your application and, in most states, the insured must not have sought medical advice or treatment after the date of the application. As to when charges under an Equity Option begin, see "Charges Included in the Monthly Deduction." It may not be in your best interest to surrender, lapse, change, or borrow from existing life insurance policies or annuity contracts in connection with the purchase of the Policy. You should compare your existing insurance and the Policy carefully. You should replace your existing insurance only when you determine that the Policy is better for you. You may have to pay a surrender charge on your existing insurance. You should talk to your financial professional or tax adviser to make sure the exchange will be tax-free. If you surrender your existing policy for cash and then buy the Policy, you may have to pay a tax, including possibly a penalty tax on the surrender. Because we will not issue the Policy until we have received an initial premium from your existing insurance company, the issuance of the Policy may be delayed. YOUR PAYMENT AND ALLOCATION OF EQUITY OPTIONS PREMIUMS The payments into the Equity Options won't guarantee that your Equity Option will have a death benefit. Rather, this depends on the Equity Option's cash value and the conditional guaranteed minimum death benefit. PAYING PREMIUMS To the extent discussed below under "Transferring Cash Value," you can move cash value into an Equity Option from a fixed option that corresponds to that Equity Option. Also, you can make premium payments: - For the Equity Additions: through dividends or other credits on the Policy. Any request to designate the Equity Additions (or any other credit options) as the option for receiving credits under your Policy will take effect upon our Date of Receipt of your written request. Only one election may be made for any credit payment date and that election will apply to all credits payable under the Policy. - For the Equity Enricher: - through a voluntary planned periodic premium schedule. You choose the schedule on your Equity Enricher application. The schedule sets forth the amount of premiums, fixed payment intervals, and the period of time that you intend to pay premiums. The schedule can be: (a) annual; (b) semi-annual; (c) periodic automatic pre-authorized transfers from your checking account ("check-o-matic"); (d) systematic through payment plans that your employer makes available; or (e) through another method to which we agree. You do not have to pay premiums in accordance with your voluntary planned periodic premium schedule. 13

- through unscheduled premium payments that you can make at any time. We will hold a premium payment received before its due date in a non-interest bearing holding account until the due date, if necessary to prevent a Policy becoming a modified endowment contract. (See "Modified Endowment Contracts" under "Tax Matters" below.) We will send you an additional notice of this arrangement by letter immediately after receiving your payment. We will also give you the option to either have the money held until the due date or applied on our Date of Receipt of your instructions to apply the money (unless the due date has already passed). MAXIMUM AND MINIMUM PREMIUM PAYMENTS - Total premium payments for the Enricher and the Equity Enricher may not exceed $2.5 million in the first base policy year and $500,000 in each year thereafter. - We will let you make premium payments that would turn your Policy into a modified endowment contract, but we will tell you of this status not later than in your annual statement, and if possible we will tell you how to reverse the status. - The following additional limitations apply to your premiums under the Equity Enricher. When applying the limits, we aggregate payments to the Equity Enricher with payments to the Enricher: I. You may not make any premium payments: A. While we are considering your application for benefits on the base policy under a disability waiver of benefits option or an acceleration of death benefit option. B. If we are paying or have finished paying benefits under one of the above options. C. If you have made no payments to the Equity Enricher during the first year after its issuance or for any two consecutive base policy years (unless, during any part of such period, your right to make payments was terminated for reasons described in A, or, unless you were taking withdrawals from the Equity Enricher to pay for a child's education and you provide us with proof of such payment that we find satisfactory). D. After the later of the base policy anniversary on which the insured is 65, or the tenth base policy anniversary. In no event will payments be accepted after the base policy anniversary on which the insured is age 86. In any of these cases, you may elect to receive the cash value, transfer the cash value to the Enricher, or leave the cash value in the Equity Enricher. If you leave the cash value in the Equity Enricher, it will remain subject to applicable fees and charges. If investment performance is not sufficient to offset the amount of these expenses, the death benefit may decline or terminate. II. Your voluntary planned periodic payments must be at least: A. $250 annually ($100 for policies that are part of our Tower or Executive Series or where the insured was under 18 when the base policy was issued). 14

B. $125 semi-annually ($50 for policies that are part of our Tower or Executive Series or where the insured was under 18 when the base policy was issued). C. $25 for all monthly methods of payment ($10 for policies that are part of our Tower or Executive Series or where the insured was under 18 when the base policy was issued). III. Each unscheduled premium payment should be at least $250 ($100 for the Tower or Executive Series or where the insured was under age 18 when the base policy was issued). IV. During the first base policy year, we reserve the right to reject any amount that exceeds the cumulative amount of your first base policy year's voluntary planned periodic premiums. V. During the first base policy year, the maximum annual payment we permit is 15 times the nonsmoker standard annual premium (minus the base policy fee) set forth in your base policy. VI. After the first base policy year, the maximum payment we permit is the greater of A. 3 times the base policy's nonsmoker standard annual premium (minus the base policy fee) set forth in your base policy; or B. $5,000 VII. We reserve the right to require evidence of insurability of premium payments that exceed both $25,000 and 2 times the greater of the total payments made in either of the prior two Policy years. ALLOCATING EQUITY ENRICHER PREMIUMS You can instruct us to allocate your Equity Enricher premiums (after deduction of any charges) to either or both of the available separate account investment divisions on the Investment Start Date. The percentage of your allocation into each division must be at least 1% and must be a whole number. You can change this allocation (effective after the Investment Start Date) by giving us written notice at our Designated Office or in any other manner that we may permit. SENDING COMMUNICATIONS AND PAYMENTS TO US CONTACTING US You can communicate all of your requests, instructions and notifications to us by contacting us in writing at our Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. These include: changing your beneficiary; taking a Policy loan; taking a partial withdrawal; surrendering your Policy or an Equity Option; making transfer requests; changing the benefit option to which you want to allocate your Policy credits; or changing the allocation between investment divisions for future premium payments that you make to Equity Enricher. Below is a list of our Designated Offices for various functions. We may name additional or alternate Designated Offices. If we do, we will notify you in NET PREMIUMS UNDER EQUITY ENRICHER ARE YOUR PREMIUM PAYMENTS MINUS THE CHARGES WE DEDUCT FROM THOSE PREMIUMS. YOU CAN CONTACT US AT OUR DESIGNATED OFFICE. 15

writing. You may also contact us at 1-800-MET-5000 for any function not listed below or for any other inquiry. <Table> <Caption> -------------------------------------------------------------------------------------- FUNCTION DESIGNATED OFFICE -------------------------------------------------------------------------------------- <S> <C> Premium Payments & Inquiries MetLife, P.O. Box 30074, Tampa, FL 33630-3074 -------------------------------------------------------------------------------------- Surrenders, Withdrawals, Loans, Investment MetLife, P.O. Box 336, Warwick, R.I. Division Transfers, Premium Reallocation 02887-0336 -------------------------------------------------------------------------------------- Death Claims MetLife, P.O. Box 330, Warwick, R.I. 02887-0330 -------------------------------------------------------------------------------------- Beneficiary & Assignment MetLife, P.O. Box 313, Warwick, R.I. 02887-0313 -------------------------------------------------------------------------------------- "Free Look" Cancellation MetLife, 500 Schoolhouse Road, Johnstown, PA 15904-1097 Attn: Free Look -------------------------------------------------------------------------------------- Address Changes MetLife, 500 Schoolhouse Road, Johnstown, PA 15904-1097 Attn: Data Integrity -------------------------------------------------------------------------------------- Reinstatements MetLife, P.O. Box 30074, Tampa, FL 33630-3074 -------------------------------------------------------------------------------------- </Table> WHEN YOUR REQUESTS, INSTRUCTIONS AND NOTIFICATIONS BECOME EFFECTIVE Generally, requests, premium payments and other instructions and notifications are effective on the Date of Receipt. In those cases, the effective time is at the end of a Valuation Period during which we receive them at our Designated Office. (Some exceptions to this general rule are noted below and elsewhere in this prospectus.) A Valuation Period is the period between two successive Valuation Dates. It begins at the close of regular trading on the New York Stock Exchange on a Valuation Date and ends at the close of regular trading on the New York Stock Exchange on the next succeeding Valuation Date. The close of regular trading is 4:00 p.m., Eastern Time on most days. A Valuation Date is each day on which the New York Stock Exchange is open for trading. The initial effective time of your Equity Options' investment in the Separate Account is the Investment Start Date. The Investment Start Date is: - For Equity Additions, the credit payment date of the first base policy credit that is allocated to the option or, if sooner, the date of the first transfer of cash value to Equity Additions from the Fixed Additional Insurance Option. - For the Equity Enricher, the end of the first Valuation Date after the latest of: - The date we receive the first premium payment allocated to the Equity Enricher; - The 20th day following the Date of Policy indicated in the base policy; and - The 20th day following the date we receive the first full premium due for the base policy. Prior to the Investment Start Date, we will place in our general account any premium payments you make to the Equity Enricher. 16

There it will earn a fixed rate of interest commencing with its date of receipt or, if later, the Date of Policy until the Investment Start Date. THIRD PARTY REQUESTS Generally, we accept requests for transactions or information only from you. Therefore, we reserve the right to not process transactions requested on your behalf by your agent with a power of attorney or any other authorization. This includes processing transactions by an agent you designate, through a power of attorney or other authorization, who has the ability to control the amount and timing of transfers for a number of other Policy owners, and who simultaneously makes the same request or series of requests on behalf of other Policy owners. EQUITY OPTIONS INSURANCE PROCEEDS PAYABLE IF THE INSURED DIES We will pay your beneficiary any insurance proceeds as of the end of the Valuation Period that includes the insured's date of death. We will pay this amount after we receive documents that we request as due proof of the insured's death. The beneficiary can receive the death benefit in a single sum or under various income plans described in the Statement of Additional Information. You may make this choice during the insured's lifetime. If you make no selection, we may place the amount in an account to which we will credit interest, and the beneficiary will have immediate access to all or part of that amount. The beneficiary has one year from the date the insurance proceeds are paid to change the selection from a single sum payment to an income plan, as long as we have made no payments from the interest-bearing account. If the terms of the income plan permit the beneficiary to withdraw the entire amount from the plan, the beneficiary can also name contingent beneficiaries. The insurance proceeds equal the Equity Option's death benefit. EQUITY OPTIONS DEATH BENEFITS The Equity Option's death benefit is: - the cash value (after we deduct the Mortality and Expense Risk and Administrative Services Charge and the Cost of Insurance Charge, pro rated for the appropriate period) at the end of the Valuation Period in which the insured dies; divided by - the net single premium for that day (see "Net Single Premium" below). Any increase or decrease in the cash value of an Equity Option also will increase or decrease the death benefit that otherwise would apply. In such cases, the death benefit will change by a larger amount than does the cash value. For example: the Equity Additions net single premium is .30142 at the base policy anniversary nearest a male insured's 40(th) birthday. If the insured died on that date and the Equity Additions cash value was then $50,000, the Equity Additions death benefit would be $165,881 (i.e., $50,000 divided by .30142). But if the Equity Additions cash value had been only $40,000, the Equity Additions death benefit would have been only $132,705 (i.e., $40,000 divided by .30142); and if the Equity Additions cash value had been $60,000, the Equity Additions death benefit would have been $199,058 (i.e., $60,000 divided by .30142). 17

Any increases in death benefit due to an increase in the Equity Additions cash value will be partially or wholly offset (and any decreases will be accentuated) by the fact that the net single premium increases the longer your Policy is outstanding. For example: in the example set out above, the Equity Additions net single premium for a 40 year old male insured was .30142, which resulted in a $165,888 death benefit, assuming a $50,000 cash value. If that same insured had instead been age 45, the net single premium would have been .35291, which would have resulted in an Equity Additions death benefit of only $141,679 (assuming the same $50,000 cash value). On the other hand, if the same insured had been only age 35, the net single premium would have been only .25594, which would have resulted in an Equity Additions death benefit of $195,358 (again, assuming the same $50,000 cash value). Therefore, in order for your Equity Option death benefit to increase or remain constant, your Equity Option cash value must increase enough to compensate for the effect of the increases in net single premium. If your Equity Option cash value declines to zero (due to adverse investment results, transfers out of the Equity Option, the charges we deduct, and/or insufficient premium payments), your Equity Option death benefit also will be zero. ALTERNATE DEATH BENEFIT THAT AUTOMATICALLY APPLIES IN SOME CASES In no event will the Policy death benefit be lower than the minimum amount required to maintain the Policy as life insurance under the federal income tax laws (which calculation shall exclude coverage provided under the DWI benefit option). CONDITIONAL GUARANTEED MINIMUM DEATH BENEFIT We provide a conditional guaranteed minimum death benefit that will be in effect during the first 7 years of your base policy or another 7 year period beginning from any date your policy is "materially modified" (within the meaning of the tax law test discussed under "Federal Tax Matters-modified endowment contract status," below). During any such 7 year period, the conditional guaranteed minimum death benefit generally will equal the Equity Option's death benefit at the beginning of each such 7 year period. The guaranteed minimum death benefit ends: - if the Policy becomes a Modified Endowment Contract; or - for the Equity Additions, if you change your credit option to a different credit option for the next credit payment date. The conditional guaranteed minimum death benefit is reduced for any: - loan; - withdrawal; or - cash value transfer from the Equity Option. You should consult with your MetLife account representative before taking any action listed above to find out whether (and by how much) the action will affect the conditional guaranteed minimum death benefit. If your conditional guaranteed minimum death benefit is reduced or ends, your Policy may become a modified endowment contract. EQUITY OPTIONS OFFERS A CONDITIONAL GUARANTEED MINIMUM DEATH BENEFIT. 18

EQUITY OPTIONS CASH VALUE Your Equity Option's cash value equals the Separate Account cash value. The Separate Account cash value is allocated to each applicable investment division. An Equity Option's cash value is calculated as follows: - On the Investment Start Date, we will allocate your cash value to each applicable investment division. - Thereafter, at the end of each Valuation Period the cash value in the investment division will equal: - The cash value in the investment division at the beginning of the Valuation Period; plus - All Equity Option premiums (less any applicable charges) and cash value transfers that are directed into the investment division during the Valuation Period; minus - All partial cash withdrawals, loan amounts and cash value transfers out of the investment division during the Valuation Period; minus - The portion of any charges and deductions allocated to the cash value in the investment division during the Valuation Period; plus - The net investment return for the Valuation Period on the amount of cash value in the investment division at the beginning of the Valuation Period. The net investment return currently equals the rate of increase or decrease in the net asset value per share of the underlying Fund portfolio over the Valuation Period, adjusted upward to take appropriate account of any dividends and other distributions paid by the portfolio during the period. We reserve the right to reduce the net investment return by a charge for taxes that may be imposed on us. If your Equity Option has no cash value, we will not provide any insurance coverage under it, nor will we take a monthly deduction, until the Equity Option does have cash value. SURRENDERS AND PARTIAL WITHDRAWALS FROM EQUITY OPTIONS If you surrender (turn in) your Equity Option, you can choose to receive the option's cash value or have the proceeds transferred to any benefit option that is permitted to receive premiums at that time. In the event of such a transfer, any credit that might be payable on amounts in such option will be adjusted to reflect the timing of receipt of such transfer. We will deem your request for surrender of the base policy also to be a request for surrender of the Equity Option. You may receive the surrender proceeds in a single sum or under an income plan. If you would like to make a partial withdrawal, you may direct from which Equity Option and/or investment division, where relevant, the amount will be taken. If you do not identify the part of your Policy from which you want your withdrawal to be taken, we will take it first from any available value in the parts of your policy other than the Equity Options. We will take from the Equity Options only that portion of the withdrawal request that remains after all of such other available value has been withdrawn. If you have both the Equity Additions and Equity Enricher in effect, we will take any withdrawals from your Equity Options first from Equity Additions, unless you have instructed otherwise. If you have cash value in both of the variable EQUITY OPTIONS ARE DESIGNED TO ACCUMULATE CASH VALUE. YOU CAN SURRENDER YOUR EQUITY OPTION FOR ITS CASH VALUE. 19

investment options under Equity Enricher, we will take any withdrawals from your Equity Enricher proportionately based on the allocation on file at the time of your request is received, unless you have instructed otherwise. If you request a partial withdrawal of an amount that exceeds the cash value in the chosen Equity Option or investment division, we will tell you and we will honor your request only if you ask for a smaller withdrawal or a different allocation. Before surrendering your Equity Option or requesting a partial withdrawal you should consider the following: - Amounts received may be taxable as income and, if your Policy is a modified endowment contract, subject to certain tax penalties. - Your Policy could become a modified endowment contract. - For partial withdrawals, your death benefit will decrease. - In some cases you may be better off taking a Policy loan, rather than a withdrawal. - The conditional guaranteed minimum death benefit will be reduced by the same proportion as the withdrawal reduces the Equity Option's cash value. TRANSFERRING CASH VALUE You may transfer cash value from an Equity Option to pay premiums, loan interest, or charges under the base policy. You can also make the following transfers: - For the Equity Additions, transfers can be made to or from the Fixed Additional Insurance credit option. - For the Equity Enricher, transfers can be made between the available investment divisions and/or between the Equity Enricher and the Enricher. We will adjust any credit that would be due under a Policy part to reflect the timing and effect of any transfer. Any transfer will reduce the conditional guaranteed minimum death benefit if, and in the same proportion as, it reduces the Equity Options' cash value. There is no charge for cash value transfers. If you would like to make a transfer, you must indicate which investment division, where relevant, and which Policy parts are involved in the transfer. Transfers among the investment divisions and transfers between an Equity Option and any other Policy part are not currently taxable transactions. We did not design the Equity Options' transfer privilege to give you a way to speculate on short-term market movements. To prevent excessive transfers that could disrupt the management of the Portfolios and increase transaction costs, we may adopt procedures to limit excessive transfer activity. In addition, the Fund may restrict or refuse certain transfers between or purchases of shares in its Portfolios as a result of certain market timing activities. You should read the Fund's prospectus for more details. YOU MAY TRANSFER CASH VALUE AMONG THE ELIGIBLE PORTIONS OF YOUR POLICY AT ANY TIME. 20

We reserve the right to refuse to accept any transaction request where the request would tend to disrupt administration of the Equity Options or is not in the best interests of Equity Option owners, or the Separate Account. AUTOMATED TRANSFER We may in the future allow you to make automatic transfers of Equity Option cash values to pay the base policy premiums. If we do, we will set forth the terms and conditions in the forms we provide to you to establish the automatic transfers. TRANSFERS BY TELEPHONE We may, if permitted by state law, allow you to make transfer requests and changes to allocations of Equity Enricher premiums by phone. We may also allow you to authorize your sales representative to make such requests. The following procedures apply: - We must have received your authorization in writing satisfactory to us, to act on instructions from any person that claims to be you or your sales representative, as applicable, as long as that person follows our procedures. - We will institute reasonable procedures to confirm that instructions we receive are genuine. Our procedures will include receiving from the caller your personalized data. - All telephone calls will be recorded. - You will receive a written confirmation of any transaction. - Neither the Separate Account nor we will be liable for any loss, expense or cost arising out of a telephone request if we reasonably believed the request to be genuine. - You should contact our Designated Office with any questions regarding the procedures. BORROWING FROM YOUR POLICY You may obtain a loan from us whenever your Policy has a loan value. The loan value equals the Policy cash value less the anticipated loan interest for the remainder of that base policy year. We will take the loan from available cash value in accordance with our administrative procedures that are in effect at the time you take the loan. As of the Date of Receipt, for any loan request that affects an Equity Option, we will: - Remove an amount equal to the loan from your Equity Option . We will place an equal amount in the Fixed Additional Insurance option (if the loan is from Equity Additions) or in the Enricher (if the loan is from the Equity Enricher), where it will accumulate in accordance with the terms of whichever of those options we have placed it in. - Charge you interest, which will accrue daily. We will tell you the initial interest rate that applies to your loan and mail you advance notices of any increases applicable to existing loans. Your interest payments are due at the end of each Policy year. If you don't pay the interest, we will treat it as a new Policy loan, which will be taken from available cash value in accordance with our administrative procedures that are in effect at the YOU CAN BORROW FROM US AND USE YOUR POLICY AS SECURITY FOR THE LOAN. 21

time. The interest rate charged for a base policy year will never be more than the maximum allowed by law and will generally be the greater of: - the published monthly average for the calendar month ending two months before the start of such year; or - the rate used to calculate the guaranteed cash value of the base policy and its riders for the base policy year plus 1%. The published monthly average means (a) Moody's Corporate Bond Yield Average Monthly Average Corporates, as published by Moody's Investors Service, Inc., or any successor service; or (b) If the Moody's average is not published, a substantially similar average established by regulation issued by the insurance supervisory official of the state in which the base policy is delivered. Repaying your loans (plus accrued interest) is done by sending in payments of at least $50. We will allocate your repayment to the fixed additional insurance benefit rider to which we had transferred the Equity Options cash value that you used as security for your loan. You may then transfer such repaid amount to your Equity Option at any time. Before taking a Policy loan, you should consider the following: - Interest payments on loans are generally not deductible for tax purposes. - Under certain situations, Policy loans could be considered taxable distributions. - If you surrender your Policy or if we terminate your Policy, any outstanding loan amounts (plus accrued interest) will be taxed as a distribution. Generally, there will be federal income tax payable on the amount by which withdrawals and loans exceed the premiums paid to date. (See "Federal Tax Matters--Loans" below.) In addition, the amounts borrowed and withdrawn reduce the Policy's cash value and any remaining cash value of the Policy may be insufficient to pay the income tax on your gains. - A Policy loan increases the chances of our terminating your Policy due to insufficient cash value. - An Equity Option's conditional guaranteed minimum death benefit will be reduced by the same proportion as the loan reduces the Equity Option's cash value. - Your Policy's death benefit will be reduced by any unpaid loan (plus accrued interest). - The amount taken from your Equity Options' cash value, as a result of a loan does not participate in the investment experience of the investment divisions. Therefore, a loan can permanently affect the death benefit and cash value of the Equity Options, even if they are repaid. EQUITY OPTIONS TERMINATION AND REINSTATEMENT TERMINATION We will terminate Equity Options if you are not making sufficient premium payments under the base policy or if you reduce your base policy face amount of insurance below $50,000 ($100,000 for policies issued prior to July 1, 1997). We will terminate your base policy if we do not receive sufficient premium payments (or sufficient loan repayments so that the loan 22

portion does not exceed the cash value of the Policy) by the end of a 31 day grace period. If the insured dies during the grace period, the insurance proceeds will still be payable, but we will deduct any due and unpaid base policy premiums and any Policy loan and loan interest from the proceeds. At the end of the grace period, if you have elected to do so, and if there is sufficient cash value in your Equity Option to do so, we will pay your premium from the Equity Option cash value through an automatic loan feature. If the automatic loan feature is not used to pay the base policy premium and the Policy is terminated, we will transfer your Equity Additions cash value into the Fixed Additional Insurance option and your Equity Enricher cash value into the Enricher in accordance with your Policy's provisions and our administrative practices. REINSTATEMENT We will reinstate (put back in force) the Equity Option if we reinstate your base policy. The reinstated Equity Option will have no cash value until an Equity Option premium payment or a permitted transfer into an Equity Option is made. We will reinstate your base policy subject to certain terms and conditions that the base policy provides. We must receive your reinstatement request within 3 years (or within any longer period provided by state law) after the end of the base policy's grace period and before its Final Date. CHARGES AND DEDUCTIONS YOU PAY FOR EQUITY OPTIONS The Equity Option charges compensate us for our expenses and risks. The name of a charge can suggest the purposes for which the charge is imposed. For example, the "sales charge" for the Equity Enricher is designed primarily to defray commissions and other costs of marketing that Option. However, our revenues from any particular Equity Option charge may be more or less than any costs or expenses that charge may be intended primarily to cover. We may use our revenues from one Equity Options charge to pay other costs and expenses in connection with the Equity Options. We may also profit from our revenues from all the Equity Options charges combined. The following sets forth additional information about the Equity Options charges. DEDUCTIONS FROM PREMIUMS -- EQUITY ENRICHER ONLY Sales charge: We deduct a 2.00% sales charge from each premium. Charge for average expected state taxes attributable to premiums: We deduct 2.00% from each premium to reimburse us for the state and local taxes that we must pay based on premiums we receive. Premium taxes vary from state to state and currently range from 0 to 3.5%. Our charge approximates the average tax rate we expect to pay on premiums we receive from all states. Federal tax charge: We deduct 1.00% from each premium to reimburse us for our estimate of the Federal income tax liability related to premiums. CHARGES INCLUDED IN THE MONTHLY DEDUCTION We deduct the monthly deduction as of each base policy monthly anniversary, beginning with the first base policy month during which an CAREFULLY REVIEW THE "FEE TABLES" THAT SET FORTH THE CHARGES THAT YOU PAY UNDER THE EQUITY OPTIONS. 23

Equity Option is in effect. We take the monthly deduction from each investment division you are using, in proportion to the Equity Option's Cash Value in that investment division. If there is no cash value in the Equity Option, there is no insurance coverage provided under the Option and therefore no monthly deduction is due. Cost of insurance: This charge varies monthly based on many factors. Each month, we determine the charge by multiplying the applicable cost of insurance percent by the cash value at the end of the prior Policy month. - The cost of insurance percent is based on our expectations as to future experience, taking into account the insured's sex (if permitted by law), age, smoking status and rate class. The percentages will never exceed the guaranteed cost of insurance percentages set forth in your Equity Option rider. These guaranteed percentages are based on certain 1980 Commissioners Standard Ordinary Mortality Tables and the insured's sex (if permitted by law), age and rate class. Our current percentages are lower than the maximums in most cases. We review our percentages periodically and may adjust them, but we will apply the same percentages to everyone who has had their Equity Option for the same amount of time and who is the same age, sex and rate class. As a general rule, the cost of insurance percentage increases each year you own your Equity Option, as the insured's age increases. - Rate class relates to the level of mortality risk we assume with respect to an insured. It can be the standard rate class, or one that is higher or lower (and, if the insured is 18 or older, we divide rate class by smoking status). The insured's rate class will affect your charge for insurance coverage. - The cash value of an Equity Option (to which the cost of insurance percent is applied) depends on a number of factors that are discussed below under "Equity Options Cash Value." The amounts that you allocate to your Equity Options and any favorable investment performance on those amounts will tend to make such cash value go up. On the other hand, poor investment performance, the charges that we deduct each month, and any withdrawals or loans you take from Your Equity Options cash value tend to make that cash value go down. Mortality and expense risk and administrative services charge: We make this monthly charge primarily to compensate us for: - expenses we incur in the administration of the Equity Option - mortality risks that insureds may live for a shorter period than we expect; and - expense risks that our issuing and administrative expenses may be higher than we expect. The amount of the charge is lower if the base policy's face amount is at least $250,000 at the date we calculate the charge. Therefore, changes you make in your base policy's face amount could affect the rate at which this charge applies to you. CHARGES AND EXPENSES OF THE SEPARATE ACCOUNT AND THE PORTFOLIOS Charges for Income Taxes: In general, we don't expect to incur federal, state or local taxes upon the earnings or realized capital gains attributable to the assets in the Separate Account relating to the Policies' cash value. If we 24

do incur such taxes, we reserve the right to charge the cash value allocated to the Separate Account for these taxes. Portfolio Expenses: There are daily charges against each Portfolio's assets for investment advisory services and fund operating expenses. These are described under "Fee Tables -- Annual Portfolio Operating Expenses" in this prospectus as well as in the Fund prospectuses attached to this prospectus. NET SINGLE PREMIUM The net single premium varies from day to day and is based on the 1980 Commissioners Standard Ordinary Mortality Tables and the insured's sex (if permitted by law), age and, in the case of Equity Additions, whether the cash value originally came from the base policy or from Enricher. To determine a death benefit, we divide an Equity Option's cash value by the net single premium. While it is not a charge or expense, the lower the net single premium, the higher the death benefit, and vice versa. The net single premium under your Equity Option will increase each month, as the insured grows older. The amount of your net single premium for each month is prescribed in the Equity Option itself and we will not alter such amounts. FEDERAL TAX MATTERS The following is a brief summary of some tax rules that may apply to your Policy. You should consult with your own tax advisor to find out how taxes can affect your benefits and rights under your Policy, especially before you make unscheduled premium payments, change the coverage provided by the base policy or the benefit options, take a loan or withdrawal, or assign or surrender the Policy. INSURANCE PROCEEDS - Generally excludable from your beneficiary's gross income. - The proceeds may be subject to federal estate tax: (i) if paid to the insured's estate; or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. - If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. - Whether or not any federal estate tax is due is based on a number of factors including the estate size. - The insurance proceeds payable upon death of the insured will never be less than the minimum amount required for the Policy to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) - You are generally not taxed on your cash value (except with respect to the DWI option) until you withdraw it or surrender your Policy. In these cases, you are generally permitted to take withdrawals up to the amount of premiums paid without any tax consequences. However, withdrawals will be subject to income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules apply in the first 15 Policy years, when a distribution may be subject to tax if there is a YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR TO FIND OUT HOW TAXES CAN AFFECT YOUR BENEFITS AND RIGHTS UNDER YOUR POLICY. 25

gain in your Policy (which is generally when your cash value exceeds the cumulative premiums you paid). - There may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if you are subject to that tax. - For income tax purposes, if you surrender an Equity Option for its cash value but the base policy remains in force, you will be considered to have made a partial withdrawal. SPLIT DOLLAR INSURANCE PLANS The IRS has recently issued guidance on split dollar insurance plans. A tax advisor should be consulted with respect to this new guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on U.S. exchanges, from extending, directly or indirectly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted to apply to split-dollar life insurance arrangements for directors and executive officers of such companies, since such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. Although the prohibition on loans generally took effect as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy or the purchase of a new Policy in connection with a split-dollar life insurance arrangement should consult legal counsel. LOANS - Loan amounts received will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. - Interest on loans is generally not deductible. For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. - If your Policy terminates (upon surrender, cancellation, lapse or, in most cases, exchange) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. Since amounts borrowed reduce the cash value that will be distributed to you if the Policy is surrendered, canceled or lapses, any cash value distributed to you in these circumstances may be insufficient to pay the income tax on any gain. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance contracts where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the 26

Policy, exceed tax law limits referred to as the "7-pay test." Material changes in the Policy include changes in the level of benefits and certain other changes to your Policy after the issue date. Reductions in benefits during a 7-pay period may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts. If your Policy is considered a modified endowment contract the following applies: - The death benefit will generally be income tax free to your beneficiary, as discussed above. - Amounts withdrawn or distributed before the insured's death, including loans, assignments and pledges, are treated as income first and subject to income tax (to the extent of any gain in your Policy). All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. - An additional 10% income tax generally applies to the taxable portion of the amounts received before age 59 1/2, except generally if you are disabled or if the distribution is part of a series of substantially equal periodic payments. DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Equity Options. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy owners of gains under their Policies. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: - Possible taxation of cash value transfers among the options within the Policy. - Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets. - Possible changes in the tax treatment of Policy benefits and rights. FOREIGN TAX CREDITS To the extent permitted under the federal tax law, we may claim the benefit of certain foreign tax credits attributable to taxes paid by certain Portfolios to foreign jurisdictions. RIGHTS WE RESERVE We reserve the right to make certain changes if we believe the changes are in the best interest of our Policy owners or would help carry out the 27

purposes of the Policy. We will make these changes in the manner permitted by applicable law and only after getting any necessary owner and regulatory approval. We will notify you of any changes that result in a material change in the underlying investments in the investment divisions, and you will have a chance to transfer out of the affected division (without charge). Some of the changes we may make include: - Operating the Separate Account in any other form that is permitted by applicable law. - Changes to obtain or continue exemptions from the 1940 Act. - Transferring assets among investment divisions or to other separate accounts, or our general account or combining or removing investment divisions from the Separate Account. - Substituting Fund shares in an investment division for shares of another portfolio of the Fund or another fund or investment permitted by law. - Changing the way we assess charges without exceeding the aggregate amount of the Equity Option's guaranteed maximum charges. - Making any necessary technical changes to the Policy to conform it to the changes we have made. OTHER POLICY PROVISIONS You should read your Policy, including the Equity Options riders, for a full discussion of their provisions. The following is a brief discussion of some of the provisions that you should consider: "FREE LOOK" PERIOD TO CANCEL YOUR POLICY You can return the Policy during this period. The period is the later of: - 10 days after you receive the Policy (unless state law requires your Policy to specify a longer period); and - 45 days after the completed application is signed (in the case of tele- underwritten policies, 45 days after the preliminary application is signed). If you return your Policy, we will send you a complete refund of any premiums paid (or cash value plus any charges deducted if state law requires) within seven days. SUICIDE If the insured commits suicide within the first two base policy years (or any different period specified in your base policy, if required by state law), your beneficiary will receive all premiums paid to the Policy (without interest), less any outstanding loans (plus accrued interest) and withdrawals taken. ASSIGNMENT AND CHANGE OF OWNERSHIP You can designate a new owner or otherwise assign an Equity Option only as part of an assignment of your Policy. You can assign your Policy as collateral if you notify us in writing. The assignment or release of the assignment is effective when it is recorded at the Designated Office. We are not responsible for determining the validity of the assignment or its release. Also, there could be serious adverse tax consequences to you or your beneficiary, so you should consult with your tax adviser before making any change of ownership or other assignment. CAREFULLY REVIEW YOUR POLICY WHICH CONTAINS A FULL DISCUSSION OF ALL ITS PROVISIONS. 28

PAYMENT AND DEFERMENT Generally, we will pay or transfer amounts from the Separate Account within seven days after the Date of Receipt of all necessary documentation required for such payment or transfer. We can defer this if: - The New York Stock Exchange has an unscheduled closing. - There is an emergency so that we could not reasonably determine the investment experience of an Equity Option. - The Securities and Exchange Commission by order permits us to do so for the protection of Equity Option owners (provided that the delay is permitted under New York State insurance law and regulations). - With respect to the insurance proceeds, entitlement to a payment is being questioned or is uncertain. - We are paying amounts attributable to a check. In that case we can wait for a reasonable time (15 days or less) to let the check clear. We currently pay interest on the amount of insurance proceeds at 3% per year (or higher if state law requires) from the date of death until the date we pay the benefit. DIVIDENDS The Equity Options are "nonparticipating," which means they are not eligible for dividends from us and do not share in any distributions of our surplus. SALES AND ADMINISTRATION OF THE POLICIES We serve as the "principal underwriter," as defined in the 1940 Act, for the Equity Options. We are registered under the Securities Exchange Act of 1934 as a broker-dealer and are a member of the National Association of Securities Dealers, Inc. DISTRIBUTING THE POLICIES We sell Policies that include an Equity Option through licensed life insurance sales representatives: - Registered through us. - Registered through other broker-dealers, including a wholly owned subsidiary. COMMISSIONS We do not pay commissions for the sale of the Equity Additions. However, representatives who write the Policy receive compensation calculated by adding the cash value in the Policy and in certain other products offered by MetLife and our affiliates. This compensation will not exceed .15% per year of the total aggregate cash value. For Policies issued after January 1, 2003, we do not pay this commission. We pay commissions on the sale of the base policy and certain riders. We pay maximum commissions on the Equity Enricher of 2% of the gross amount paid for each premium payment. The commissions do not increase the charges deducted from the Policy. We also pay the sales manager of a sales representative employed by us an override commission based on many factors including the commissions paid WE PERFORM THE SALES AND ADMINISTRATIVE SERVICES FOR THE POLICIES. 29

to the representative who sold the Equity Option and to other representatives the sales manager supervises. We may require all or part of the commissions to be returned to us if, during the first year you either make a withdrawal from your Equity Enricher or the base policy terminates. LEGAL PROCEEDINGS MetLife, like other life insurance companies, is involved in lawsuits, including class action lawsuits. In some class action and other lawsuits involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation cannot be predicted with certainty, MetLife believes that, as of the date of this prospectus, there are no pending or threatened lawsuits that will have a materially adverse impact on it or the Separate Account. RESTRICTIONS ON FINANCIAL TRANSACTIONS Federal laws designed to counter terrorism and prevent money laundering by criminals might, in certain circumstances, require us to reject a premium payment and/or block or "freeze" your account. If these laws apply in a particular situation, we would not be allowed to process any request for withdrawals, surrenders, or death benefits, make transfers, or continue making payments under your death benefit option until instructions are received from the appropriate regulator. We also may be required to provide additional information about your account to government regulators. EXPERTS The financial statements included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, 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. Deloitte & Touche LLP's principal business address is 201 E. Kennedy Boulevard, Suite 1200, Tampa, Florida 33602. FINANCIAL STATEMENTS The financial statements of the Separate Account are attached to this prospectus. You can find the financial statements of MetLife in the Statement of Additional Information referred to on the following page. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 30

Additional information about the Equity Options and the Separate Account can be found in the Statement of Additional Information. You may obtain a copy of the Statement of Additional Information, without charge, by calling 800-MET-5000, or by logging on to our website at www.metlife.com. For current information about your Equity Option values, for transfers and premium reallocations, to change or update Equity Option information such as your billing address, billing mode, beneficiary or ownership, for information about other Equity Option transactions, and to ask questions about your Equity Option, you may call our TeleService Center at 800-MET-5000. You may also obtain, without charge, a personalized illustration of death benefits and cash values by contacting your MetLife sales representative. This prospectus incorporates by reference all of the information contained in the Statement of Additional Information, which is legally part of this prospectus. Information about the Equity Options and the Separate Account, including the Statement of Additional Information, is available for viewing and copying at the SEC's Public Reference Room in Washington, D.C. Information about the operation of the public reference room may be obtained by calling the SEC at 202-942-8090. The Statement of Additional Information, reports and other information about the Separate Account are available on the SEC Internet site as www.sec.gov. Copies of this information may be obtained upon payment of a duplicating fee, by writing to the SEC's Public Reference Section at 450 Fifth Street, NW, Washington, DC 20549-0102. MetLife was formed under the laws of New York State in 1868. MetLife Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and group customers. The MetLife companies serve approximately 9 million individual households in the United States and companies and institutions with over 33 million employees and members. It also has international insurance operations in 14 countries. For more information about MetLife, please visit our website at www.metlife.com. File No. 811-6025

INDEPENDENT AUDITORS' REPORT To the Policyholders of Metropolitan Life Separate Account UL and the Board of Directors of Metropolitan Life Insurance Company: We have audited the accompanying statement of assets and liabilities of each of the sub-accounts (as disclosed in Note 1 to the financial statements) comprising Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company as of December 31, 2002, and the related statements of operations and changes in net assets for each of the periods in the three years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2002, by correspondence with the custodians and the depositors of the Separate Account. An audit also includes 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, the financial statements referred to above present fairly, in all material respects, the financial position of each of the sub-accounts comprising Metropolitan Life Separate Account UL of Metropolitan Life Insurance Company as of December 31, 2002, and the results of their operations and changes in net assets for each of the periods in the three years then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Tampa, Florida March 26, 2003 F-1

Metropolitan Life Separate Account UL STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2002 <TABLE> <CAPTION> Metropolitan Fund -------------------------------------------------------------------------- State Street State Street State Street Putnam Research Research Research MetLife International Investment Trust Diversified Aggressive Growth Stock Index Stock Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- ------------ ----------------- ------------ ------------- <S> <C> <C> <C> <C> <C> ASSETS: Investments at Value: Metropolitan Fund State Street Research Investment Trust Portfolio (14,474,724 shares; cost $440,761,220).......... $276,756,720 $ -- $ -- $ -- $ -- State Street Research Diversified Portfolio (18,221,054 shares; cost $300,082,589).......... -- 238,149,180 -- -- -- State Street Research Aggressive Growth Portfolio (10,255,141 shares; cost $252,928,964).......... -- -- 130,753,042 -- -- MetLife Stock Index Portfolio (13,911,433 shares; cost $442,239,598).......... -- -- -- 325,666,649 -- Putnam International Stock Portfolio (4,241,422 shares; cost $49,020,108)............ -- -- -- -- 32,913,436 Janus Mid Cap Portfolio (11,349,518 shares; cost $227,150,552).......... -- -- -- -- -- T. Rowe Price Small Cap Growth Portfolio (4,570,520 shares; cost $56,451,446)............ -- -- -- -- -- Scudder Global Equity Portfolio (2,273,932 shares; cost $27,906,569)............ -- -- -- -- -- Harris Oakmark Large Cap Value Portfolio (2,397,225 shares; cost $25,848,040)............ -- -- -- -- -- Neuberger Berman Partners Mid Cap Value Portfolio (1,432,018 shares; cost $19,895,280)............ -- -- -- -- -- T. Rowe Price Large Cap Growth Portfolio (2,468,024 shares; cost $27,759,151)............ -- -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio (4,841,080 shares; cost $50,327,819)............ -- -- -- -- -- Morgan Stanley EAFE Index Portfolio (1,843,069 shares; cost $15,649,298)............ -- -- -- -- -- Russell 2000 Index Portfolio (1,794,610 shares; cost $17,132,177)............ -- -- -- -- -- Putnam Large Cap Growth Portfolio (1,449,674 shares; cost $7,190,171)............. -- -- -- -- -- State Street Research Aurora Portfolio (2,626,537 shares; cost $34,513,109)............ -- -- -- -- -- MetLife Mid Cap Stock Index Portfolio (1,752,987 shares; cost $17,286,892)............ -- -- -- -- -- Janus Growth Portfolio (374,303 shares; cost $2,471,214)............... -- -- -- -- -- Franklin Templeton Small Cap Growth Portfolio (197,810 shares; cost $1,523,267)............... -- -- -- -- -- State Street Research Large Cap Value Portfolio (23,763 shares; cost $192,091).................. -- -- -- -- -- Janus Fund Janus Aspen Growth Portfolio (148,078 shares; cost $3,022,525)............... -- -- -- -- -- Invesco Fund Invesco VIF High Yield Portfolio (70,674 shares; cost $517,831).................. -- -- -- -- -- Invesco VIF Equity Income Portfolio (8,467 shares; cost $152,250)................... -- -- -- -- -- Invesco VIF Real Estate Opportunity Portfolio (17,086 shares; cost $174,935).................. -- -- -- -- -- Franklin Fund Franklin Templeton International Stock Portfolio (274,662 shares; cost $3,092,787)............... -- -- -- -- -- Franklin Templeton Valuemark Small Cap Portfolio (63,068 shares; cost $980,915).................. -- -- -- -- -- ------------ ------------ ------------ ------------ ----------- Total Investments................................ 276,756,720 238,149,180 130,753,042 325,666,649 32,913,436 Cash and Accounts Receivable..................... 223,249 -- 62,576 561,314 52,662 ------------ ------------ ------------ ------------ ----------- Total assets..................................... 276,979,969 238,149,180 130,815,618 326,227,963 32,966,098 LIABILITIES: Due to Metropolitan Life Insurance Company....... -- 128,827 -- -- -- ------------ ------------ ------------ ------------ ----------- NET ASSETS....................................... $276,979,969 $238,020,353 $130,815,618 $326,227,963 $32,966,098 ============ ============ ============ ============ =========== Outstanding Units (In Thousands)................. 15,060 12,268 11,447 22,140 3,296 Unit Values...................................... $8.11 to $9.78 to $8.32 to $7.48 to $7.78 to $25.66 $25.64 $12.09 $23.03 $10.91 </TABLE> See Notes to Financial Statements. F-2

<TABLE> <CAPTION> Metropolitan Fund -------------------------------------------------------------------------------------------------------------- T. Rowe Neuberger T. Rowe Morgan Janus Price Small Scudder Harris Oakmark Berman Partners Price Large Lehman Brothers Stanley Mid Cap Cap Growth Global Equity Large Cap Mid Cap Value Cap Growth Aggregate Bond EAFE Index Portfolio Portfolio Portfolio Value Portfolio Portfolio Portfolio Index Portfolio Portfolio ------------ ----------- ------------- --------------- --------------- ----------- --------------- ----------- <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 118,148,481 -- -- -- -- -- -- -- -- 39,809,233 -- -- -- -- -- -- -- -- 20,419,906 -- -- -- -- -- -- -- -- 23,037,333 -- -- -- -- -- -- -- -- 18,272,550 -- -- -- -- -- -- -- -- 21,990,092 -- -- -- -- -- -- -- -- 54,074,866 -- -- -- -- -- -- -- -- 13,380,681 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- 118,148,481 39,809,233 20,419,906 23,037,333 18,272,550 21,990,092 54,074,866 13,380,681 871,094 70,855 56,027 35,221 13,272 104,793 -- 115,391 ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- 119,019,575 39,880,088 20,475,933 23,072,554 18,285,822 22,094,885 54,074,866 13,496,072 -- -- -- -- -- -- 28,578 -- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- $119,019,575 $39,880,088 $20,475,933 $23,072,554 $18,285,822 $22,094,885 $54,046,288 $13,496,072 ============ =========== =========== =========== =========== =========== =========== =========== 11,521 4,261 1,978 2,346 1,567 2,853 4,147 2,044 $4.22 to $9.05 to $9.90 to $9.23 to $10.24 to $6.35 to $12.43 to $5.76 to $12.07 $10.04 $11.03 $11.71 $14.13 $9.27 $13.19 $7.53 </TABLE> F-3

Metropolitan Life Separate Account UL STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2002 <TABLE> <CAPTION> Metropolitan Fund ---------------------------------------------------------- MetLife Russell Putnam State Street Mid Cap 2000 Large Cap Research Stock Janus Index Growth Aurora Index Growth Portfolio Portfolio Portfolio Portfolio Portfolio ----------- ---------- ------------ ----------- ---------- <S> <C> <C> <C> <C> <C> ASSETS: Investments at Value: Metropolitan Fund State Street Research Investment Trust Portfolio (14,474,724 shares; cost $440,761,220).......... $ -- $ -- $ -- $ -- $ -- State Street Research Diversified Portfolio (18,221,054 shares; cost $300,082,589).......... -- -- -- -- -- State Street Research Aggressive Growth Portfolio (10,255,141 shares; cost $252,928,964).......... -- -- -- -- -- MetLife Stock Index Portfolio (13,911,433 shares; cost $442,239,598).......... -- -- -- -- -- Putnam International Stock Portfolio (4,241,422 shares; cost $49,020,108)............ -- -- -- -- -- Janus Mid Cap Portfolio (11,349,518 shares; cost $227,150,552).......... -- -- -- -- -- T. Rowe Price Small Cap Growth Portfolio (4,570,520 shares; cost $56,451,446)............ -- -- -- -- -- Scudder Global Equity Portfolio (2,273,932 shares; cost $27,906,569)............ -- -- -- -- -- Harris Oakmark Large Cap Value Portfolio (2,397,225 shares; cost $25,848,040)............ -- -- -- -- -- Neuberger Berman Partners Mid Cap Value Portfolio (1,432,018 shares; cost $19,895,280)............ -- -- -- -- -- T. Rowe Price Large Cap Growth Portfolio (2,468,024 shares; cost $27,759,151)............ -- -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio (4,841,080 shares; cost $50,327,819)............ -- -- -- -- -- Morgan Stanley EAFE Index Portfolio (1,843,069 shares; cost $15,649,298)............ -- -- -- -- -- Russell 2000 Index Portfolio (1,794,610 shares; cost $17,132,177)............ 14,805,534 -- -- -- -- Putnam Large Cap Growth Portfolio (1,449,674 shares; cost $7,190,171)............. -- 5,204,328 -- -- -- State Street Research Aurora Portfolio (2,626,537 shares; cost $34,513,109)............ -- -- 29,075,760 -- -- MetLife Mid Cap Stock Index Portfolio (1,752,987 shares; cost $17,286,892)............ -- -- -- 15,548,990 -- Janus Growth Portfolio (374,303 shares; cost $2,471,214)............... -- -- -- -- 2,032,467 Franklin Templeton Small Cap Growth Portfolio (197,810 shares; cost $1,523,267)............... -- -- -- -- -- State Street Research Large Cap Value Portfolio (23,763 shares; cost $192,091).................. -- -- -- -- -- Janus Fund Janus Aspen Growth Portfolio (148,078 shares; cost $3,022,525)............... -- -- -- -- -- Invesco Fund Invesco VIF High Yield Portfolio (70,674 shares; cost $517,831).................. -- -- -- -- -- Invesco VIF Equity Income Portfolio (8,467 shares; cost $152,250)................... -- -- -- -- -- Invesco VIF Real Estate Opportunity Portfolio (17,086 shares; cost $174,935).................. -- -- -- -- -- Franklin Fund Franklin Templeton International Stock Portfolio (274,662 shares; cost $3,092,787)............... -- -- -- -- -- Franklin Templeton Valuemark Small Cap Portfolio (63,068 shares; cost $980,915).................. -- -- -- -- -- ----------- ---------- ----------- ----------- ---------- Total Investments................................ 14,805,534 5,204,328 29,075,760 15,548,990 2,032,467 Cash and Accounts Receivable..................... 23,000 48,385 -- 18,967 12,817 ----------- ---------- ----------- ----------- ---------- Total assets..................................... 14,828,534 5,252,713 29,075,760 15,567,957 2,045,284 LIABILITIES: Due to Metropolitan Life Insurance............... -- -- 15,202 -- -- ----------- ---------- ----------- ----------- ---------- NET ASSETS....................................... $14,828,534 $5,252,713 $29,060,558 $15,567,957 $2,045,284 =========== ========== =========== =========== ========== Outstanding Units (In Thousands)................. 1,614 1,463 2,599 1,762 381 Unit Values...................................... $7.43 to $3.51 to $10.30 to $8.18 to $5.35 to $9.99 $3.79 $11.25 $8.98 $5.43 </TABLE> See Notes to Financial Statements. F-4

<TABLE> <CAPTION> Metropolitan Fund Janus Fund Invesco Fund Franklin Fund ----------------------- ---------- ----------------------------------- ----------------------- Franklin State Street Franklin Franklin Templeton Research Janus Invesco VIF Invesco VIF Invesco VIF Templeton Templeton Small Cap Large Cap Aspen High Equity Real Estate International Valuemark Growth Value Growth Yield Income Opportunity Stock Small Cap Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- ------------ ---------- ----------- ----------- ----------- ------------- --------- <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,267,960 -- -- -- -- -- -- -- -- 188,913 -- -- -- -- -- -- -- -- 2,163,422 -- -- -- -- -- -- -- -- 475,634 -- -- -- -- -- -- -- -- 125,063 -- -- -- -- -- -- -- -- 179,233 -- -- -- -- -- -- -- -- 2,612,034 -- -- -- -- -- -- -- -- 800,968 ---------- --------- ---------- -------- -------- -------- ---------- -------- 1,267,960 188,913 2,163,422 475,634 125,063 179,233 2,612,034 800,968 -- -- -- -- -- -- -- -- ---------- --------- ---------- -------- -------- -------- ---------- -------- 1,267,960 188,913 2,163,422 475,634 125,063 179,233 2,612,034 800,968 2,227 328 -- -- -- -- -- -- ---------- --------- ---------- -------- -------- -------- ---------- -------- $1,265,733 $ 188,585 $2,163,422 $475,634 $125,063 $179,233 $2,612,034 $800,968 ========== ========= ========== ======== ======== ======== ========== ======== 198 23 354 65 15 14 344 163 $6.31 to $7.96 to $6.10 $7.37 $7.94 $12.82 $7.57 $4.93 $6.41 $8.00 </TABLE> F-5

Metropolitan Life Separate Account UL STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2002 <TABLE> <CAPTION> Zenith Fund ------------------------------------------------- Loomis MFS Davis Sayles Small Alger Equity Investors Venture Value Cap Growth Trust Portfolio Portfolio Portfolio Portfolio ------------- ------------ ------------ --------- <S> <C> <C> <C> <C> ASSETS: Investments at Value: Zenith Fund Davis Venture Value Portfolio (691,858 shares; cost $15,908,944)....................... $13,415,133 $ -- $ -- $ -- Loomis Sayles Small Cap Portfolio (17,312 shares; cost $2,876,139)......................... -- 2,404,640 -- -- Alger Equity Growth Portfolio (215,204 shares; cost $3,971,211)........................ -- -- 2,982,730 -- MFS Investors Trust Portfolio (101,400 shares; cost $764,507).......................... -- -- -- 690,536 MFS Research Managers Portfolio (45,747 shares; cost $372,528)........................... -- -- -- -- State Street Research Bond Income Portfolio (826,931 shares; cost $87,823,814)....................... -- -- -- -- FI Structured Equity Portfolio (745 shares; cost $99,856)............................... -- -- -- -- Harris Oakmark Focused Value Portfolio (76,214 shares; cost $13,563,953)........................ -- -- -- -- Salomon Brothers Strategic Bond Opportunities Portfolio (190,267 shares; cost $2,109,683)........................ -- -- -- -- Salomon Brothers U.S. Government Portfolio (353,985 shares; cost $4,286,785)........................ -- -- -- -- State Street Research Money Market Portfolio (307,784 shares; cost $30,778,444)....................... -- -- -- -- FI Mid Cap Opportunities Portfolio (20,522 shares; cost $164,318)........................... -- -- -- -- Alliance Fund Alliance Growth & Income Portfolio (72,234 shares; cost $1,301,223)......................... -- -- -- -- Alliance Premier Growth Portfolio (2,442 shares; cost $53,408)............................. -- -- -- -- Alliance Technology Portfolio (1,827 shares; cost $29,944)............................. -- -- -- -- Fidelity Fund Fidelity VIP Contrafund Portfolio (13,884 shares; cost $278,912)........................... -- -- -- -- Fidelity VIP Asset Manager Growth Portfolio (12,818 shares; cost $152,436)........................... -- -- -- -- Fidelity VIP Growth Portfolio (5,757 shares; cost $177,657)............................ -- -- -- -- American Fund American Funds Growth Portfolio (289,649 shares; cost $11,296,498)....................... -- -- -- -- American Funds Growth-Income Portfolio (324,009 shares; cost $9,336,164)........................ -- -- -- -- American Funds Global Small Cap Portfolio (219,146 shares; cost $2,372,426)........................ -- -- -- -- Met Investors Fund JPM Enhanced Index Portfolio (711 shares; cost $9,571)................................ -- -- -- -- MFS Mid Cap Growth Portfolio (293,301 shares; cost $1,734,251)........................ -- -- -- -- MFS Research International Portfolio (95,153 shares; cost $713,916)........................... -- -- -- -- PIMCO Total Return Portfolio (548,334 shares; cost $5,961,523)........................ -- -- -- -- PIMCO Innovation Portfolio (412,507 shares; cost $1,910,459)........................ -- -- -- -- Lord Abbett Bond Debenture Portfolio (831,072 shares; cost $8,642,613)........................ -- -- -- -- Met/AIM Mid Cap Core Equity Portfolio (25,740 shares; cost $259,635)........................... -- -- -- -- Met/AIM Small Cap Growth Portfolio (13,390 shares; cost $120,143)........................... -- -- -- -- State Street Research Concentrated International Portfolio (16,867 shares; cost $152,869)........................... -- -- -- -- ----------- ---------- ---------- --------- Total Investments......................................... 13,415,133 2,404,640 2,982,730 690,536 Cash and Accounts Receivable.............................. 15,059 3,753 -- 3,357 ----------- ---------- ---------- --------- Total assets.............................................. 13,430,192 2,408,393 2,982,730 693,893 LIABILITIES: Due to Metropolitan Life Insurance Company................ -- -- -- -- ----------- ---------- ---------- --------- NET ASSETS................................................ $13,430,192 $2,408,393 $2,982,730 $ 693,893 =========== ========== ========== ========= Outstanding Units (In Thousands).......................... 901 18 589 104 Unit Values............................................... $7.48 to $6.80 to $5.06 $6.54 to $21.70 $150.51 $6.84 </TABLE> See Notes to Financial Statements. F-6

<TABLE> <CAPTION> Zenith Fund ------------------------------------------------------------------------------------------------------------- MFS State Street FI Salomon Brothers State Street FI Research Research Structured Harris Oakmark Strategic Bond Salomon Brothers Research Mid Cap Managers Bond Income Equity Focused Value Opportunities U.S. Government Money Market Opportunities Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- ------------ ---------- -------------- ---------------- ---------------- ------------ ------------- <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 313,368 -- -- -- -- -- -- -- -- 93,228,177 -- -- -- -- -- -- -- -- 93,104 -- -- -- -- -- -- -- -- 12,905,272 -- -- -- -- -- -- -- -- 2,176,655 -- -- -- -- -- -- -- -- 4,368,173 -- -- -- -- -- -- -- -- 30,778,444 -- -- -- -- -- -- -- -- 168,076 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --------- ----------- --------- ----------- ---------- ---------- ----------- --------- 313,368 93,228,177 93,104 12,905,272 2,176,655 4,368,173 30,778,444 168,076 972 -- -- -- -- -- 32,169 -- --------- ----------- --------- ----------- ---------- ---------- ----------- --------- 314,340 93,228,177 93,104 12,905,272 2,176,655 4,368,173 30,810,613 168,076 -- 70,245 206 26,739 2,992 2,763 -- 207 --------- ----------- --------- ----------- ---------- ---------- ----------- --------- $ 314,340 $93,157,932 $ 92,898 $12,878,533 $2,173,663 $4,365,410 $30,810,613 $ 167,869 ========= =========== ========= =========== ========== ========== =========== ========= 47 5,564 12 76 177 340 1,981 21 $5.29 to $12.18 to $6.59 to $167.13 to $12.12 to $12.72 to $13.09 to $8.14 to $6.86 $25.85 $8.32 $169.65 $12.30 $12.91 $15.93 $8.19 </TABLE> F-7

Metropolitan Life Separate Account UL STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2002 <TABLE> <CAPTION> Alliance Fund ------------------------------------------- Alliance Alliance Premier Alliance Growth & Income Growth Technology Portfolio Portfolio Portfolio --------------- ---------------- ---------- <S> <C> <C> <C> ASSETS: Investments at Value: Zenith Fund Davis Venture Value Portfolio (691,858 shares; cost $15,908,944)....................... $ -- $ -- $ -- Loomis Sayles Small Cap Portfolio (17,312 shares; cost $2,876,139)......................... -- -- -- Alger Equity Growth Portfolio (215,204 shares; cost $3,971,211)........................ -- -- -- MFS Investors Trust Portfolio (101,400 shares; cost $764,507).......................... -- -- -- MFS Research Managers Portfolio (45,747 shares; cost $372,528)........................... -- -- -- State Street Research Bond Income Portfolio (826,931 shares; cost $87,823,814)....................... -- -- -- FI Structured Equity Portfolio (745 shares; cost $99,856)............................... -- -- -- Harris Oakmark Focused Value Portfolio (76,214 shares; cost $13,563,953)........................ -- -- -- Salomon Brothers Strategic Bond Opportunities Portfolio (190,267 shares; cost $2,109,683)........................ -- -- -- Salomon Brothers U.S. Government Portfolio (353,985 shares; cost $4,286,785)........................ -- -- -- State Street Research Money Market Portfolio (307,784 shares; cost $30,778,444)....................... -- -- -- FI Mid Cap Opportunities Portfolio (20,522 shares; cost $164,318)........................... -- -- -- Alliance Fund Alliance Growth & Income Portfolio (72,234 shares; cost $1,301,223)......................... 1,191,135 -- -- Alliance Premier Growth Portfolio (2,442 shares; cost $53,408)............................. -- 42,227 -- Alliance Technology Portfolio (1,827 shares; cost $29,944)............................. -- -- 18,230 Fidelity Fund Fidelity VIP Contrafund Portfolio (13,884 shares; cost $278,912)........................... -- -- -- Fidelity VIP Asset Manager Growth Portfolio (12,818 shares; cost $152,436)........................... -- -- -- Fidelity VIP Growth Portfolio (5,757 shares; cost $177,657)............................ -- -- -- American Fund American Funds Growth Portfolio (289,649 shares; cost $11,296,498)....................... -- -- -- American Funds Growth-Income Portfolio (324,009 shares; cost $9,336,164)........................ -- -- -- American Funds Global Small Cap Portfolio (219,146 shares; cost $2,372,426)........................ -- -- -- Met Investors Fund JPM Enhanced Index Portfolio (711 shares; cost $9,571)................................ -- -- -- MFS Mid Cap Growth Portfolio (293,301 shares; cost $1,734,251)........................ -- -- -- MFS Research International Portfolio (95,153 shares; cost $713,916)........................... -- -- -- PIMCO Total Return Portfolio (548,334 shares; cost $5,961,523)........................ -- -- -- PIMCO Innovation Portfolio (412,507 shares; cost $1,910,459)........................ -- -- -- Lord Abbett Bond Debenture Portfolio (831,072 shares; cost $8,642,613)........................ -- -- -- Met/AIM Mid Cap Core Equity Portfolio (25,740 shares; cost $259,635)........................... -- -- -- Met/AIM Small Cap Growth Portfolio (13,390 shares; cost $120,143)........................... -- -- -- State Street Research Concentrated International Portfolio (16,867 shares; cost $152,869)........................... -- -- -- ---------- ------- ------- Total Investments......................................... 1,191,135 42,227 18,230 Cash and Accounts Receivable.............................. -- -- -- ---------- ------- ------- Total assets.............................................. 1,191,135 42,227 18,230 LIABILITIES: Due to Metropolitan Life Insurance Company................ -- -- -- ---------- ------- ------- NET ASSETS................................................ $1,191,135 $42,227 $18,230 ========== ======= ======= Outstanding Units (In Thousands).......................... 150 9 6 Unit Values............................................... $7.92 $4.94 $3.16 </TABLE> See Notes to Financial Statements. F-8

<TABLE> <CAPTION> Fidelity Fund American Fund Met Investors Fund --------------------------------------- -------------------------------------------- -------------------- Fidelity VIP American Funds American Funds JPM MFS Fidelity VIP Asset Manager Fidelity VIP American Funds Growth- Global Enhanced Mid Cap Contrafund Growth Growth Growth Income Small Cap Index Growth Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------------ ------------- ------------ -------------- -------------- -------------- --------- ---------- <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 249,221 -- -- -- -- -- -- -- -- 130,875 -- -- -- -- -- -- -- -- 133,611 -- -- -- -- -- -- -- -- 9,642,419 -- -- -- -- -- -- -- -- 8,268,707 -- -- -- -- -- -- -- -- 2,022,713 -- -- -- -- -- -- -- -- 7,765 -- -- -- -- -- -- -- -- 1,366,781 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -------- -------- -------- ---------- ---------- ---------- ------ ---------- 249,221 130,875 133,611 9,642,419 8,268,707 2,022,713 7,765 1,366,781 -- -- -- 349,603 138,794 10,200 -- 6,216 -------- -------- -------- ---------- ---------- ---------- ------ ---------- 249,221 130,875 133,611 9,992,022 8,407,501 2,032,913 7,765 1,372,997 -- -- -- -- -- -- -- -- -------- -------- -------- ---------- ---------- ---------- ------ ---------- $249,221 $130,875 $133,611 $9,992,022 $8,407,501 $2,032,913 $7,765 $1,372,997 ======== ======== ======== ========== ========== ========== ====== ========== 35 20 28 221 287 203 1 294 $7.16 $6.50 $4.72 $44.64 to $28.98 to $9.90 to $6.09 $4.62 to $45.32 $29.42 $10.05 $4.69 </TABLE> F-9

Metropolitan Life Separate Account UL STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2002 <TABLE> <CAPTION> Met Investors Fund ------------------------------------------------- MFS Lord Abbett Research PIMCO PIMCO Bond International Total Return Innovation Debenture Portfolio Portfolio Portfolio Portfolio ------------- ------------ ---------- ----------- <S> <C> <C> <C> <C> ASSETS: Investments at Value: Zenith Fund Davis Venture Value Portfolio (691,858 shares; cost $15,908,944)....................... $ -- $ -- $ -- $ -- Loomis Sayles Small Cap Portfolio (17,312 shares; cost $2,876,139)......................... -- -- -- -- Alger Equity Growth Portfolio (215,204 shares; cost $3,971,211)........................ -- -- -- -- MFS Investors Trust Portfolio (101,400 shares; cost $764,507).......................... -- -- -- -- MFS Research Managers Portfolio (45,747 shares; cost $372,528)........................... -- -- -- -- State Street Research Bond Income Portfolio (826,931 shares; cost $87,823,814)....................... -- -- -- -- FI Structured Equity Portfolio (745 shares; cost $99,856)............................... -- -- -- -- Harris Oakmark Focused Value Portfolio (76,214 shares; cost $13,563,953)........................ -- -- -- -- Salomon Brothers Strategic Bond Opportunities Portfolio (190,267 shares; cost $2,109,683)........................ -- -- -- -- Salomon Brothers U.S. Government Portfolio (353,985 shares; cost $4,286,785)........................ -- -- -- -- State Street Research Money Market Portfolio (307,784 shares; cost $30,778,444)....................... -- -- -- -- FI Mid Cap Opportunities Portfolio (20,522 shares; cost $164,318)........................... -- -- -- -- Alliance Fund Alliance Growth & Income Portfolio (72,234 shares; cost $1,301,223)......................... -- -- -- -- Alliance Premier Growth Portfolio (2,442 shares; cost $53,408)............................. -- -- -- -- Alliance Technology Portfolio (1,827 shares; cost $29,944)............................. -- -- -- -- Fidelity Fund Fidelity VIP Contrafund Portfolio (13,884 shares; cost $278,912)........................... -- -- -- -- Fidelity VIP Asset Manager Growth Portfolio (12,818 shares; cost $152,436)........................... -- -- -- -- Fidelity VIP Growth Portfolio (5,757 shares; cost $177,657)............................ -- -- -- -- American Fund American Funds Growth Portfolio (289,649 shares; cost $11,296,498)....................... -- -- -- -- American Funds Growth-Income Portfolio (324,009 shares; cost $9,336,164)........................ -- -- -- -- American Funds Global Small Cap Portfolio (219,146 shares; cost $2,372,426)........................ -- -- -- -- Met Investors Fund JPM Enhanced Index Portfolio (711 shares; cost $9,571)................................ -- -- -- -- MFS Mid Cap Growth Portfolio (293,301 shares; cost $1,734,251)........................ -- -- -- -- MFS Research International Portfolio (95,153 shares; cost $713,916)........................... 712,696 -- -- -- PIMCO Total Return Portfolio (548,334 shares; cost $5,961,523)........................ -- 6,218,104 -- -- PIMCO Innovation Portfolio (412,507 shares; cost $1,910,459)........................ -- -- 1,262,271 -- Lord Abbett Bond Debenture Portfolio (831,072 shares; cost $8,642,613)........................ -- -- -- 8,510,181 Met/AIM Mid Cap Core Equity Portfolio (25,740 shares; cost $259,635)........................... -- -- -- -- Met/AIM Small Cap Growth Portfolio (13,390 shares; cost $120,143)........................... -- -- -- -- State Street Research Concentrated International Portfolio (16,867 shares; cost $152,869)........................... -- -- -- -- --------- ---------- ---------- ---------- Total Investments......................................... 712,696 6,218,104 1,262,271 8,510,181 Cash and Accounts Receivable.............................. 986 -- 6,810 86,425 --------- ---------- ---------- ---------- Total assets.............................................. 713,682 6,218,104 1,269,081 8,596,606 LIABILITIES: Due to Metropolitan Life Insurance Company................ -- 4,422 -- -- --------- ---------- ---------- ---------- NET ASSETS................................................ $ 713,682 $6,213,682 $1,269,081 $8,596,606 ========= ========== ========== ========== Outstanding Units (In Thousands).......................... 95 534 416 748 Unit Values............................................... $7.41 to $11.55 to $3.01 to $10.87 to $7.52 $11.72 $3.06 $12.51 </TABLE> See Notes to Financial Statements. F-10

<TABLE> <CAPTION> Met Investors Fund ------------------------------------------- Met/AIM Met/AIM State Street Research Mid Cap Small Cap Concentrated Core Equity Growth International Portfolio Portfolio Portfolio ----------- --------- --------------------- <S> <C> <C> $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 253,284 -- -- -- 115,821 -- -- -- 149,949 --------- --------- --------- 253,284 115,821 149,949 -- -- 21 --------- --------- --------- 253,284 115,821 149,970 304 25 -- --------- --------- --------- $ 252,980 $ 115,796 $ 149,970 ========= ========= ========= 30 15 18 $8.53 to $7.59 to $8.37 to $8.58 $7.63 $8.42 </TABLE> F-11

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Metropolitan Fund ----------------------------------------- State Street Research Investment Trust Portfolio ----------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------- ------------ <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 1,708,899 $ 51,437,166 $ 4,838,821 Expenses: Mortality and expense charges................................ 2,678,347 3,136,115 3,798,303 ------------ ------------- ------------ Net investment (loss) income................................... (969,448) 48,301,051 1,040,518 ------------ ------------- ------------ NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (6,132,437) 731,187 5,846,334 Change in unrealized (depreciation) appreciation of investments (90,883,953) (122,469,738) (37,904,600) ------------ ------------- ------------ Net realized and unrealized (losses) gains on investments...... (97,016,390) (121,738,551) (32,058,266) ------------ ------------- ------------ NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(97,985,838) $ (73,437,500) $(31,017,748) ============ ============= ============ </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-12

<TABLE> <CAPTION> Metropolitan Fund --------------------------------------------------------------------------------------------------------------------------- State Street Research Diversified State Street Research Aggressive Growth MetLife Stock Index Portfolio Portfolio Portfolio --------------------------------------- ---------------------------------------- ---------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 5,726,999 $ 25,415,648 $ 1,174,688 $ -- $ 46,776,659 $ 27,463,699 $ 5,409,402 $ 3,858,667 $ 13,335,508 2,168,000 2,231,404 2,258,802 1,263,240 1,493,070 1,992,343 2,704,257 2,645,594 2,457,289 ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ 3,558,999 23,184,244 (1,084,114) (1,263,240) 45,283,589 25,471,356 2,705,145 1,213,073 10,878,219 ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ (1,810,936) (111,095) 1,585,197 (5,953,657) (1,536,972) 3,369,764 (5,045,284) 4,130,927 6,159,583 (41,694,719) (42,080,714) (360,101) (44,703,891) (94,895,107) (48,026,970) (82,559,071) (48,985,481) (49,619,601) ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ (43,505,655) (42,191,809) 1,225,096 (50,657,548) (96,432,079) (44,657,206) (87,604,355) (44,854,554) (43,460,018) ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------ ------------ $(39,946,656) $(19,007,565) $ 140,982 $(51,920,788) $(51,148,490) $(19,185,850) $(84,899,210) $(43,641,481) $(32,581,799) ============ ============ =========== ============ ============ ============ ============ ============ ============ </TABLE> F-13

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Metropolitan Fund -------------------------------------- Putnam International Stock Portfolio -------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 317,077 $ 1,500,375 $ 274,114 Expenses: Mortality and expense charges................................ 298,333 327,499 377,435 ----------- ------------ ----------- Net investment (loss) income................................... 18,744 1,172,876 (103,321) ----------- ------------ ----------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (2,655,399) (1,661,736) 309,181 Change in unrealized (depreciation) appreciation of investments (4,418,288) (9,202,287) (5,241,506) ----------- ------------ ----------- Net realized and unrealized (losses) gains on investments...... (7,073,687) (10,864,023) (4,932,325) ----------- ------------ ----------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(7,054,943) $ (9,691,147) $(5,035,646) =========== ============ =========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-14

<TABLE> <CAPTION> Metropolitan Fund ----------------------------------------------------------------------------------------------------------------------- Janus Mid Cap T. Rowe Price Small Cap Growth Scudder Global Equity Portfolio Portfolio Portfolio ---------------------------------------- -------------------------------------- ------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ 11,303,876 $ -- $ 3,542,193 $ -- $ 350,009 $ 2,319,964 $ 64,757 1,013,088 1,037,631 1,274,377 332,098 332,644 307,077 168,321 164,713 142,655 ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------- (1,013,088) (1,037,631) 10,029,499 (332,098) 3,209,549 (307,077) 181,688 2,155,251 (77,898) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------- (5,163,698) (2,451,549) 3,280,184 (297,872) (796,014) 759,159 (466,029) (71,082) 423,877 (34,449,605) (53,291,667) (70,128,825) (12,423,975) (6,595,361) (4,955,737) (3,445,540) (5,825,339) (702,165) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------- (39,613,303) (55,743,216) (66,848,641) (12,721,847) (7,391,375) (4,196,578) (3,911,569) (5,896,421) (278,288) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- --------- $(40,626,391) $(56,780,847) $(56,819,142) $(13,053,945) $(4,181,826) $(4,503,655) $(3,729,881) $(3,741,170) $(356,186) ============ ============ ============ ============ =========== =========== =========== =========== ========= </TABLE> F-15

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Metropolitan Fund ------------------------------------- Harris Oakmark Large Cap Value Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 618,214 $ 12,105 $ 45,533 Expenses: Mortality and expense charges................................ 179,930 68,617 8,356 ----------- -------- -------- Net investment (loss) income................................... 438,284 (56,512) 37,177 ----------- -------- -------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... 173,172 94,596 (27,497) Change in unrealized (depreciation) appreciation of investments (3,824,797) 810,284 217,646 ----------- -------- -------- Net realized and unrealized (losses) gains on investments...... (3,651,625) 904,880 190,149 ----------- -------- -------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,213,341) $848,368 $227,326 =========== ======== ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-16

<TABLE> <CAPTION> Metropolitan Fund ------------------------------------------------------------------------------------------------------------------- Neuberger Berman Partners Mid Cap Value T. Rowe Price Large Cap Growth Lehman Brothers Aggregate Bond Index Portfolio Portfolio Portfolio -------------------------------------- ------------------------------------- ------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 49,885 $ 196,293 $192,122 $ 57,106 $ 8,447 $ 212,097 $1,283,105 $ 366,468 $1,151,414 139,354 89,772 16,357 163,196 103,226 28,064 300,244 154,225 51,779 ----------- --------- -------- ----------- --------- --------- ---------- ---------- ---------- (89,469) 106,521 175,765 (106,090) (94,779) 184,033 982,861 212,243 1,099,635 ----------- --------- -------- ----------- --------- --------- ---------- ---------- ---------- 105,666 (68,863) 28,891 (317,124) (100,488) 9,246 515,268 210,509 61,931 (1,888,036) (195,526) 444,118 (5,333,848) (92,461) (515,437) 2,760,523 1,053,501 (39,445) ----------- --------- -------- ----------- --------- --------- ---------- ---------- ---------- (1,782,370) (264,389) 473,009 (5,650,972) (192,949) (506,191) 3,275,791 1,264,010 22,486 ----------- --------- -------- ----------- --------- --------- ---------- ---------- ---------- $(1,871,839) $(157,868) $648,774 $(5,757,062) $(287,728) $(322,158) $4,258,652 $1,476,253 $1,122,121 =========== ========= ======== =========== ========= ========= ========== ========== ========== </TABLE> F-17

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Metropolitan Fund ------------------------------------- Morgan Stanley EAFE Index Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 59,278 $ 25,460 $ 90,887 Expenses: Mortality and expense charges................................ 123,406 63,300 22,497 ----------- ----------- --------- Net investment (loss) income................................... (64,128) (37,840) 68,390 ----------- ----------- --------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (800,822) (961,834) (86,470) Change in unrealized (depreciation) appreciation of investments (1,274,363) (729,479) (425,063) ----------- ----------- --------- Net realized and unrealized (losses) gains on investments...... (2,075,185) (1,691,313) (511,533) ----------- ----------- --------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,139,313) $(1,729,153) $(443,143) =========== =========== ========= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-18

<TABLE> <CAPTION> Metropolitan Fund ------------------------------------------------------------------------------------------------------------------------- Russell 2000 Index Putnam Large Cap Growth State Street Research Aurora Portfolio Portfolio Portfolio ------------------------------------- --------------------------------------- ----------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Period For the Year For the Year For the Period Ended Ended Ended Ended Ended May 1, 2000 to Ended Ended July 5, 2000 to December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ -------------- ------------ ------------ --------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 74,869 $ 21,244 $ 797,642 $ -- $ -- $ -- $ 127,494 $ 44,265 $ 20,669 104,600 68,898 21,802 39,278 22,732 1,713 225,368 95,291 3,697 ----------- ----------- ----------- ----------- --------- --------- ----------- ---------- -------- (29,731) (47,654) 775,840 (39,278) (22,732) (1,713) (97,874) (51,026) 16,972 ----------- ----------- ----------- ----------- --------- --------- ----------- ---------- -------- (343,069) (1,016,179) (27,586) (304,226) (113,353) (1,766) 81,843 155,882 3,082 (2,545,881) 1,215,383 (1,037,181) (1,227,374) (585,114) (173,356) (6,958,922) 1,218,805 302,768 ----------- ----------- ----------- ----------- --------- --------- ----------- ---------- -------- (2,888,950) 199,204 (1,064,767) (1,531,600) (698,467) (175,122) (6,877,079) 1,374,687 305,850 ----------- ----------- ----------- ----------- --------- --------- ----------- ---------- -------- $(2,918,681) $ 151,550 $ (288,927) $(1,570,878) $(721,199) $(176,835) $(6,974,953) $1,323,661 $322,822 =========== =========== =========== =========== ========= ========= =========== ========== ======== </TABLE> F-19

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Metropolitan Fund -------------------------------------------------------------------- MetLife Mid Cap Stock Index Janus Growth Portfolio Portfolio ---------------------------------------- -------------------------- For the Year For the Year For the Period For the Year For the Period Ended Ended July 5, 2000 to Ended May 1, 2001 to December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 ------------ ------------ --------------- ------------ -------------- <S> <C> <C> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.............................................. $ 42,658 $ 24,102 $ 8,945 $ -- $ -- Expenses: Mortality and expense charges.......................... 98,019 42,826 1,923 13,374 2,780 ----------- -------- ------- --------- -------- Net investment (loss) income............................. (55,361) (18,724) 7,022 (13,374) (2,780) ----------- -------- ------- --------- -------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions... (23,095) (19,531) (300) (78,401) (43,356) Change in unrealized (depreciation) appreciation of investments............................................. (2,089,536) 294,328 57,307 (426,893) (11,854) ----------- -------- ------- --------- -------- Net realized and unrealized (losses) gains on investments (2,112,631) 274,797 57,007 (505,294) (55,210) ----------- -------- ------- --------- -------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... $(2,167,992) $256,073 $64,029 $(518,668) $(57,990) =========== ======== ======= ========= ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-20

<TABLE> <CAPTION> Metropolitan Fund Janus Fund Invesco Fund ------------------------------------------------ ------------------------------------- ------------------------------------- Franklin Templeton State Street Research Small Cap Growth Large Cap Value Janus Aspen Growth Invesco VIF High Yield Portfolio Portfolio Portfolio Portfolio -------------------------- --------------------- ------------------------------------- ------------------------------------- For the Year For the Period For the Period For the Year For the Year For the Year For the Year For the Year For the Year Ended May 1, 2001 to May 1, 2002 to Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2002 2001 2000 2002 2001 2000 ------------ -------------- --------------------- ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ 869 $ 708 $ 210,720 $ 191,433 $ 49,754 $ 29,774 $ -- 8,397 1,124 436 10,078 25,354 19,763 1,346 602 42 --------- ------- ------- --------- ----------- ----------- -------- -------- ------- (8,397) (1,124) 433 (9,370) 185,366 171,670 48,408 29,172 (42) --------- ------- ------- --------- ----------- ----------- -------- -------- ------- (42,766) (3,651) (3,284) (179,152) (1,848,663) (11,878) (31,480) (3,798) (11) (271,373) 16,066 (3,178) (329,490) 498,521 (1,038,841) (7,350) (33,395) (1,445) --------- ------- ------- --------- ----------- ----------- -------- -------- ------- (314,139) 12,415 (6,462) (508,642) (1,350,142) (1,050,719) (38,830) (37,193) (1,456) --------- ------- ------- --------- ----------- ----------- -------- -------- ------- $(322,536) $11,291 $(6,029) $(518,012) $(1,164,776) $ (879,049) $ 9,578 $ (8,021) $(1,498) ========= ======= ======= ========= =========== =========== ======== ======== ======= </TABLE> F-21

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Invesco Fund ------------------------------------- Invesco VIF Equity Income Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 2,157 $ 1,779 $ 783 Expenses: Mortality and expense charges................................ 638 304 58 -------- ------- ----- Net investment (loss) income................................... 1,519 1,475 725 -------- ------- ----- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (7,425) (1,414) 18 Change in unrealized (depreciation) appreciation of investments (21,641) (4,995) (596) -------- ------- ----- Net realized and unrealized (losses) gains on investments...... (29,066) (6,409) (578) -------- ------- ----- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(27,547) $(4,934) $ 147 ======== ======= ===== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-22

<TABLE> <CAPTION> Invesco Fund Franklin Fund ------------------------------------- ------------------------------------------------------------------ Invesco VIF Real Estate Franklin Templeton Franklin Templeton Valuemark Opportunity Portfolio International Stock Portfolio Small Cap Portfolio (a) ------------------------------------- ------------------------------------- --------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> $ 1,881 $ 1,183 $ -- $ 44,446 $ 203,320 $ 34,323 $ 2,327 $ 56 2,129 531 288 13,035 5,484 3,352 3,601 177 ------- ------- ------ --------- --------- -------- --------- ------ (248) 652 (288) 31,411 197,836 30,971 (1,274) (121) ------- ------- ------ --------- --------- -------- --------- ------ 12,032 1,271 445 (325,690) (18,952) (35,953) (49,638) (480) 3,016 (3,692) 4,890 (187,267) (287,060) (6,907) (184,311) 4,364 ------- ------- ------ --------- --------- -------- --------- ------ 15,048 (2,421) 5,335 (512,957) (306,012) (42,860) (233,949) 3,884 ------- ------- ------ --------- --------- -------- --------- ------ $14,800 $(1,769) $5,047 $(481,546) $(108,176) $(11,889) $(235,223) $3,763 ======= ======= ====== ========= ========= ======== ========= ====== </TABLE> F-23

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Zenith Fund ---------------------------------------- Davis Venture Value Portfolio ---------------------------------------- For the Year For the Year For the Period Ended Ended July 5, 2000 to December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ --------------- <S> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 91,596 $ 192,850 $ -- Expenses: Mortality and expense charges................................ 90,846 39,662 1,697 ----------- --------- ------- Net investment (loss) income................................... 750 153,188 (1,697) ----------- --------- ------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (188,804) (46,987) (482) Change in unrealized (depreciation) appreciation of investments (2,083,879) (437,523) 27,591 ----------- --------- ------- Net realized and unrealized (losses) gains on investments...... (2,272,683) (484,510) 27,109 ----------- --------- ------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,271,933) $(331,322) $25,412 =========== ========= ======= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-24

<TABLE> <CAPTION> Zenith Fund ---------------------------------------------------------------------------------------------------------------------- Loomis Sayles Small Cap Alger Equity Growth MFS Investors Trust MFS Research Managers Portfolio Portfolio (a) Portfolio (a) Portfolio (a) ---------------------------------------- ------------------------ ------------------------ ------------------------ For the Year For the Year For the Period For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended July 5, 2000 to Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2002 2001 2002 2001 ------------ ------------ --------------- ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 2,322 $ 86,281 $ -- $ -- $ -- $ 3,660 $ -- $ 705 $ 386 18,464 11,207 629 13,698 121 6,375 1,179 3,132 749 --------- -------- ------ ----------- ------- --------- ------- -------- ------ (16,142) 75,074 (629) (13,698) (121) (2,715) (1,179) (2,427) (363) --------- -------- ------ ----------- ------- --------- ------- -------- ------ (106,829) (35,645) (42) (57,097) (175) (71,866) (5,896) (30,794) 1,304 (414,868) (62,611) 5,980 (983,355) (5,126) (78,498) 4,527 (58,814) (346) --------- -------- ------ ----------- ------- --------- ------- -------- ------ (521,697) (98,256) 5,938 (1,040,452) (5,301) (150,364) (1,369) (89,608) 958 --------- -------- ------ ----------- ------- --------- ------- -------- ------ $(537,839) $(23,182) $5,309 $(1,054,150) $(5,422) $(153,079) $(2,548) $(92,035) $ 595 ========= ======== ====== =========== ======= ========= ======= ======== ====== </TABLE> F-25

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Zenith Fund --------------------------------------------------------------- State Street Research Bond Income FI Structured Equity Portfolio Portfolio (a) ------------------------------------- ------------------------ For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.............................................. $4,937,322 $5,667,650 $ 3,139 $ 527 $ -- Expenses: Mortality and expense charges.......................... 658,727 572,051 557,064 457 69 ---------- ---------- ---------- -------- ------- Net investment (loss) income............................. 4,278,595 5,095,599 (553,925) 70 (69) ---------- ---------- ---------- -------- ------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions... (378,655) 400,025 (764,188) (9,596) (77) Change in unrealized (depreciation) appreciation of investments............................................. 2,444,438 (137,736) 8,375,071 (4,285) (2,467) ---------- ---------- ---------- -------- ------- Net realized and unrealized (losses) gains on investments 2,065,783 262,289 7,610,883 (13,881) (2,544) ---------- ---------- ---------- -------- ------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... $6,344,378 $5,357,888 $7,056,958 $(13,811) $(2,613) ========== ========== ========== ======== ======= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-26

<TABLE> <CAPTION> Zenith Fund ------------------------------------------------------------------------------------------------------------------------- Harris Oakmark Focused Salomon Brothers Strategic Salomon Brothers State Street Research Money Market Value Portfolio Bond Opportunities Portfolio U.S. Government Portfolio Portfolio -------------------------- -------------------------- -------------------------- ------------------------------------- For the Year For the Period For the Year For the Period For the Year For the Period For the Year For the Year For the Year Ended May 1, 2001 to Ended May 1, 2001 to Ended May 1, 2001 to Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2001 2002 2001 2000 ------------ -------------- ------------ -------------- ------------ -------------- ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 15,621 $ -- $ 83,495 $ -- $ 90,377 $ -- $ 527,338 $1,134,017 $1,677,962 79,292 9,775 10,768 894 18,808 1,841 268,010 215,488 291,782 ----------- -------- -------- ------ -------- ------- --------- ---------- ---------- (63,671) (9,775) 72,727 (894) 71,569 (1,841) 259,328 918,529 1,386,180 ----------- -------- -------- ------ -------- ------- --------- ---------- ---------- (9,588) (43) 241 117 10,225 5,065 (628,588) (499,341) 1,059,353 (938,481) 279,801 62,351 4,621 83,661 (2,273) 611,711 796,577 (454,099) ----------- -------- -------- ------ -------- ------- --------- ---------- ---------- (948,069) 279,758 62,592 4,738 93,886 2,792 (16,877) 297,236 605,254 ----------- -------- -------- ------ -------- ------- --------- ---------- ---------- $(1,011,740) $269,983 $135,319 $3,844 $165,455 $ 951 $ 242,451 $1,215,765 $1,991,434 =========== ======== ======== ====== ======== ======= ========= ========== ========== </TABLE> F-27

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Zenith Fund Alliance Fund -------------- ----------------------------------------- FI Mid Cap Opportunities Alliance Growth & Income Portfolio Portfolio -------------- ----------------------------------------- For the Period For the Year For the Year For the Period May 1, 2002 to Ended Ended September 30 to December 31, December 31, December 31, December 31, 2002 2002 2001 2000 -------------- ------------ ------------ --------------- <S> <C> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ -- $ 27,692 $ 3,229 $ -- Expenses: Mortality and expense charges................................ 333 4,105 1,034 -- ------- --------- ------- ------ Net investment (loss) income................................... (333) 23,587 2,195 -- ------- --------- ------- ------ NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (1,950) (18,278) (318) -- Change in unrealized (depreciation) appreciation of investments 3,758 (137,057) 24,267 2,702 ------- --------- ------- ------ Net realized and unrealized (losses) gains on investments...... 1,808 (155,335) 23,949 2,702 ------- --------- ------- ------ NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $ 1,475 $(131,748) $26,144 $2,702 ======= ========= ======= ====== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-28

<TABLE> <CAPTION> Alliance Fund Fidelity Fund -------------------------------------------------- -------------------------------------------------- Fidelity VIP Fidelity VIP Alliance Premier Growth Alliance Technology Contrafund Asset Manager Growth Portfolio (a) Portfolio (a) Portfolio (a) Portfolio (a) ------------------------ ------------------------ ------------------------ ------------------------ For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2001 2002 2001 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ -- $ 782 $ 187 $ -- $ 3,640 $ -- 274 104 96 121 1,113 57 623 233 -------- ------ ------- -------- -------- ----- -------- ------- (274) (104) (96) 661 (926) (57) 3,017 (233) -------- ------ ------- -------- -------- ----- -------- ------- (9,853) (138) (519) (19,763) (348) (27) (5,591) 113 (12,480) 1,299 (9,033) (2,681) (29,437) (253) (19,964) (1,597) -------- ------ ------- -------- -------- ----- -------- ------- (22,333) 1,161 (9,552) (22,444) (29,785) (280) (25,555) (1,484) -------- ------ ------- -------- -------- ----- -------- ------- $(22,607) $1,057 $(9,648) $(21,783) $(30,711) $(337) $(22,538) $(1,717) ======== ====== ======= ======== ======== ===== ======== ======= </TABLE> F-29

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Fidelity Fund American Fund ------------------------ -------------------------- Fidelity VIP Growth American Funds Growth Portfolio (a) Portfolio ------------------------ -------------------------- For the Year For the Year For the Year For the Period Ended Ended Ended May 1, 2001 to December 31, December 31, December December 31, 2002 2001 31, 2002 2001 ------------ ------------ ------------ -------------- <S> <C> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 132 $ -- $ 3,067 $ 134,864 Expenses: Mortality and expense charges................................ 649 243 59,610 6,807 -------- ------- ----------- --------- Net investment (loss) income................................... (517) (243) (56,543) 128,057 -------- ------- ----------- --------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (8,400) (3,407) (49,022) (95,342) Change in unrealized (depreciation) appreciation of investments (40,968) (3,078) (1,636,890) (17,189) -------- ------- ----------- --------- Net realized and unrealized (losses) gains on investments...... (49,368) (6,485) (1,685,912) (112,531) -------- ------- ----------- --------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $(49,885) $(6,728) $(1,742,455) $ 15,526 ======== ======= =========== ========= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-30

<TABLE> <CAPTION> American Fund Met Investors Fund ------------------------------------------------------ ---------------------------------------------------- American Funds Growth- American Funds Global Small JPM Enhanced Index MFS Mid Cap Growth Income Portfolio Cap Portfolio Portfolio (a) Portfolio -------------------------- -------------------------- ------------------------ -------------------------- For the Year For the Period For the Year For the Period For the Year For the Year For the Year For the Period Ended May 1, 2001 to Ended May 1, 2001 to Ended Ended Ended May 1, 2001 to December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2001 2002 2001 ------------ -------------- ------------ -------------- ------------ ------------ ------------ -------------- <S> <C> <C> <C> <C> <C> <C> <C> $ 83,225 $ 20,236 $ 10,794 $ 7,147 $ 117 $ -- $ 7,906 $ -- 48,157 5,104 12,245 1,216 39 13 6,944 940 ----------- -------- --------- -------- ------- ----- --------- ------- 35,068 15,132 (1,451) 5,931 78 (13) 962 (940) ----------- -------- --------- -------- ------- ----- --------- ------- (51,319) (13,398) 35,746 (18,714) (1,186) (25) (55,314) (1,372) (1,122,854) 55,397 (396,292) 46,579 (1,483) (320) (378,709) 11,239 ----------- -------- --------- -------- ------- ----- --------- ------- (1,174,173) 41,999 (360,546) 27,865 (2,669) (345) (434,023) 9,867 ----------- -------- --------- -------- ------- ----- --------- ------- $(1,139,105) $ 57,131 $(361,997) $ 33,796 $(2,591) $(358) $(433,061) $ 8,927 =========== ======== ========= ======== ======= ===== ========= ======= </TABLE> F-31

Metropolitan Life Separate Account UL STATEMENTS OF OPERATIONS <TABLE> <CAPTION> Met Investors Fund ------------------------------------------------------ MFS Research International PIMCO Total Return Portfolio Portfolio -------------------------- -------------------------- For the Year For the Period For the Year For the Period Ended May 1, 2001 to Ended May 1, 2001 to December 31, December 31, December 31, December 31, 2002 2001 2002 2001 ------------ -------------- ------------ -------------- <S> <C> <C> <C> <C> INVESTMENT (LOSS) INCOME: Income: Dividends.................................................... $ 1,203 $ 174 $ -- $ 26,164 Expenses: Mortality and expense charges................................ 3,324 525 28,120 2,322 -------- ------- -------- -------- Net investment (loss) income................................... (2,121) (351) (28,120) 23,842 -------- ------- -------- -------- NET REALIZED AND UNREALIZED (LOSSES) GAINS ON INVESTMENTS: Net realized (losses) gains from security transactions......... (66,559) (4,107) 60,373 1,564 Change in unrealized (depreciation) appreciation of investments (2,664) 1,444 270,736 (14,155) -------- ------- -------- -------- Net realized and unrealized (losses) gains on investments...... (69,223) (2,663) 331,109 (12,591) -------- ------- -------- -------- NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $(71,344) $(3,014) $302,989 $ 11,251 ======== ======= ======== ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-32

<TABLE> <CAPTION> Met Investors Fund -------------------------------------------------------------------------------------------------------------------- Met/AIM State Street Research Mid Cap Met/AIM Concentrated PIMCO Innovation Lord Abbett Bond Debenture Core Equity Small Cap Growth International Portfolio Portfolio Portfolio Portfolio Portfolio -------------------------- ------------------------------------- ----------- ---------------- --------------------- For the For the Year For the Period For the Year For the Year For the Year Period May For the Period For the Period Ended May 1, 2001 to Ended Ended Ended 1, 2002 to May 1, 2002 to May 1, 2002 to December 31, December 31, December 31, December 31, December 31, December December 31, December 31, 2002 2001 2002 2001 2000 31, 2002 2002 2002 ------------ -------------- ------------ ------------ ------------ ----------- ---------------- --------------------- <S> <C> <C> <C> <C> <C> <C> <C> $ -- $ -- $ 996,547 $ 923,897 $ 2,401 $ 291 $ -- $ 210 9,521 1,528 71,674 64,809 50,458 638 281 298 --------- ------- ----------- ----------- --------- ------- ------- ------- (9,521) (1,528) 924,873 859,088 (48,057) (347) (281) (88) --------- ------- ----------- ----------- --------- ------- ------- ------- (111,879) (9,873) (1,886,218) (134,223) (62,427) (1,242) (593) (843) (652,366) 4,179 949,375 (902,997) (65,158) (6,351) (4,322) (2,920) --------- ------- ----------- ----------- --------- ------- ------- ------- (764,245) (5,694) (936,843) (1,037,220) (127,585) (7,593) (4,915) (3,763) --------- ------- ----------- ----------- --------- ------- ------- ------- $(773,766) $(7,222) $ (11,970) $ (178,132) $(175,642) $(7,940) $(5,196) $(3,851) ========= ======= =========== =========== ========= ======= ======= ======= </TABLE> F-33

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Metropolitan Fund ----------------------------------------- State Street Research Investment Trust Portfolio ----------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------- ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ (969,448) $ 48,301,051 $ 1,040,518 Net realized (losses) gains from security transactions..................... (6,132,437) 731,187 5,846,334 Change in unrealized (depreciation) appreciation of investments............ (90,883,953) (122,469,738) (37,904,600) ------------ ------------- ------------ Net (decrease) increase in net assets resulting from operations............ (97,985,838) (73,437,500) (31,017,748) ------------ ------------- ------------ From capital transactions: Net premiums............................................................... 78,160,135 80,046,712 78,775,448 Redemptions................................................................ (10,399,853) (15,513,042) (15,714,936) Net portfolio transfers.................................................... (11,186,400) 2,751,095 (7,049,932) Other net transfers........................................................ (38,309,389) (40,534,492) (41,272,460) ------------ ------------- ------------ Net increase (decrease) in net assets resulting from capital transactions.. 18,264,493 26,750,273 14,738,120 ------------ ------------- ------------ NET CHANGE IN NET ASSETS...................................................... (79,721,345) (46,687,227) (16,279,628) NET ASSETS--BEGINNING OF PERIOD............................................... 356,701,314 403,388,541 419,668,169 ------------ ------------- ------------ NET ASSETS--END OF PERIOD..................................................... $276,979,969 $ 356,701,314 $403,388,541 ============ ============= ============ </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-34

<TABLE> <CAPTION> Metropolitan Fund ---------------------------------------------------------------------------------------------------------------------------- State Street Research Diversified State Street Research Aggressive Growth MetLife Stock Index Portfolio Portfolio Portfolio ---------------------------------------- ---------------------------------------- ---------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 3,558,999 $ 23,184,244 $ (1,084,114) $ (1,263,240) $ 45,283,589 $ 25,471,356 $ 2,705,145 $ 1,213,073 $ 10,878,219 (1,810,936) (111,095) 1,585,197 (5,953,657) (1,536,972) 3,369,764 (5,045,284) 4,130,927 6,159,583 (41,694,719) (42,080,714) (360,101) (44,703,891) (94,895,107) (48,026,970) (82,559,071) (48,985,481) (49,619,601) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (39,946,656) (19,007,565) 140,982 (51,920,788) (51,148,490) (19,185,850) (84,899,210) (43,641,481) (32,581,799) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 54,194,120 55,767,097 53,773,281 40,003,786 42,942,155 41,898,360 114,022,950 113,949,042 101,155,153 (9,523,000) (8,333,720) (9,860,611) (4,831,140) (6,486,474) (10,429,472) (13,779,170) (11,030,629) (8,709,802) (383,162) 8,413,016 (3,492,574) (6,485,783) 1,097,789 (209,434) 11,797,286 19,393,554 32,416,473 (32,044,615) (31,250,185) (28,128,760) (17,642,321) (19,697,556) (21,759,150) (47,844,806) (45,631,351) (39,683,105) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 12,243,343 24,596,208 12,291,336 11,044,542 17,855,914 9,500,304 64,196,260 76,680,616 85,178,719 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (27,703,313) 5,588,643 12,432,318 (40,876,246) (33,292,576) (9,685,546) (20,702,950) 33,039,135 52,596,920 265,723,666 260,135,023 247,702,705 171,691,864 204,984,440 214,669,986 346,930,913 313,891,778 261,294,858 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $238,020,353 $265,723,666 $260,135,023 $130,815,618 $171,691,864 $204,984,440 $326,227,963 $346,930,913 $313,891,778 ============ ============ ============ ============ ============ ============ ============ ============ ============ </TABLE> F-35

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Metropolitan Fund ------------------------------------- Putnam International Stock Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ 18,744 $ 1,172,876 $ (103,321) Net realized (losses) gains from security transactions..................... (2,655,399) (1,661,736) 309,181 Change in unrealized (depreciation) appreciation of investments............ (4,418,288) (9,202,287) (5,241,506) ----------- ----------- ----------- Net (decrease) increase in net assets resulting from operations............ (7,054,943) (9,691,147) (5,035,646) ----------- ----------- ----------- From capital transactions: Net premiums............................................................... 9,783,594 9,615,907 9,900,638 Redemptions................................................................ (1,287,021) (1,289,983) (2,135,289) Net portfolio transfers.................................................... (2,781,604) 323,092 760,648 Other net transfers........................................................ (3,974,969) (4,148,436) (3,943,304) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions.. 1,740,000 4,500,580 4,582,693 ----------- ----------- ----------- NET CHANGE IN NET ASSETS...................................................... (5,314,943) (5,190,567) (452,953) NET ASSETS--BEGINNING OF PERIOD............................................... 38,281,041 43,471,608 43,924,561 ----------- ----------- ----------- NET ASSETS--END OF PERIOD..................................................... $32,966,098 $38,281,041 $43,471,608 =========== =========== =========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-36

<TABLE> <CAPTION> Metropolitan Fund ----------------------------------------------------------------------------------------------------------------------- Janus Mid Cap T. Rowe Price Small Cap Growth Scudder Global Equity Portfolio Portfolio Portfolio ---------------------------------------- -------------------------------------- ------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Ended Ended Ended Ended Ended Ended Ended Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 2002 2001 2000 2002 2001 2000 2002 2001 31, 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ----------- <S> <C> <C> <C> <C> <C> <C> <C> <C> $ (1,013,088) $ (1,037,631) $ 10,029,499 $ (332,098) $ 3,209,549 $ (307,077) $ 181,688 $ 2,155,251 $ (77,898) (5,163,698) (2,451,549) 3,280,184 (297,872) (796,014) 759,159 (466,029) (71,082) 423,877 (34,449,605) (53,291,667) (70,128,825) (12,423,975) (6,595,361) (4,955,737) (3,445,540) (5,825,339) (702,165) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- (40,626,391) (56,780,847) (56,819,142) (13,053,945) (4,181,826) (4,503,655) (3,729,881) (3,741,170) (356,186) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 64,528,237 74,363,749 64,927,917 14,332,234 15,023,523 13,173,661 7,029,500 7,562,752 6,536,768 (2,804,544) (3,144,623) (3,404,065) (1,348,311) (2,577,320) (960,930) (936,418) (630,613) (543,240) (5,298,371) 3,860,189 39,706,625 753,895 (372,409) 7,018,243 (322,915) 603,395 1,878,567 (21,964,497) (23,970,747) (26,632,666) (5,463,573) (5,350,422) (4,758,398) (2,670,700) (2,572,779) (2,129,044) ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 34,460,825 51,108,568 74,597,811 8,274,245 6,723,372 14,472,576 3,099,467 4,962,755 5,743,051 ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- (6,165,566) (5,672,279) 17,778,669 (4,779,700) 2,541,546 9,968,921 (630,414) 1,221,585 5,386,865 125,185,141 130,857,420 113,078,751 44,659,788 42,118,242 32,149,321 21,106,347 19,884,762 14,497,897 ------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- $119,019,575 $125,185,141 $130,857,420 $ 39,880,088 $44,659,788 $42,118,242 $20,475,933 $21,106,347 $19,884,762 ============ ============ ============ ============ =========== =========== =========== =========== =========== </TABLE> F-37

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Metropolitan Fund ------------------------------------- Harris Oakmark Large Cap Value Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ 438,284 $ (56,512) $ 37,177 Net realized (losses) gains from security transactions..................... 173,172 94,596 (27,497) Change in unrealized (depreciation) appreciation of investments............ (3,824,797) 810,284 217,646 ----------- ----------- ---------- Net (decrease) increase in net assets resulting from operations............ (3,213,341) 848,368 227,326 ----------- ----------- ---------- From capital transactions: Net premiums............................................................... 10,115,432 4,073,390 715,820 Redemptions................................................................ (287,586) (268,807) (22,511) Net portfolio transfers.................................................... 6,291,525 9,043,603 1,142,472 Other net transfers........................................................ (4,169,815) (1,466,228) (296,592) ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions.. 11,949,556 11,381,958 1,539,189 ----------- ----------- ---------- NET CHANGE IN NET ASSETS...................................................... 8,736,215 12,230,326 1,766,515 NET ASSETS--BEGINNING OF PERIOD............................................... 14,336,339 2,106,013 339,498 ----------- ----------- ---------- NET ASSETS--END OF PERIOD..................................................... $23,072,554 $14,336,339 $2,106,013 =========== =========== ========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-38

<TABLE> <CAPTION> Metropolitan Fund ------------------------------------------------------------------------------------------------------------------- Neuberger Berman Partners Mid Cap Value T. Rowe Price Large Cap Growth Lehman Brothers Aggregate Bond Index Portfolio Portfolio Portfolio ------------------------------------- ------------------------------------- ------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ (89,469) $ 106,521 $ 175,765 $ (106,090) $ (94,779) $ 184,033 $ 982,861 $ 212,243 $ 1,099,635 105,666 (68,863) 28,891 (317,124) (100,488) 9,246 515,268 210,509 61,931 (1,888,036) (195,526) 444,118 (5,333,848) (92,461) (515,437) 2,760,523 1,053,501 (39,445) ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- (1,871,839) (157,868) 648,774 (5,757,062) (287,728) (322,158) 4,258,652 1,476,253 1,122,121 ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 8,172,686 5,746,048 1,424,997 9,447,412 8,996,035 2,941,543 10,479,062 8,533,067 6,001,873 (1,215,338) (57,006) (48,928) (125,856) (60,227) (19,075) (1,839,866) (1,024,276) (253,963) 2,321,678 4,766,372 4,051,096 873,833 8,736,398 4,471,715 8,318,943 11,244,179 12,581,907 (3,236,171) (2,321,908) (529,061) (3,453,967) (3,536,498) (1,062,875) (4,492,832) (2,262,688) (657,185) ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 6,042,855 8,133,506 4,898,104 6,741,422 14,135,708 6,331,308 12,465,307 16,490,282 17,672,632 ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 4,171,016 7,975,638 5,546,878 984,360 13,847,980 6,009,150 16,723,959 17,966,535 18,794,753 14,114,806 6,139,168 592,290 21,110,525 7,262,545 1,253,395 37,322,329 19,355,794 561,041 ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- $18,285,822 $14,114,806 $6,139,168 $22,094,885 $21,110,525 $ 7,262,545 $54,046,288 $37,322,329 $19,355,794 =========== =========== ========== =========== =========== =========== =========== =========== =========== </TABLE> F-39

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Metropolitan Fund ------------------------------------- Morgan Stanley EAFE Index Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ (64,128) $ (37,840) $ 68,390 Net realized (losses) gains from security transactions..................... (800,822) (961,834) (86,470) Change in unrealized (depreciation) appreciation of investments............ (1,274,363) (729,479) (425,063) ----------- ----------- ---------- Net (decrease) increase in net assets resulting from operations............ (2,139,313) (1,729,153) (443,143) ----------- ----------- ---------- From capital transactions: Net premiums............................................................... 6,625,665 4,890,376 1,984,111 Redemptions................................................................ (1,101,621) (722,285) (25,611) Net portfolio transfers.................................................... 1,672,217 4,395,203 3,730,891 Other net transfers........................................................ (2,360,586) (1,819,787) (682,554) ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions.. 4,835,675 6,743,507 5,006,837 ----------- ----------- ---------- NET CHANGE IN NET ASSETS...................................................... 2,696,362 5,014,354 4,563,694. NET ASSETS--BEGINNING OF PERIOD............................................... 10,799,710 5,785,356 1,221,662. ----------- ----------- ---------- NET ASSETS--END OF PERIOD..................................................... $13,496,072 $10,799,710 $5,785,356. =========== =========== ========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-40

<TABLE> <CAPTION> Metropolitan Fund ----------------------------------------------------------------------------------------------------------------------- Russell 2000 Index Putnam Large Cap Growth State Street Research Aurora Portfolio Portfolio Portfolio ------------------------------------- --------------------------------------- --------------------------------------- For the Period For the Period For the Year For the Year For the Year For the Year For the Year May 1, 2000 For the Year For the Year July 5, 2000 Ended Ended Ended Ended Ended to Ended Ended to December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ -------------- ------------ ------------ -------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> $ (29,731) $ (47,654) $ 775,840 $ (39,278) $ (22,732) $ (1,713) $ (97,874) $ (51,026) $ 16,972 (343,069) (1,016,179) (27,586) (304,226) (113,353) (1,766) 81,843 155,882 3,082 (2,545,881) 1,215,383 (1,037,181) (1,227,374) (585,114) (173,356) (6,958,922) 1,218,805 302,768 ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- (2,918,681) 151,550 (288,927) (1,570,878) (721,199) (176,835) (6,974,953) 1,323,661 322,822 ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- 7,082,371 5,343,692 2,510,031 3,461,165 2,425,615 306,843 15,376,489 7,040,736 335,643 (266,570) (375,673) (45,875) (27,865) (23,841) (5,695) (302,359) (81,569) (11,356) 2,834,125 1,811,235 3,956,271 548,678 2,239,800 915,075 6,843,668 11,247,758 2,585,881 (2,527,437) (2,007,235) (882,331) (1,159,060) (878,209) (80,881) (5,887,521) (2,656,308) (102,034) ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- 7,122,489 4,772,019 5,538,096 2,822,918 3,763,365 1,135,342 16,030,277 15,550,617 2,808,134 ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- 4,203,808 4,923,569 5,249,169 1,252,040 3,042,166 958,507 9,055,324 16,874,278 3,130,956 10,624,726 5,701,157 451,988 4,000,673 958,507 -- 20,005,234 3,130,956 -- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- $14,828,534 $10,624,726 $ 5,701,157 $ 5,252,713 $4,000,673 $ 958,507 $29,060,558 $20,005,234 $3,130,956 =========== =========== =========== =========== ========== ========== =========== =========== ========== </TABLE> F-41

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Metropolitan Fund ---------------------------------------- MetLife Mid Cap Stock Index Portfolio ---------------------------------------- For the Year For the Year For the Period Ended Ended July 5, 2000 to December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ --------------- <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ (55,361) $ (18,724) $ 7,022 Net realized (losses) gains from security transactions..................... (23,095) (19,531) (300) Change in unrealized (depreciation) appreciation of investments............ (2,089,536) 294,328 57,307 ----------- ----------- ---------- Net (decrease) increase in net assets resulting from operations............ (2,167,992) 256,073 64,029 ----------- ----------- ---------- From capital transactions: Net premiums............................................................... 7,438,484 4,147,919 240,407 Redemptions................................................................ (109,971) (16,900) (8,675) Net portfolio transfers.................................................... 4,006,261 4,052,437 1,949,602 Other net transfers........................................................ (2,617,681) (1,566,864) (99,172) ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions.. 8,717,093 6,616,592 2,082,162 ----------- ----------- ---------- NET CHANGE IN NET ASSETS...................................................... 6,549,101 6,872,665 2,146,191 NET ASSETS--BEGINNING OF PERIOD............................................... 9,018,856 2,146,191 -- ----------- ----------- ---------- NET ASSETS--END OF PERIOD..................................................... $15,567,957 $ 9,018,856 $2,146,191 =========== =========== ========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-42

<TABLE> <CAPTION> Metropolitan Fund Janus Fund ---------------------------------------------------------------------------- ------------------------------------- Franklin Templeton State Street Research Janus Growth Small Cap Growth Large Cap Value Janus Aspen Growth Portfolio Portfolio Portfolio Portfolio -------------------------- -------------------------- --------------------- ------------------------------------- For the Year For the Period For the Year For the Period For the Period For the Year For the Year For the Year Ended May 1, 2001 to Ended May 1, 2001 to May 1, 2002 to Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2002 2001 2000 ------------ -------------- ------------ -------------- --------------------- ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> $ (13,374) $ (2,780) $ (8,397) $ (1,124) $ 433 $ (9,370) $ 185,366 $ 171,670 (78,401) (43,356) (42,766) (3,651) (3,284) (179,152) (1,848,663) (11,878) (426,893) (11,854) (271,373) 16,066 (3,178) (329,490) 498,521 (1,038,841) ---------- ---------- ---------- -------- -------- ---------- ----------- ----------- (518,668) (57,990) (322,536) 11,291 (6,029) (518,012) (1,164,776) (879,049) ---------- ---------- ---------- -------- -------- ---------- ----------- ----------- 1,567,918 311,526 626,488 107,629 64,977 913,602 779,753 1,494,340 (23,600) -- (5,592) (802) (313) (13,590) (2,741,484) (102) 607,036 817,361 745,849 369,945 153,138 34,319 254,486 4,654,955 (540,084) (118,215) (235,608) (30,931) (23,188) (211,649) (189,372) (346,372) ---------- ---------- ---------- -------- -------- ---------- ----------- ----------- 1,611,270 1,010,672 1,131,137 445,841 194,614 722,682 (1,896,617) 5,802,821 ---------- ---------- ---------- -------- -------- ---------- ----------- ----------- 1,092,602 952,682 808,601 457,132 188,585 204,670 (3,061,393) 4,923,772 952,682 -- 457,132 -- -- 1,958,752 5,020,145 96,373 ---------- ---------- ---------- -------- -------- ---------- ----------- ----------- $2,045,284 $ 952,682 $1,265,733 $457,132 $188,585 $2,163,422 $ 1,958,752 $ 5,020,145 ========== ========== ========== ======== ======== ========== =========== =========== </TABLE> F-43

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Invesco Fund ------------------------------------- Invesco VIF High Yield Portfolio ------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ 48,408 $ 29,172 $ (42) Net realized (losses) gains from security transactions..................... (31,480) (3,798) (11) Change in unrealized (depreciation) appreciation of investments............ (7,350) (33,395) (1,445) -------- -------- ------- Net (decrease) increase in net assets resulting from operations............ 9,578 (8,021) (1,498) -------- -------- ------- From capital transactions: Net premiums............................................................... 216,788 213,527 2,194 Redemptions................................................................ -- -- -- Net portfolio transfers.................................................... 2,473 71,476 7,138 Other net transfers........................................................ (27,503) (13,506) (239) -------- -------- ------- Net increase (decrease) in net assets resulting from capital transactions.. 191,758 271,497 9,093 -------- -------- ------- NET CHANGE IN NET ASSETS...................................................... 201,336 263,476 7,595 NET ASSETS--BEGINNING OF PERIOD............................................... 274,298 10,822 3,227 -------- -------- ------- NET ASSETS--END OF PERIOD..................................................... $475,634 $274,298 $10,822 ======== ======== ======= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-44

<TABLE> <CAPTION> Invesco Fund Franklin Fund ---------------------------------------------------------------------------- ------------------------------------- Invesco VIF Equity Income Invesco VIF Real Estate Opportunity Franklin Templeton International Stock Portfolio Portfolio Portfolio ------------------------------------- ------------------------------------- ------------------------------------- For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended Ended Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2000 2002 2001 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 1,519 $ 1,475 $ 725 $ (248) $ 652 $ (288) $ 31,411 $ 197,836 $ 30,971 (7,425) (1,414) 18 12,032 1,271 445 (325,690) (18,952) (35,953) (21,641) (4,995) (596) 3,016 (3,692) 4,890 (187,267) (287,060) (6,907) -------- -------- ------- -------- -------- -------- ---------- ---------- ---------- (27,547) (4,934) 147 14,800 (1,769) 5,047 (481,546) (108,176) (11,889) -------- -------- ------- -------- -------- -------- ---------- ---------- ---------- 30,604 5,886 7,244 9,629 3,478 1,795 937,164 461,547 199,820 -- (780) -- -- -- -- (90,063) (236,261) (1,160) 7,548 112,018 1,027 64,182 (24,700) 107,017 643,475 589,847 922,250 (8,020) (3,589) (413) 1,520 (2,641) (709) (163,651) (39,531) (16,624) -------- -------- ------- -------- -------- -------- ---------- ---------- ---------- 30,132 113,535 7,858 75,331 (23,863) 108,103 1,326,925 775,602 1,104,286 -------- -------- ------- -------- -------- -------- ---------- ---------- ---------- 2,585 108,601 8,005 90,131 (25,632) 113,150 845,379 667,426 1,092,397 122,478 13,877 5,872 89,102 114,734 1,584 1,766,655 1,099,229 6,832 -------- -------- ------- -------- -------- -------- ---------- ---------- ---------- $125,063 $122,478 $13,877 $179,233 $ 89,102 $114,734 $2,612,034 $1,766,655 $1,099,229 ======== ======== ======= ======== ======== ======== ========== ========== ========== </TABLE> F-45

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Franklin Fund Zenith Fund ------------------------ --------------------------------------- Franklin Templeton Valuemark Small Cap Davis Venture Value Portfolio (a) Portfolio ------------------------ --------------------------------------- For the Period For the Year For the Year For the Year For the Year July 5, 2000 Ended Ended Ended Ended to December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2000 ------------ ------------ ------------ ------------ -------------- <S> <C> <C> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................ $ (1,274) $ (121) $ 750 $ 153,188 $ (1,697) Net realized (losses) gains from security transactions.. (49,638) (480) (188,804) (46,987) (482) Change in unrealized (depreciation) appreciation of investments............................................ (184,311) 4,364 (2,083,879) (437,523) 27,591 --------- -------- ----------- ----------- ---------- Net (decrease) increase in net assets resulting from operations............................................. (235,223) 3,763 (2,271,933) (331,322) 25,412 --------- -------- ----------- ----------- ---------- From capital transactions: Net premiums............................................ 40,174 32,699 5,157,409 3,338,434 199,454 Redemptions............................................. -- -- (86,825) (44,938) (6,528) Net portfolio transfers................................. 995,374 69,587 5,300,022 4,710,785 973,687 Other net transfers..................................... (102,364) (3,042) (2,166,021) (1,312,198) (55,246) --------- -------- ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... 933,184 99,244 8,204,585 6,692,083 1,111,367 --------- -------- ----------- ----------- ---------- NET CHANGE IN NET ASSETS................................... 697,961 103,007 5,932,652 6,360,761 1,136,779 NET ASSETS--BEGINNING OF PERIOD............................ 103,007 -- 7,497,540 1,136,779 -- --------- -------- ----------- ----------- ---------- NET ASSETS--END OF PERIOD.................................. $ 800,968 $103,007 $13,430,192 $ 7,497,540 $1,136,779 ========= ======== =========== =========== ========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-46

<TABLE> <CAPTION> Zenith Fund --------------------------------------------------------------------------------------------------------------------- Loomis Sayles Small Cap Alger Equity Growth MFS Investors Trust MFS Research Managers Portfolio Portfolio (a) Portfolio (a) Portfolio (a) --------------------------------------- ------------------------ ------------------------ ------------------------ For the Period For the Year For the Year July 5, 2000 For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended to Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2002 2001 2002 2001 ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ (16,142) $ 75,074 $ (629) $ (13,698) $ (121) $ (2,715) $ (1,179) $ (2,427) $ (363) (106,829) (35,645) (42) (57,097) (175) (71,866) (5,896) (30,794) 1,304 (414,868) (62,611) 5,980 (983,355) (5,126) (78,498) 4,527 (58,814) (346) ---------- ---------- -------- ----------- ------- --------- --------- --------- --------- (537,839) (23,182) 5,309 (1,054,150) (5,422) (153,079) (2,548) (92,035) 595 ---------- ---------- -------- ----------- ------- --------- --------- --------- --------- 1,200,038 909,510 62,643 40,283 -- 657,381 122,835 256,687 72,571 (11,815) (7,864) (6,573) -- -- (4,428) (1,444) (250) (3,984) 268,407 960,425 403,213 4,290,312 52,468 480,329 486,210 151,712 231,621 (436,811) (356,458) (20,610) (338,952) (1,809) (608,417) (282,946) (153,237) (149,340) ---------- ---------- -------- ----------- ------- --------- --------- --------- --------- 1,019,819 1,505,613 438,673 3,991,643 50,659 524,865 324,655 254,912 150,868 ---------- ---------- -------- ----------- ------- --------- --------- --------- --------- 481,980 1,482,431 443,982 2,937,493 45,237 371,786 322,107 162,877 151,463 1,926,413 443,982 -- 45,237 -- 322,107 -- 151,463 -- ---------- ---------- -------- ----------- ------- --------- --------- --------- --------- $2,408,393 $1,926,413 $443,982 $ 2,982,730 $45,237 $ 693,893 $ 322,107 $ 314,340 $ 151,463 ========== ========== ======== =========== ======= ========= ========= ========= ========= </TABLE> F-47

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Zenith Fund -------------------------------------- State Street Research Bond Income Portfolio -------------------------------------- For the Year For the Year For the Year Ended Ended Ended December 31, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income............................................... $ 4,278,595 $ 5,095,599 $ (553,925) Net realized (losses) gains from security transactions..................... (378,655) 400,025 (764,188) Change in unrealized (depreciation) appreciation of investments............ 2,444,438 (137,736) 8,375,071 ----------- ------------ ----------- Net (decrease) increase in net assets resulting from operations............ 6,344,378 5,357,888 7,056,958 ----------- ------------ ----------- From capital transactions: Net premiums............................................................... 18,007,464 14,237,318 16,247,550 Redemptions................................................................ (3,078,401) (3,623,665) (2,164,427) Net portfolio transfers.................................................... 1,121,089 3,289,281 (4,736,604) Other net transfers........................................................ (8,719,726) (15,760,945) (6,051,666) ----------- ------------ ----------- Net increase (decrease) in net assets resulting from capital transactions.. 7,330,426 (1,858,011) 3,294,853 ----------- ------------ ----------- NET CHANGE IN NET ASSETS...................................................... 13,674,804 3,499,877 10,351,811 NET ASSETS--BEGINNING OF PERIOD............................................... 79,483,128 75,983,251 65,631,440 ----------- ------------ ----------- NET ASSETS--END OF PERIOD..................................................... $93,157,932 $ 79,483,128 $75,983,251 =========== ============ =========== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-48

<TABLE> <CAPTION> Zenith Fund ------------------------------------------------------------------------------------------------------------ Salomon Brothers Salomon Brothers FI Structured Equity Harris Oakmark Focused Value Strategic Bond Opportunities U.S. Government Portfolio (a) Portfolio Portfolio Portfolio ------------------------ -------------------------- -------------------------- -------------------------- For the Year For the Year For the Year For the Period For the Year For the Period For the Year For the Period Ended Ended Ended May 1, 2001 to Ended May 1, 2001 to Ended May 1, 2001 to December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2001 2002 2001 ------------ ------------ ------------ -------------- ------------ -------------- ------------ -------------- <S> <C> <C> <C> <C> <C> <C> <C> $ 70 $ (69) $ (63,671) $ (9,775) $ 72,727 $ (894) $ 71,569 $ (1,841) (9,596) (77) (9,588) (43) 241 117 10,225 5,065 (4,285) (2,467) (938,481) 279,801 62,351 4,621 83,661 (2,273) -------- ------- ----------- ---------- ---------- -------- ---------- -------- (13,811) (2,613) (1,011,740) 269,983 135,319 3,844 165,455 951 -------- ------- ----------- ---------- ---------- -------- ---------- -------- 51,077 -- 6,333,512 999,657 890,271 97,914 1,641,232 162,934 -- -- (161,171) (7,188) (17,732) (566) (35,283) (10,909) 41,277 28,886 5,880,885 3,223,723 1,049,918 396,753 2,382,469 755,686 (10,863) (1,055) (2,377,498) (271,630) (348,947) (33,111) (637,762) (59,363) -------- ------- ----------- ---------- ---------- -------- ---------- -------- 81,491 27,831 9,675,728 3,944,562 1,573,510 460,990 3,350,656 848,348 -------- ------- ----------- ---------- ---------- -------- ---------- -------- 67,680 25,218 8,663,988 4,214,545 1,708,829 464,834 3,516,111 849,299 25,218 -- 4,214,545 -- 464,834 -- 849,299 -- -------- ------- ----------- ---------- ---------- -------- ---------- -------- $ 92,898 $25,218 $12,878,533 $4,214,545 $2,173,663 $464,834 $4,365,410 $849,299 ======== ======= =========== ========== ========== ======== ========== ======== </TABLE> F-49

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Zenith Fund ------------------------------------------------------ FI Mid Cap State Street Research Opportunities Money Market Portfolio Portfolio --------------------------------------- -------------- For the Year For the Year For the Year For the Period Ended Ended Ended May 1, 2002 to December 31, December 31, December 31, December 31, 2002 2001 2000 2002 ------------ ------------ ------------ -------------- <S> <C> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income........................................ $ 259,328 $ 918,529 $ 1,386,180 $ (333) Net realized (losses) gains from security transactions.............. (628,588) (499,341) 1,059,353 (1,950) Change in unrealized (depreciation) appreciation of investments..... 611,711 796,577 (454,099) 3,758 ------------ ----------- ------------ -------- Net (decrease) increase in net assets resulting from operations..... 242,451 1,215,765 1,991,434 1,475 ------------ ----------- ------------ -------- From capital transactions: Net premiums........................................................ 25,769,284 17,936,134 35,316,006 49,033 Redemptions......................................................... (4,958,930) (1,689,474) (18,249,957) (19) Net portfolio transfers............................................. (33,048,287) (4,603,225) (27,922,080) 149,230 Other net transfers................................................. 10,079,748 (1,666,768) (2,674,970) (31,850) ------------ ----------- ------------ -------- Net increase (decrease) in net assets resulting from capital transactions....................................................... (2,158,185) 9,976,667 (13,531,001) 166,394 ------------ ----------- ------------ -------- NET CHANGE IN NET ASSETS............................................... (1,915,734) 11,192,432 (11,539,567) 167,869 NET ASSETS--BEGINNING OF PERIOD........................................ 32,726,347 21,533,915 33,073,482 -- ------------ ----------- ------------ -------- NET ASSETS--END OF PERIOD.............................................. $ 30,810,613 $32,726,347 $ 21,533,915 $167,869 ============ =========== ============ ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-50

<TABLE> <CAPTION> Alliance Fund Fidelity Fund -------------------------------------------------------------------------------------------------- ------------------------ Fidelity VIP Alliance Growth & Income Alliance Premier Growth Alliance Technology Contrafund Portfolio Portfolio (a) Portfolio (a) Portfolio (a) ----------------------------------------------- ------------------------ ------------------------ ------------------------ For the Year For the Year For the Period For the Year For the Year For the Year For the Year For the Year For the Year Ended Ended September 30, 2000 to Ended Ended Ended Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 2002 2001 2002 2001 2002 2001 ------------ ------------ --------------------- ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> $ 23,587 $ 2,195 $ -- $ (274) $ (104) $ (96) $ 661 $ (926) $ (57) (18,278) (318) -- (9,853) (138) (519) (19,763) (348) (27) (137,057) 24,267 2,702 (12,480) 1,299 (9,033) (2,681) (29,437) (253) ---------- -------- ------- -------- ------- ------- -------- -------- ------- (131,748) 26,144 2,702 (22,607) 1,057 (9,648) (21,783) (30,711) (337) ---------- -------- ------- -------- ------- ------- -------- -------- ------- 560,351 422,139 -- 29,958 -- 17,162 463 22,932 3,356 (14,526) -- -- -- -- -- -- -- -- 192,482 160,474 54,402 (60,622) 97,128 -- 36,082 237,002 21,462 (71,035) (11,019) 769 (2,820) 133 (1,833) (2,213) (3,862) (621) ---------- -------- ------- -------- ------- ------- -------- -------- ------- 667,272 571,594 55,171 (33,484) 97,261 15,329 34,332 256,072 24,197 ---------- -------- ------- -------- ------- ------- -------- -------- ------- 535,524 597,738 57,873 (56,091) 98,318 5,681 12,549 225,361 23,860 655,611 57,873 -- 98,318 -- 12,549 -- 23,860 -- ---------- -------- ------- -------- ------- ------- -------- -------- ------- $1,191,135 $655,611 $57,873 $ 42,227 $98,318 $18,230 $ 12,549 $249,221 $23,860 ========== ======== ======= ======== ======= ======= ======== ======== ======= </TABLE> F-51

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Fidelity Fund -------------------------------------------------- Fidelity VIP Fidelity VIP Asset Manager Growth Growth Portfolio (a) Portfolio (a) ------------------------ ------------------------ For the Year For the Year For the Year For the Year Ended Ended Ended Ended December 31, December 31, December 31, December 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income.................................. $ 3,017 $ (233) $ (517) $ (243) Net realized (losses) gains from security transactions........ (5,591) 113 (8,400) (3,407) Change in unrealized (depreciation) appreciation of investments.................................................. (19,964) (1,597) (40,968) (3,078) -------- ------- -------- ------- Net (decrease) increase in net assets resulting from operations................................................... (22,538) (1,717) (49,885) (6,728) -------- ------- -------- ------- From capital transactions: Net premiums.................................................. 105,094 16,990 102,972 22,338 Redemptions................................................... (2,162) -- -- -- Net portfolio transfers....................................... (31,085) 84,590 (1,143) 74,755 Other net transfers........................................... (12,942) (5,355) (5,581) (3,117) -------- ------- -------- ------- Net increase (decrease) in net assets resulting from capital transactions................................................. 58,905 96,225 96,248 93,976 -------- ------- -------- ------- NET CHANGE IN NET ASSETS......................................... 36,367 94,508 46,363 87,248 NET ASSETS--BEGINNING OF PERIOD.................................. 94,508 -- 87,248 -- -------- ------- -------- ------- NET ASSETS--END OF PERIOD........................................ $130,875 $94,508 $133,611 $87,248 ======== ======= ======== ======= </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-52

<TABLE> <CAPTION> American Fund Met Investors Fund -------------------------------------------------------------------------------------- ------------------------ American Funds Growth American Funds Growth-Income American Funds Global Small Cap JPM Enhanced Index Portfolio Portfolio Portfolio Portfolio (a) -------------------------- -------------------------- ------------------------------ ------------------------ For the Year For the Period For the Year For the Period For the Year For the Period For the Year For the Year Ended May 1, 2001 to Ended May 1, 2001 to Ended May 1, 2001 to Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 2002 2001 2002 2001 2002 2001 2002 31, 2001 ------------ -------------- ------------ -------------- ------------ -------------- ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> $ (56,543) $ 128,057 $ 35,068 $ 15,132 $ (1,451) $ 5,931 $ 78 $ (13) (49,022) (95,342) (51,319) (13,398) 35,746 (18,714) (1,186) (25) (1,636,890) (17,189) (1,122,854) 55,397 (396,292) 46,579 (1,483) (320) ----------- ---------- ----------- ---------- ---------- -------- ------- ------ (1,742,455) 15,526 (1,139,105) 57,131 (361,997) 33,796 (2,591) (358) ----------- ---------- ----------- ---------- ---------- -------- ------- ------ 5,515,691 700,197 4,324,156 553,810 1,071,636 138,839 6,165 -- (51,220) (1,570) (62,519) (6,270) (8,869) -- -- -- 5,147,713 2,173,706 4,404,613 1,876,550 1,067,611 476,691 1,869 5,908 (2,053,980) 288,414 (1,573,001) (27,864) (354,525) (30,269) (3,041) (187) ----------- ---------- ----------- ---------- ---------- -------- ------- ------ 8,558,204 3,160,747 7,093,249 2,396,226 1,775,853 585,261 4,993 5,721 ----------- ---------- ----------- ---------- ---------- -------- ------- ------ 6,815,749 3,176,273 5,954,144 2,453,357 1,413,856 619,057 2,402 5,363 3,176,273 -- 2,453,357 -- 619,057 -- 5,363 -- ----------- ---------- ----------- ---------- ---------- -------- ------- ------ $ 9,992,022 $3,176,273 $ 8,407,501 $2,453,357 $2,032,913 $619,057 $ 7,765 $5,363 =========== ========== =========== ========== ========== ======== ======= ====== </TABLE> F-53

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Met Investors Fund ------------------------------------------------------ MFS Mid Cap Growth MFS Research International Portfolio Portfolio -------------------------- -------------------------- For the Year For the Period For the Year For the Period Ended May 1, 2001 to Ended May 1, 2001 to December 31, December 31, December 31, December 31, 2002 2001 2002 2001 ------------ -------------- ------------ -------------- <S> <C> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income................................... $ 962 $ (940) $ (2,121) $ (351) Net realized (losses) gains from security transactions......... (55,314) (1,372) (66,559) (4,107) Change in unrealized (depreciation) appreciation of investments................................................... (378,709) 11,239 (2,664) 1,444 ---------- -------- -------- -------- Net (decrease) increase in net assets resulting from operations.................................................... (433,061) 8,927 (71,344) (3,014) ---------- -------- -------- -------- From capital transactions: Net premiums................................................... 820,210 82,192 323,700 38,580 Redemptions.................................................... (1,344) (543) (1,956) -- Net portfolio transfers........................................ 375,032 264,649 254,704 77,076 Other net transfers............................................ 47,743 209,192 (28,935) 124,871 ---------- -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions.................................................. 1,241,641 555,490 547,513 240,527 ---------- -------- -------- -------- NET CHANGE IN NET ASSETS.......................................... 808,580 564,417 476,169 237,513 NET ASSETS--BEGINNING OF PERIOD................................... 564,417 -- 237,513 -- ---------- -------- -------- -------- NET ASSETS--END OF PERIOD......................................... $1,372,997 $564,417 $713,682 $237,513 ========== ======== ======== ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-54

<TABLE> <CAPTION> Met Investors Fund ---------------------------------------------------------------------------------------------- PIMCO Total Return PIMCO Innovation Lord Abbett Bond Debenture Portfolio Portfolio Portfolio -------------------------- -------------------------- -------------------------------------- For the Year For the Period For the Year For the Period For the Year For the Year For the Year Ended May 1, 2001 to Ended May 1, 2001 to Ended Ended Ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2002 2001 2002 2001 2002 2001 2000 ------------ -------------- ------------ -------------- ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> $ (28,120) $ 23,842 $ (9,521) $ (1,528) $ 924,873 $ 859,088 $ (48,057) 60,373 1,564 (111,879) (9,873) (1,886,218) (134,223) (62,427) 270,736 (14,155) (652,366) 4,179 949,375 (902,997) (65,158) ---------- ---------- ---------- -------- ------------ ---------- ---------- 302,989 11,251 (773,766) (7,222) (11,970) (178,132) (175,642) ---------- ---------- ---------- -------- ------------ ---------- ---------- 1,998,260 266,987 931,879 138,136 2,500,797 2,653,126 2,272,880 (31,798) (9,397) (7,020) -- (441,582) (478,731) (256,031) 3,693,012 902,199 627,449 661,537 11,019,013 807,014 762,530 (851,347) (68,474) (258,151) (43,761) (13,314,199) (872,472) (644,203) ---------- ---------- ---------- -------- ------------ ---------- ---------- 4,808,127 1,091,315 1,294,157 755,912 (235,971) 2,108,937 2,135,176 ---------- ---------- ---------- -------- ------------ ---------- ---------- 5,111,116 1,102,566 520,391 748,690 (247,941) 1,930,805 1,959,534 1,102,566 -- 748,690 -- 8,844,547 6,913,742 4,954,208 ---------- ---------- ---------- -------- ------------ ---------- ---------- $6,213,682 $1,102,566 $1,269,081 $748,690 $ 8,596,606 $8,844,547 $6,913,742 ========== ========== ========== ======== ============ ========== ========== </TABLE> F-55

Metropolitan Life Separate Account UL STATEMENTS OF CHANGES IN NET ASSETS <TABLE> <CAPTION> Met Investors Fund ----------------------------------------------- Met/AIM Mid Cap State Street Research Core Met/AIM Concentrated Equity Small Cap Growth International Portfolio Portfolio Portfolio --------- ---------------- --------------------- For the Period May 1, For the Period For the Period 2002 to May 1, 2002 to May 1, 2002 to December December 31, December 31, 31, 2002 2002 2002 --------- ---------------- --------------------- <S> <C> <C> <C> (DECREASE) INCREASE IN NET ASSETS From operations: Net investment (loss) income................................... $ (347) $ (281) $ (88) Net realized (losses) gains from security transactions......... (1,242) (593) (843) Change in unrealized (depreciation) appreciation of investments................................................... (6,351) (4,322) (2,920) -------- -------- -------- Net (decrease) increase in net assets resulting from operations.................................................... (7,940) (5,196) (3,851) -------- -------- -------- From capital transactions: Net premiums................................................... 70,763 30,362 59,332 Redemptions.................................................... (929) (129) (178) Net portfolio transfers........................................ 212,616 84,320 122,434 Other net transfers............................................ (21,530) 6,439 (27,767) -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions.................................................. 260,920 120,992 153,821 -------- -------- -------- NET CHANGE IN NET ASSETS.......................................... 252,980 115,796 149,970 NET ASSETS--BEGINNING OF PERIOD................................... -- -- -- -------- -------- -------- NET ASSETS--END OF PERIOD......................................... $252,980 $115,796 $149,970 ======== ======== ======== </TABLE> -------- (a) Commenced operations on January 1, 2001. See Notes to Financial Statements. F-56

Metropolitan Life Separate Account UL NOTES TO FINANCIAL STATEMENTS December 31, 2002 1. BUSINESS Metropolitan Life Separate Account UL (the "Separate Account"), a separate account of Metropolitan Life Insurance Company ("Metropolitan Life"), was established on December 13, 1988 to support Metropolitan Life's operations with respect to certain variable universal life contracts ("Contracts"). Metropolitan Life is a wholly owned subsidiary of MetLife, Inc. ("MetLife"). The Separate Account was registered as a unit investment trust on January 5, 1990 under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York Insurance Department. The Separate Account presently consists of fifty-six sub-accounts that support various variable universal life insurance contracts (Flexible Premium Multifunded Life ("UL II"), MetLife Flexible Premium Variable Life ("MetFlex"), Group Variable Universal Life ("GVUL"), Flexible Premium Multifunded Life ("UL 2001"), Variable Additional Insurance ("VAI") and Variable Additional Benefits Rider ("VABR")). The Separate Account is divided into sub-accounts invested in shares of the corresponding portfolios, series or funds of the Metropolitan Series Fund, Inc. ("Metropolitan Fund"), the Janus Aspen Series Funds ("Janus Fund"), the Invesco Variable Investment Funds, Inc. ("Invesco Fund"), the Franklin Templeton Variable Insurance Product Series Funds ("Franklin Fund"), the New England Zenith Series Funds, Inc. ("Zenith Fund"), the Alliance Variable Product Series Funds ("Alliance Fund"), the Fidelity Variable Insurance Products Funds ("Fidelity Fund"), American Series Funds ("American Fund"), and the MetLife Investors Trust Funds ("Met Investors Fund"), collectively, (the "Funds"). For convenience, the portfolios, series or funds are referred to as "portfolios." The assets of the Separate Account are registered in the name of Metropolitan Life. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from Metropolitan Life's other assets and liabilities. The portion of the Separate Account's assets applicable to the variable life contracts is not chargeable with liabilities arising out of any other business Metropolitan Life may conduct. Metropolitan Fund: State Street Research Investment Trust Portfolio State Street Research Diversified Portfolio State Street Research Aggressive Growth Portfolio MetLife Stock Index Portfolio Putnam International Stock Portfolio Janus Mid Cap Portfolio T. Rowe Price Small Cap Growth Portfolio Scudder Global Equity Portfolio Harris Oakmark Large Cap Value Portfolio Neuberger Berman Partners Mid Cap Value Portfolio T. Rowe Price Large Cap Growth Portfolio Lehman Brothers Aggregate Bond Index Portfolio Morgan Stanley EAFE Index Portfolio Russell 2000 Index Portfolio Putnam Large Cap Growth Portfolio State Street Research Aurora Portfolio MetLife Mid Cap Stock Index Portfolio Janus Growth Portfolio (b) Franklin Templeton Small Cap Growth Portfolio (b) State Street Research Large Cap Value Portfolio (c) Janus Fund: Janus Aspen Growth Portfolio Invesco Fund: Invesco VIF High Yield Portfolio Invesco VIF Equity Income Portfolio Invesco VIF Real Estate Opportunity Portfolio Franklin Fund: Franklin Templeton International Stock Portfolio Franklin Templeton Valuemark Small Cap Portfolio (a) Zenith Fund: Davis Venture Value Portfolio Loomis Sayles Small Cap Portfolio Zenith Fund: (continued) Alger Equity Growth Portfolio (a) MFS Investors Trust Portfolio (a) MFS Research Managers Portfolio (a) State Street Research Bond Income Portfolio FI Structured Equity Portfolio (a) Harris Oakmark Focused Value Portfolio (b) Salomon Brothers Strategic Bond Opportunities Portfolio (b) Salomon Brothers U.S. Government Portfolio (b) State Street Research Money Market Portfolio FI Mid Cap Opportunities Portfolio (c) Alliance Fund: Alliance Growth & Income Portfolio Alliance Premier Growth Portfolio (a) Alliance Technology Portfolio (a) Fidelity Fund: Fidelity VIP Contrafund Portfolio (a) Fidelity VIP Asset Manager Growth Portfolio (a) Fidelity VIP Growth Portfolio (a) American Fund: American Funds Growth Portfolio (b) American Funds Growth-Income Portfolio (b) American Funds Global Small Cap Portfolio (b) Met Investors Fund: JPM Enhanced Index Portfolio (a) MFS Mid Cap Growth Portfolio (b) MFS Research International Portfolio (b) PIMCO Total Return Portfolio (b) PIMCO Innovation Portfolio (b) Lord Abbett Bond Debenture Portfolio Met/AIM Mid Cap Core Equity Portfolio (c) Met/AIM Small Cap Growth Portfolio (c) State Street Research Concentrated International Portfolio (c) F-57

NOTES TO FINANCIAL STATEMENTS -- (Continued) (a) On January 1, 2001, operations commenced for eleven new sub-accounts added to the Separate Account on that date: Franklin Templeton Valuemark Small Cap Portfolio, Alger Equity Growth Portfolio, MFS Investors Trust Portfolio, MFS Research Managers Portfolio, FI Structured Equity Portfolio, Alliance Premier Growth Portfolio, Alliance Technology Portfolio, Fidelity VIP Contrafund Portfolio, Fidelity VIP Asset Manager Growth Portfolio, Fidelity VIP Growth Portfolio, and JPM Enhanced Index Portfolio. (b) On May 1, 2001, operations commenced for twelve new sub-accounts added to the Separate Account on that date: Janus Growth Portfolio, Franklin Templeton Small Cap Growth Portfolio, Harris Oakmark Focused Value Portfolio, Salomon Brothers Strategic Bond Opportunities Portfolio, Salomon Brothers U.S. Government Portfolio, American Funds Growth Portfolio, American Funds Growth-Income Portfolio, American Funds Global Small Cap Portfolio, MFS Mid Cap Growth Portfolio, MFS Research International Portfolio, PIMCO Total Return Portfolio, and PIMCO Innovation Portfolio. (c) On May 1, 2002, operations commenced for five new sub-accounts added to the Separate Account on that date: State Street Research Large Cap Value Portfolio, FI Mid Cap Opportunities Portfolio, Met/AIM Mid Cap Core Equity Portfolio, Met/AIM Small Cap Growth Portfolio, and State Street Research Concentrated International Portfolio. 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements included herein have been provided in accordance with accounting principles generally accepted in the United States of America for variable universal life separate accounts registered as unit investment trusts. A. Valuation of Investments Investments are made in the portfolios of the Funds and are valued at the reported net asset values of these portfolios. The investments of the Funds are valued at fair value. Money market fund investments are valued utilizing the amortized cost method of valuation. B. Security Transactions Purchases and sales are recorded on the trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the identified cost of the investment sold. Income from dividends, and gains from realized gain distributions, are recorded on the ex-distribution date. C. Federal Income Taxes The operations of the Separate Account are included in the Federal income tax return of Metropolitan Life, which is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, Metropolitan Life does not expect to incur Federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Separate Account for Federal income taxes. Metropolitan Life will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any Federal income taxes that would be attributed to the contracts. D. Net Premiums Metropolitan Life deducts a sales load and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain policies, Metropolitan Life also deducts a Federal income tax charge before amounts are allocated to the Separate Account. The Federal income tax charge is imposed in connection with certain policies to recover a portion of the Federal income tax adjustment attributable to policy acquisition expenses. E. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. F-58

NOTES TO FINANCIAL STATEMENTS -- (Continued) F. Purchase Payments Purchase payments received by Metropolitan Life are credited as Accumulation Units as of the end of the valuation period in which received, as provided in the prospectus. 3. EXPENSES With respect to assets in the Separate Account that support certain policies, Metropolitan Life deducts a charge from the assets of the Separate Account for the assumption of general administrative expenses and mortality and expense risks. This charge is equivalent to an effective annual rate of 0.45% of the average daily values of the assets in the Separate Account for GVUL contracts, 0.90% for UL II & UL 2001 contracts, 0.60% for MetFlex contracts, 0.75% for VAI and VABR contracts less than $250K and 0.50% for VAI and VABR contracts $250K and greater. F-59

NOTES TO FINANCIAL STATEMENTS -- (Continued) 4. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and proceeds from sales of investments for the year ended December 31, 2002 were as follows: <TABLE> <CAPTION> Purchases Sales --------- -------- (In Thousands) <S> <C> <C> Metropolitan Fund: State Street Research Investment Trust Portfolio........... $ 32,829 $ 15,670 State Street Research Diversified Portfolio................ 26,136 10,410 State Street Research Aggressive Growth Portfolio.......... 16,339 6,652 MetLife Stock Index Portfolio.............................. 87,889 21,171 Putnam International Stock Portfolio....................... 7,707 5,948 Janus Mid Cap Portfolio.................................... 37,929 4,514 T. Rowe Price Small Cap Growth Portfolio................... 9,717 1,779 Scudder Global Equity Portfolio............................ 4,871 1,590 Harris Oakmark Large Cap Value Portfolio................... 15,367 2,991 Neuberger Berman Partners Mid Cap Value Portfolio.......... 7,400 1,451 T. Rowe Price Large Cap Growth Portfolio................... 7,831 1,174 Lehman Brothers Aggregate Bond Index Portfolio............. 20,492 7,029 Morgan Stanley EAFE Index Portfolio........................ 7,939 3,223 Russell 2000 Index Portfolio............................... 8,157 1,082 Putnam Large Cap Growth Portfolio.......................... 3,172 380 State Street Research Aurora Portfolio..................... 18,753 2,817 MetLife Mid Cap Stock Index Portfolio...................... 8,936 275 Janus Growth Portfolio..................................... 1,927 342 Franklin Templeton Small Cap Growth Portfolio.............. 1,353 236 State Street Research Large Cap Value Portfolio............ 210 15 Janus Fund: Janus Aspen Growth Portfolio............................... 930 218 Invesco Fund: Invesco VIF High Yield Portfolio........................... 353 112 Invesco VIF Equity Income Portfolio........................ 190 159 Invesco VIF Real Estate Opportunity Portfolio.............. 797 722 Franklin Fund: Franklin Templeton International Stock Portfolio........... 1,870 512 Franklin Templeton Valuemark Small Cap Portfolio........... 1,139 207 Zenith Fund: Davis Venture Value Portfolio.............................. 8,847 634 Loomis Sayles Small Cap Portfolio.......................... 1,328 322 Alger Equity Growth Portfolio.............................. 4,181 203 MFS Investors Trust Portfolio.............................. 1,196 920 MFS Research Managers Portfolio............................ 674 555 State Street Research Bond Income Portfolio................ 107,330 95,684 FI Structured Equity Portfolio............................. 119 37 Harris Oakmark Focused Value Portfolio..................... 9,880 248 Salomon Brothers Strategic Bond Opportunities Portfolio.... 1,928 279 Salomon Brothers U.S. Government Portfolio................. 4,209 784 State Street Research Money Market Portfolio............... 73,813 75,754 FI Mid Cap Opportunities Portfolio......................... 188 22 Alliance Fund: Alliance Growth & Income Portfolio......................... 770 80 Alliance Premier Growth Portfolio.......................... 31 64 Alliance Technology Portfolio.............................. 16 1 Fidelity Fund: Fidelity VIP Contrafund Portfolio.......................... 472 217 Fidelity VIP Asset Manager Growth Portfolio................ 125 63 Fidelity VIP Growth Portfolio.............................. 112 16 American Fund: American Funds Growth Portfolio............................ 8,863 234 American Funds Growth-Income Portfolio..................... 7,522 368 American Funds Global Small Cap Portfolio.................. 2,219 445 Met Investors Fund: JPM Enhanced Index Portfolio............................... 8 3 MFS Mid Cap Growth Portfolio............................... 1,567 83 MFS Research International Portfolio....................... 1,710 1,026 PIMCO Total Return Portfolio............................... 5,986 1,202 PIMCO Innovation Portfolio................................. 1,519 242 Lord Abbett Bond Debenture Portfolio....................... 12,824 12,140 Met/AIM Mid Cap Core Equity Portfolio...................... 267 7 Met/AIM Small Cap Growth Portfolio......................... 124 3 State Street Research Concentrated International Portfolio. 160 6 -------- -------- Total...................................................... $588,221 $282,321 ======== ======== </TABLE> F-60

[THIS PAGE INTENTIONALLY LEFT BLANK] F-61

NOTES TO FINANCIAL STATEMENTS -- (Continued) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2002 and 2001 were as follows: <TABLE> <CAPTION> Metropolitan Fund --------------------------------------------------- State Street State Street State Street Research MetLife Research Research Aggressive Stock Investment Trust Diversified Growth Index Portfolio Portfolio Portfolio Portfolio ---------------- ------------ ------------ --------- <S> <C> <C> <C> <C> (In Thousands) Outstanding at December 31, 2001 13,264 11,138 10,503 17,015 Activity during 2002: Issued........................ 5,072 3,678 3,343 9,909 Redeemed...................... (3,276) (2,548) (2,399) (4,784) ------ ------ ------ ------ Outstanding at December 31, 2002 15,060 12,268 11,447 22,140 ====== ====== ====== ====== Outstanding at December 31, 2000 11,054 9,234 9,254 11,689 Activity during 2001: Issued........................ 2,828 2,200 1,392 6,525 Redeemed...................... (618) (296) (143) (1,199) ------ ------ ------ ------ Outstanding at December 31, 2001 13,264 11,138 10,503 17,015 ====== ====== ====== ====== </TABLE> F-62

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Metropolitan Fund ---------------------------------------------------------------------------------------------------------------- Putnam T. Rowe Price Harris Neuberger T. Rowe Price Lehman Brothers International Janus Small Cap Scudder Oakmark Berman Partners Large Cap Aggregate Stock Mid Cap Growth Global Equity Large Cap Value Mid Cap Value Growth Bond Index Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------------- --------- ------------- ------------- --------------- --------------- ------------- --------------- <S> <C> <C> <C> <C> <C> <C> <C> 3,106 8,481 3,509 2,000 1,242 1,076 2,124 3,153 1,176 5,867 1,561 687 1,697 906 1,289 1,774 (986) (2,827) (809) (709) (593) (415) (560) (780) ------ ------ ----- ----- ----- ----- ----- ----- 3,296 11,521 4,261 1,978 2,346 1,567 2,853 4,147 ====== ====== ===== ===== ===== ===== ===== ===== 2,709 5,367 2,995 1,848 220 456 632 1,730 1,578 3,701 864 209 1,076 790 2,004 2,267 (1,181) (587) (350) (57) (54) (170) (512) (844) ------ ------ ----- ----- ----- ----- ----- ----- 3,106 8,481 3,509 2,000 1,242 1,076 2,124 3,153 ====== ====== ===== ===== ===== ===== ===== ===== </TABLE> F-63

NOTES TO FINANCIAL STATEMENTS -- (Continued) 5. CHANGES IN OUTSTANDING UNITS -- (Continued) <TABLE> <CAPTION> Metropolitan Fund -------------------------------------------------- Morgan Stanley State Street EAFE Russell Putman Large Research Index 2000 Index Cap Growth Aurora Portfolio Portfolio Portfolio Portfolio -------------- ---------- ------------ ------------ <S> <C> <C> <C> <C> (In Thousands) Outstanding at December 31, 2001 1,352 920 792 1,317 Activity during 2002: Issued........................ 1,485 1,015 1,075 1,944 Redeemed...................... (793) (321) (404) (662) ------ ----- ----- ----- Outstanding at December 31, 2002 2,044 1,614 1,463 2,599 ====== ===== ===== ===== Outstanding at December 31, 2000 544 512 131 164 Activity during 2001: Issued........................ 1,865 1,181 704 1,201 Redeemed...................... (1,057) (773) (43) (48) ------ ----- ----- ----- Outstanding at December 31, 2001 1,352 920 792 1,317 ====== ===== ===== ===== </TABLE> F-64

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Metropolitan Fund Janus Fund Invesco Funds ----------------------------------------------------- ---------- ------------------------------------- Metlife Mid Franklin State Street Janus Invesco Invesco VIF Invesco Cap Stock Janus Templeton Research Aspen VIF Equity VIF Real Estate Index Growth Small Cap Growth Large Cap Value Growth High Yield Income Opportunity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ----------- --------- ---------------- --------------- ---------- ---------- ----------- --------------- <S> <C> <C> <C> <C> <C> <C> <C> 867 122 52 -- 236 37 12 7 1,231 409 215 27 149 38 5 61 (336) (150) (69) (4) (31) (10) (2) (54) ----- ---- --- -- ---- --- -- --- 1,762 381 198 23 354 65 15 14 ===== ==== === == ==== === == === 210 -- -- -- 473 1 2 10 693 148 54 -- 84 45 12 1 (36) (26) (2) -- (321) (9) (2) (4) ----- ---- --- -- ---- --- -- --- 867 122 52 -- 236 37 12 7 ===== ==== === == ==== === == === </TABLE> F-65

NOTES TO FINANCIAL STATEMENTS -- (Continued) 5. CHANGES IN OUTSTANDING UNITS -- (Continued) <TABLE> <CAPTION> Franklin Fund Zenith Fund ------------------------------------ -------------------------- Franklin Templeton Franklin Templeton International Valuemark Davis Venture Loomis Sayles Stock Small Cap Value Small Cap Portfolio Portfolio Portfolio Portfolio ------------------ ------------------ ------------- ------------- <S> <C> <C> <C> <C> (In Thousands) Outstanding at December 31, 2001 189 16 297 11 Activity during 2002: Issued........................ 183 183 754 12 Redeemed...................... (28) (36) (150) (5) --- --- ---- -- Outstanding at December 31, 2002 344 163 901 18 === === ==== == Outstanding at December 31, 2000 99 -- 39 2 Activity during 2001: Issued........................ 118 17 267 10 Redeemed...................... (28) (1) (9) (1) --- --- ---- -- Outstanding at December 31, 2001 189 16 297 11 === === ==== == </TABLE> F-66

NOTES TO FINANCIAL STATEMENTS -- (Continued) 5. CHANGES IN OUTSTANDING UNITS -- (Continued) <TABLE> <CAPTION> Zenith Fund Alliance Fund ------------------------- ---------------------------------- State Street FI Alliance Research Mid Cap Growth & Alliance Alliance Money Market Opportunities Income Premier Growth Technology Portfolio Portfolio Portfolio Portfolio Portfolio ------------ ------------- --------- -------------- ---------- <S> <C> <C> <C> <C> <C> (In Thousands) Outstanding at December 31, 2001 2,156 -- 65 14 2 Activity during 2002: Issued........................ 1,770 22 95 5 4 Redeemed...................... (1,945) (1) (10) (10) -- ------ -- --- --- --- Outstanding at December 31, 2002 1,981 21 150 9 6 ====== == === === === Outstanding at December 31, 2000 1,479 -- 6 -- -- Activity during 2001: Issued........................ 2,983 -- 60 14 26 Redeemed...................... (2,306) -- (1) -- (24) ------ -- --- --- --- Outstanding at December 31, 2001 2,156 -- 65 14 2 ====== == === === === </TABLE> F-68

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Fidelity Fund American Fund Met Investors Fund -------------------------------------- --------------------------------------- ------------------ Fidelity VIP American JPM MFS Fidelity VIP Asset Manager Fidelity VIP American American Funds Funds Global Enhanced Mid Cap Contrafund Growth Growth Funds Growth Growth-Income Small Cap Index Growth Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------------ ------------- ------------ ------------ -------------- ------------ --------- --------- <S> <C> <C> <C> <C> <C> <C> <C> 3 13 13 53 68 49 1 68 33 15 18 217 287 226 1 328 (1) (8) (3) (49) (68) (72) (1) (102) -- -- -- --- --- --- -- ---- 35 20 28 221 287 203 1 294 == == == === === === == ==== -- -- -- -- -- -- -- -- 3 14 17 67 76 55 1 71 -- (1) (4) (14) (8) (6) -- (3) -- -- -- --- --- --- -- ---- 3 13 13 53 68 49 1 68 == == == === === === == ==== </TABLE> F-69

NOTES TO FINANCIAL STATEMENTS -- (Continued) 5. CHANGES IN OUTSTANDING UNITS -- (Continued) <TABLE> <CAPTION> Met Investors Fund ------------------------------------------------ MFS Lord Abbett Research PIMCO PIMCO Bond International Total Return Innovation Debenture Portfolio Portfolio Portfolio Portfolio ------------- ------------ ---------- ----------- <S> <C> <C> <C> <C> (In Thousands) Outstanding at December 31, 2001 28 103 121 774 Activity during 2002: Issued........................ 239 623 437 178 Redeemed...................... (172) (192) (142) (204) ---- ---- ---- ---- Outstanding at December 31, 2002 95 534 416 748 ==== ==== ==== ==== Outstanding at December 31, 2000 -- -- -- 601 Activity during 2001: Issued........................ 113 123 128 246 Redeemed...................... (85) (20) (7) (73) ---- ---- ---- ---- Outstanding at December 31, 2001 28 103 121 774 ==== ==== ==== ==== </TABLE> F-70

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Met Investors Fund ---------------------------------- State Street Met/AIM Met/AIM Research Mid Cap Small Cap Concentrated Core Equity Growth International Portfolio Portfolio Portfolio ----------- --------- ------------- <S> <C> <C> -- -- -- 33 17 22 (3) (2) (4) -- -- -- 30 15 18 == == == -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- == == == </TABLE> F-71

NOTES TO FINANCIAL STATEMENTS -- (Continued) 6. UNIT VALUES A summary of unit values and units outstanding for the Contracts and the expense as a percentage of average net assets, excluding expenses for the underlying funds, for each of the two years in the period ended December 31, 2002 or lesser time period if applicable. <TABLE> <CAPTION> Metropolitan Fund ------------------------------------------------------------------ State Street State Street State Street Research Research Research Aggressive MetLife Investment Trust Diversified Growth Stock Index Portfolio Portfolio Portfolio Portfolio ---------------- ---------------- ---------------- --------------- <S> <C> <C> <C> <C> 2002 Units (In Thousands)............................. 15,060 12,268 11,447 22,140 Unit Value (1)................................... $8.11 to $25.66 $9.78 to $25.64 $8.32 to $12.09 $7.48 to $23.03 Net Assets (In Thousands)........................ $276,980 $238,020 $130,816 $326,228 Investment Income Ratio to Average Net Assets (2) 0.54% 2.27% 0.00% 1.61% Expenses as a Percent of Average Net Assets (3).. 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return (4)................................. -27% to -26% -15% to -14% -29% -23% to -22% 2001 Units (In Thousands)............................. 13,264 11,138 10,503 17,015 Unit Value (1)................................... $10.98 to $35.04 $11.35 to $30.04 $11.67 to $17.12 $9.62 to $29.91 Net Assets (In Thousands)........................ $356,701 $265,724 $171,692 $346,931 Investment Income Ratio to Average Net Assets (2) 13.53% 9.67% 24.84% 1.17% Expenses as a Percent of Average Net Assets (3).. 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return (4)................................. -18% to -17% -7% to -6% -24% -13% to -12% </TABLE> -------- (1) Metropolitan Life sells a number of variable life products which have unique combinations of features and fees that are charged against the contract owners' 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 mutual 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 charges, that result in direct reductions in the unit value. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-accounts invest. (3) These ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units, and expenses of the underlying fund, are excluded. (4) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deduction for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. F-72

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Metropolitan Fund ------------------------------------------------------------------------------------------------------------------- Putnam T. Rowe Price Harris Neuberger T. Rowe Price International Janus Small Cap Scudder Oakmark Large Berman Partners Large Cap Stock Mid Cap Growth Global Equity Cap Value Mid Cap Value Growth Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------------- --------------- ---------------- ---------------- ---------------- ---------------- --------------- <S> <C> <C> <C> <C> <C> <C> 3,296 11,521 4,261 1,978 2,346 1,567 2,853 $7.78 to $10.91 $4.22 to $12.07 $9.05 to $10.04 $9.90 to $11.03 $9.23 to $11.71 $10.24 to $14.13 $6.35 to $9.27 $32,966 $119,020 $39,880 $20,476 $23,073 $18,286 $22,095 0.89% 0.00% 0.00% 1.68% 3.31% 0.31% 0.26% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -18% to -17% -30% to -29% -27% -17% to -16% -15% to -14% -10% -24% to -23% 3,106 8,481 3,509 2,000 1,242 1,076 2,124 $9.47 to $13.35 $5.95 to $17.08 $12.46 to $13.76 $11.79 to $12.88 $10.80 to $13.76 $11.44 to $15.63 $8.35 to $12.08 $38,281 $125,185 $44,660 $21,106 $14,336 $14,115 $21,111 3.67% 0.00% 8.16% 11.32% 0.15% 1.94% 0.06% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% 0.60% to 0.90% -21% to -20% -37% to -33% -10% to 2% -16% to -15% 17% to 20% -3% to 0% -11% to -6% </TABLE> Lehman Brothers Aggregate Bond Index Portfolio ---------------- 4,147 $12.43 to $13.19 $54,046 2.81% 0.45% to 0.90% 9% to 10% 3,153 $11.38 to $11.97 $37,322 1.29% 0.45% to 0.90% 7% F-73

NOTES TO FINANCIAL STATEMENTS -- (Continued) 6. UNIT VALUES -- (Continued) <TABLE> <CAPTION> Metropolitan Fund -------------------------------------------------------------- State Street Morgan Stanley Russell 2000 Putman Large Research EAFE Index Index Cap Growth Aurora Portfolio Portfolio Portfolio Portfolio -------------- --------------- -------------- ---------------- <S> <C> <C> <C> <C> 2002 Units (In Thousands)............................. 2,044 1,614 1,463 2,599 Unit Value (1)................................... $5.76 to $7.53 $7.43 to $9.99 $3.51 to $3.79 $10.30 to $11.25 Net Assets (In Thousands)........................ $13,496 $14,829 $5,253 $29,061 Investment Income Ratio to Average Net Assets (2) 0.49% 0.59% 0.00% 0.52% Expenses as a Percent of Average Net Assets (3).. 0.45% to 0.90% 0.45% to 0.90% 0.50% to 0.90% 0.50% to 0.90% Total Return (4)................................. -17% -21% to -20% -30% to -29% -22% to -21% 2001 Units (In Thousands)............................. 1,352 920 792 1,317 Unit Value (1)................................... $6.97 to $9.04 $9.42 to $12.56 $4.98 to $5.04 $13.09 to $14.29 Net Assets (In Thousands)........................ $10,800 $10,625 $4,001 $20,005 Investment Income Ratio to Average Net Assets (2) 0.31% 0.26% 0.00% 0.38% Expenses as a Percent of Average Net Assets (3).. 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% 0.60% to 0.90% Total Return (4)................................. -22% to -21% 0% to 6% -46% to -31% 16% to 19% </TABLE> -------- (1) Metropolitan Life sells a number of variable life products which have unique combinations of features and fees that are charged against the contract owners' 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 mutual 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 charges, that result in direct reductions in the unit value. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-accounts invest. (3) These ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units, and expenses of the underlying fund, are excluded. (4) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deduction for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. F-74

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Metropolitan Fund Janus Fund Invesco Fund ------------------------------------------------------------- ---------- -------------------------------- Franklin Metlife Mid Templeton State Street Janus Invesco Invesco Invesco VIF Cap Stock Janus Small Cap Research Aspen VIF High VIF Equity Real Estate Index Growth Growth Large Cap Value Growth Yield Income Opportunity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------------- -------------- -------------- --------------- ---------- --------- ---------- ----------- <S> <C> <C> <C> <C> <C> <C> <C> 1,762 381 198 23 354 65 15 14 $8.18 to $8.98 $5.35 to $5.43 $6.31 to $6.41 $7.96 to $8.00 $6.10 $7.37 $7.94 $12.82 $15,568 $2,045 $1,266 $189 $2,163 $476 $125 $179 0.35% 0.00% 0.00% 0.92% 0.03% 13.27% 1.74% 1.40% 0.50% to 0.90% 0.90% 0.90% 0.90% 0.60% 0.60% 0.60% 0.60% -16% to -15% -31% -28% -20% -27% -1% -19% -6% 867 122 52 -- 236 37 12 7 $9.62 to $10.56 $7.73 to $7.82 $8.83 to $8.88 $-- $8.30 $7.46 $9.81 $12.05 $9,019 $953 $457 $-- $1,959 $274 $122 $89 0.43% 0.00% 0.00% -- 6.04% 20.89% 2.61% 1.16% 0.60% to 0.90% 0.90% 0.60% -- 0.60% 0.60% 0.60% 0.60% -1% to 3% -23% to -22% -12% to -11% -- -19% -15% -7% 1% </TABLE> F-75

NOTES TO FINANCIAL STATEMENTS -- (Continued) 6. UNIT VALUES -- (Continued) <TABLE> <CAPTION> Franklin Fund Zenith Fund ----------------------- -------------------------------- Franklin Franklin Templeton Templeton Loomis International Valuemark Davis Sayles Small Stock Small Cap Venture Value Cap Series Portfolio Portfolio Portfolio Portfolio ------------- --------- --------------- ---------------- <S> <C> <C> <C> <C> 2002 Units (In Thousands)............................. 344 163 901 18 Unit Value (1)................................... $7.57 $4.93 $7.48 to $21.70 $6.80 to $150.51 Net Assets (In Thousands)........................ $2,612 $801 $13,430 $2,408 Investment Income Ratio to Average Net Assets (2) 2.03% 0.51% 0.88% 0.11% Expenses as a Percent of Average Net Assets (3).. 0.60% 0.60% 0.50% to 0.90% 0.50% to 0.90% Total Return (4)................................. -18% -29% -17% to -16% -22% 2001 Units (In Thousands)............................. 189 16 297 11 Unit Value (1)................................... $9.27 $6.91 $8.94 to $25.95 $8.66 to $191.87 Net Assets (In Thousands)........................ $1,767 $103 $7,498 $1,926 Investment Income Ratio to Average Net Assets (2) 14.19% 0.05% 4.47% 7.28% Expenses as a Percent of Average Net Assets (3).. 0.60% 0.60% 0.60% to 0.90% 0.60% to 0.90% Total Return (4)................................. -16% -9% -11% to -9% -9% to -4% </TABLE> -------- (1) Metropolitan Life sells a number of variable life products which have unique combinations of features and fees that are charged against the contract owners' 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 mutual 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 charges, that result in direct reductions in the unit value. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-accounts invest. (3) These ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units, and expenses of the underlying fund, are excluded. (4) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deduction for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. F-76

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Zenith Fund --------------------------------------------------------------------------------------------------------------------------------- Salomon MFS State Street FI Brothers Salomon Alger MFS Research Research Structured Harris Oakmark Strategic Bond Brothers Equity Growth Investors Trust Managers Bond Income Equity Focused Value Opportunities U.S. Government Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------------- --------------- -------------- ---------------- -------------- ------------------ ---------------- ---------------- <S> <C> <C> <C> <C> <C> <C> <C> 589 104 47 5,564 12 76 177 340 $5.06 $6.54 to $6.84 $5.29 to $6.86 $12.18 to $25.85 $6.59 to $8.32 $167.13 to $169.65 $12.12 to $12.30 $12.72 to $12.91 $2,983 $694 $314 $93,158 $93 $12,879 $2,174 $4,365 0.00% 0.72% 0.30% 5.72% 0.89% 0.18% 6.33% 3.47% 0.60% 0.60% to 0.90% 0.60% to 0.90% 0.60% to 0.90% 0.60% to 0.90% 0.90% 0.90% 0.90% -33% -21% to -20% -25% to -24% 7% to 8% -19% to -17% -10% to -9% 9% to 10% 7% to 8% 6 43 13 4,202 3 23 41 71 $7.57 $8.19 to $8.57 $6.97 to $9.04 $11.23 to $24.08 $8.19 $184.98 to $186.09 $11.15 to $11.22 $11.89 to $11.96 $45 $322 $151 $79,483 $25 $4,215 $465 $849 0.00% 0.00% 0.25% 5.64% to 7.28% 0.00% 0.00% 0.00% 0.00% 0.60% 0.60% to 0.90% 0.60% to 0.90% 0.45% to 0.90% 0.60% 0.90% 0.90% 0.90% -16% -14% to -3% -17% to -14% 7% to 8% -11% 12% to 13% 3% to 4% 4% </TABLE> F-77

NOTES TO FINANCIAL STATEMENTS -- (Continued) 6. UNIT VALUES -- (Continued) <TABLE> <CAPTION> Zenith Fund Alliance Fund ------------------------------- ----------------------------------- State Street FI Alliance Research Mid Cap Growth & Alliance Alliance Money Market Opportunities Income Premier Growth Technology Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- -------------- --------- -------------- ---------- <S> <C> <C> <C> <C> <C> 2002 Units (In Thousands)............................. 1,981 21 150 9 6 Unit Value (1)................................... $13.09 to $15.93 $8.14 to $8.19 $7.92 $4.94 $3.16 Net Assets (In Thousands)........................ $30,811 $168 $1,191 $42 $18 Investment Income Ratio to Average Net Assets (2) 1.57% 0.00% 3.31% 0.00% 5.08% Expenses as a Percent of Average Net Assets (3).. 0.45% to 0.90% 0.90% 0.60% 0.60% 0.60% Total Return (4)................................. 0% to 1% -19% to -18% -22% -31% -42% 2001 Units (In Thousands)............................. 2,156 -- 65 14 2 Unit Value (1)................................... $14.88 to $15.85 $ -- $10.19 $7.15 $5.43 Net Assets (In Thousands)........................ $32,726 $ -- $656 $98 $13 Investment Income Ratio to Average Net Assets (2) 4.18% -- 0.91% 0.00% 6.23% Expenses as a Percent of Average Net Assets (3).. 0.60% to 0.90% -- 0.60% 0.60% 0.60% Total Return (4)................................. 3% to 4% -- 2% -14% -35% </TABLE> -------- (1) Metropolitan Life sells a number of variable life products which have unique combinations of features and fees that are charged against the contract owners' 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 mutual 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 charges, that result in direct reductions in the unit value. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-accounts invest. (3) These ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units, and expenses of the underlying fund, are excluded. (4) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deduction for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. F-78

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Fidelity Fund American Fund Met Investors Fund ------------------------------ -------------------------------------------------- ------------------------ Fidelity VIP American Fidelity Asset Fidelity American American Funds JPM MFS VIP Manager VIP Funds Funds Global Enhanced Mid Cap Contrafund Growth Growth Growth Growth-Income Small Cap Index Growth Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ---------- --------- --------- ---------------- ---------------- ---------------- --------- -------------- <S> <C> <C> <C> <C> <C> <C> <C> 35 20 28 221 287 203 1 294 $7.16 $6.50 $4.72 $44.64 to $45.32 $28.98 to $29.42 $ 9.90 to $10.05 $6.09 $4.62 to $4.69 $249 $131 $134 $9,992 $8,408 $2,033 $8 $1,373 0.14% 3.23% 0.12% 0.05% 1.74% 0.81% 1.78% 0.82% 0.60% 0.60% 0.60% 0.90% 0.90% 0.90% 0.60% 0.90% -10% -18% -30% -25% to -24% -19% to -18% -20% to -19% -25% -44% 3 13 13 53 68 49 1 68 $7.96 $7.89 $6.77 $59.63 to $59.99 $35.81 to $36.03 $12.34 to $12.41 $8.12 $8.32 to $8.37 $24 $95 $87 $3,176 $2,453 $619 $5 $564 0.00% 0.00% 0.00% 4.25% 0.82% 1.15% 0.00% 0.00% 0.60% 0.60% 0.60% 0.90% 0.90% 0.90% 0.60% 0.90% -12% -10% -20% -15% to -14% -3% -9% to -8% -9% -16% to -15% </TABLE> F-79

NOTES TO FINANCIAL STATEMENTS -- (Continued) 6. UNIT VALUES -- (Continued) <TABLE> <CAPTION> Met Investors Fund --------------------------------------------------------------- MFS Lord Abbett Research PIMCO Total PIMCO Bond International Return Innovation Debenture Portfolio Portfolio Portfolio Portfolio -------------- ---------------- -------------- ---------------- <S> <C> <C> <C> <C> 2002 Units (In Thousands)............................. 95 534 416 748 Unit Value (1)................................... $7.41 to $7.52 $11.55 to $11.72 $3.01 to $3.06 $10.87 to $12.51 Net Assets (In Thousands)........................ $714 $6,214 $1,269 $8,597 Investment Income Ratio to Average Net Assets (2) 0.25% 0.00% 0.00% 11.43% Expenses as a Percent of Average Net Assets (3).. 0.90% 0.90% 0.90% 0.45% to 0.90% Total Return (4)................................. -12% 9% to 10% -51% 0% to 1% 2001 Units (In Thousands)............................. 28 103 121 774 Unit Value (1)................................... $8.44 to $8.50 $10.64 to $10.70 $6.15 to $6.19 $10.83 to $12.35 Net Assets (In Thousands)........................ $238 $1,103 $749 $8,845 Investment Income Ratio to Average Net Assets (2) 0.07% 2.37% 0.00% 11.73% Expenses as a Percent of Average Net Assets (3).. 0.90% 0.90% 0.90% 0.45% to 0.90% Total Return (4)................................. -13% to -12% 6% -25% -2% to -1% </TABLE> -------- (1) Metropolitan Life sells a number of variable life products which have unique combinations of features and fees that are charged against the contract owners' 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 mutual 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 charges, that result in direct reductions in the unit value. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-accounts invest. (3) These ratios represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense charges for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units, and expenses of the underlying fund, are excluded. (4) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deduction for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units. Inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. F-80

NOTES TO FINANCIAL STATEMENTS -- (Continued) <TABLE> <CAPTION> Met Investors Fund ----------------------------------------------------- Met/AIM Met/AIM Mid Cap Small Cap State Street Core Equity Growth Research Concentrated Portfolio Portfolio International Portfolio -------------- -------------- ----------------------- <S> <C> <C> 30 15 18 $8.53 to $8.58 $7.59 to $7.63 $8.37 to $8.42 $253 $116 $150 0.00% 0.00% 0.00% 0.90% 0.90% 0.90% -15% to -14% -24% -16% -- -- -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- </TABLE> F-81

NOTES TO FINANCIAL STATEMENTS -- (Concluded) 7. CHANGE OF PORTFOLIO NAME AND PORTFOLIO MERGERS Effective July 1, 2001, State Street Research became the sub-investment manager of the State Street Research Bond Income Portfolio (formerly Back Bay Advisers Bond Income Portfolio) of the New England Zenith Series Fund. Effective May 1, 2001, State Street Research Growth Portfolio changed its name to State Street Research Investment Trust Portfolio. Effective April 29, 2002, State Street Research Income Portfolio and State Street Research Money Market Portfolio of the Metropolitan Fund were merged respectively into the State Street Research Bond Income Portfolio and the State Street Research Money Market Portfolio of the Zenith Fund. Effective April 29, 2002, Loomis Sayles High Yield Bond Portfolio of the Metropolitan Fund was merged into the Lord Abbett Bond Debenture Portfolio of the Met Investors Fund. Effective May 1, 2002, State Street Research Aurora Small Cap Value Portfolio and the Harris Oakmark Mid Cap Value Portfolio changed their names to State Street Research Aurora Portfolio and Harris Oakmark Focused Value Portfolio, respectively. F-82

EQUITY OPTIONS VARIABLE ADDITIONAL INSURANCE DIVIDEND OPTION AND VARIABLE ADDITIONAL BENEFITS RIDER METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION (PART B) MAY 1, 2003 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the prospectus dated May 1, 2003 and should be read in conjunction therewith. A copy of the prospectus for Equity Options may be obtained by writing to Metlife, P.O. Box 336, Warwick, RI 02887-0336.

TABLE OF CONTENTS <Table> <S> <C> The Company and the Separate Account........................ SAI-3 Distribution of the Policies that Include the Equity Options................................................... SAI-3 Commissions............................................... SAI-3 Income Plans................................................ SAI-3 Limits to MetLife's Right to Challenge the Policy........... SAI-3 Misstatement of Age or Sex.................................. SAI-4 Reports..................................................... SAI-4 Showing Performance......................................... SAI-4 Personalized Illustrations.................................. SAI-4 Legal Notices............................................... SAI-5 Experts..................................................... SAI-5 Financial Statements........................................ SAI- </Table> SAI- 2

THE COMPANY AND THE SEPARATE ACCOUNT MetLife is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. Our main office is located at One Madison Avenue, New York, New York 10010. MetLife was formed under the laws of New York State in 1868. MetLife, Inc., through its subsidiaries and affiliates, provides insurance and other financial services to individual and group customers. We established the Separate Account under New York law on December 13, 1988. The Separate Account receives premium payments from the Equity Options described in the Prospectus and other variable life insurance policies that we issue. We have registered the Separate Account as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). DISTRIBUTION OF THE POLICIES THAT INCLUDE THE EQUITY OPTIONS We serve as the "principal underwriter," as defined in the 1940 Act, for the Equity Options. We are registered under the Securities Exchange Act of 1934 as a broker-dealer and are a member of the National Association of Securities Dealers, Inc. We perform the sales and administrative services for the Policies. We offer the Equity Options through licensed life insurance sales representatives who are either registered through us, or registered through other broker-dealers, including a wholly owned subsidiary. We offer the Equity Options to the public on a continuous basis. We anticipate continuing to offer the Equity Options, but reserve the right to discontinue the offering. COMMISSIONS We do not pay commissions for the sale of the Equity Additions. Commissions paid on the sale of Equity Enricher in 2000, 2001 and 2002 were $50,000, $10,000 and $53,000, respectively. INCOME PLANS Generally, you can receive the Policy's insurance proceeds or amounts paid upon surrender of your Policy or your Equity Option under an income plan instead of in a lump sum. Before you purchase an income plan you should consider: - The tax consequences associated with insurance or surrender proceeds, which can vary considerably, depending on whether a plan is chosen. You or your beneficiary should consult with a qualified tax adviser about tax consequences. - That your Policy or Equity Options will terminate at the time you purchase an income plan and you will receive a new contract, which describes the terms of the income plan. You should carefully review the terms of the new contract, because it contains important information about the terms and conditions of the income plan. - That these plans do not have a variable investment return. Generally, we currently make the following income plans available: - Interest income - Installment Income for a Stated Amount - Joint and Survivor Life Income - Installment Income for a Stated Period - Single Life Income-Guaranteed Payment Period - Single Life Income-Guaranteed Return LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY We will not contest your Policy after two years from the base policy's issue or reinstatement (excluding riders added later). SAI- 3

MISSTATEMENT OF AGE OR SEX We will adjust benefits to reflect the correct age and sex of the insured, if this information is not correct in any Policy application. REPORTS Generally, you will promptly receive statements confirming your significant transactions such as: - Transactions between an Equity Option and another part of the Policy. - Transfers between investment divisions. - Partial withdrawals. - Loan amounts you request. - Premium payments. If your premium payments are made through check-o-matic or another systematic payment method, we will not send you any confirmation in addition to the one you receive from your bank or employer. We will also send you an annual statement within 30 days after a Policy year that will summarize the year's transactions and include information on: - Deductions and charges. - Status of the death benefit. - Cash values. - Amounts in each investment division you are using. - Status of Policy loans. - Automatic loans to pay interest. - Information on your modified endowment contract status (if applicable). We will also send you a Fund's annual and semi-annual reports to shareholders. SHOWING PERFORMANCE We may provide information on the following: - Investment division performance ranking and rating information as it compares among similar investments as compiled by independent organizations. - Comparisons of the investment divisions with performance of similar investments and appropriate indices. - Our insurance company ratings that are assigned by independent rating agencies and that are relevant when considering our ability to honor our guarantees. - Personalized illustrations based on historical Separate Account performance. PERSONALIZED ILLUSTRATIONS We may provide personalized illustrations showing how the Equity Options work based on assumptions about investment returns and the Policy Owner's and/or insured's characteristics. The illustrations are intended to show how the death benefit and cash value could vary over an extended period of time assuming hypothetical gross rates of return (i.e., investment income and capital gains and losses, realized or unrealized) for the Separate Account equal to specified constant after-tax rates of return. One of the gross rates of return will be 0%. Gross rates of return do not reflect the deduction of any charges and expenses. The illustrations will be based on specified assumptions, such as face amount, premium payments, insured, underwriting class, and death benefit option. Illustrations will SAI- 4

disclose the specific assumptions upon which they are based. Values will be given based on guaranteed mortality and expense risk and other charges and may also be based on current mortality and expense risk and other charges. The illustrated death benefit and cash value for a hypothetical Equity Option would be different, either higher or lower, from the amounts shown in the illustration if the actual gross rates of return averaged the gross rates of return upon which the illustration is based, but varied above and below the average during the period, or if premiums were paid in other amounts or at other than annual intervals. For Equity Additions, they would also differ depending on the level of dividends declared by MetLife on the base policy. For Equity Enricher, they would also be different depending on the allocation of cash value among the Separate Account's investment divisions, if the actual gross rate of return for all investment divisions averaged 0%, 6% or 12%, but varied above or below that average for individual investment divisions. For both Equity Options, they would also differ if a Policy loan or partial surrender were made during the period of time illustrated, if the insured were female or in another risk classification, or if the Policies were issued in situations where distinctions between male and female insured were not permitted. LEGAL MATTERS Anne M. Goggin, Chief Counsel-Individual Business at MetLife, has passed upon the legality of the Policies, including the Equity Options. The law firm of Foley & Lardner, Washington, D.C., has advised us on certain matters relating to the federal securities laws. EXPERTS The financial statements included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, 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. Deloitte & Touche LLP's principal business address is 201 E. Kennedy Boulevard, Suite 1200, Tampa, Florida 33602. FINANCIAL STATEMENTS The financial statements of MetLife are attached to this Statement of Additional Information. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. SAI- 5

Independent Auditors' Report To the Board of Directors and Shareholder of Metropolitan Life Insurance Company: We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2002. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of Metropolitan Life Insurance Company and subsidiaries as of December 31, 2002 and 2001, and the consolidated results of their operations and their consolidated cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP New York, New York February 19, 2003 F-65

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2002 and 2001 (Dollars in millions, except share and per share data) <TABLE> <CAPTION> 2002 2001 -------- -------- <S> <C> <C> Assets Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $ 117,781 and $107,630, respectively). $124,525 $110,601 Equity securities, at fair value (cost: $1,242 and $2,421, respectively).................................. 1,286 3,027 Mortgage loans on real estate............................ 25,353 24,626 Policy loans............................................. 8,047 7,894 Real estate and real estate joint ventures held-for-investment.................................... 3,620 3,278 Real estate held-for-sale................................ 229 1,647 Other limited partnership interests...................... 2,380 1,637 Short-term investments................................... 1,199 1,168 Other invested assets.................................... 3,419 3,013 -------- -------- Total investments.................................... 170,058 156,891 Cash and cash equivalents................................... 1,106 3,932 Accrued investment income................................... 1,889 1,981 Premiums and other receivables.............................. 7,945 7,126 Deferred policy acquisition costs........................... 9,666 10,471 Other assets................................................ 4,819 4,750 Separate account assets..................................... 53,912 62,714 -------- -------- Total assets......................................... $249,395 $247,865 ======== ======== Liabilities and Stockholder's Equity Liabilities: Future policy benefits................................... $ 86,039 $ 83,493 Policyholder account balances............................ 54,464 54,764 Other policyholder funds................................. 6,206 6,001 Policyholder dividends payable........................... 1,025 1,042 Policyholder dividend obligation......................... 1,882 708 Short-term debt.......................................... 912 345 Long-term debt........................................... 2,624 2,380 Current income taxes payable............................. 873 162 Deferred income taxes payable............................ 1,947 1,893 Payables under securities loaned transactions............ 16,321 12,662 Other liabilities........................................ 6,848 6,981 Separate account liabilities............................. 53,912 62,714 -------- -------- Total liabilities.................................... 233,053 233,145 -------- -------- Commitments and contingencies (Note 11) Company-obligated mandatorily redeemable securities of subsidiary trusts......................................... 277 276 -------- -------- Stockholder's Equity: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding at December 31, 2002 and December 31, 2001. 5 5 Additional paid-in capital............................... 13,474 12,825 Retained earnings........................................ 708 -- Accumulated other comprehensive income................... 1,878 1,614 -------- -------- Total stockholder's equity........................... 16,065 14,444 -------- -------- Total liabilities and stockholder's equity........... $249,395 $247,865 ======== ======== </TABLE> See Accompanying Notes to Consolidated Financial Statements. F-66

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 2002, 2001 and 2000 (Dollars in millions) <TABLE> <CAPTION> 2002 2001 2000 ------- ------- ------- <S> <C> <C> <C> Revenues Premiums............................................ $18,470 $17,023 $16,263 Universal life and investment-type product policy fees.............................................. 1,918 1,874 1,820 Net investment income............................... 10,700 11,122 11,029 Other revenues...................................... 1,400 1,532 2,259 Net investment (losses) gains (net of amounts allocable to other accounts of $(139), $(33) and $(54), respectively).............................. (730) 927 (418) ------- ------- ------- Total revenues................................... 31,758 32,478 30,953 ------- ------- ------- Expenses Policyholder benefits and claims (excludes amounts directly related to net investment losses and gains of $(150), $(54) and $41, respectively)..... 18,860 18,265 16,935 Interest credited to policyholder account balances.. 2,711 3,035 2,935 Policyholder dividends.............................. 1,911 2,060 1,913 Payments to former Canadian policyholders........... -- -- 327 Demutualization costs............................... -- -- 230 Other expenses (excludes amounts directly related to net investment losses and gains of $11, $21 and $(95), respectively).......................... 6,589 6,920 7,308 ------- ------- ------- Total expenses................................... 30,071 30,280 29,648 ------- ------- ------- Income from continuing operations before provision for income taxes.................................. 1,687 2,198 1,305 Provision for income taxes.......................... 525 797 435 ------- ------- ------- Income from continuing operations................... 1,162 1,401 870 Income from discontinued operations, net of income taxes............................................. 450 86 79 ------- ------- ------- Net income.......................................... $ 1,612 $ 1,487 $ 949 ======= ======= ======= Net income after April 7, 2000 (date of demutualization) (Note 1)......................... $ 1,169 ======= </TABLE> See Accompanying Notes to Consolidated Financial Statements. F-67

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY For the Years Ended December 31, 2002, 2001 and 2000 (Dollars in millions) <TABLE> <CAPTION> Accumulated Other Comprehensive Income (Loss) ------------------------------------ Net Foreign Minimum Additional Unrealized Currency Pension Common Paid-in Retained Investment Translation Liability Stock Capital Earnings (Losses) Gains Adjustment Adjustment Total ------ ---------- -------- -------------- ----------- ---------- ------- <S> <C> <C> <C> <C> <C> <C> <C> Balance at December 31, 1999..................... $-- $ -- $ 14,100 $ (297) $ (94) $(19) $13,690 Policy credits and cash payments to eligible policyholders................................... (2,958) (2,958) Common stock issued in demutualization........... 5 10,917 (10,922) -- Capital contribution from the Holding Company......................................... 3,632 3,632 Dividends on common stock........................ (762) (762) Comprehensive income: Net loss before date of demutualization........ (220) (220) Net income after date of demutualization....... 1,169 1,169 Other comprehensive income: Unrealized investment gains, net of related offsets, reclassification adjustments and income taxes................................. 1,480 1,480 Foreign currency translation adjustments...... (6) (6) Minimum pension liability adjustment.......... (9) (9) ------- Other comprehensive income.................... 1,465 ------- Comprehensive income........................... 2,414 --- ------- -------- ------ ----- ---- ------- Balance at December 31, 2000..................... 5 14,549 407 1,183 (100) (28) 16,016 Sale of subsidiary to the Holding Company........ 96 96 Issuance of warrants--by subsidiary.............. 40 40 Dividends on common stock........................ (1,860) (1,894) (3,754) Comprehensive income: Net income..................................... 1,487 1,487 Other comprehensive income: Cumulative effect of change in accounting for derivatives, net of income taxes and reclassification adjustment.................. 22 22 Unrealized gains on derivative instruments, net of income taxes.......................... 24 24 Unrealized investment gains, net of related offsets, reclassification adjustments and income taxes................................. 570 570 Foreign currency translation adjustments...... (39) (39) Minimum pension liability adjustment.......... (18) (18) ------- Other comprehensive income.................... 559 ------- Comprehensive income........................... 2,046 --- ------- -------- ------ ----- ---- ------- Balance at December 31, 2001..................... 5 12,825 -- 1,799 (139) (46) 14,444 Sale of subsidiaries to the Holding Company...... 149 149 Capital contribution from the Holding Company......................................... 500 500 Dividends on common stock........................ (904) (904) Comprehensive income: Net income..................................... 1,612 1,612 Other comprehensive income: Unrealized losses on derivative instruments, net of income taxes.......................... (58) (58) Unrealized investment gains, net of related offsets, reclassification adjustments and income taxes................................. 250 250 Foreign currency translation adjustments...... 72 72 ------- Other comprehensive income.................... 264 ------- Comprehensive income........................... 1,876 --- ------- -------- ------ ----- ---- ------- Balance at December 31, 2002..................... $ 5 $13,474 $ 708 $1,991 $ (67) $(46) $16,065 === ======= ======== ====== ===== ==== ======= </TABLE> See Accompanying Notes to Consolidated Financial Statements F-68

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2002, 2001 and 2000 (Dollars in millions) <TABLE> <CAPTION> 2002 2001 2000 -------- -------- -------- <S> <C> <C> <C> Cash flows from operating activities Net income............................................................. $ 1,612 $ 1,487 $ 949 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expenses.............................. 383 318 363 Amortization of premiums and accretion of discounts associated with investments, net.................................................. (456) (358) (451) Losses (gains) from sales of investments and businesses, net........ 870 (894) 472 Interest credited to other policyholder account balances............ 2,711 3,035 2,935 Universal life and investment-type product policy fees.............. (1,918) (1,874) (1,820) Change in premiums and other receivables............................ (2,200) (612) 331 Change in deferred policy acquisition costs, net.................... (766) (553) (519) Change in insurance-related liabilities............................. 4,550 3,522 2,618 Change in income taxes payable...................................... 684 871 246 Change in other liabilities......................................... 32 (226) (997) Other, net.......................................................... (698) (920) (919) -------- -------- -------- Net cash provided by operating activities.............................. 4,804 3,796 3,208 -------- -------- -------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturities.................................................... 61,473 51,438 56,971 Equity securities................................................... 2,676 2,073 748 Mortgage loans on real estate....................................... 2,632 1,936 2,185 Real estate and real estate joint ventures.......................... 179 1,131 606 Other limited partnership interests................................. 340 396 422 Purchases of: Fixed maturities.................................................... (79,527) (51,417) (64,918) Equity securities................................................... (1,217) (3,045) (863) Mortgage loans on real estate....................................... (3,188) (3,412) (2,787) Real estate and real estate joint ventures.......................... (28) (665) (407) Other limited partnership interests................................. (447) (424) (660) Net change in short-term investments................................... (308) (303) 2,382 Purchase of businesses, net of cash received........................... -- -- (416) Proceeds from sales of businesses...................................... 749 831 877 Net change in payable under securities loaned transactions............. 3,659 361 5,840 Other, net............................................................. (814) (534) (821) -------- -------- -------- Net cash used in investing activities.................................. $(13,821) $ (1,634) $ (841) -------- -------- -------- </TABLE> See Accompanying Notes to Consolidated Financial Statements. F-69

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued) For the Years Ended December 31, 2002, 2001 and 2000 (Dollars in millions) <TABLE> <CAPTION> 2002 2001 2000 -------- -------- -------- <S> <C> <C> <C> Cash flows from financing activities Policyholder account balances: Deposits........................................................... $ 27,681 $ 29,171 $ 28,452 Withdrawals........................................................ (22,118) (25,593) (28,504) Net change in short-term debt......................................... 567 (740) (3,095) Long-term debt issued................................................. 537 353 1,214 Long-term debt repaid................................................. (221) (1,379) (124) Capital contribution from the Holding Company......................... 649 96 3,632 Net proceeds from issuance of company-obligated mandatorily redeemable securities of subsidiary trust...................................... -- 197 -- Cash payments to eligible policyholders............................... -- -- (2,550) Dividends on common stock............................................. (904) (3,754) (762) -------- -------- -------- Net cash provided by (used in) financing activities................... 6,191 (1,649) (1,737) -------- -------- -------- Change in cash and cash equivalents................................... (2,826) 513 630 Cash and cash equivalents, beginning of year.......................... 3,932 3,419 2,789 -------- -------- -------- Cash and cash equivalents, end of year................................ $ 1,106 $ 3,932 $ 3,419 ======== ======== ======== Supplemental disclosures of cash flow information: Cash paid (refunded) during the year for: Interest....................................................... $ 267 $ 336 $ 448 ======== ======== ======== Income taxes................................................... $ 96 $ (335) $ 256 ======== ======== ======== Non-cash transactions during the year: Policy credits to eligible policyholders....................... $ -- $ -- $ 408 ======== ======== ======== Business acquisitions--assets.................................. $ -- $ -- $ 22,936 ======== ======== ======== Business acquisitions--liabilities............................. $ -- $ -- $ 22,437 ======== ======== ======== Business dispositions--assets.................................. $ 17,276 $ 6,162 $ 1,184 ======== ======== ======== Business dispositions--liabilities............................. $ 16,547 $ 5,263 $ 1,014 ======== ======== ======== Real estate acquired in satisfaction of debt................... $ 30 $ 30 $ 24 ======== ======== ======== Mortgage note on sale of real estate........................... $ -- $ 1,530 $ -- ======== ======== ======== Purchase money mortgage on real estate sale.................... $ 954 $ -- $ 49 ======== ======== ======== </TABLE> See Accompanying Notes to Consolidated Financial Statements. F-70

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Accounting Policies Business Metropolitan Life Insurance Company ("Metropolitan Life") and its subsidiaries (the "Company") is a leading provider of insurance and other financial services to a broad section of individual and institutional customers. The Company offers life insurance, annuities, automobile and property insurance and mutual funds to individuals and group insurance, reinsurance, as well as retirement and savings products and services to corporations and other institutions. Metropolitan Life is a wholly-owned subsidiary of MetLife, Inc. ("MetLife" or the "Holding Company"). Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The New York Insurance Department (the "Department") recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company for determining solvency under the New York Insurance Law. No consideration is given by the Department to financial statements prepared in conformity with GAAP in making such determination. The accompanying consolidated financial statements include the accounts of Metropolitan Life and its subsidiaries, partnerships and joint ventures in which the Company has a majority voting interest. Closed block assets, liabilities, revenues and expenses are combined on a line by line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item. See Note 7. Intercompany accounts and transactions have been eliminated. Metropolitan Insurance and Annuity Company ("MIAC"), which was sold to MetLife in 2001, and Cova Corporation, MetLife Investors Group, Inc., MetLife International Holdings, Inc., Walnut Street Securities, Inc., Seguros Genesis S.A., MetLife Pensiones S.A. and Metropolitan Life Seguros de Vida S.A., which were sold to MetLife in 2002, are included in the accompanying Financial Statements until the date of sale. See Note 12. 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 interest, has influence over the partnership's operating and financial policies and does not have a controlling interest. The Company uses the cost method for minor interest investments and when it has virtually no influence over the partnership's operating and financial policies. Minority interest related to consolidated entities included in other liabilities was $481 million and $442 million at December 31, 2002 and 2001, respectively. Certain amounts in the prior years' consolidated financial statements have been reclassified to conform with the 2002 presentation. Summary of Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements. The critical accounting policies, estimates and related judgments underlying the Company's consolidated financial statements are summarized below. 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. F-71

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Investments The Company's principal investments are in fixed maturities, mortgage loans and real estate, all of which are exposed to three primary sources of investment risk: credit, interest rate and market valuation. The financial statement risks are those associated with the recognition of impairments and income, as well as the determination of fair values. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in fair value. 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 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; and (vi) other subjective factors, including concentrations and information obtained from regulators and rating agencies. In addition, the earnings on certain investments are dependent upon market conditions, which could result in prepayments and changes in amounts to be earned due to changing interest rates or equity markets. The determination of fair values in the absence of quoted market values is based on valuation methodologies, securities the Company deems to be comparable and assumptions deemed appropriate given the circumstances. The use of different methodologies and assumptions may have a material effect on the estimated fair value amounts. Derivatives The Company enters into freestanding derivative transactions primarily to manage the risk associated with variability in cash flows related to the Company's financial assets and liabilities or to changing fair values. The Company also purchases investment securities and issues certain insurance and reinsurance policies with embedded derivatives. The associated financial statement risk is the volatility in net income, which can result from (i) changes in fair value of derivatives not qualifying as accounting hedges, and (ii) ineffectiveness of designated hedges in an environment of changing interest rates or fair values. In addition, accounting for derivatives is complex, as evidenced by significant authoritative interpretations of the primary accounting standards which continue to evolve, as well as the significant judgments and estimates involved in determining fair value in the absence of quoted market values. These estimates are based on valuation methodologies and assumptions deemed appropriate in the circumstances. Such assumptions include estimated market volatility and interest rates used in the determination of fair value where quoted market values are not available. The use of different assumptions may have a material effect on the estimated fair value amounts. Deferred Policy Acquisition Costs The Company incurs significant costs in connection with acquiring new insurance business. These costs, which vary with, and are primarily related to, the production of new business, are deferred. The recovery of such costs is dependent on the future profitability of the related business. The amount of future profit is dependent principally upon investment returns, mortality, morbidity, persistency, expenses to administer the business creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns are most likely to impact the rate of amortization of such costs. The aforementioned factors enter into management's estimates of gross margins and profits, which generally are used to amortize such costs. Revisions to estimates result in changes to the amounts expensed in the reporting period in which the revisions are made and could result in the impairment of the asset and a charge to income if estimated future gross margins and profits are less than amounts deferred. In addition, the Company F-72

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) utilizes the reversion to the mean assumption, a standard industry practice, in its determination of the amortization of deferred policy acquisition costs. This practice assumes that the expectation for long-term appreciation in equity markets is not changed by minor short-term market fluctuations, but that it does change when large interim deviations have occurred. Future Policy Benefits The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, annuities and disability insurance. Generally, amounts are payable over an extended period of time and the profitability of the products is dependent on the pricing of the products. Principal assumptions used in pricing policies and in the establishment of liabilities for future policy benefits are mortality, morbidity, expenses, persistency, investment returns and inflation. The Company also establishes liabilities for unpaid claims and claims expenses for property and casualty insurance. Pricing of this insurance takes into account the expected frequency and severity of losses, the costs of providing coverage, competitive factors, characteristics of the insured and the property covered, and profit considerations. Liabilities for property and casualty insurance are dependent on estimates of amounts payable for claims reported but not settled and claims incurred but not reported. These estimates are influenced by historical experience and actuarial assumptions of current developments, anticipated trends and risk management strategies. Differences between the actual experience and assumptions used in pricing these policies and in the establishment of liabilities result in variances in profit and could result in losses. Reinsurance The Company enters into reinsurance transactions as both a provider and a purchaser of reinsurance. 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 policy benefits and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed above. Additionally, for each of its reinsurance contracts, the Company must determine if the contract provides indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. The Company must review all contractual features, particularly those that may limit the amount of insurance risk to which the Company is subject or features that delay the timely reimbursement of claims. If the Company determines that a contract does not expose it to a reasonable possibility of a significant loss from insurance risk, the Company records the contract using the deposit method of accounting. Litigation The Company is a party to a number of legal actions. Given the inherent unpredictability of litigation, it is difficult to estimate the impact of litigation on the Company's consolidated financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities related to certain lawsuits, including the Company's asbestos-related liability, are especially difficult to estimate due to the limitation of available data and uncertainty regarding numerous variables used to determine amounts recorded. The data and variables that impact the assumption used to estimate the Company's asbestos-related liability include the number of future claims, the cost to resolve claims, the disease mix and severity of disease, the jurisdiction of claims filed, tort reform efforts and the impact of any possible future adverse verdicts and their amounts. It is possible that an adverse outcome in certain of the Company's litigation, F-73

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) including asbestos-related cases, or the use of different assumptions in the determination of amounts recorded could have a material effect upon the Company's consolidated net income or cash flows in particular quarterly or annual periods. Employee Benefit Plans The Company sponsors pension and other retirement plans in various forms covering employees who meet specified eligibility requirements. The reported expense and liability associated with these plans requires an extensive use of assumptions which include the discount rate, expected return on plan assets and rate of future compensation increases as determined by the Company. Management determines these assumptions based upon currently available market and industry data, historical performance of the plan and its assets, and consultation with an independent consulting actuarial firm to aid it in selecting appropriate assumptions and valuing its related liabilities. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of the participants. These differences may have a significant effect on the Company's consolidated financial statements and liquidity. Significant Accounting Policies Investments 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 securities are recorded as a separate component of other comprehensive income or loss, net of policyholder related amounts and deferred income taxes. The cost of fixed maturity and equity securities is adjusted for impairments in value deemed to be other than temporary. These adjustments are recorded as investment losses. Investment gains and losses on sales of securities are determined on a specific identification basis. All security transactions are recorded on a trade date basis. Mortgage loans on real estate are stated at amortized cost, net of valuation allowances. Valuation allowances are established for the excess carrying value of the mortgage loan over its estimated fair value when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Valuation allowances are included in net investment gains and losses and are based upon the present value of expected future cash flows discounted at the loan's original effective interest rate or the collateral value if the loan is collateral dependent. Interest income earned on impaired loans is accrued on the principal amount of the loan based on the loan's contractual interest rate. However, interest ceases to be accrued for loans on which interest is generally more than 60 days past due and/or where the collection of interest is not considered probable. Cash receipts on impaired loans are recorded as a reduction of the recorded asset. Real estate held-for-investment including related improvements, is stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful life of the asset (typically 20 to 40 years). Real estate held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs. Real estate is not depreciated while it is classified as held-for-sale. Cost of real estate held-for-investment is adjusted for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Impaired real estate is written down to estimated fair value with the impairment loss being included in net investment gains and losses. Impairment losses are based upon the estimated fair value of real estate, which is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks. Real estate acquired upon F-74

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) foreclosure of commercial and agricultural mortgage loans is recorded at the lower of estimated fair value or the carrying value of the mortgage loan at the date of foreclosure. Policy loans are stated at unpaid principal balances. Short-term investments are stated at amortized cost, which approximates fair value. Other invested assets consist principally of leveraged leases and funds withheld at interest. The leveraged leases are recorded net of non-recourse debt. The Company participates in lease transactions which are diversified by geographic area. The Company regularly reviews residual values and writes down residuals to expected values as needed. Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. For agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets supporting the reinsured policies and equal to the net statutory reserves are withheld and continue to be legally owned by the ceding companies. The Company recognizes interest on funds withheld in accordance with the treaty terms as investment income is earned on the assets supporting the reinsured policies. Structured Investment Transactions and Variable Interest Entities The Company participates in structured investment transactions, primarily asset securitizations and structured notes. These transactions enhance the Company's total return of the investment portfolio principally by generating management fee income on asset securitizations and by providing equity-based returns on debt securities through structured notes and similar type instruments. The Company sponsors financial asset securitizations of high yield debt securities, investment grade bonds and structured finance securities and also is the collateral manager and a beneficial interest holder in such transactions. As the collateral manager, the Company earns management fees on the outstanding securitized asset balance, which are recorded in income as earned. When the Company transfers assets to a bankruptcy-remote special purpose entity ("SPE") and surrenders control over the transferred assets, the transaction is accounted for as a sale. Gains or losses on securitizations are determined with reference to the carrying amount of the financial assets transferred, which is allocated to the assets sold and the beneficial interests retained based on relative fair values at the date of transfer. Beneficial interests in securitizations are carried at fair value in fixed maturities. Income on the beneficial interests is recognized using the prospective method in accordance with Emerging Issues Task Force ("EITF") Issue No. 99-20, Recognition of Interest Income and Impairment on Certain Investments ("EITF 99-20"). The SPEs used to securitize assets are not consolidated by the Company because unrelated third parties hold controlling interests through ownership of equity in the SPEs, representing at least three percent of the value of the total assets of the SPE throughout the life of the SPE, and such equity class has the substantive risks and rewards of the residual interest of the SPE. The Company purchases or receives beneficial interests in SPEs, which generally acquire financial assets, including corporate equities, debt securities and purchased options. The Company has not guaranteed the performance, liquidity or obligations of the SPEs and the Company's exposure to loss is limited to its carrying value of the beneficial interests in the SPEs. The Company uses the beneficial interests as part of its risk management strategy, including asset-liability management. These SPEs are not consolidated by the Company because unrelated third parties hold controlling interests through ownership of equity in the SPEs, representing at least three percent of the value of the total assets of the SPE throughout the life of the SPE, and such equity class has the substantive risks and rewards of the residual interest of the SPE. The beneficial interests in SPEs where the Company exercises significant influence over the operating and financial policies of the SPE are accounted for in accordance with the equity method of accounting. Impairments of these beneficial interests are included in F-75

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) net investment gains and losses. The beneficial interests in SPEs where the Company does not exercise significant influence are accounted for based on the substance of the beneficial interest's rights and obligations. Beneficial interests are accounted for and are included in fixed maturities. These beneficial interests are generally structured notes, as defined by EITF Issue No. 96-12, Recognition of Interest Income and Balance Sheet Classification of Structured Notes, and their income is recognized using the retrospective interest method or the level yield method, as appropriate. Effective in 2003, Financial Accounting Standards Board ("FASB") Interpretation No. 46, Consolidation of Variable Interest Entities, and Interpretation of APB No. 51 ("FIN 46") will establish new accounting guidance relating to the consolidation of variable interest entities ("VIEs"). Certain of the asset-backed securitizations and structured investment transactions discussed above meet the definition of a VIE under FIN 46. In addition, certain investments in real estate joint ventures and other limited partnership interests also meet the VIE definition. The Company will be required to consolidate any VIE for which it is determined that the Company is the primary beneficiary. The Company is still in the process of evaluating its investments with regard to the implementation of FIN 46. The following table presents the total assets and the maximum exposure to loss relating to the VIEs that the Company believes it is reasonably possible it will need to consolidate in accordance with the provisions of FIN 46 at: <TABLE> <CAPTION> December 31, 2002 ------------------ Maximum Total Exposure to Assets Loss ------ ----------- (Dollars in millions) <S> <C> <C> Financial asset-backed securitizations and collateralized debt and bond obligations.......................................................... $1,719 $ 9(1) Other structured investment transactions............................... 89 38(2) Real estate joint ventures............................................. 443 196(3) Other limited partnership interests.................................... 864 167(3) ------ ---- Total............................................................... $3,115 $410 ====== ==== </TABLE> -------- (1) The maximum exposure to loss is based on the carrying value of retained interests. (2) The maximum exposure to loss is based on the carrying value of beneficial interests. (3) The maximum exposure to loss is based on the carrying value plus unfunded commitments reduced by amounts guaranteed by other partners. Derivative Instruments The Company uses derivative instruments to manage risk through one of four principal risk management strategies: (i) the hedging of liabilities, (ii) invested assets, (iii) portfolios of assets or liabilities and (iv) firm commitments and forecasted transactions. Additionally, the Company enters into income generation and replication derivative transactions as permitted by its derivatives use plan that was approved by the New York Insurance Department (the "Department"). The Company's derivative hedging strategy employs a variety of instruments, including financial futures, financial forwards, interest rate, credit default and foreign currency swaps, foreign currency forwards contracts, and options, including caps and floors. On the date the Company enters into a derivative contract, management designates the derivative as a hedge of the identified exposure (fair value, cash flow or foreign currency). If a derivative does not qualify as a hedge, F-76

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) according to Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended ("SFAS 133"), the derivative is recorded at fair value and changes in its fair value are generally reported in net investment gains or losses. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. In this documentation, the Company specifically identifies the asset, liability, firm commitment, or forecasted transaction that has been designated as a hedged item and states how the hedging instrument is expected to hedge the risks related to the hedged item. The Company formally measures effectiveness of its hedging relationships both at the hedge inception and on an ongoing basis in accordance with its risk management policy. The Company generally determines hedge effectiveness based on total changes in fair value of a derivative instrument. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item, (ii) the derivative expires or is sold, terminated, or exercised, (iii) the derivative is de-designated as a hedge instrument, (iv) it is probable that the forecasted transaction will not occur, (v) a hedged firm commitment no longer meets the definition of a firm commitment, or (vi) management determines that designation of the derivative as a hedge instrument is no longer appropriate. The Company designates and accounts for the following as cash flow hedges, when they have met the effectiveness requirements of SFAS 133: (i) various types of interest rate swaps to convert floating rate investments to fixed rate investments, (ii) receive U.S. dollar fixed on foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments, (iii) foreign currency forwards to hedge the exposure of future payments or receipts in foreign currencies, and (iv) other instruments to hedge the cash flows of various other forecasted transactions. For all qualifying and highly effective cash flow hedges, the effective portion of changes in fair value of the derivative instrument is reported in other comprehensive income or loss. The ineffective portion of changes in fair value of the derivative instrument is reported in net investment gains or losses. Hedged forecasted transactions, other than the receipt or payment of variable interest payments, are not expected to occur more than 12 months after hedge inception. The Company designates and accounts for the following as fair value hedges when they have met the effectiveness requirements of SFAS 133: (i) various types of interest rate swaps to convert fixed rate investments to floating rate investments, (ii) receive U.S. dollar floating on foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments, and (iii) other instruments to hedge various other fair value exposures of investments. For all qualifying and highly effective fair value hedges, the changes in fair value of the derivative instrument are reported as net investment gains or losses. In addition, changes in fair value attributable to the hedged portion of the underlying instrument are reported in net investment gains and losses. When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair value hedge, the derivative continues to be carried on the consolidated balance sheet at its fair value, but the hedged asset or liability will no longer be adjusted for changes in fair value. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, the derivative continues to be carried on the consolidated balance sheet at its fair value, and any asset or liability that was recorded pursuant to recognition of the firm commitment is removed from the consolidated balance sheet and recognized as a net investment gain or loss in the current period. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative continues to be carried on the consolidated balance sheet at its fair value, and gains and losses that were accumulated in other comprehensive income or loss are recognized immediately in net investment gains or losses. When the hedged forecasted F-77

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) transaction is no longer probable, but is reasonably possible, the accumulated gain or loss remains in other comprehensive income or loss and is recognized when the transaction affects net income or loss; however, prospective hedge accounting for the transaction is terminated. In all other situations in which hedge accounting is discontinued, the derivative is carried at its fair value on the consolidated balance sheet, with changes in its fair value generally recognized in the current period as net investment gains or losses. The Company may enter into contracts that are not themselves derivative instruments but contain embedded derivatives. For each contract, the Company assesses whether the economic characteristics of the embedded derivative are clearly and closely related to those of the host contract and determines whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. If it is determined that the embedded derivative possesses economic characteristics that 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 separated from the host contract and accounted for as a stand-alone derivative. Such embedded derivatives are recorded on the consolidated balance sheet at fair value and changes in their fair value are recorded currently in net investment gains or 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 consolidated balance sheet at fair value, with changes in fair value recognized in the current period as net investment gains or losses. The Company also uses derivatives to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These securities, called replication synthetic asset transactions ("RSATs"), are a combination of a derivative and a cash security to synthetically create a third replicated security. These derivatives are not designated as hedges. As of December 31, 2002 and 2001, 19 and 15, respectively, of such RSATs, with notional amounts totaling $285 million and $205 million, respectively, have been created through the combination of a credit default swap and a U.S. Treasury security. The Company records the premiums received on the credit default swaps in investment income over the life of the contract and changes in fair value are recorded in net investment gains and losses. The Company enters into written covered calls and net written covered collars to generate additional investment income on the underlying assets it holds. These derivatives are not designated as hedges. The Company records the premiums received as net investment income over the life of the contract and changes in fair value of such options and collars as net investment gains and losses. Cash and Cash Equivalents The Company considers all investments purchased with an original maturity of three months or less to be cash equivalents. Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using either the straight-line or sum-of-the-years-digits method over the estimated useful lives of the assets. The estimated life for a company occupied real estate property is 40 years. Estimated lives range from five to ten years for leasehold improvements and three to five years for all other property and equipment. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $368 million and $546 million at December 31, 2002 and 2001, respectively. Related depreciation and amortization expense was $81 million, $96 million and $90 million for the years ended December 31, 2002, 2001 and 2000, respectively. F-78

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a three-year period using the straight-line method. Accumulated amortization of capitalized software was $297 million and $165 million at December 31, 2002 and 2001, respectively. Related amortization expense was $153 million, $106 million and $45 million for the years ended December 31, 2002, 2001 and 2000, respectively. Deferred Policy Acquisition Costs The costs of acquiring new insurance business that vary with, and are primarily related to, the production of new business are deferred. Such costs, which consist principally of commissions, agency and policy issue expenses, are amortized with interest over the expected life of the contract for participating traditional life, universal life and investment-type products. Generally, deferred policy acquisition costs are amortized in proportion to the present value of estimated gross margins or profits from investment, mortality, expense margins and surrender charges. Interest rates are based on rates in effect at the inception or acquisition of the contracts. Actual gross margins or profits can vary from management's estimates resulting in increases or decreases in the rate of amortization. Management utilizes the reversion to the mean assumption, a standard industry practice, in its determination of the amortization of deferred policy acquisition costs. This practice assumes that the expectation for long-term appreciation is not changed by minor short-term market fluctuations, but that it does change when large interim deviations have occurred. Management periodically updates these estimates and evaluates the recoverability of deferred policy acquisition costs. When appropriate, management revises its assumptions of the estimated gross margins or profits of these contracts, and the cumulative amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. Deferred policy acquisition costs for non-participating traditional life, non-medical health and annuity policies with life contingencies are amortized in proportion to anticipated premiums. Assumptions as to anticipated premiums are made at the date of policy issuance or acquisition and are consistently applied during the lives of the contracts. Deviations from estimated experience are included in operations when they occur. For these contracts, the amortization period is typically the estimated life of the policy. Policy acquisition costs related to internally replaced contracts are expensed at the date of replacement. Deferred policy acquisition costs for property and casualty insurance contracts, which are primarily comprised of commissions and certain underwriting expenses, are deferred and amortized on a pro rata basis over the applicable contract term or reinsurance treaty. Value of business acquired ("VOBA"), included as part of deferred policy acquisition costs, represents the present value of future profits generated from existing insurance contracts in force at the date of acquisition and is amortized over the expected policy or contract duration in relation to the present value of estimated gross profits from such policies and contracts. F-79

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Information regarding VOBA and deferred policy acquisition costs for the year ended December 31, 2000 is as follows: <TABLE> <CAPTION> Deferred Value of Policy Business Acquisition Acquired Costs Total -------- ----------- ------- (Dollars in millions) <S> <C> <C> <C> Balance at January 1, 2000.............. $ 632 $ 8,438 $ 9,070 Capitalizations......................... -- 1,805 1,805 Acquisitions............................ 1,480 201 1,681 ------ ------- ------- Total............................ 2,112 10,444 12,556 ------ ------- ------- Amortization allocated to: Net investment gains (losses)........ 28 (123) (95) Unrealized investment gains.......... 93 503 596 Other expenses....................... 310 1,162 1,472 ------ ------- ------- Total amortization............... 431 1,542 1,973 ------ ------- ------- Dispositions and other.................. (7) (79) (86) ------ ------- ------- Balance at December 31, 2000............ $1,674 $ 8,823 $10,497 ====== ======= ======= </TABLE> The estimated future amortization expense allocated to other expenses for VOBA is $83 million in 2003, $78 million in 2004, $73 million in 2005, $70 million in 2006 and $64 million in 2007. Amortization of VOBA and deferred policy acquisition costs is allocated to (i) investment gains and losses to provide consolidated statement of income information regarding the impact of such gains and losses on the amount of the amortization, (ii) unrealized investment gains and losses to provide information regarding the amount of deferred policy acquisition costs that would have been amortized if such gains and losses had been recognized, and (iii) other expenses to provide amounts related to the gross margins or profits originating from transactions other than investment gains and losses. Investment gains and losses related to certain products have a direct impact on the amortization of VOBA and deferred policy acquisition costs. Presenting investment gains and losses net of related amortization of VOBA and deferred policy acquisition costs provides information useful in evaluating the operating performance of the Company. This presentation may not be comparable to presentations made by other insurers. Goodwill The excess of cost over the fair value of net assets acquired ("goodwill") is included in other assets. On January 1, 2002, the Company adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, ("SFAS 142"). In accordance with SFAS 142, goodwill is not amortized but is tested for impairment at least annually to determine if a write down of the cost of the asset is required. Impairments are recognized in operating results when the carrying amount of goodwill exceeds its implied fair value. Prior to the adoption of SFAS 142, goodwill was amortized on a straight-line basis over a period ranging from ten to 30 years and impairments were recognized in operating results when permanent diminution in value was deemed to have occurred. F-81

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Changes in goodwill were as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ----- ---- ----- (Dollars in millions) <S> <C> <C> <C> Net balance at January 1.. $ 575 $703 $ 611 Acquisitions.............. 7 20 286 Amortization.............. -- (47) (50) Impairment losses......... (2) (61) -- Dispositions and other.... (175) (40) (144) ----- ---- ----- Net balance at December 31 $ 405 $575 $ 703 ===== ==== ===== </TABLE> Accumulated amortization from goodwill was as follows at: <TABLE> <CAPTION> December 31, ------------------ 2002 2001 ---- ---- (Dollars in millions) <S> <C> <C> Accumulated amortization $71 $100 === ==== </TABLE> Future Policy Benefits and Policyholder Account Balances Future policy benefit liabilities for participating traditional life insurance policies are equal to the aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the nonforfeiture interest rate, ranging from 3% to 8%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts), (ii) the liability for terminal dividends, and (iii) premium deficiency reserves, which are established when the liabilities for future policy benefits plus the present value of expected future gross premiums are insufficient to provide for expected future policy benefits and expenses after deferred policy acquisition costs are written off. Future policy benefit liabilities for traditional annuities are equal to accumulated contractholder fund balances during the accumulation period and the present value of expected future payments after annuitization. Interest rates used in establishing such liabilities range from 3% to 9%. Future policy benefit liabilities for non-medical health insurance are calculated using the net level premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rates used in establishing such liabilities range from 3% to 7%. Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rates used in establishing such liabilities range from 3% to 8%. Policyholder account balances for universal life and investment-type contracts are equal to the policy account values, which consist of an accumulation of gross premium payments plus credited interest, ranging from 1% to 13%, less expenses, mortality charges, and withdrawals. The liability for unpaid claims and claim expenses for property and casualty insurance represents the amount estimated for claims that have been reported but not settled and claims incurred but not reported. Liabilities for unpaid claims are estimated based upon the Company's historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs, F-82

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) reduced for anticipated salvage and subrogation. Revisions of these estimates are included in operations in the year such refinements are made. Recognition of Insurance Revenue and Related Benefits Premiums related to traditional life and annuity policies with life contingencies are recognized as revenues when due. Benefits and expenses are provided against such revenues to recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life 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 recognized 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 related to property and casualty contracts are recognized as revenue on a pro rata basis over the applicable contract term. Unearned premiums are included in other liabilities. Other Revenues Other revenues include asset management and advisory fees, broker/dealer commissions and fees, and administrative service fees. Such fees and commissions are recognized in the period in which services are performed. Other revenues also include changes in account value relating to corporate-owned life insurance ("COLI"). Under certain COLI contracts, if the Company reports certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject to market value adjustment, which could result in a reduction of the account value. Policyholder Dividends Policyholder dividends are approved annually by the insurance subsidiaries' boards of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the appropriate level of statutory surplus to be retained by the insurance subsidiaries. Participating Business Participating business represented approximately 16% and 18% of the Company's life insurance in-force, and 90% and 82% of the number of life insurance policies in-force, at December 31, 2002 and 2001, respectively. Participating policies represented approximately 43% and 46%, 44% and 46%, and 47% and 50% of gross and net life insurance premiums for the years ended December 31, 2002, 2001 and 2000, respectively. The percentages indicated are calculated excluding the business of the Reinsurance segment. Income Taxes Metropolitan Life, the Holding Company and its includable life insurance and non-life insurance subsidiaries file a consolidated U.S. federal income tax return in accordance with the provisions of the Internal F-83

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Revenue Code of 1986, as amended (the "Code"). Non-includable subsidiaries file either separate tax returns or separate consolidated tax returns. Under the Code, the amount of federal income tax expense incurred by mutual life insurance companies includes an equity tax calculated based upon a prescribed formula that incorporates a differential earnings rate between stock and mutual life insurance companies. Metropolitan Life has not been subject to the equity tax since the date of demutualization. The future tax consequences of temporary differences between financial reporting and tax bases of assets and liabilities are measured at the balance sheet dates and are recorded as deferred income tax assets and liabilities. Reinsurance The Company has reinsured certain of its life insurance and property and casualty insurance contracts with other insurance companies under various agreements. Amounts due from reinsurers are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Policy and contract liabilities are reported gross of reinsurance credits. Deferred policy acquisition costs are reduced by amounts recovered under reinsurance contracts. Amounts received from reinsurers for policy administration are reported in other revenues. The Company assumes and retrocedes financial reinsurance contracts, which represent low mortality risk reinsurance treaties. These contracts are reported as deposits and are included in other assets. The amount of revenue reported on these contracts represents fees and the cost of insurance under the terms of the reinsurance agreement. 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. Investments (stated at estimated fair value) and liabilities of the separate accounts are reported separately as assets and liabilities. Deposits to separate accounts, investment income and recognized and unrealized gains and losses on the investments of the separate accounts accrue directly to contractholders and, accordingly, are not reflected in the Company's consolidated statements of income and cash flows. Mortality, policy administration and surrender charges to all separate accounts are included in revenues. Stock Based Compensation The Company accounts for the stock-based compensation plans using the accounting method prescribed by Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees ("APB 25") and has included in Note 17 the pro forma disclosures required by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). Foreign Currency Translation Balance sheet accounts of foreign operations are translated at the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing during the year. The local currencies of foreign operations are the functional currencies unless the local economy is highly inflationary. Translation adjustments are charged or credited directly to other comprehensive income or loss. Gains and losses from foreign currency transactions are reported in earnings. Discontinued Operations The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale on or after January 1, 2002 are reported in discontinued operations if the operations and cash flows F-84

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. Demutualization and Initial Public Offering On April 7, 2000 (the "date of demutualization"), Metropolitan Life converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife. The conversion was pursuant to an order by the New York Superintendent of Insurance (the "Superintendent") approving Metropolitan Life's plan of reorganization, as amended (the "plan"). On the date of demutualization, policyholders' membership interests in Metropolitan Life were extinguished and eligible policyholders received, in exchange for their interests, trust interests representing 494,466,664 shares of common stock of MetLife to be held in a trust, cash payments aggregating $2,550 million and adjustments to their policy values in the form of policy credits aggregating $408 million, as provided in the plan. In addition, Metropolitan Life's Canadian branch made cash payments of $327 million in the second quarter of 2000 to holders of certain policies transferred to Clarica Life Insurance Company in connection with the sale of a substantial portion of Metropolitan Life's Canadian operations in 1998, as a result of a commitment made in connection with obtaining Canadian regulatory approval of that sale. Application of Accounting Pronouncements In January 2003, the FASB issued FIN 46 which requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The Company is in the process of assessing the impact of FIN 46 on its consolidated financial statements. Certain disclosure provisions of FIN 46 were required for December 31, 2002 financial statements. See "Structured Investment Transactions and Variable Interest Entities." As of December 31, 2002, the FASB is deliberating on a proposed statement that would further amend SFAS 133. The proposed statement will address certain SFAS 133 Implementation Issues. The proposed statement is not expected to have a significant impact on the Company's consolidated financial statements. In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation --Transition and Disclosure ("SFAS 148"), which provides guidance on how to transition from the intrinsic value method of accounting for stock-based employee compensation under APB 25 to the fair value method of accounting of SFAS 123, if a company so elects. Effective January 1, 2003, the Company adopted the fair value method of recording stock options under SFAS 123. In accordance with alternatives available under the transitional guidance of SFAS 148, the Company has elected to apply the fair value method of accounting for stock options prospectively to awards granted subsequent to January 1, 2003. As permitted, options granted prior to January 1, 2003, will continue to be accounted for under APB 25, and the pro forma impact of accounting for these options at fair value will continue to be disclosed in the consolidated financial statements until the last of those options vest in 2005. In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires entities to establish liabilities for certain types of guarantees, and expands financial statement disclosures F-85

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) for others. Disclosure requirements under FIN 45 are effective for financial statements of annual periods ending after December 15, 2002 and are applicable to all guarantees issued by the guarantor subject to the provisions of FIN 45. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Company does not expect the initial adoption of FIN 45 to have a significant impact on the Company's consolidated financial statements. The adoption of FIN 45 requires the Company to include disclosures in its consolidated financial statements related to guarantees. See Note 11. In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("SFAS 146"), which must be adopted for exit and disposal activities initiated after December 31, 2002. SFAS 146 will require that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred rather than at the date of an entity's commitment to an exit plan as required by EITF 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) ("EITF 94-3"). As discussed in Note 13, in the fourth quarter of 2001, the Company recorded a charge of $330 million, net of income taxes of $169 million, associated with business realignment initiatives using the EITF 94-3 accounting guidance. In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("SFAS 145"). In addition to amending or rescinding other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions, SFAS 145 generally precludes companies from recording gains and losses from the extinguishment of debt as an extraordinary item. SFAS 145 also requires sale-leaseback treatment for certain modifications of a capital lease that result in the lease being classified as an operating lease. SFAS 145 is effective for fiscal years beginning after May 15, 2002, and the initial application of this standard did not have a significant impact on the Company's consolidated financial statements. Effective January 1, 2002, the Company adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 provides a single model for accounting for long-lived assets to be disposed of by superseding SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of ("SFAS 121"), and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations -- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions ("APB 30"). Under SFAS 144, discontinued operations are measured at the lower of carrying value or fair value less costs to sell, rather than on a net realizable value basis. Future operating losses relating to discontinued operations also are no longer recognized before they occur. SFAS 144 (i) broadens the definition of a discontinued operation to include a component of an entity (rather than a segment of a business); (ii) requires long-lived assets to be disposed of other than by sale to be considered held and used until disposed; and (iii) retains the basic provisions of (a) APB 30 regarding the presentation of discontinued operations in the statements of income, (b) SFAS 121 relating to recognition and measurement of impaired long-lived assets (other than goodwill), and (c) SFAS 121 relating to the measurement of long-lived assets classified as held-for-sale. Adoption of SFAS 144 did not have a material impact on the Company's consolidated financial statements other than the presentation as discontinued operations of net investment income and net investment gains related to operations of real estate on which the Company initiated disposition activities subsequent to January 1, 2002 and the classification of such real estate as held-for-sale on the consolidated balance sheets. See Note 20. Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). SFAS 142 eliminates the systematic amortization and establishes criteria for measuring the impairment of goodwill and certain other intangible assets by reporting unit. The Company did not amortize F-86

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) goodwill during 2002. Amortization of goodwill was $47 million and $50 million for the years ended December 31, 2001 and 2000, respectively. Amortization of other intangible assets was not material for the years ended December 31, 2002, 2001 and 2000. The Company has completed the required impairment tests of goodwill and indefinite-lived intangible assets. As a result of these tests, the Company recorded a $5 million charge to earnings relating to the impairment of certain goodwill assets in the third quarter of 2002 as a cumulative effect of a change in accounting. There was no impairment of identified intangible assets or significant reclassifications between goodwill and other intangible assets at January 1, 2002. Effective July 1, 2001, the Company adopted SFAS No. 141, Business Combinations ("SFAS 141"). SFAS 141 requires the purchase method of accounting for all business combinations and separate recognition of intangible assets apart from goodwill if such intangible assets meet certain criteria. In accordance with SFAS 141, the elimination of $5 million of negative goodwill was reported in income in the first quarter of 2002 as a cumulative effect of a change in accounting. In July 2001, the U.S. Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin ("SAB") No. 102, Selected Loan Loss Allowance and Documentation Issues ("SAB 102"). SAB 102 summarizes certain of the SEC's views on the development, documentation and application of a systematic methodology for determining allowances for loan and lease losses. The application of SAB 102 by the Company did not have a material impact on the Company's consolidated financial statements. Effective April 1, 2001, the Company adopted certain additional accounting and reporting requirements of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities--a Replacement of FASB Statement No. 125, relating to the derecognition of transferred assets and extinguished liabilities and the reporting of servicing assets and liabilities. The initial adoption of these requirements did not have a material impact on the Company's consolidated financial statements. Effective April 1, 2001, the Company adopted EITF 99-20, Recognition of Interest Income and Impairment on Certain Investments. This pronouncement requires investors in certain asset-backed securities to record changes in their estimated yield on a prospective basis and to apply specific evaluation methods to these securities for an other-than-temporary decline in value. The initial adoption of EITF 99-20 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2001, the Company adopted SFAS 133 which established new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The cumulative effect of the adoption of SFAS 133, as of January 1, 2001, resulted in a $33 million increase in other comprehensive income, net of income taxes of $18 million, and had no material impact on net income. The increase to other comprehensive income is attributable to net gains on cash flow-type hedges at transition. Also at transition, the amortized cost of fixed maturities decreased and other invested assets increased by $22 million, representing the fair value of certain interest rate swaps that were accounted for prior to SFAS 133 using fair value-type settlement accounting. During the year ended December 31, 2001, $18 million of the pre-tax gain reported in accumulated other comprehensive income at transition was reclassified into net investment income. The FASB continues to issue additional guidance relating to the accounting for derivatives under SFAS 133, which may result in further adjustments to the Company's treatment of derivatives in subsequent accounting periods. Effective October 1, 2000, the Company adopted SAB No. 101, Revenue Recognition in Financial Statements ("SAB 101"). SAB 101 summarizes certain of the Securities and Exchange Commission's views in F-87

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) applying GAAP to revenue recognition in financial statements. The requirements of SAB 101 did not have a material effect on the Company's consolidated financial statements. Effective January 1, 2000, the Company adopted Statement of Position ("SOP") No. 98-7, Accounting for Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk ("SOP 98-7"). SOP 98-7 provides guidance on the method of accounting for insurance and reinsurance contracts that do not transfer insurance risk, defined in the SOP as the deposit method. SOP 98-7 classifies insurance and reinsurance contracts for which the deposit method is appropriate into those that (i) transfer only significant timing risk, (ii) transfer only significant underwriting risk, (iii) transfer neither significant timing nor underwriting risk and (iv) have an indeterminate risk. Adoption of SOP 98-7 did not have a material effect on the Company's consolidated financial statements. 2. September 11, 2001 Tragedies On September 11, 2001 terrorist attacks occurred in New York, Washington, D.C. and Pennsylvania (the "tragedies") triggering a significant loss of life and property which had an adverse impact on certain of the Company's businesses. The Company has direct exposure to these events with claims arising from its Individual, Institutional, Reinsurance and Auto & Home insurance coverages, and it believes the majority of such claims have been reported or otherwise analyzed by the Company. The Company's original estimate of the total insurance losses related to the tragedies, which was recorded in the third quarter of 2001, was $208 million, net of income taxes of $117 million. Net income for the year ended December 31, 2002 includes a $17 million, net of income taxes of $9 million, benefit from the reduction of the liability associated with the tragedies. This revision of the liability is the result of an analysis completed during the fourth quarter of 2002, which focused on the emerging incidence experienced over the past 12 months associated with certain disability products. As of December 31, 2002, the Company's remaining liability for unpaid and future claims associated with the tragedies was $47 million, principally related to disability coverages. The estimate has been and will continue to be subject to revision in subsequent periods, as claims are received from insureds and the claims to reinsurers are identified and processed. Any revision to the estimate of gross losses and reinsurance recoveries in subsequent periods will affect net income in such periods. Reinsurance recoveries are dependent on the continued creditworthiness of the reinsurers, which may be adversely affected by their other reinsured losses in connection with the tragedies. The Company's general account investment portfolios include investments, primarily comprised of fixed maturities, in industries that were affected by the tragedies, including airline, other travel, lodging and insurance. Exposures to these industries also exist through mortgage loans and investments in real estate. The carrying value of the Company's investment portfolio exposed to industries affected by the tragedies was approximately $3.5 billion at December 31, 2002. The long-term effects of the tragedies on the Company's businesses cannot be assessed at this time. The tragedies have had significant adverse effects on the general economic, market and political conditions, increasing many of the Company's business risks. This may have a negative effect on MetLife's businesses and results of operations over time. In particular, the declines in share prices experienced after the reopening of the U.S. equity markets following the tragedies have contributed, and may continue to contribute, to a decline in separate account assets, which in turn may have an adverse effect on fees earned in the Company's businesses. In addition, the Company has received and expects to continue to receive disability claims from individuals resulting from the tragedies. F-88

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 3. Investments Fixed Maturities and Equity Securities Fixed maturities and equity securities at December 31, 2002 were as follows: <TABLE> <CAPTION> Cost or Gross Unrealized Amortized ---------------- Estimated Cost Gain Loss Fair Value --------- ------ ------ ---------- (Dollars in millions) <S> <C> <C> <C> <C> Fixed Maturities: Bonds: U.S. corporates securities........ $ 42,265 $2,914 $ 896 $ 44,283 Mortgage-backed securities........ 30,444 1,534 20 31,958 Foreign corporate securities...... 15,405 1,295 185 16,515 U.S. treasuries/agencies.......... 13,256 1,514 3 14,767 Asset-backed securities........... 8,070 204 181 8,093 Foreign government securities..... 4,649 516 50 5,115 States and political subdivisions. 2,575 181 20 2,736 Other fixed income assets......... 312 126 82 356 -------- ------ ------ -------- Total bonds..................... 116,976 8,284 1,437 123,823 Redeemable preferred stocks......... 805 13 116 702 -------- ------ ------ -------- Total fixed maturities............ $117,781 $8,297 $1,553 $124,525 ======== ====== ====== ======== Equity Securities: Common stocks....................... $ 827 $ 114 $ 80 $ 861 Nonredeemable preferred stocks...... 415 13 3 425 -------- ------ ------ -------- Total equity securities........... $ 1,242 $ 127 $ 83 $ 1,286 ======== ====== ====== ======== </TABLE> Fixed maturities and equity securities at December 31, 2001 were as follows: <TABLE> <CAPTION> Cost or Gross Unrealized Amortized ---------------- Estimated Cost Gain Loss Fair Value --------- ------ ------ ---------- (Dollars in millions) <S> <C> <C> <C> <C> Fixed Maturities: Bonds: U.S. corporates securities........ $ 41,552 $1,371 $ 671 $ 42,252 Mortgage-backed securities........ 24,579 839 190 25,228 Foreign corporate securities...... 15,682 657 528 15,811 U.S. treasuries/agencies.......... 7,923 1,007 42 8,888 Asset-backed securities........... 7,856 147 204 7,799 Foreign government securities..... 5,130 522 36 5,616 States and political subdivisions. 2,243 68 21 2,290 Other fixed income assets......... 1,881 284 211 1,954 -------- ------ ------ -------- Total bonds..................... 106,846 4,895 1,903 109,838 Redeemable preferred stocks.......... 784 12 33 763 -------- ------ ------ -------- Total fixed maturities............ $107,630 $4,907 $1,936 $110,601 ======== ====== ====== ======== Equity Securities: Common stocks....................... $ 1,938 $ 655 $ 75 $ 2,518 Nonredeemable preferred stocks...... 483 28 2 509 -------- ------ ------ -------- Total equity securities........... $ 2,421 $ 683 $ 77 $ 3,027 ======== ====== ====== ======== </TABLE> F-89

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The Company held foreign currency derivatives with notional amounts of $2,372 million and $1,958 million to hedge the exchange rate risk associated with foreign bonds at December 31, 2002 and 2001, respectively. The Company held fixed maturities at estimated fair values that were below investment grade or not rated by an independent rating agency that totaled $10,731 million and $9,618 million at December 31, 2002 and 2001, respectively. Non-income producing fixed maturities were $395 million and $236 million at December 31, 2002 and 2001, respectively. The cost or amortized cost and estimated fair value of bonds at December 31, 2002, by contractual maturity date (excluding scheduled sinking funds), are shown below: <TABLE> <CAPTION> Cost or Amortized Estimated Cost Fair Value --------- ---------- (Dollars in millions) <S> <C> <C> Due in one year or less.................... $ 3,702 $ 3,765 Due after one year through five years...... 22,212 23,250 Due after five years through ten years..... 20,504 21,985 Due after ten years........................ 32,044 34,772 -------- -------- Subtotal................................ 78,462 83,772 Mortgage-backed and asset-backed securities 38,514 40,051 -------- -------- Subtotal................................ 116,976 123,823 Redeemable preferred stock................. 805 702 -------- -------- Total fixed maturities.................. $117,781 $124,525 ======== ======== </TABLE> Bonds not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities may differ from contractual maturities due to the exercise of prepayment options. Sales of fixed maturities and equity securities classified as available-for-sale were as follows: <TABLE> <CAPTION> Years ended December 31, ------------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Proceeds............... $34,918 $27,576 $46,205 Gross investment gains. $ 1,683 $ 634 $ 599 Gross investment losses $ (973) $ (934) $(1,520) </TABLE> Gross investment losses above exclude writedowns recorded during 2002, 2001 and 2000 for other than temporarily impaired available-for-sale fixed maturities and equity securities of $1,342 million, $278 million and $324 million, respectively. Excluding investments in U.S. Treasury securities and obligations of U.S. government corporations and agencies, the Company is not exposed to any significant concentration of credit risk in its fixed maturities portfolio. Securities Lending Program The Company participates in securities lending programs whereby blocks of securities, which are included in investments, are loaned to third parties, primarily major brokerage firms. The Company requires a minimum F-90

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) of 102% of the fair value of the loaned securities to be separately maintained as collateral for the loans. Securities with a cost or amortized cost of $13,477 million and $11,416 million and an estimated fair value of $16,120 million and $12,066 million were on loan under the program at December 31, 2002 and 2001, respectively. The Company was liable for cash collateral under its control of $16,321 million and $12,662 million at December 31, 2002 and 2001, respectively. Security collateral on deposit from customers may not be sold or repledged and is not reflected in the consolidated financial statements. Structured Investment Transactions The Company securitizes high yield debt securities, investment grade bonds and structured finance securities. The Company has sponsored five securitizations with a total of approximately $1,719 million in financial assets as of December 31, 2002. Two of these transactions included the transfer of assets totaling approximately $289 million in 2001, resulting in the recognition of an insignificant amount of investment gains. The Company's beneficial interests in these SPEs as of December, 31, 2002 and 2001 and the related investment income for the years ended December 31, 2002, 2001 and 2000 were insignificant. The Company also invests in structured notes and similar type instruments, which generally provide equity-based returns on debt securities. The carrying value of such investments was approximately $870 million and $1.6 billion at December 31, 2002 and 2001, respectively. The related income recognized was $1 million, $44 million and $62 million for the years ended December 31, 2002, 2001 and 2000, respectively. Assets on Deposit and Held in Trust The Company had investment assets on deposit with regulatory agencies with a fair market value of $939 million and $835 million at December 31, 2002 and 2001, respectively. Company securities held in trust to satisfy collateral requirements had an amortized cost of $1,430 million and $1,336 million at December 31, 2002 and 2001, respectively. Mortgage Loans on Real Estate Mortgage loans on real estate were categorized as follows: <TABLE> <CAPTION> December 31, ------------------------------- 2002 2001 --------------- --------------- Amount Percent Amount Percent ------- ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> <C> Commercial mortgage loans.. $20,433 80% $19,503 79% Agricultural mortgage loans 5,042 20% 5,267 21% ------- ---- ------- ---- Total................... 25,475 100% 24,770 100% ======= ==== ======= ==== Less: Valuation allowances. 122 144 ------- ------- Mortgage loans.......... $25,353 $24,626 ======= ======= </TABLE> Mortgage loans on real estate are collateralized by properties primarily located throughout the United States. At December 31, 2002, approximately 18%, 13% and 7% of the properties were located in California, New York and Florida, respectively. Generally, the Company (as the lender) requires that a minimum of one-fourth of the purchase price of the underlying real estate be paid by the borrower. Mortgage loans at December 31, 2002 and 2001 include $1,515 million and $1,530 million, respectively from MIAC, a related party, in connection with MIAC's purchase of real estate from the Company in 2001. F-91

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Certain of the Company's real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgages were $620 million and $644 million at December 31, 2002 and 2001, respectively. Changes in mortgage loan valuation allowances were as follows: <TABLE> <CAPTION> Years ended December 31, -------------------- 2002 2001 2000 ---- ---- ---- (Dollars in millions) <S> <C> <C> <C> Balance at January 1...................... $144 $ 83 $ 90 Additions................................. 39 106 38 Deductions for writedowns and dispositions (56) (45) (74) (Dispositions) acquisitions of affiliates. (5) -- 29 ---- ---- ---- Balance at December 31.................... $122 $144 $ 83 ==== ==== ==== </TABLE> A portion of the Company's mortgage loans on real estate was impaired and consisted of the following: <TABLE> <CAPTION> December 31, ----------- 2002 2001 ---- ------ (Dollars in millions) <S> <C> <C> Impaired mortgage loans with valuation allowances... $604 $ 816 Impaired mortgage loans without valuation allowances 257 315 ---- ------ Total............................................... 861 1,131 Less: Valuation allowances on impaired mortgages.... 121 140 ---- ------ Impaired mortgage loans.......................... $740 $ 991 ==== ====== </TABLE> The average investment in impaired mortgage loans on real estate was $1,068 million, $938 million and $912 million for the years ended December 31, 2002, 2001 and 2000, respectively. Interest income on impaired mortgage loans was $88 million, $103 million and $80 million for the years ended December 31, 2002, 2001 and 2000, respectively. The investment in restructured mortgage loans on real estate was $410 million and $684 million at December 31, 2002 and 2001, respectively. Interest income of $44 million, $76 million and $77 million was recognized on restructured loans for the years ended December 31, 2002, 2001 and 2000, respectively. Gross interest income that would have been recorded in accordance with the original terms of such loans amounted to $41 million, $60 million and $74 million for the years ended December 31, 2002, 2001 and 2000, respectively. Mortgage loans on real estate with scheduled payments of 60 days (90 days for agriculture mortgages) or more past due or in foreclosure had an amortized cost of $28 million and $43 million at December 31, 2002 and 2001, respectively. F-92

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Real Estate and Real Estate Joint Ventures Real estate and real estate joint ventures consisted of the following: <TABLE> <CAPTION> December 31, -------------- 2002 2001 ------ ------ (Dollars in millions) <S> <C> <C> Real estate and real estate joint ventures held-for-investment $3,808 $3,435 Impairments................................................... (188) (157) ------ ------ Total...................................................... 3,620 3,278 ------ ------ Real estate held-for-sale..................................... 327 1,859 Impairments................................................... (82) (177) Valuation allowance........................................... (16) (35) ------ ------ Total...................................................... 229 1,647 ------ ------ Real estate and real estate joint ventures............. $3,849 $4,925 ====== ====== </TABLE> Accumulated depreciation on real estate was $1,319 million and $1,882 million at December 31, 2002 and 2001, respectively. Related depreciation expense was $180 million, $217 million and $224 million for the years ended December 31, 2002, 2001 and 2000, respectively. These amounts include $48 million, $79 million and $80 million of depreciation expense related to discontinued operations for the years ended December 31, 2002, 2001 and 2000, respectively. Real estate and real estate joint ventures were categorized as follows: <TABLE> <CAPTION> December 31, ----------------------------- 2002 2001 -------------- -------------- Amount Percent Amount Percent ------ ------- ------ ------- (Dollars in millions) <S> <C> <C> <C> <C> Office..... $2,244 58% $3,079 63% Retail..... 697 18% 779 16% Apartments. 454 12% 495 10% Land....... 87 2% 184 4% Agriculture 7 0% 14 0% Other...... 360 10% 374 7% ------ ---- ------ ---- Total... $3,849 100% $4,925 100% ====== ==== ====== ==== </TABLE> F-93

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The Company's real estate holdings are primarily located throughout the United States. At December 31, 2002, approximately 26%, 23% and 16% of the Company's real estate holdings were located in California, New York and Texas, respectively. Changes in real estate and real estate joint ventures held-for-sale valuation allowance were as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ---- ---- ---- (Dollars in millions) <S> <C> <C> <C> Balance at January 1...................... $ 35 $ 39 $ 34 Additions charged to operations........... 21 16 17 Deductions for writedowns and dispositions (40) (20) (12) ---- ---- ---- Balance at December 31.................... $ 16 $ 35 $ 39 ==== ==== ==== </TABLE> Investment income related to impaired real estate and real estate joint ventures held-for-investment was $40 million, $22 million and $11 million for the years ended December 31, 2002, 2001 and 2000, respectively. Investment income related to impaired real estate held-for-sale was $11 million, $31 million and $52 million for the years ended December 31, 2002, 2001 and 2000, respectively. The carrying value of non-income producing real estate and real estate joint ventures was $62 million and $9 million at December 31, 2002 and 2001, respectively. The Company owned real estate acquired in satisfaction of debt of $8 million and $49 million at December 31, 2002 and 2001, respectively. Leveraged Leases Leveraged leases, included in other invested assets, consisted of the following: <TABLE> <CAPTION> December 31, -------------------- 2002 2001 ------ ------ (Dollars in millions) <S> <C> <C> Investment............... $ 985 $1,070 Estimated residual values 428 505 ------ ------ Total................. 1,413 1,575 Unearned income.......... (368) (404) ------ ------ Leveraged leases...... $1,045 $1,171 ====== ====== </TABLE> The investment amounts set forth above are generally due in monthly installments. The payment periods generally range from two to 15 years, but in certain circumstances are as long as 30 years. These receivables are generally collateralized by the related property. The Company's deferred tax provision related to leveraged leases was $981 million and $1,077 million at December 31, 2002 and 2001, respectively. F-94

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Net Investment Income The components of net investment income were as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Fixed maturities................................. $ 7,861 $ 8,462 $ 8,529 Equity securities................................ 25 48 41 Mortgage loans on real estate.................... 1,840 1,838 1,693 Real estate and real estate joint ventures(1).... 756 910 990 Policy loans..................................... 512 527 515 Other limited partnership interests.............. 57 48 142 Cash, cash equivalents and short-term investments 224 264 271 Other............................................ 318 268 192 ------- ------- ------- Total......................................... 11,593 12,365 12,373 Less: Investment expenses(1)..................... 893 1,243 1,344 ------- ------- ------- Net investment income......................... $10,700 $11,122 $11,029 ======= ======= ======= </TABLE> -------- (1) Excludes amounts related to real estate held-for-sale presented as discontinued operations in accordance with SFAS 144. Net Investment (Losses) Gains Net investment (losses) gains, including changes in valuation allowances, were as follows: <TABLE> <CAPTION> Years ended December 31, ---------------------- 2002 2001 2000 ----- ------ ------- (Dollars in millions) <S> <C> <C> <C> Fixed maturities............................. $(862) $ (644) $(1,437) Equity securities............................ 230 66 192 Mortgage loans on real estate................ (21) (91) (18) Real estate and real estate joint ventures(1) (6) 1,626 101 Other limited partnership interests.......... (2) (161) (7) Sales of businesses.......................... (7) 25 632 Other........................................ (201) 73 65 ----- ------ ------- Total................................. (869) 894 (472) Amounts allocable to: Deferred policy acquisition costs......... (11) (21) 95 Participating contracts................... (7) (105) (126) Policyholder dividend obligation.......... 157 159 85 ----- ------ ------- Net investment (losses) gains......... $(730) $ 927 $ (418) ===== ====== ======= </TABLE> -------- (1) The amount presented for the year ended December 31, 2002 excludes amounts related to sales of real estate held-for-sale presented as discontinued operations in accordance with SFAS 144. Investment gains and losses are net of related policyholder amounts. The amounts netted against investment gains and losses are (i) amortization of deferred policy acquisition costs to the extent that such amortization results from investment gains and losses, (ii) adjustments to participating contractholder accounts when amounts equal to such investment gains and losses are applied to the contractholder's accounts, and (iii) adjustments to the F-95

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) policyholder dividend obligation resulting from investment gains and losses. This presentation may not be comparable to presentations made by other insurers. Real estate and real estate joint ventures net investment gains for 2001 include $1,630 million related to the sale of real estate to MIAC. Net Unrealized Investment Gains The components of net unrealized investment gains, included in accumulated other comprehensive income, were as follows: <TABLE> <CAPTION> Years ended December 31, ------------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Fixed maturities........................... $ 6,713 $ 2,971 $ 1,696 Equity securities.......................... 44 606 744 Derivatives................................ (24) 71 -- Other invested assets...................... 1 59 58 ------- ------- ------- Total............................... 6,734 3,707 2,498 ------- ------- ------- Amounts allocable to: Future policy benefit loss recognition.. (1,242) (30) (284) Deferred policy acquisition costs....... (366) (6) 113 Participating contracts................. (129) (127) (133) Policyholder dividend obligation........ (1,882) (708) (385) Deferred income taxes...................... (1,124) (1,037) (626) ------- ------- ------- Total............................... (4,743) (1,908) (1,315) ------- ------- ------- Net unrealized investment gains..... $ 1,991 $ 1,799 $ 1,183 ======= ======= ======= </TABLE> The changes in net unrealized investment gains were as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ------- ------ ------ (Dollars in millions) <S> <C> <C> <C> Balance at January 1................................................. $ 1,799 $1,183 $ (297) Unrealized investment gains during the year.......................... 2,803 1,391 3,298 Unrealized investment (losses) gains relating to: Future policy benefit (loss) gain recognition..................... (1,212) 254 (35) Deferred policy acquisition costs................................. (204) (128) (596) Participating contracts........................................... (2) 6 (15) Policyholder dividend obligation.................................. (1,174) (323) (385) Deferred income taxes................................................ (72) (475) (787) Unrealized investment gains (losses) of subsidiaries at date of sale, net of deferred income taxes....................................... 53 (109) -- ------- ------ ------ Balance at December 31............................................... $ 1,991 $1,799 $1,183 ======= ====== ====== Net change in unrealized investment gains............................ $ 192 $ 616 $1,480 ======= ====== ====== </TABLE> F-96

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 4. Derivative Instruments The table below provides a summary of the notional amount and fair value of derivative financial instruments held at December 31, 2002 and 2001: <TABLE> <CAPTION> 2002 2001 --------------------------- --------------------------- Current Market or Current Market Fair Value or Fair Value Notional ------------------ Notional ------------------ Amount Assets Liabilities Amount Assets Liabilities -------- ------ ----------- -------- ------ ----------- <S> <C> <C> <C> <C> <C> <C> Financial futures................ $ 4 $ -- $ -- $ -- $ -- $-- Interest rate swaps.............. 3,866 196 126 1,823 73 9 Floors........................... 325 9 -- 325 11 -- Caps............................. 7,770 -- -- 8,010 5 -- Financial forwards............... 1,870 -- 12 -- -- -- Foreign currency swaps........... 2,371 92 181 1,925 188 26 Options.......................... 78 9 -- 1,880 8 12 Foreign currency forwards........ 1 -- -- 33 4 -- Written covered calls............ -- -- -- 40 -- -- Credit default swaps............. 376 2 -- 270 -- -- ------- ---- ---- ------- ---- --- Total contractual commitments. $16,661 $308 $319 $14,306 $289 $47 ======= ==== ==== ======= ==== === </TABLE> The following is a reconciliation of the notional amounts by derivative type and strategy at December 31, 2002 and 2001: <TABLE> <CAPTION> December 31, 2001 Terminations/ December 31, 2002 Notional Amount Additions Maturities Notional Amount ----------------- --------- ------------- ----------------- (Dollars in millions) <S> <C> <C> <C> <C> BY DERIVATIVE TYPE Financial futures................ $ -- $ 760 $ 756 $ 4 Interest rate swaps.............. 1,823 3,005 962 3,866 Floors........................... 325 -- -- 325 Caps............................. 8,010 3,750 3,990 7,770 Financial forwards............... -- 2,870 1,000 1,870 Foreign currency swaps........... 1,925 760 314 2,371 Options.......................... 1,880 55 1,857 78 Foreign currency forwards........ 33 1 33 1 Written covered calls............ 40 -- 40 -- Credit default swaps............. 270 121 15 376 ------- ------- ------ ------- Total contractual commitments. $14,306 $11,322 $8,967 $16,661 ======= ======= ====== ======= BY DERIVATIVE STRATEGY Liability hedging................ 9,008 3,817 4,142 8,683 Invested asset hedging........... 4,768 4,488 3,972 5,284 Portfolio hedging................ 530 2,104 -- 2,634 Forecasted transaction hedging... -- 913 853 60 ------- ------- ------ ------- Total contractual commitments. $14,306 $11,322 $8,967 $16,661 ======= ======= ====== ======= </TABLE> F-97

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The following table presents the notional amounts of derivative financial instruments by maturity at December 31, 2002: <TABLE> <CAPTION> Remaining Life --------------------------------------------------------------------- One Year After One Year After Five Years or Less Through Five Years Through Ten Years After Ten Years Total -------- ------------------ ----------------- --------------- ------- (Dollars in millions) <S> <C> <C> <C> <C> <C> Financial futures........ $ 4 $ -- $ -- $ -- $ 4 Interest rate swaps...... 64 1,887 1,630 285 3,866 Floors................... -- -- 325 -- 325 Caps..................... 1,000 6,770 -- -- 7,770 Financial forwards....... 1,870 -- -- -- 1,870 Foreign currency swaps... 88 962 851 470 2,371 Options.................. 3 20 -- 55 78 Foreign currency forwards -- 1 -- -- 1 Written covered calls.... -- -- -- -- -- Credit default swaps..... 45 331 -- -- 376 ------ ------ ------ ---- ------- Total contractual commitments......... $3,074 $9,971 $2,806 $810 $16,661 ====== ====== ====== ==== ======= </TABLE> The following table presents the notional amounts and fair values of derivatives by type of hedge designation at December 31, 2002 and 2001: <TABLE> <CAPTION> 2002 2001 --------------------------- --------------------------- Fair Value Fair Value Notional ------------------ Notional ------------------ Amount Assets Liabilities Amount Assets Liabilities -------- ------ ----------- -------- ------ ----------- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> BY TYPE OF HEDGE Fair value...... $ 418 $ -- $ 64 $ -- $ -- $-- Cash flow....... 3,445 69 72 607 61 1 Non qualifying.. 12,798 239 183 13,699 228 46 ------- ---- ---- ------- ---- --- Total........ $16,661 $308 $319 $14,306 $289 $47 ======= ==== ==== ======= ==== === </TABLE> For the years ended December 2002, 2001 and 2000, the Company recognized net investment income of $23 million, $32 million and $13 million, respectively, from the periodic settlement of interest rate and foreign currency swaps. During the year ended December 31, 2002, the Company recognized $30 million in net investment losses related to qualifying fair value hedges. Accordingly, $34 million of unrealized gains on fair value hedged investments were recognized in net investment gains and losses. There were no derivatives designated as fair value hedges during the year ended December 31, 2001. There were no discontinued hedges during the year ended December 31, 2002. For the years ended December 31, 2002 and 2001, the amounts accumulated in other comprehensive income relating to cash flow hedges were losses of $24 million and gains of $71 million, respectively. During the year ended December 31, 2002, the Company recognized other comprehensive losses of $142 million relating to the effective portion of cash flow hedges. During the year ended December 31, 2002, $10 million of other comprehensive income and $57 million of other comprehensive losses were reclassified into net investment F-98

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) income and net investment losses, respectively. During the year ended December 31, 2001, $19 million of other comprehensive income was reclassified into net investment income due to the SFAS No. 133 transition adjustment. Approximately $6 million and $12 million of the losses reported in accumulated other comprehensive income at December 31, 2002 are expected to be reclassified during the year ending December 31, 2003 into net investment income and net investment gains and losses, respectively, as the underlying investments mature or expire according to their original terms. For the years ended December 31, 2002 and 2001, the Company recognized net investment income of $32 million and $24 million, respectively, and net investment losses of $172 million and net investment gains of $100 million, respectively, from derivatives not qualifying as accounting hedges. The use of these non-speculative derivatives is permitted by the Department. 5. Fair Value Information The estimated fair values of financial instruments have been determined by using available market information and the valuation methodologies described below. Considerable judgment is often required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein may not necessarily be indicative of amounts that could be realized in a current market exchange. The use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Amounts related to the Company's financial instruments were as follows: <TABLE> <CAPTION> Notional Carrying Estimated December 31, 2002 Amount Value Fair Value ----------------- -------- -------- ---------- (Dollars in millions) <S> <C> <C> <C> Assets: Fixed maturities.................................................. $124,525 $124,525 Equity securities................................................. $ 1,286 $ 1,286 Mortgage loans on real estate..................................... $ 25,353 $ 27,935 Policy loans...................................................... $ 8,047 $ 8,047 Short-term investments............................................ $ 1,199 $ 1,199 Cash and cash equivalents......................................... $ 1,106 $ 1,106 Mortgage loan commitments......................................... $ 859 $ -- $ 12 Commitments to fund partnership investments....................... $1,667 $ -- $ -- Liabilities: Policyholder account balances..................................... $ 34,706 $ 35,063 Short-term debt................................................... $ 912 $ 912 Long-term debt.................................................... $ 2,624 $ 2,794 Payable under securities loaned transactions...................... $ 16,321 $ 16,321 Other: Company-obligated mandatorily redeemable securities of subsidiary trusts.......................................................... $ 277 $ 310 </TABLE> F-99

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) <TABLE> <CAPTION> Notional Carrying Estimated December 31, 2001 Amount Value Fair Value ----------------- -------- -------- ---------- (Dollars in millions) <S> <C> <C> <C> Assets: Fixed maturities.................................................. $110,601 $110,601 Equity securities................................................. $ 3,027 $ 3,027 Mortgage loans on real estate..................................... $ 24,626 $ 25,815 Policy loans...................................................... $ 7,894 $ 7,894 Short-term investments............................................ $ 1,168 $ 1,168 Cash and cash equivalents......................................... $ 3,932 $ 3,932 Mortgage loan commitments......................................... $ 532 $ -- $ (4) Commitments to fund partnership investments....................... $1,898 $ -- $ -- Liabilities: Policyholder account balances..................................... $ 47,494 $ 47,833 Short-term debt................................................... $ 345 $ 345 Long-term debt.................................................... $ 2,380 $ 2,442 Payable under securities loaned transactions...................... $ 12,662 $ 12,662 Other: Company-obligated mandatorily redeemable securities of subsidiary trusts.......................................................... $ 276 $ 276 </TABLE> The methods and assumptions used to estimate the fair values of financial instruments are summarized as follows: Fixed Maturities and Equity Securities The fair value of fixed maturities and equity securities are based upon quotations published by applicable stock exchanges or received from other reliable sources. For securities for which the market values were not readily available, fair values were estimated using quoted market prices of comparable investments. Mortgage Loans on Real Estate, Mortgage Loan Commitments and Commitments to Fund Partnership Agreements 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, the estimated fair value is the net premium or discount of the commitments. Commitments to fund partnership agreements have no stated interest rate and are assumed to have a fair value of zero. Policy Loans The carrying values for policy loans approximate fair value. Cash and Cash Equivalents and Short-term Investments The carrying values for cash and cash equivalents and short-term investments approximated fair values due to the short-term maturities of these instruments. Policyholder Account Balances The fair value of policyholder account balances 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. F-100

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Short-term and Long-term Debt, Payables Under Securities Loaned Transactions and Company-Obligated Mandatorily Redeemable Securities of Subsidiary Trusts The fair values of short-term and long-term debt, payables under securities loaned transactions and Company-obligated mandatorily redeemable securities of subsidiary trusts are determined by discounting expected future cash flows, using risk rates currently available for debt with similar terms and remaining maturities. Derivative Instruments The fair value of derivative instruments, including financial futures, financial forwards, interest rate, credit default and foreign currency swaps, floors, foreign currency forwards, caps, floors, options and written covered calls are based upon quotations obtained from dealers or other reliable sources. See Note 4 for derivative fair value disclosures. F-101

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 6. Employee Benefit Plans Pension Benefit and Other Benefit Plans The Company is both the sponsor and administrator of defined benefit pension plans covering eligible employees and sales representatives of the Company. Retirement benefits are based upon years of credited service and final average earnings history. The Company also provides certain postemployment benefits and certain postretirement health care and life insurance benefits for retired employees through insurance contracts. Substantially all of the Company's employees may, in accordance with the plans applicable to the postretirement benefits, become eligible for these benefits if they attain retirement age, with sufficient service, while working for the Company. <TABLE> <CAPTION> December 31, ------------------------------ Pension Benefits Other Benefits -------------- -------------- 2002 2001 2002 2001 ------ ------ ------ ------ (Dollars in millions) <S> <C> <C> <C> <C> Change in projected benefit obligation: Projected benefit obligation at beginning of year. $4,426 $4,145 $1,669 $1,542 Service cost.................................... 104 104 36 34 Interest cost................................... 307 308 123 115 Acquisitions and divestitures................... (110) (12) -- -- Actuarial losses................................ 307 169 342 66 Curtailments and terminations................... (3) (49) (2) 9 Change in benefits.............................. -- 29 (168) -- Benefits paid................................... (284) (268) (122) (97) ------ ------ ------ ------ Projected benefit obligation at end of year....... 4,747 4,426 1,878 1,669 ------ ------ ------ ------ Change in plan assets: Contract value of plan assets at beginning of year 4,161 4,619 1,169 1,318 Actual return on plan assets.................... (185) (201) (92) (49) Acquisitions and divestitures................... (110) (12) -- -- Employer and participant contributions.......... 426 23 1 1 Benefits paid................................... (284) (268) (113) (101) ------ ------ ------ ------ Contract value of plan assets at end of year...... 4,008 4,161 965 1,169 ------ ------ ------ ------ Under funded....................................... (739) (265) (913) (500) Unrecognized net actuarial losses (gains).......... 1,507 693 262 (258) Unrecognized prior service cost (credit)........... 101 116 (208) (49) ------ ------ ------ ------ Prepaid benefit (accrued) cost..................... $ 869 $ 544 $ (859) $ (807) ====== ====== ====== ====== Qualified plan prepaid pension cost................ $1,164 $ 805 Non-qualified plan accrued pension cost............ (341) (323) Unamortized prior service cost..................... -- 16 Accumulated other comprehensive loss............... 46 46 ------ ------ Prepaid benefit cost............................... $ 869 $ 544 ====== ====== </TABLE> F-102

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The aggregate projected benefit obligation and aggregate contract value of plan assets for the pension plans were as follows: <TABLE> <CAPTION> Qualified Plan Non-Qualified Plan Total ---------------- ----------------- ---------------- 2002 2001 2002 2001 2002 2001 ------- ------- ----- ----- ------- ------- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> Aggregate projected benefit obligation........................... $(4,273) $(4,006) $(474) $(420) $(4,747) $(4,426) Aggregate contract value of plan assets (principally Company contracts)...... 4,008 4,161 -- -- 4,008 4,161 ------- ------- ----- ----- ------- ------- (Under) over funded.................... $ (265) $ 155 $(474) $(420) $ (739) $ (265) ======= ======= ===== ===== ======= ======= </TABLE> The assumptions used in determining the aggregate projected benefit obligation and aggregate contract value for the pension and other benefits were as follows: <TABLE> <CAPTION> Pension Benefits Other Benefits ---------------- ------------------ 2002 2001 2002 2001 ------ --------- ---------- ------- (Dollars in millions) <S> <C> <C> <C> <C> Weighted average assumptions at December 31: Discount rate............................ 6.75% 6.9%-7.4% 6.5%-7.25% 6%-7.4% Expected rate of return on plan assets... 8%-9% 8%-9% 5.2%-9% 6%-9% Rate of compensation increase............ 4%-6% 4%-6% N/A N/A </TABLE> The assumed health care cost trend rates used in measuring the accumulated nonpension postretirement benefit obligation were as follows: <TABLE> <CAPTION> December 31, ----------------------------------------------- 2002 2001 ---------------------- ------------------------ <S> <C> <C> Pre-Medicare eligible claims 9% down to 5% in 2010 9.5% down to 5% in 2010 Medicare eligible claims.... 11% down to 5% in 2014 11.5% down to 5% in 2014 </TABLE> Assumed health care cost trend rates may have a significant effect on the amounts reported for health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects: <TABLE> <CAPTION> One Percent One Percent Increase Decrease ----------- ----------- (Dollars in millions) <S> <C> <C> Effect on total of service and interest cost components $10 $10 Effect on accumulated postretirement benefit obligation $90 $88 </TABLE> The components of net periodic benefit cost were as follows: <TABLE> <CAPTION> Pension Benefits Other Benefits ------------------- ----------------- 2002 2001 2000 2002 2001 2000 ----- ----- ----- ---- ----- ---- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> Service cost.................................. $ 104 $ 104 $ 98 $ 36 $ 34 $ 29 Interest cost................................. 307 308 291 123 115 113 Expected return on plan assets................ (354) (402) (420) (93) (108) (97) Amortization of prior actuarial losses (gains) 33 (2) (19) (9) (27) (22) Curtailment cost (credit)..................... 11 21 (3) 4 6 2 ----- ----- ----- ---- ----- ---- Net periodic benefit cost (credit)............ $ 101 $ 29 $ (53) $ 61 $ 20 $ 25 ===== ===== ===== ==== ===== ==== </TABLE> F-103

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Savings and Investment Plans The Company sponsors savings and investment plans for substantially all employees under which the Company matches a portion of employee contributions. The Company contributed $49 million, $55 million and $65 million for the years ended December 31, 2002, 2001 and 2000, respectively. 7. Closed Block On the date of demutualization, Metropolitan Life established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the date of demutualization. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the effective date of the demutualization (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block is greater than the expected cumulative earnings of the closed block, the Company will pay the excess of the actual cumulative earnings of the closed block over the expected cumulative earnings to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block is less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the F-104

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) expected cumulative earnings. Amounts reported for the period after demutualization are as of April 1, 2000 and for the period beginning on April 1, 2000 (the effect of transaction from April 1, 2000 through April 6, 2000 is not considered material). Closed block liabilities and assets designated to the closed block are as follows: <TABLE> <CAPTION> December 31, -------------------- 2002 2001 ------- ------- (Dollars in millions) <S> <C> <C> CLOSED BLOCK LIABILITIES Future policy benefits...................................................................... $41,207 $40,325 Other policyholder funds.................................................................... 279 321 Policyholder dividends payable.............................................................. 719 757 Policyholder dividend obligation............................................................ 1,882 708 Payables under securities loaned transactions............................................... 4,851 3,350 Other liabilities........................................................................... 433 90 ------- ------- Total closed block liabilities....................................................... 49,371 45,551 ------- ------- ASSETS DESIGNATED TO THE CLOSED BLOCK Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $28,334 and $25,761, respectively).......................................................................... 29,981 26,331 Equity securities, at fair value (amortized cost: $236 and $240, respectively)........... 218 282 Mortgage loans on real estate............................................................ 7,032 6,358 Policy loans............................................................................. 3,988 3,898 Short-term investments................................................................... 24 170 Other invested assets.................................................................... 604 159 ------- ------- Total investments.................................................................... 41,847 37,198 Cash and cash equivalents................................................................... 435 1,119 Accrued investment income................................................................... 540 550 Deferred income taxes....................................................................... 1,151 1,060 Premiums and other receivables.............................................................. 130 244 ------- ------- Total assets designated to the closed block.......................................... 44,103 40,171 ------- ------- Excess of closed block liabilities over assets designated to the closed block............... 5,268 5,380 ------- ------- Amounts included in accumulated other comprehensive loss: Net unrealized investment gains, net of deferred income tax of $577 and $219, respectively........................................................................... 1,047 389 Unrealized derivative gains, net of deferred income tax of $7 and $9, respectively....... 13 17 Allocated to policyholder dividend obligation, net of deferred income tax of $668 and $255, respectively..................................................................... (1,214) (453) ------- ------- (154) (47) ------- ------- Maximum future earnings to be recognized from closed block assets and liabilities........... $ 5,114 $ 5,333 ======= ======= </TABLE> F-105

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Information regarding the policyholder dividend obligation is as follows: <TABLE> <CAPTION> For the period Years ended April 7, 2000 December 31, through ------------- December 31, 2002 2001 2000 ------ ----- -------------- (Dollars in millions) <S> <C> <C> <C> Balance at beginning of period........................................ $ 708 $ 385 $ -- Impact on net income before amounts allocable to policyholder dividend obligation.......................................................... 157 159 85 Net investment losses................................................. (157) (159) (85) Change in unrealized investment and derivative gains.................. 1,174 323 385 ------ ----- ---- Balance at end of period.............................................. $1,882 $ 708 $385 ====== ===== ==== </TABLE> Closed block revenues and expenses were as follows: <TABLE> <CAPTION> For the period Years ended April 7, 2000 December 31, through ------------- December 31, 2002 2001 2000 ------ ------ -------------- (Dollars in millions) <S> <C> <C> <C> REVENUES Premiums..................................................................... $3,551 $3,658 $2,900 Net investment income and other revenues..................................... 2,568 2,555 1,789 Net investment gains (losses) (net of amounts allocable to the policyholder dividend obligation of $(157), $(159) and $(85), respectively)............. 168 (20) (150) ------ ------ ------ Total revenues............................................................ 6,287 6,193 4,539 ------ ------ ------ EXPENSES Policyholder benefits and claims............................................. 3,770 3,862 2,874 Policyholder dividends....................................................... 1,573 1,544 1,132 Change in policyholder dividend obligation (excludes amounts directly related to net investment losses of $(157), $(159) and $(85), respectively)........ 157 159 85 Other expenses............................................................... 310 352 265 ------ ------ ------ Total expenses............................................................ 5,810 5,917 4,356 ------ ------ ------ Revenues net of expenses before income taxes................................. 477 276 183 Income taxes................................................................. 173 97 67 ------ ------ ------ Revenues net of expenses and income taxes.................................... $ 304 $ 179 $ 116 ====== ====== ====== </TABLE> F-106

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The change in maximum future earnings of the closed block was as follows: <TABLE> <CAPTION> For the period Years ended April 7, 2000 December 31, through -------------- December 31, 2002 2001 2000 ------ ------ -------------- (Dollars in millions) <S> <C> <C> <C> Balance at the end of period...... $5,114 $5,333 $5,512 Less: Reallocation of assets......... 85 -- -- Balance at beginning of period. 5,333 5,512 5,628 ------ ------ ------ Change during period.............. $ (304) $ (179) $ (116) ====== ====== ====== </TABLE> During the year ended December 31, 2002, the allocation of assets to the closed block was revised to appropriately classify assets in accordance with the plan of demutualization. The reallocation of assets had no impact on consolidated assets or liabilities. Metropolitan Life charges the closed block with Federal income taxes, state and local premium taxes, and other additive state or local taxes, as well as investment management expenses relating to the closed block as provided in the plan of demutualization. Metropolitan Life also charges the closed block for expenses of maintaining the policies included in the closed block. Many of the derivative instrument strategies used by the Company are also used for the closed block. The table below provides a summary of the notional amount and fair value of derivatives by hedge accounting classification at: <TABLE> <CAPTION> December 31, 2002 December 31, 2001 --------------------------- --------------------------- Fair Value Fair Value Notional ------------------ Carrying ------------------ Amount Assets Liabilities Value Assets Liabilities -------- ------ ----------- -------- ------ ----------- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> By Type of Hedge Fair value...... $ -- $-- $-- $ -- $-- $-- Cash flow....... 128 2 11 171 22 -- Non-qualifying.. 258 32 2 112 13 5 ---- --- --- ---- --- --- Total........ $386 $34 $13 $283 $35 $ 5 ==== === === ==== === === </TABLE> The amounts accumulated in other comprehensive loss relating to cash flow hedges were gains of $21 million for both the years ended December 31, 2002 and 2001. During the year ended December 31, 2002, the Company recognized other comprehensive gains of $4 million relating to the effective portion of cash flow hedges. Reclassifications are recognized over the life of the hedged item. During the year ended December 31, 2002, $4 million of other comprehensive loss was reclassified into net investment income. Approximately $3 million of the gains reported in accumulated other comprehensive loss is expected to be reclassified into net investment income during the year ending December 31, 2003, as the underlying investments mature or expire according to their original terms. For the years ended December 31, 2002 and 2001, the Company recognized net investment losses of $11 million and net investment gains of $5 million, respectively, from derivatives not qualifying as accounting hedges. The use of these non-speculative derivatives is permitted by the Department. F-107

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The cumulative effect of the adoption of SFAS 133, as of January 1, 2001, resulted in $11 million of other comprehensive income, net of income taxes of $6 million. 8. Separate Accounts Separate accounts include two categories of account types: non-guaranteed separate accounts totaling $39,157 million and $48,912 million at December 31, 2002 and 2001, respectively, for which the policyholder assumes the investment risk, and guaranteed separate accounts totaling $14,755 million and $13,802 million at December 31, 2002 and 2001, respectively, for which the Company contractually guarantees either a minimum return or account value to the policyholder. 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 $463 million, $564 million and $667 million for the years ended December 31, 2002, 2001 and 2000, respectively. Guaranteed separate accounts consisted primarily of Met Managed Guaranteed Interest Contracts and participating close out contracts. The average interest rates credited on these contracts were 4.8% and 7.0% at December 31, 2002 and 2001, respectively. The assets that support these liabilities were comprised of $12,531 million and $11,888 million in fixed maturities at December 31, 2002 and 2001, respectively. The portfolios are segregated from other investments and are managed to minimize liquidity and interest rate risk. In order to minimize the risk of early withdrawals to invest in instruments yielding a higher return, these investment products carry a graded surrender charge as well as a market value adjustment. 9. Debt Debt consisted of the following: <TABLE> <CAPTION> December 31, ------------- 2002 2001 ------ ------ (Dollars in millions) <S> <C> <C> Surplus notes, interest rates ranging from 6.30% to 7.88%, maturity dates ranging from 2003 to 2025.............................................................. $1,632 $1,630 Capital notes payable to the Holding Company, interest rate of 7.13%, maturity dates ranging from 2032 to 2033................................................ 500 -- Senior notes, interest rates ranging from 6.75% to 7.25%, maturity dates ranging from 2006 to 2011.............................................................. 298 298 Investment related exchangeable debt, interest rate of 4.90%..................... -- 195 Fixed rate notes, interest rates ranging from 4.39% to 12.00%, maturity dates ranging from 2005 to 2019...................................................... 33 87 Capital lease obligations........................................................ 21 23 Other notes with varying interest rates.......................................... 140 147 ------ ------ Total long-term debt............................................................. 2,624 2,380 Total short-term debt............................................................ 912 345 ------ ------ Total......................................................................... $3,536 $2,725 ====== ====== </TABLE> The Company maintains committed and unsecured credit facilities aggregating $2,434 million ($1,140 million expiring in 2003 and $1,294 million expiring in 2005). If these facilities were drawn upon, they would bear interest at rates stated in the agreements. The facilities can be used for general corporate purposes and also F-108

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) provide support for the Company's commercial paper program. At December 31, 2002, the Company had drawn approximately $28 million under the facilities expiring in 2005 at interest rates ranging from 4.39% to 5.57%. At December 31, 2002, the Company had approximately $508 million in letters of credit from various banks. Payments of interest and principal on the surplus notes, subordinated to all other indebtedness, may be made only with the prior approval of the insurance department of the state of domicile. Subject to the prior approval of the Superintendent, the $300 million 7.45% surplus notes due 2023 may be redeemed, in whole or in part, at the election of Metropolitan Life at any time on or after November 1, 2003 and, if redeemed prior to November 2013, would include a premium. The investment-related exchangeable debt instrument is payable in cash or by delivery of an underlying security owned by the Company. The amount of the debt payable at maturity is greater than the principal of the debt if the market value of the underlying security appreciates above certain levels at the date of debt repayment as compared to the market value of the underlying security at the date of debt issuance. At December 31, 2001, the underlying security pledged as collateral had a market value of $240 million. The aggregate maturities of long-term debt for the Company are $405 million in 2003, $9 million in 2004, $392 million in 2005, $100 million in 2006, $4 million in 2007 and $1,714 million thereafter. Short-term debt of the Company consisted of commercial paper with a weighted average interest rate of 1.4% and a weighted average maturity of 63 days at December 31, 2002. Short-term debt of the Company consisted of commercial paper with a weighted average interest rate of 2.1% and a weighted average maturity of 87 days at December 31, 2001. The Company also has other collaterlized borrowings with a weighted average coupon rate of 5.83% and a weighted average maturity of 34 days at December 31, 2002. Such securities had a weighted average coupon rate of 7.25% and a weighted average maturity of 30 days at December 31, 2001. Interest expense related to the Company's indebtedness included in other expenses was $208 million, $313 million and $417 million for the years ended December 31, 2002, 2001 and 2000, respectively. 10. Company-Obligated Mandatorily Redeemable Securities of Subsidiary Trusts GenAmerica Capital I. In June 1997, GenAmerica Corporation ("GenAmerica") issued $125 million of 8.525% capital securities through a wholly-owned subsidiary trust, GenAmerica Capital I. GenAmerica has fully and unconditionally guaranteed, on a subordinated basis, the obligation of the trust under the capital securities and is obligated to mandatorily redeem the securities on June 30, 2027. GenAmerica may prepay the securities any time after June 30, 2007. Capital securities outstanding were $119 million and $118 million, net of unamortized discounts of $6 million and $7 million at December 31, 2002 and 2001, respectively. Interest expense on these instruments is included in other expenses and was $11 million for each of the years ended December 31, 2002, 2001 and 2000. RGA Capital Trust I. In December 2001, a subsidiary of the Company, RGA, through its wholly-owned trust, RGA Capital Trust I (the "Trust"), issued 4,500,000 Preferred Income Equity Redeemable Securities ("PIERS") Units. Each PIERS unit consists of (i) a preferred security issued by the Trust, having a stated liquidation amount of $50 per unit, representing an undivided beneficial ownership interest in the assets of the Trust, which consist solely of junior subordinated debentures issued by RGA which have a principal amount at maturity of $50 and a stated maturity of March 18, 2051, and (ii) a warrant to purchase, at any time prior to December 15, 2050, 1.2508 shares of RGA stock at an exercise price of $50. The fair market value of the warrant on the issuance date was $14.87 and is detachable from the preferred security. RGA fully and unconditionally guarantees, on a subordinated basis, the obligations of the Trust under the preferred securities. The preferred F-109

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) securities and subordinated debentures were issued at a discount (original issue discount) to the face or liquidation value of $14.87 per security. The securities will accrete to their $50 face/liquidation value over the life of the security on a level yield basis. The weighted average effective interest rate on the preferred securities and the subordinated debentures is 8.25% per annum. Capital securities outstanding were $158 million, net of unamortized discount of $67 million, at both December 31, 2002 and 2001. 11. Commitments, Contingencies and Guarantees Litigation Sales Practices Claims Over the past several years, Metropolitan Life, New England Mutual Life Insurance Company ("New England Mutual") and General American Life Insurance Company ("General American") have faced numerous claims, including class action lawsuits, alleging improper marketing and sales of individual life insurance policies or annuities. These lawsuits are generally referred to as "sales practices claims." In December 1999, a federal court approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies and annuity contracts or certificates issued pursuant to individual sales in the United States by Metropolitan Life, Metropolitan Insurance and Annuity Company or Metropolitan Tower Life Insurance Company between January 1, 1982 and December 31, 1997. The class includes owners of approximately six million in-force or terminated insurance policies and approximately one million in-force or terminated annuity contracts or certificates. Similar sales practices class actions against New England Mutual, with which Metropolitan Life merged in 1996, and General American, which was acquired in 2000, have been settled. In October 2000, a federal court approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies issued by New England Mutual between January 1, 1983 through August 31, 1996. The class includes owners of approximately 600,000 in-force or terminated policies. A federal court has approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies issued by General American between January 1, 1982 through December 31, 1996. An appellate court has affirmed the order approving the settlement. The class includes owners of approximately 250,000 in-force or terminated policies. Implementation of the General American class action settlement is proceeding. Certain class members have opted out of the class action settlements noted above and have brought or continued non-class action sales practices lawsuits. In addition, other sales practices lawsuits have been brought. As of December 31, 2002, there are approximately 420 sales practices lawsuits pending against Metropolitan Life, approximately 60 sales practices lawsuits pending against New England Mutual and approximately 35 sales practices lawsuits pending against General American. Metropolitan Life, New England Mutual and General American continue to defend themselves vigorously against these lawsuits. Some individual sales practices claims have been resolved through settlement, won by dispositive motions, or, in a few instances, have gone to trial. Most of the current cases seek substantial damages, including in some cases punitive and treble damages and attorneys' fees. Additional litigation relating to the Company's marketing and sales of individual life insurance may be commenced in the future. The Metropolitan Life class action settlement did not resolve two putative class actions involving sales practices claims filed against Metropolitan Life in Canada, and these actions remain pending. In March 2002, a purported class action complaint was filed in a federal court in Kansas by S-G Metals Industries, Inc. ("S-G Metals") against New England Mutual. The complaint seeks certification of a class on behalf of corporations and F-110

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) banks that purchased participating life insurance policies, as well as persons who purchased participating policies for use in pension plans or through work site marketing. These policyholders were not part of the New England Mutual class action settlement noted above. The action was transferred to a federal court in Massachusetts. New England Mutual moved to dismiss the case and in November 2002, the federal district court dismissed the case. S-G Metals has filed a notice of appeal. New England Mutual intends to continue to defend itself vigorously against the case. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices claims against Metropolitan Life, New England Mutual and General American. Regulatory authorities in a small number of states have had investigations or inquiries relating to Metropolitan Life's, New England Mutual's or General American's sales of individual life insurance policies or annuities. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief. The Company may continue to resolve investigations in a similar manner. Asbestos-Related Claims Metropolitan Life is a defendant in thousands of lawsuits seeking compensatory and punitive damages for personal injuries allegedly caused by exposure to asbestos or asbestos-containing products. Metropolitan Life has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. Rather, these lawsuits have principally been based upon allegations relating to certain research, publication and other activities of one or more of Metropolitan Life's employees during the period from the 1920's through approximately the 1950's and alleging that Metropolitan Life learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life believes that it should not have legal liability in such cases. Legal theories asserted against Metropolitan Life have included negligence, intentional tort claims and conspiracy claims concerning the health risks associated with asbestos. Although Metropolitan Life believes it has meritorious defenses to these claims, and has not suffered any adverse monetary judgments in respect of these claims, due to the risks and expenses of litigation, almost all past cases have been resolved by settlements. Metropolitan Life's defenses (beyond denial of certain factual allegations) to plaintiffs' claims include that: (i) Metropolitan Life owed no duty to the plaintiffs--it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot demonstrate proximate causation. In defending asbestos cases, Metropolitan Life selects various strategies depending upon the jurisdictions in which such cases are brought and other factors which, in Metropolitan Life's judgment, best protect Metropolitan Life's interests. Strategies include seeking to settle or compromise claims, motions challenging the legal or factual basis for such claims or defending on the merits at trial. In early 2002 and in early 2003, two trial courts granted motions dismissing claims against Metropolitan Life on some or all of the above grounds. Other courts have denied motions brought by Metropolitan Life to dismiss cases without the necessity of trial. There can be no assurance that Metropolitan Life will receive favorable decisions on motions in the future. Metropolitan Life intends to continue to exercise its best judgment regarding settlement or defense of such cases, including when trials of these cases are appropriate. F-111

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The following table sets forth the total number of asbestos personal injury claims pending against Metropolitan Life as of the dates indicated, the number of new claims during the years ended on those dates and the total settlement payments made to resolve asbestos personal injury claims during those years: <TABLE> <CAPTION> At or for the years ended December 31, ------------------------ 2002 2001 2000 -------- ------- ------- <S> <C> <C> <C> Asbestos personal injury claims at year end (approximate)... 106,500 89,000 73,000 Number of new claims during the year (approximate).......... 66,000 59,500 54,500 Settlement payments during the year (dollars in millions)(1) $ 95.1 $ 90.7 $ 71.1 </TABLE> -------- (1) Settlement payments represent payments made by Metropolitan Life during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life's attorneys' fees and expenses and do not reflect amounts received from insurance carriers. During the fourth quarter of 2002, Metropolitan Life analyzed its claims experience and reviewed external publications and numerous variables to identify trends and assessed their impact on its recorded asbestos liability. Certain publications suggest a trend towards more asbestos-related claims and a greater awareness of asbestos litigation generally by potential plaintiffs and plaintiffs' lawyers. Plaintiffs' lawyers continue to advertise heavily with respect to asbestos litigation. Bankruptcies and reorganizations of other defendants in asbestos litigation may increase the pressures on remaining defendants, including Metropolitan Life. Through the first nine months of 2002, the number of new claims received by Metropolitan Life was lower than those received during the comparable 2001 period. However, the number of new claims received by Metropolitan Life during the fourth quarter of 2002 was significantly higher than those received in the prior year quarter, resulting in more new claims being received by Metropolitan Life in 2002 than in 2001. Factors considered also included expected trends in filing cases, the dates of initial exposure of plaintiffs to asbestos, the likely percentage of total asbestos claims which included Metropolitan Life as a defendant and experience in claims settlement negotiations. Metropolitan Life also considered views derived from actuarial calculations it made in the fourth quarter of 2002. These calculations were made using, among other things, current information regarding Metropolitan Life's claims and settlement experience, information available in public reports, as well as a study regarding the possible future incidence of mesothelioma. Based on all of the above information, including greater than expected claims experience over the last three years, Metropolitan Life expects to receive more claims in the future than it had previously expected. Previously, Metropolitan Life's liability reflected that the increase in asbestos-related claims was a result of an acceleration in the reporting of such claims; the liability now reflects that such an increase is also the result of an increase in the total number of asbestos-related claims expected to be received by Metropolitan Life. Accordingly, Metropolitan Life increased its recorded liability for asbestos-related claims by $402 million from approximately $820 million to $1,225 million at December 31, 2002. This total recorded asbestos-related liability (after the self-insured retention) is within the coverage of the excess insurance policies discussed below. During 1998, Metropolitan Life paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance policies for asbestos-related claims provide for recovery of losses up to $1,500 million, which is in excess of a $400 million self-insured retention. The asbestos-related policies are also subject to annual and per-claim sublimits. Amounts are recoverable under the policies annually with respect to claims paid during the prior calendar year. Although amounts paid by Metropolitan Life in any given year that may be recoverable in the next calendar year under the policies will be reflected as a reduction in the Company's operating cash flows for the year in which they are paid, management believes that the payments will not have a material adverse effect on the Company's liquidity. F-112

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Each asbestos-related policy contains an experience fund and a reference fund that provides for payments to the Company at the commutation date if the reference fund is greater than zero at commutation or pro rata reductions from time to time in the loss reimbursements to the Company if the cumulative return on the reference fund is less than the return specified in the experience fund. The return in the reference fund is tied to performance of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A claim will be made under the excess insurance policies in 2003 for the amounts paid with respect to asbestos litigation in excess of the retention. Based on performance of the reference fund, at December 31, 2002, the loss reimbursements to the Company in 2003 and the amount recoverable with respect to later periods will be $42 million less than the amount of the recorded losses. Such foregone loss reimbursements may be recovered upon commutation depending upon future performance of the reference fund. The foregone loss reimbursements are estimated to be $9 million with respect to 2002 claims and $42 million in the aggregate. The $402 million increase in the recorded liability for asbestos claims less the foregone loss reimbursement adjustment of $42 million ($27 million net of income tax) resulted in an increase in the recoverable of $360 million. At December 31, 2002, a portion ($136 million) of the $360 million recoverable was recognized in income while the remainder ($224 million) was recorded as a deferred gain which is expected to be recognized in income in the future over the estimated settlement period of the excess insurance policies. The $402 million increase in the recorded liability, less the portion of the recoverable recognized in income, resulted in a net expense of $266 million ($169 million net of income tax). The $360 million recoverable may change depending on the future performance of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. As a result of the excess insurance policies, $1,237 million is recorded as a recoverable at December 31, 2002 ($224 million of which is recorded as a deferred gain as mentioned above); the amount includes recoveries expected to be obtained in 2003 for amounts paid in 2002. If at some point in the future, the Company believes the liability for probable and estimable losses for asbestos-related claims should be increased, an expense would be recorded and the insurance recoverable would be adjusted subject to the terms, conditions and limits of the excess insurance policies. Portions of the change in the insurance recoverable would be recorded as a deferred gain and amortized into income over the estimated remaining settlement period of the insurance policies. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. The ability of Metropolitan Life to estimate its ultimate asbestos exposure is subject to considerable uncertainty due to numerous factors. The availability of data is limited and it is difficult to predict with any certainty numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease, the jurisdiction of claims filed, tort reform efforts and the impact of any possible future adverse verdicts and their amounts. Recent bankruptcies of other companies involved in asbestos litigation, as well as advertising by plaintiffs' asbestos lawyers, may be resulting in an increase in the number of claims and the cost of resolving claims, as well as the number of trials and possible adverse verdicts Metropolitan Life may experience. Plaintiffs are seeking additional funds from defendants, including Metropolitan Life, in light of such recent bankruptcies by certain other defendants. It is likely that bills will be introduced in 2003 in the United States Congress to reform asbestos litigation. While the Company strongly supports reform efforts, there can be no assurance that legislative reforms will be enacted. Metropolitan Life will continue to study its claims experience, review external literature regarding asbestos claims experience in the United States and consider numerous variables that can affect its asbestos liability exposure, including bankruptcies of other companies involved in asbestos litigation and legislative and judicial developments, to identify trends and to assess their impact on the recorded asbestos liability. F-113

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The number of asbestos cases that may be brought or the aggregate amount of any liability that Metropolitan Life may ultimately incur is uncertain. Accordingly, it is reasonably possible that the Company's total exposure to asbestos claims may be greater than the liability recorded by the Company in its consolidated financial statements and that future charges to income may be necessary. While the potential future charges could be material in particular quarterly or annual periods in which they are recorded, based on information currently known by management, it does not believe any such charges are likely to have a material adverse effect on the Company's consolidated financial position. Property and Casualty Actions Purported class action suits involving claims by policyholders for the alleged diminished value of automobiles after accident-related repairs have been filed in Rhode Island, Texas, Georgia and Tennessee against Metropolitan Property and Casualty Insurance Company. Rhode Island and Texas trial courts denied plaintiffs' motions for class certification and a hearing on plaintiffs' motion in Tennessee for class certification is to be scheduled. A settlement has been reached in the Georgia class action; the Company determined to settle the case in light of a Georgia Supreme Court decision involving another insurer. The settlement is being implemented. A purported class action has been filed against Metropolitan Property and Casualty Insurance Company's subsidiary, Metropolitan Casualty Insurance Company, in Florida. The complaint alleges breach of contract and unfair trade practices with respect to allowing the use of parts not made by the original manufacturer to repair damaged automobiles. Discovery is ongoing and a motion for class certification is pending. Total loss valuation methods are the subject of national class actions involving other insurance companies. A Pennsylvania state court purported class action lawsuit filed in 2001 alleges that Metropolitan Property and Casualty Insurance Company improperly took depreciation on partial homeowner losses where the insured replaced the covered item. The court has dismissed the action. An appeal has been filed. Metropolitan Property and Casualty Insurance Company and Metropolitan Casualty Insurance Company are vigorously defending themselves against these lawsuits. Demutualization Actions Several lawsuits were brought in 2000 challenging the fairness of Metropolitan Life's plan of reorganization and the adequacy and accuracy of Metropolitan Life's disclosure to policyholders regarding the plan. These actions name as defendants some or all of Metropolitan Life, the Holding Company, the individual directors, the Superintendent and the underwriters for MetLife, Inc.'s initial public offering, Goldman Sachs & Company and Credit Suisse First Boston. Five purported class actions pending in the New York state court in New York County were consolidated within the commercial part. In addition, there remained a separate purported class action in New York state court in New York County. Another purported class action in New York state court in Kings County has been voluntarily held in abeyance by plaintiffs. The plaintiffs in the state court class actions seek injunctive, declaratory and compensatory relief, as well as an accounting and, in some instances, punitive damages. Some of the plaintiffs in the above described actions also have brought a proceeding under Article 78 of New York's Civil Practice Law and Rules challenging the Opinion and Decision of the Superintendent who approved the plan. In this proceeding, petitioners seek to vacate the Superintendent's Opinion and Decision and enjoin him from granting final approval of the plan. This case also is being held in abeyance by plaintiffs. Another purported class action was filed in New York state court in New York County on behalf of a purported class of beneficiaries of Metropolitan Life annuities purchased to fund structured settlements claiming that the class members should have received common stock or cash in connection with the demutualization. Metropolitan Life's motion to dismiss this case was granted in a decision filed on October 31, 2002. Plaintiff has withdrawn her notice of appeal. Three purported class actions were filed in the United States District Court for the Eastern District of New York claiming violation of the Securities Act of 1933. The plaintiffs in these actions, which have been consolidated, claim that the Policyholder Information Booklets relating to the plan failed to disclose certain material facts and seek rescission and compensatory damages. Metropolitan Life's motion to dismiss these three cases was denied in 2001. On February 4, 2003, plaintiffs filed a consolidated amended complaint adding a fraud F-114

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) claim under the Securities Exchange Act of 1934. A purported class action also was filed in the United States District Court for the Southern District of New York seeking damages from Metropolitan Life and the Holding Company for alleged violations of various provisions of the Constitution of the United States in connection with the plan of reorganization. In 2001, pursuant to a motion to dismiss filed by Metropolitan Life, this case was dismissed by the District Court. In January 2003, the United States Court of Appeals for the Second Circuit affirmed the dismissal. Metropolitan Life, the Holding Company and the individual defendants believe they have meritorious defenses to the plaintiffs' claims and are contesting vigorously all of the plaintiffs' claims in these actions. In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario, Canada on behalf of a proposed class of certain former Canadian policyholders against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance Company of Canada. Plaintiffs' allegations concern the way that their policies were treated in connection with the demutualization of Metropolitan Life; they seek damages, declarations, and other non-pecuniary relief. The defendants believe they have meritorious defenses to the plaintiffs' claims and will contest vigorously all of plaintiffs' claims in this matter. In July 2002, a lawsuit was filed in the United States District Court for the Eastern District of Texas on behalf of a proposed class comprised of the settlement class in the Metropolitan Life sales practices class action settlement approved in December 1999 by the United States District Court for the Western District of Pennsylvania. The Holding Company, Metropolitan Life, the trustee of the policyholder trust, and certain present and former individual directors and officers of Metropolitan Life are named as defendants. Plaintiffs' allegations concern the treatment of the cost of the settlement in connection with the demutualization of Metropolitan Life and the adequacy and accuracy of the disclosure, particularly with respect to those costs. Plaintiffs seek compensatory, treble and punitive damages, as well as attorneys' fees and costs. The defendants' motion to transfer the lawsuit to the Western District of Pennsylvania was granted on February 14, 2003. The defendants' motion to dismiss is pending. Plaintiffs have filed a motion for class certification which the Texas court has adjourned. The defendants believe they have meritorious defenses to the plaintiffs' claims and will contest them vigorously. Race-Conscious Underwriting Claims Insurance Departments in a number of states initiated inquiries in 2000 about possible race-conscious underwriting of life insurance. These inquiries generally have been directed to all life insurers licensed in their respective states, including Metropolitan Life and certain of its subsidiaries. The New York Insurance Department has concluded its examination of Metropolitan Life concerning possible past race-conscious underwriting practices. Metropolitan Life has cooperated fully with that inquiry. Four purported class action lawsuits filed against Metropolitan Life in 2000 and 2001 alleging racial discrimination in the marketing, sale, and administration of life insurance policies have been consolidated in the United States District Court for the Southern District of New York. The plaintiffs seek unspecified monetary damages, punitive damages, reformation, imposition of a constructive trust, a declaration that the alleged practices are discriminatory and illegal, injunctive relief requiring Metropolitan Life to discontinue the alleged discriminatory practices and adjust policy values, and other relief. Metropolitan Life has entered into settlement agreements to resolve the regulatory examination and the actions pending in the United States District Court for the Southern District of New York. The class action settlement, which has received preliminary approval from the court, must receive final approval before it can be implemented. A fairness hearing was held on February 7, 2003. The regulatory settlement agreement is conditioned upon final approval of the class action settlement. Metropolitan Life recorded a charge in the fourth quarter of 2001 in connection with the anticipated resolution of these matters and believes that charge is adequate to cover the costs associated with these settlements. F-115

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Sixteen lawsuits involving approximately 125 plaintiffs have been filed in federal and state court in Alabama, Mississippi and Tennessee alleging federal and/or state law claims of racial discrimination in connection with the sale, formation, administration or servicing of life insurance policies. Metropolitan Life is contesting vigorously plaintiffs' claims in these actions. Other In 2001, a putative class action was filed against Metropolitan Life in the United States District Court for the Southern District of New York alleging gender discrimination and retaliation in the MetLife Financial Services unit of the Individual segment. The plaintiffs seek unspecified compensatory damages, punitive damages, a declaration that the alleged practices are discriminatory and illegal, injunctive relief requiring Metropolitan Life to discontinue the alleged discriminatory practices, an order restoring class members to their rightful positions (or appropriate compensation in lieu thereof), and other relief. Metropolitan Life is vigorously defending itself against these allegations. A lawsuit has been filed against Metropolitan Life in Ontario, Canada by Clarica Life Insurance Company regarding the sale of the majority of Metropolitan Life's Canadian operation to Clarica in 1998. Clarica alleges that Metropolitan Life breached certain representations and warranties contained in the sale agreement, that Metropolitan Life made misrepresentations upon which Clarica relied during the negotiations and that Metropolitan Life was negligent in the performance of certain of its obligations and duties under the sale agreement. Metropolitan Life is vigorously defending itself against this lawsuit. A putative class action lawsuit is pending in the United States District Court for the District of Columbia, in which plaintiffs allege that they were denied certain ad hoc pension increases awarded to retirees under the Metropolitan Life retirement plan. The ad hoc pension increases were awarded only to retirees (i.e., individuals who were entitled to an immediate retirement benefit upon their termination of employment) and were not available to individuals like plaintiffs whose employment, or whose spouses' employment, had terminated before they became eligible for an immediate retirement benefit. The district court denied the parties' cross-motions for summary judgment to allow for discovery. Discovery has not yet commenced pending the court's ruling as to the timing of a class certification motion. The plaintiffs seek to represent a class consisting of former Metropolitan Life employees, or their surviving spouses, who are receiving deferred vested annuity payments under the retirement plan and who were allegedly eligible to receive the ad hoc pension increases awarded in 1977, 1980, 1989, 1992, 1996 and 2001, as well as increases awarded in earlier years. Metropolitan Life is vigorously defending itself against these allegations. A reinsurer of universal life policy liabilities of Metropolitan Life and certain affiliates is seeking rescission and has commenced an arbitration proceeding claiming that, during underwriting, material misrepresentations or omissions were made. The reinsurer also has sent a notice purporting to increase reinsurance premium rates. Metropolitan Life and these affiliates intend to vigorously defend themselves against the claims of the reinsurer, including the purported rate increase. Various litigation, claims and assessments against the Company, in addition to those discussed above and those otherwise provided for in the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. F-116

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Summary It is not feasible to predict or determine the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses, except as noted above in connection with specific matters. In some of the matters referred to above, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's consolidated financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. Leases In accordance with industry practice, certain of the Company's income from lease agreements with retail tenants is contingent upon the level of the tenants' sales revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office space, data processing and other equipment. Future minimum rental and sublease income, and minimum gross rental payments relating to these lease agreements were as follows: <TABLE> <CAPTION> Rental Income Sublease Income Gross Rental Payments ------------- --------------- --------------------- (Dollars in millions) <S> <C> <C> <C> 2003...... $ 540 $14 $184 2004...... 510 12 160 2005...... 464 11 145 2006...... 428 10 130 2007...... 379 9 114 Thereafter 1,724 8 643 </TABLE> 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 $1,667 million and $1,898 million at December 31, 2002 and 2001, respectively. The Company anticipates that these amounts will be invested in the partnerships over the next three to five years. Guarantees In the 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 disposition 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. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from $1 million to $800 million, while in other cases such limitations are not specified or applicable. Since certain of F-117

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount due under these guarantees in the future. In addition, Metropolitan Life and its subsidiaries indemnify their respective directors and officers as provided in their charters and by-laws. 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 due under these indemnities in the future. The Company has not recorded any liability for these indemnities, guarantees and commitments in the accompanying consolidated balance sheets at December 31, 2002 or 2001. 12. Acquisitions and Dispositions Dispositions In December 2002, the Company completed its sales of Cova Corporation, MetLife Investors Group, Inc., MetLife International Holdings, Inc., Walnut Street Securities, Inc., Seguros Genesis S.A., MetLife Pensiones S.A. and Metropolitan Life Seguros de Vida S.A. to the Holding Company. The amount received in excess of book value of $149 million was recorded as a capital contribution from the Holding Company. Total assets and total liabilities of the entities sold at the date of sale were $17,853 million and $16,545 million, respectively. Total revenues of the entities sold included in the consolidated statements of income were $1,648 million, $1,463 million, and $1,256 million for the years ended December 31, 2002, 2001 and 2000, respectively. In December 2001, the Company completed its sale of MIAC to the Holding Company. The amount received in excess of book value of $96 million was recorded as a capital contribution from the Holding Company. Total assets and total liabilities of MIAC at the date of sale were $6,240 million and $5,219 million, respectively. Total revenues of MIAC included in the consolidated statements of income were $391 million and $509 million for the years ended December 31, 2001 and 2000, respectively. In July 2001, the Company completed its sale of Conning Corporation ("Conning"), an affiliate acquired in the acquisition of GenAmerica Financial Corporation ("GenAmerica"). Conning specialized in asset management for insurance company investment portfolios and investment research. The Company received $108 million in the transaction and reported a gain of approximately $25 million in the third quarter of 2001. In October 2000, the Company completed the sale of its 48% ownership interest in its affiliates, Nvest, L.P. and Nvest Companies L.P. This transaction resulted in an investment gain of $663 million. Acquisitions In January 2000, Metropolitan Life completed its acquisition of GenAmerica, a holding company which included General American Life Insurance Company, approximately 49% of the outstanding shares of RGA common stock, and 61% of the outstanding shares of Conning common stock which was subsequently sold in 2001. Metropolitan Life owned 9% of the outstanding shares of RGA common stock prior to the completion of the GenAmerica acquisition. During 2002, MetLife, Inc. purchased additional shares of RGA's outstanding common stock. These purchases are intended to offset potential future dilution of the Company's holding of RGA's common stock arising from the issuance by RGA of company-obligated mandatorily redeemable securities of a subsidiary trust on December 10, 2001. At December 31, 2002 and 2001, Metropolitan Life's ownership percentage of the outstanding shares of common stock was approximately 58%. F-118

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) In April 2000, Metropolitan Life acquired the outstanding shares of Conning common stock not already owned by Metropolitan Life for $73 million. The shares of Conning were subsequently sold in their entirety in July 2001. 13. Business Realignment Initiatives During the fourth quarter of 2001, the Company implemented several business realignment initiatives, which resulted from a strategic review of operations and an ongoing commitment to reduce expenses. The following tables represent the original expenses recorded in the fourth quarter of 2001 and the remaining liability as of December 31, 2002: <TABLE> <CAPTION> Pre-tax Charges Recorded in the Fourth Quarter of 2001 ------------------------------------------------------ Institutional Individual Auto & Home Total ------------- ---------- ----------- ----- (Dollars in millions) <S> <C> <C> <C> <C> Severance and severance-related costs $ 9 $32 $ 3 $ 44 Facilities' consolidation costs...... 3 65 -- 68 Business exit costs.................. 387 -- -- 387 ---- --- --- ---- Total............................. $399 $97 $ 3 $499 ==== === === ==== Remaining Liability as of December 31, 2002 ------------------------------------------------------ Institutional Individual Auto & Home Total ------------- ---------- ----------- ----- (Dollars in millions) Severance and severance-related costs $ -- $ 1 $-- $ 1 Facilities' consolidation costs...... -- 13 -- 13 Business exit costs.................. 40 -- -- 40 ---- --- --- ---- Total............................. $ 40 $14 $-- $ 54 ==== === === ==== </TABLE> The 2001 facilities' consolidation costs include $15 million of charges related to MetLife Investors Group, Inc., a subsidiary sold to the Holding Company in December 2002. The remaining liability as of December 31, 2002 related to this subsidiary, which is not included in the above table, was $4 million. Institutional. The charges to this segment in the fourth quarter of 2001 include costs associated with exiting a business, including the write-off of goodwill, severance and severance-related costs, and facilities' consolidation costs. These expenses are the result of the discontinuance of certain 401(k) recordkeeping services and externally-managed guaranteed index separate accounts. These actions resulted in charges to policyholder benefits and claims and other expenses of $215 million and $184 million, respectively. During the fourth quarter of 2002, approximately $30 million of the charges recorded in 2001 were released into income primarily as a result of the accelerated implementation of the Company's exit from the large market 401(k) business. The business realignment initiatives will result in the elimination of approximately 930 positions. As of December 31, 2002, there were approximately 340 terminations to be completed. The Company continues to carry a liability as of December 31, 2002 since the exit plan could not be completed within one year due to circumstances outside the Company's control, and since certain of its contractual obligations extended beyond one year. F-119

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Individual. The charges to this segment in the fourth quarter of 2001 include facilities' consolidation costs, severance and severance-related costs, which predominately stem from the elimination of approximately 560 non-sales positions and 190 operations and technology positions supporting this segment. As of December 31, 2002, there were approximately 25 terminations to be completed. These costs were recorded in other expenses. The remaining liability as of December 31, 2002 is due to certain contractual obligations that extended beyond one year. Auto & Home. The charges to this segment in the fourth quarter of 2001 include severance and severance-related costs associated with the elimination of approximately 200 positions. All terminations were completed as of December 31, 2002. The costs were recorded in other expenses. 14. Income Taxes The provision for income taxes for continuing operations was as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ----- ---- ----- (Dollars in millions) <S> <C> <C> <C> Current: Federal................ $ 841 $(22) $(131) State and local........ (18) (4) 34 Foreign................ (5) 15 5 ----- ---- ----- 818 (11) (92) ----- ---- ----- Deferred: Federal................ (322) 775 513 State and local........ 17 32 8 Foreign................ 12 1 6 ----- ---- ----- (293) 808 527 ----- ---- ----- Provision for income taxes $ 525 $797 $ 435 ===== ==== ===== </TABLE> Reconciliations of the income tax provision at the U.S. statutory rate to the provision for income taxes for continuing operations were as follows: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ---- ---- ----- (Dollars in millions) <S> <C> <C> <C> Tax provision at U.S. statutory rate........ $590 $771 $ 457 Tax effect of: Tax exempt investment income............. (86) (82) (52) Surplus tax.............................. -- -- (145) State and local income taxes............. 21 35 30 Prior year taxes......................... (8) 36 (37) Demutualization costs.................... -- -- 21 Payment to former Canadian policyholders. -- -- 114 Sales of businesses...................... -- 5 31 Other, net............................... 8 32 16 ---- ---- ----- Provision for income taxes.................. $525 $797 $ 435 ==== ==== ===== </TABLE> Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities. F-120

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Net deferred income tax assets and liabilities consisted of the following: <TABLE> <CAPTION> December 31, -------------------- 2002 2001 ------- ------- (Dollars in millions) <S> <C> <C> Deferred income tax assets: Policyholder liabilities and receivables. $ 3,020 $ 3,033 Net operating losses..................... 187 318 Employee benefits........................ -- 123 Litigation related....................... 95 279 Other.................................... 286 438 ------- ------- 3,588 4,191 Less: Valuation allowance................ 14 114 ------- ------- 3,574 4,077 ------- ------- Deferred income tax liabilities:............ Investments.............................. 1,597 2,053 Deferred policy acquisition costs........ 2,699 2,756 Employee benefits........................ 65 -- Net unrealized investment gains.......... 1,124 1,037 Other.................................... 36 124 ------- ------- 5,521 5,970 ------- ------- Net deferred income tax liability........... $(1,947) $(1,893) ======= ======= </TABLE> Domestic net operating loss carryforwards amount to $503 million at December 31, 2002 and will expire beginning in 2019. Foreign net operating loss carryforwards amount to $42 million at December 31, 2002 and were generated in various foreign countries with expiration periods of five years to infinity. The Company has recorded a valuation allowance related to tax benefits of certain foreign net operating loss carryforwards. The valuation allowance reflects management's assessment, based on available information, that it is more likely than not that the deferred income tax asset for certain foreign net operating loss carryforwards will not be realized. The tax benefit will be recognized when management believes that it is more likely than not that these deferred income tax assets are realizable. The Internal Revenue Service has audited the Company for the years through and including 1996. The Company is being audited for the years 1997, 1998, and 1999. The Company believes that any adjustments that might be required for open years will not have a material effect on the Company's consolidated financial statements. 15. Reinsurance The Company's life insurance operations participate in reinsurance activities in order to limit losses, minimize exposure to large risks, and to provide additional capacity for future growth. The Company currently reinsures up to 90% of the mortality risk for all new individual life insurance policies that it writes through its various franchises. This practice was initiated by different franchises for different products starting at various points in time between 1992 and 2000. Risks in excess of $25 million on single life policies and $30 million on survivorship policies are 100% coinsured. In addition, in 1998, the Company reinsured substantially all of the F-121

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) mortality risk on its universal life policies issued since 1983. RGA retains a maximum of $4 million of coverage per individual life with respect to its assumed reinsurance business. The Company reinsures its business through a diversified group of reinsurers. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks of specific characteristics. The Company is contingently liable with respect to ceded reinsurance should any reinsurer be unable to meet its obligations under these agreements. In addition to reinsuring mortality risk, the Company reinsures other risks and 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 are an inherent risk of the property and casualty business and could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of loss and quota share reinsurance arrangements to limit its maximum loss, provide greater diversification of risk and minimize exposure to larger risks. The Company has also protected itself through the purchase of combination risk coverage. This reinsurance coverage pools risks from several lines of business and includes individual and group life claims in excess of $2 million per policy, as well as excess property and casualty losses, among others. See Note 11 for information regarding certain excess of loss reinsurance agreements providing coverage for risks associated primarily with sales practices claims. The amounts in the consolidated statements of income are presented net of reinsurance ceded. The effects of reinsurance were as follows: <TABLE> <CAPTION> Years ended December 31, ------------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Direct premiums............................................ $17,811 $16,257 $15,661 Reinsurance assumed........................................ 2,973 2,786 2,858 Reinsurance ceded.......................................... (2,314) (2,020) (2,256) ------- ------- ------- Net premiums............................................... $18,470 $17,023 $16,263 ======= ======= ======= Reinsurance recoveries netted against policyholder benefits $ 2,631 $ 2,069 $ 1,934 ======= ======= ======= </TABLE> Reinsurance recoverables, included in premiums and other receivables, were $3,533 million and $3,312 million at December 31, 2002 and 2001, respectively, including $1,348 million and $1,356 million, respectively, relating to reinsurance of long-term guaranteed interest contracts and structured settlement lump sum contracts accounted for as a financing transaction. Reinsurance and ceded commissions payables, included in other liabilities, were $45 million and $103 million at December 31, 2002 and 2001, respectively. Included in premiums and other receivables are reinsurance recoverables due from Exeter Reassurance Company, Limited, a related party, of $502 million and $644 million at December 31, 2002 and 2001, respectively. Included in other policyholder funds are reinsurance liabilities assumed from MIAC, a related party, of $763 and $778 million at December 31, 2002 and 2001, respectively. Included in future policy benefits and other policyholder funds are reinsurance liabilities assumed from Cova Corporation , MetLife Investor's Group, Inc. and MetLife International Holdings, Inc., related parties, of $772 million and $931 million, respectively, at December 31, 2002. These entities were sold at December 31, 2002. See note 12. F-122

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The following provides an analysis of the activity in the liability for benefits relating to property and casualty and group accident and non-medical health policies and contracts: <TABLE> <CAPTION> Years ended December 31, ------------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Balance at January 1............. $ 4,597 $ 4,226 $ 3,790 Reinsurance recoverables...... (457) (410) (415) ------- ------- ------- Net balance at January 1......... 4,140 3,816 3,375 ------- ------- ------- Incurred related to: Current year.................. 4,116 4,182 3,786 Prior years................... (85) (84) (112) ------- ------- ------- 4,031 4,098 3,674 ------- ------- ------- Paid related to: Current year.................. (2,503) (2,538) (2,215) Prior years................... (1,303) (1,236) (1,018) ------- ------- ------- (3,806) (3,774) (3,233) ------- ------- ------- Net Balance at December 31....... 4,365 4,140 3,816 Add: Reinsurance recoverables. 478 457 410 ------- ------- ------- Balance at December 31........... $ 4,843 $ 4,597 $ 4,226 ======= ======= ======= </TABLE> 16. Other Expenses Other expenses were comprised of the following: <TABLE> <CAPTION> Years ended December 31, ------------------------- 2002 2001 2000 ------- ------- ------- (Dollars in millions) <S> <C> <C> <C> Compensation................................................................... $ 2,423 $ 2,447 $ 2,712 Commissions.................................................................... 1,938 1,649 1,638 Interest and debt issue costs.................................................. 242 312 436 Amortization of policy acquisition costs (excludes amortization of $11, $21 and $(95), respectively, related to investment gains (losses))................... 1,501 1,434 1,472 Capitalization of policy acquisition costs..................................... (2,227) (2,018) (1,805) Rent, net of sublease income................................................... 289 280 230 Minority interest.............................................................. 74 57 115 Other.......................................................................... 2,349 2,759 2,510 ------- ------- ------- Total other expenses........................................................ $ 6,589 $ 6,920 $ 7,308 ======= ======= ======= </TABLE> 17. Stockholder's Equity Dividend Restrictions Under the New York Insurance Law, Metropolitan Life is permitted without prior insurance regulatory clearance to pay a stockholder dividend to the Holding Company as long as the aggregate amount of all such F-123

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year and (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life will be permitted to pay a stockholder dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent does not disapprove the distribution. Under the New York Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. The Department has established informal guidelines for such determinations. The guidelines, among other things, focus on the insurer's overall financial condition and profitability under statutory accounting practices. For the year ended December 31, 2002, Metropolitan Life paid to MetLife, Inc. $535 million in dividends for which prior insurance regulatory clearance was not required and $369 million in special dividends, as approved by the Superintendent. For the year ended December 31, 2001, Metropolitan Life paid to MetLife, Inc. $721 million in dividends for which prior insurance regulatory clearance was not required and $3,033 million in special dividends, as approved by the Superintendent. For the year ended December 31, 2000, Metropolitan Life paid to MetLife, Inc. $763 million in dividends for which prior insurance regulatory clearance was not required. Of the total dividend paid, $1,894 million (retained earnings from date of demutualization through the month the dividend was paid) was charged to retained earnings and $1,860 million was charged to additional paid-in-capital. At December 31, 2002, Metropolitan Life could pay the Holding Company a dividend of $662 million without prior approval of the Superintendent. Stock Compensation Plans Under the MetLife, Inc. 2000 Stock Incentive Plan (the "Stock Incentive Plan"), awards may be granted to Metropolitan Life employees in the form of non-qualified or incentive stock options qualifying under Section 422A of the Internal Revenue Code. Under the MetLife, Inc. 2000 Directors Stock Plan, (the "Directors Stock Plan") awards granted may be in the form of stock awards or non-qualified stock options or a combination of the foregoing to outside Directors of the Company. The aggregate number of shares of stock that may be awarded under the Stock Incentive Plan is subject to a maximum limit of 37,823,333 shares for the duration of the plan. The Directors Stock Plan has a maximum limit of 500,000 share awards. All options granted have an exercise price equal to the fair market value price of the Company's common stock on the date of grant, and an option's maximum term is ten years. Certain options under the Stock Incentive Plan become exercisable over a three-year period commencing with date of grant, while other options become exercisable three years after the date of grant. Options issued under the Directors Stock Plan are exercisable at any time after April 7, 2002. MetLife, Inc. applies APB 25 and related interpretations in accounting for its stock-based compensation plans. Accordingly, in the measurement of compensation expense, the excess of market price over exercise price is utilized on the first date that both the number of shares and award price are known. For the years ended December 31, 2002 and 2001, compensation expense for non-employees related to MetLife, Inc.'s Stock Incentive Plan and Directors Stock Plan was $2 million and $1 million, respectively. This expense is allocated to the Company to properly reflect compensation expense related to Metropolitan Life employees. Had the compensation cost for the MetLife, Inc. Stock Incentive Plan and Directors Stock Plan allocable to the Company been determined based on fair value at the grant date for awards under those plans consistent with the method of SFAS No. 123, the Company's net income for the years ended December 31, 2002 and 2001 would have been reduced to a pro forma amount of $1,570 million and $1,468 million, respectively. The pro forma net income is not necessarily representative of the effects on net income in future years. The pro forma net income includes the Company's ownership share of compensation costs related to RGA's incentive stock plan determined in accordance with SFAS 123. F-124

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The fair value of each option grant is estimated on the date of the grant using the Black-Scholes options-pricing model with the following weighted average assumptions used for grants for the: <TABLE> <CAPTION> 2002 2001 ----------- --------- <S> <C> <C> Dividend yield:......... 0.68% 0.68% Risk-free rate of return 4.74%-5.52% 5.72% Volatility.............. 25.3%-30.3% 31.6% Expected duration....... 4-6 years 4-6 years </TABLE> Statutory Equity and Income Applicable insurance department regulations require that the insurance subsidiaries prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. Statutory accounting practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a different basis. As of December 31, 2001, New York State Statutory Accounting Practices did not provide for deferred income taxes. The Department has adopted a modification to its regulations, effective December 31, 2002, with respect to the admissibility of deferred taxes by New York insurers, subject to certain limitations. Statutory net income of Metropolitan Life, as filed with the Department, was $1,478 million, $2,782 million and $1,027 million for the years ended 2002, 2001 and 2000, respectively; statutory capital and surplus, as filed, was $6,986 million and $5,358 million at December 31, 2002 and 2001, respectively. The National Association of Insurance Commissioners ("NAIC") adopted the Codification of Statutory Accounting Principles (the "Codification"), which is intended to standardize regulatory accounting and reporting to state insurance departments, and became effective January 1, 2001. However, statutory accounting principles continue to be established by individual state laws and permitted practices. The Department required adoption of the Codification, with certain modifications, for the preparation of statutory financial statements effective January 1, 2001. Further modifications by state insurance departments may impact the effect of the Codification on the statutory capital and surplus of Metropolitan Life and the Holding Company's other insurance subsidiaries. F-125

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 18. Other Comprehensive Income The following table sets forth the reclassification adjustments required for the years ended December 31, 2002, 2001 and 2000 to avoid double-counting in other comprehensive income items that are included as part of net income for the current year that have been reported as a part of other comprehensive income in the current or prior year: <TABLE> <CAPTION> Years ended December 31, ----------------------- 2002 2001 2000 ------- ------ ------ (Dollars in millions) <S> <C> <C> <C> Holding gains on investments arising during the year.............................. $ 2,904 $1,287 $2,807 Income tax effect of holding gains................................................ (976) (509) (975) Reclassification adjustments: Recognized holding losses included in current year income...................... 339 579 989 Amortization of premiums and accretion of discounts associated with investments.................................................................. (440) (475) (498) Recognized holding gains allocated to other policyholder amounts............... (139) (33) (54) Income tax effect.............................................................. 75 (27) (152) Allocation of holding losses on investments relating to other policyholder amounts......................................................................... (2,453) (158) (977) Income tax effect of allocation of holding losses to other policyholder amounts... 829 61 340 Unrealized investment gain (losses) of subsidiary at date of sale................. 68 (173) -- Deferred income taxes on unrealized investment gain (losses) of subsidiary at date of sale......................................................................... (15) 64 -- ------- ------ ------ Net unrealized investment gains................................................... 192 616 1,480 ------- ------ ------ Foreign currency translation adjustments arising during the year.................. 137 (58) (6) Foreign currency translation of subsidiary at date of sale........................ (65) 19 -- ------- ------ ------ Foreign currency translation adjustment........................................... 72 (39) (6) Minimum pension liability adjustment.............................................. -- (18) (9) ------- ------ ------ Other comprehensive income........................................................ $ 264 $ 559 $1,465 ======= ====== ====== </TABLE> 19. Business Segment Information The Company provides insurance and financial services to customers in the United States, Canada, Central America, South America, Europe, South Africa, Asia and Australia. The Company's business is divided into six major segments: Individual, Institutional, Reinsurance, Auto & Home, Asset Management and International. These segments are managed separately because they either provide different products and services, require different strategies or have different technology requirements. Individual offers a wide variety of individual insurance and investment products, including life insurance, annuities and mutual funds. Institutional offers a broad range of group insurance and retirement and savings products and services, including group life insurance, non-medical health insurance such as short and long-term disability, long-term care, and dental insurance, and other insurance products and services. Reinsurance provides primarily reinsurance of life and annuity policies in North America and various international markets. Additionally, reinsurance of critical illness policies is provided in select international markets. Auto & Home provides insurance coverages, including private passenger automobile, homeowners and personal excess liability insurance. Asset Management provides a broad variety of asset management products and services to individuals F-126

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) and institutions. International provides life insurance, accident and health insurance, annuities and retirement and savings products to both individuals and groups, and auto and homeowners coverage to individuals. Set forth in the tables below is certain financial information with respect to the Company's operating segments as of or for the years ended December 31, 2002, 2001 and 2000. The accounting policies of the segments are the same as those described in the summary of significant accounting policies, except for the method of capital allocation and the accounting for gains and losses from inter-company sales which are eliminated in consolidation. The Company allocates capital to each segment based upon an internal capital allocation system that allows the Company to more effectively manage its capital. The Company evaluates the performance of each operating segment based upon income or loss from operations before provision for income taxes and non-recurring items (e.g. items of unusual or infrequent nature). The Company allocates certain non-recurring items (primarily consisting of expenses associated with the resolution of proceedings alleging race-conscious underwriting practices, sales practices claims and claims for personal injuries caused by exposure to asbestos or asbestos-containing products and demutualization costs) to Corporate & Other. <TABLE> <CAPTION> At or for the year ended Auto Asset Corporate December 31, 2002 Individual Institutional Reinsurance & Home Management International & Other Total ------------------------ ---------- ------------- ----------- ------ ---------- ------------- --------- -------- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> <C> <C> Premiums......................... $ 4,419 $ 8,254 $1,984 $2,828 $ -- $992 $ (7) $ 18,470 Universal life and investment- type product policy fees....... 1,267 614 -- -- -- 37 -- 1,918 Net investment income............ 6,036 3,926 378 177 59 241 (117) 10,700 Other revenues................... 454 607 42 26 166 10 95 1,400 Net investment (losses) gains.... (131) (508) 7 (46) (4) (9) (39) (730) Policyholder benefits and claims.......................... 5,162 9,337 1,517 2,020 -- 821 3 18,860 Interest credited to policyholder account balances................ 1,608 930 146 -- -- 28 (1) 2,711 Policyholder dividends........... 1,769 115 -- (1) -- 28 -- 1,911 Other expenses................... 2,543 1,529 616 794 211 373 523 6,589 Income (loss) from continuing operations before provision for income taxes.................... 963 982 132 172 10 21 (593) 1,687 Income from discontinued operations, net of income taxes........................... 201 122 -- -- -- -- 127 450 Net income (loss)................ 811 759 86 131 6 21 (202) 1,612 Total assets..................... 120,284 94,911 9,458 4,944 191 795 18,812 249,395 Deferred policy acquisition costs........................... 7,448 608 1,429 175 -- 5 1 9,666 Goodwill, net.................... 73 62 96 156 18 -- -- 405 Separate account assets.......... 21,982 31,935 11 -- -- -- (16) 53,912 Policyholder liabilities......... 84,844 55,460 6,734 2,673 -- 248 (343) 149,616 Separate account liabilities..... 21,982 31,935 11 -- -- -- (16) 53,912 </TABLE> F-127

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) <TABLE> <CAPTION> At or for the year ended Auto Asset Corporate December 31, 2001 Individual Institutional Reinsurance & Home Management International & Other Total ------------------------ ---------- ------------- ----------- ------ ---------- ------------- --------- -------- (Dollars in millions) <S> <C> <C> <C> <C> <C> <C> <C> <C> Premiums......................... $ 4,531 $ 7,288 $1,664 $2,755 $ -- $ 788 $ (3) $ 17,023 Universal life and investment- type product policy fees........ 1,245 592 -- -- -- 38 (1) 1,874 Net investment income............ 6,130 3,965 349 200 71 256 151 11,122 Other revenues................... 527 649 35 22 198 16 85 1,532 Net investment gains (losses).... 838 (15) (10) (17) 25 (16) 122 927 Policyholder benefits and claims.......................... 5,213 8,924 1,373 2,121 -- 632 2 18,265 Interest credited to policyholder account balances................ 1,850 1,012 122 -- -- 51 -- 3,035 Policyholder dividends........... 1,767 259 -- -- -- 34 -- 2,060 Other expenses................... 2,763 1,746 478 800 252 315 566 6,920 Income (loss) from continuing operations before provision for income taxes................ 1,678 538 65 39 42 50 (214) 2,198 Income from discontinued operations, net of income taxes........................... 38 23 -- -- -- -- 25 86 Net income (loss)................ 1,092 383 39 41 27 16 (111) 1,487 Total assets..................... 127,499 89,620 7,496 4,567 256 3,385 15,042 247,865 Deferred policy acquisition costs........................... 8,371 509 1,147 179 -- 263 2 10,471 Goodwill, net.................... 223 55 106 159 20 12 -- 575 Separate account assets.......... 31,261 31,177 13 -- -- 277 (14) 62,714 Policyholder liabilities......... 84,637 52,035 5,062 2,610 -- 1,987 (323) 146,008 Separate account liabilities..... 31,261 31,177 13 -- -- 277 (14) 62,714 For the year ended Auto & Asset Corporate December 31, 2000 Individual Institutional Reinsurance Home Management International & Other Total ------------------ ---------- ------------- ----------- ------ ---------- ------------- --------- -------- (Dollars in millions) Premiums......................... $ 4,625 $ 6,900 $1,444 $2,636 $ -- $ 660 $ (2) $ 16,263 Universal life and investment- type product policy fees........ 1,221 547 -- -- -- 53 (1) 1,820 Net investment income............ 6,110 3,712 368 194 90 254 301 11,029 Other revenues................... 680 650 29 40 760 9 91 2,259 Net investment gains (losses).... 199 (475) (2) (20) -- 18 (138) (418) Policyholder benefits and claims.......................... 5,045 8,178 1,147 2,005 -- 562 (2) 16,935 Interest credited to policyholder account balances................ 1,680 1,090 109 -- -- 56 -- 2,935 Policyholder dividends........... 1,742 124 15 -- -- 32 -- 1,913 Payments to former Canadian policyholders................... -- -- -- -- -- 327 -- 327 Demutualization costs............ -- -- -- -- -- -- 230 230 Other expenses................... 3,005 1,514 452 827 784 292 434 7,308 Income (loss) from continuing operations before provision for income taxes................ 1,363 428 116 18 66 (275) (411) 1,305 Income from discontinued operations, net of income taxes........................... 36 21 -- -- -- -- 22 79 Net income (loss)................ 892 307 68 30 34 (285) (97) 949 </TABLE> F-128

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) For the year ended December 31, 2001 the Institutional, Individual, Reinsurance and Auto & Home segments include $287 million, $24 million, $9 million and $5 million, respectively, of pre-tax losses associated with the September 11, 2001 tragedies. See Note 2. The Institutional, Individual and Auto & Home segments include $399 million, $97 million and $3 million, respectively, in pre-tax charges associated with business realignment initiatives for the year ended December 31, 2001. See Note 13. For the year ended December 31, 2001, the Individual segment includes $118 million of pre-tax expenses associated with the establishment of a policyholder liability for certain group annuity policies. For the year ended December 31, 2001, pre-tax gross investment gains of $1,027 million, $142 million and $357 million resulting from the sale of certain real estate properties to MIAC are included in the Individual segment, Institutional segment and Corporate & Other, respectively. The Individual segment included an equity ownership interest in Nvest under the equity method of accounting. Nvest was included within the Asset Management segment due to the types of products and strategies employed by the entity. The Individual segment's equity in earnings of Nvest, which is included in net investment income, was $30 million for the year ended December 31, 2000. The Individual segment includes $538 million (after allocating $118 million to participating contracts) of the pre-tax gross investment gain on the sale of Nvest in 2000. As part of the GenAmerica acquisition in 2000, the Company acquired Conning, the results of which are included in the Asset Management segment due to the types of products and strategies employed by the entity from its acquisition date to July 2001, the date of its disposition. The Company sold Conning, receiving $108 million in the transaction and reported a gain of approximately $25 million in the third quarter of 2001. The Corporate & Other segment consists of various start-up entities and run-off entities, as well as the elimination of all intersegment amounts. The principal component of the intersegment amounts relates to intersegment loans, which bear interest rates commensurate with related borrowings. In addition, the elimination of the Individual segment's ownership interest in Nvest is included for the year ended December 31, 2000. Net investment income and net investment gains and losses are based upon the actual results of each segment's specifically identifiable asset portfolio adjusted for allocated capital. Other costs and operating costs were allocated to each of the segments based upon: (i) a review of the nature of such costs, (ii) time studies analyzing the amount of employee compensation costs incurred by each segment, and (iii) cost estimates included in the Company's product pricing. Revenues derived from any customer did not exceed 10% of consolidated revenues. Revenues from U.S. continuing operations were $30,487 million, $31,396 million and $29,959 million for the years ended December 31, 2002, 2001 and 2000, respectively, which represented 96%, 97% and 97%, respectively, of consolidated revenues. 20. Discontinued Operations The Company actively manages its real estate portfolio with the objective to maximize earnings through selective acquisitions and dispositions. Accordingly, the Company sold certain real estate holdings out of its F-129

METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) portfolio during 2002. In accordance with SFAS No. 144, income related to real estate classified as held-for-sale on or after January 1, 2002 is presented as discontinued operations. The following table presents the components of income from discontinued operations: <TABLE> <CAPTION> Years Ended December 31, ----------------------- 2002 2001 2000 ----- ----- ----- (Dollars in millions) <S> <C> <C> <C> Investment income...................... $ 375 $ 422 $ 418 Investment expense..................... (251) (297) (297) Net investment gains................... 582 -- -- ----- ----- ----- Total revenues...................... 706 125 121 Provision for income taxes............. 256 39 42 ----- ----- ----- Income from discontinued operations. $ 450 $ 86 $ 79 ===== ===== ===== </TABLE> The carrying value of real estate related to discontinued operations was $223 million and $1,580 million at December 31, 2002, and 2001, respectively. See Note 19 for discontinued operations by business segment. 21. Related Parties Effective January 1, 2003, MetLife Group, Incorporated, a New York corporation and wholly owned subsidiary of the Holding Company, was formed as a personnel services company to provide personnel, as needed, to support the activities of the Company. F-130

Metropolitan Life Separate Account UL PART C. OTHER INFORMATION ITEM 27. EXHIBITS (a) Resolution of the Board of Directors of Metropolitan Life effecting the establishment of Metropolitan Life Separate Account UL 2 (b) None (c) (i) Form of Broker Agreement 2 (ii) Schedule of Sales Commissions 1 (d) (i) Variable Additional Insurance Rider 5 (ii) L98 fixed benefit Life Insurance Policy 4 (iii) Form of Variable Additional Benefit Rider 6 (e) Applications (see (d)(i), (d) (ii) and (d)(iii) above) (f) (i) Restated Charter and By-Laws of Metropolitan Life 7 (ii) Amended Restated Charter and By-laws of Metropolitan Life 9 (g) None (h) None (i) None (j) None (k) (i) Opinion and Consent of Christopher P. Nicholas as to the legality of the securities being registered - For Equity Additions 4 - For Equity Enricher 6 (ii) Opinion and Consent of Anne M. Goggin as to the legality of the securities being registered 8 (iii) Consent of Anne M. Goggin, Esq. (l) None (m) None (n) (i) Consent of Independent Auditors (ii) Consent of Foley & Lardner (o) None (p) None (q) (i) Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) 2 (ii) Addendum to Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) 8 (r) Powers of attorney 3 1 Incorporated by reference from "Sales and Administration of the Policies" in the Prospectus included herein and "Distribution of the Policies That Include the Equity Options" in the Statement of Additional Information included herein. 2 Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement (File No. 033-47927) filed on April 30, 1997. 3 Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement (File No. 033-47927) filed on April 30, 1997, except for Robert H. Benmosche's power of attorney, which is incorporated by reference to the Registration Statement (File No. 333-40161) filed on November 13, 1997, Stewart G. Nagler's power of attorney which is incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement (File no. 033-47927) filed on December 23, 1997, Virginia M. Wilson's power of attorney,

which is incorporated by reference to Pre-Effective Amendment No. 2 to the Registration Statement on Metropolitan Life Separate Account E (File No. 333-80547) filed on November 1, 1999, William C. Steere's power of attorney, which is incorporated by reference to the filing of Post-Effective Amendment No. 8 of Separate Account UL (File No. 033-57320) on April 23, 1999, and John C. Danforth's power of attorney, which is incorporated by reference to Post-Effective Amendment No. 27 to the Registration Statement of Separate Account E (File No. 002-90380) on April 3, 2001. 4 Incorporated herein by reference to the Registration Statement (File No. 333-40161) filed on November 13, 1997. 5 Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6 (File No. 333-40161) as filed on April 20, 1998. 6 Incorporated herein by reference to Post-Effective Amendment No. 2 to the Registration Statement (File No. 333-40161) filed on April 13, 1999. 7 Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registration Statement (File No. 333-40161) filed on April 6, 2000. 8 Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement (File No. 033-40161) filed on April 10, 2001. 9 Incorporated herein by reference to the Registration Statement of MetLife Separate Account E (File No. 333-83716) on March 5, 2002. ITEM 28. DIRECTORS AND OFFICERS OF DEPOSITOR Name and Principal Business Address Positions and Offices with Depositor ----------------------------------- ------------------------------------ Robert H. Benmosche Chairman of the Board, President and Metropolitan Life Insurance Company Chief Executive Officer One Madison Avenue, New York, NY 10010 Curtis H. Barnette Director Chairman Emeritus Bethlehem Steel Corporation 1170 Eighth Avenue, Martin Tower 2118 Bethlehem, PA 18016-7699 Gerald Clark Vice Chairman of the Board and Chief Metropolitan Life Insurance Company Investment Officer One Madison Avenue New York, NY 10010 John C. Danforth Director Partner Bryan Cave LLP One Metropolitan Square 211 North Broadway, Suite 3600 St. Louis, MO 63102 Burton A. Dole, Jr. Director Retired Chairman of the Board, President and

Chief Executive Officer Nellcor Puritan Bennett, Inc. P.O. Box 208 Carlsbad, CA 92018 James R. Houghton Director Chairman and Chief Executive Officer Corning Incorporated One Riverfront Plaza, MP HQ E2-6 Corning, NY 14831 Harry P. Kamen Director Retired Chairman and Chief Executive Officer Metropolitan Life Insurance Company 200 Park Avenue, Suite 5700 New York, NY 10166 Helene L. Kaplan Director Of Counsel, Skadden, Arps, Slate, Meagher and Flom Four Times Square New York, NY 10036 Catherine R. Kinney Director Co-Chief Operating Officer President and Executive Vice Chairman New York Stock Exchange, Inc. 11 Wall Street, 6th floor New York, NY 10005 Charles H. Leighton Director Retired Chairman and Chief Executive Officer CML Group, Inc. 51 Vaughn Hill Road Bolton, MA 01720 Stewart G. Nagler Vice Chairman of the Board and Chief Metropolitan Life Insurance Company Financial Officer One Madison Avenue New York, NY 10010 John J. Phelan, Jr. Director Former Chairman of the Board and Chief Executive Officer New York Stock Exchange, Inc. P. O. Box 524

Locust Valley, NY 11560 Hugh B. Price Director President and Chief Executive Officer National Urban League, Inc. 120 Wall Street, 7th & 8th Floors New York, NY 10005 William C. Steere, Jr. Director Retired Chairman of the Board Pfizer, Inc. 235 East 42nd Street New York, NY 10016 Set forth below is a list of certain principal officers of Metropolitan Life. The principal business address of each officer of Metropolitan Life is One Madison Avenue, New York, New York 10010. <TABLE> <CAPTION> Name Position with Metropolitan Life <S> <C> Robert H. Benmosche Chairman of the Board, President and Chief Executive Officer Gerald Clark Vice Chairman of the Board and Chief Investment Officer Stewart C. Nagler Vice Chairman of the Board and Chief Financial Officer Gary A. Beller Senior Executive Vice-President and General Counsel Gwenn L. Carr Vice President and Secretary Daniel J. Cavanagh Executive Vice President C. Robert Henrikson President- Institutional Business Jeffrey J. Hogman Executive Vice President Catherine A. Rein Senior Executive Vice President; President and Chief Executive Officer of Metropolitan Property and Casualty Insurance Company Stanley J. Talbi Senior Vice President and Chief Actuary William J. Toppeta President, International Lisa Weber Senior Executive Vice President, Chief Administration Officer Judy E. Weiss Executive Vice President and Chief Actuary Anthony J. Williamson Senior Vice President and Treasurer Virginia M. Wilson Senior Vice President and Controller </TABLE> The business address of each officer is One Madison Avenue, New York, New York 10010. ITEM 29. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT The registrant is a separate account of Metropolitan Life Insurance Company under the New York Insurance law. Under said law the assets allocated to the separate account are the property of Metropolitan Life Insurance Company. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. The following outline

indicates those persons who are controlled by or under common control with Metropolitan Life Insurance Company:

ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 2002 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2002. 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 Capital Trust I (DE) E. Aseguradora Hidalgo, S.A. (Mexico) F. Metropolitan Insurance and Annuity Company (DE) G. MetLife Pensiones S.A. (Mexico)- Ownership of MetLife Pensiones S.A. and Seguros Genesis, S.A. (Mexico) is as follows: MetLife, Inc. owns 97.4738%, and Metropolitan Asset Management Corporation owns 2.5262%. H. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by Met- Life, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Reaseguros de Vida S.A. (Chile)- 99.999735% is owned by MetLife Chile Inversiones Limitada and 0.000265% is owned by MetLife International Holdings, Inc. 2. MetLife Chile Seguros de Vida S.A. (Chile)- 95.7302007% is owned by MetLife Chile Inversiones Limitada, 4.2696274% by MetLife Chile Reaseguros de Vida S.A. and 0.0001719% by MetLife International Holdings, Inc. I. Seguros Genesis S.A. (Mexico)- Ownership of MetLife Pensiones S.A. and Seguros Genesis, S.A. (Mexico) is as follows: MetLife, Inc. owns 97.4738%, and Metropolitan Asset Management Corporation owns 2.5262%. J. Metropolitan Life Seguros de Vida S.A. (Uruguay) 1. Jefferson Pilot Omega Seguros de Vida S.A. (Uruguay) K. Cova Corporation (MO) 1

1. Texas Life Insurance Company (TX) a) Texas Life Agency Services, Inc. (TX) b) Texas Life Agency Services of Kansas, Inc. (KS) 2. Cova Life Management Company (DE) 3. MetLife Investors Insurance Company (MO) a) MetLife Investors Insurance Company of California (CA) b) First MetLife Investors Insurance Company (NY) L. Walnut Street Securities, Inc. (MO) 1. WSS Insurance Agency of Massachusetts, Inc. (MA) 2. Walnut Street Advisers, Inc. (MO) 3. WSS Insurance Agency of Nevada, Inc. (NV) M. MetLife Investors Group, Inc. (DE) 1. MetLife Investors USA Insurance Company (DE) 2. MetLife Investors Group of Ohio (OH) 3. Security First Insurance Agency (MA) 4. MetLife Investors Distribution Company (DE) 5. MetLife Investors Insurance Agency, Inc. (Nevada) 6. Met Investors Advisory, LLC (DE) 7. MetLife Investors Financial Agency, Inc. (TX) N. MetLife International Holdings, Inc. (DE) 1. MetLife Iberia, S.A.(Spain)- Shares of MetLife Iberia, S.A. are held by MetLife International Holdings at 80%. a) Seguros Genesis S.A. (Spain) b) Genesis Seguros Gnerales, Sociedad Anonima de Seguros y Reaseguros (Spain) 2

2. Natiloportem Holdings, Inc.(DE) a) Metropolitan Life Insurance Services Limited (United Kingdom)- 50% of the shares of Metropolitan Life Insurance Services Limited are held by Metropolitan Life Insurance Company. b) Metropolitan Company Limited (Isle of Man) c) Servicios Administrativos Gen, S.A. de C.V. (Mexico) d) European Marketing Services S.r.l. (Italy)- 95% of the shares of European Marketing Services S.r.l are held by Natiloportem Holdings, Inc. and 5% are held by MetLife International Holdings, Inc. 3. MetLife India Insurance Company Private Limited (India)-26% of the shares of MetLife India Insurance Company Private Limited are held by MetLife International Holdings, Inc. and 74% by third parties. 4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong) 5. Metropolitan Life Seguros de Retiro S.A. (Argentina) 6. Metropolitan Life Seguros de Vida S.A. (Argentina) a) Met AFJP S.A. (Argentina)- 95% of the shares of Met AFJP S.A. are held by Metropolitan Life Seguros de Vida S.A. (Argentina) and 5% of the shares are held by Metropolitan Seguros de Retiro S.A. 7. MetLife Services Company Czechia, s.r.o. (Czech Republic)- 10% of the shares of MetLife Services Company Czechia are held by Natiloportem Holdings, Inc. and 90% of the shares are held by MetLife International Holdings, Inc. 8. Metropolitan Life Ubezpieczen na Zycie S.A. (Poland)- 48% of the shares of Metropolitan Life Ubezpieczen na Zycie S.A. are held directly by MetLife, Inc. 9. MetLife Insurance Company of Korea Limited (South Korea) 10. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil) a) Seguradora Seasul S.A. (Brazil) - 99.89% of the shares of Seguradora Seasul S.A. are held by Metropolitan Life Seguros e Previdencia Privada S.A. O. Metropolitan Life Insurance Company (NY) 1. 334 Madison Avenue BTP-D Holdings, LLC (DE) 2. 334 Madison Avenue BTP-E Holdings, LLC (DE) 3. 334 Madison Avenue Euro Investments, Inc. (DE) a) Park Twenty Three Investments Company (United Kingdom)- 99% of the voting control of Park Twenty Three Investments Four Company is held by 334 Madison Euro Investments, Inc. and 1% is held by St. James Fleet Investments Two Limited. 3

(1) Convent Station Euro Investments Four Company (United Kingdom)- 99% of the voting control of Convent Station Euro Investments Four Company is held by Park Twenty Three Investments Company and 1% by 334 Madison Euro Investments, Inc. as nominee for Park Twenty Three Investments Company. 4. 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. 5. One Madison Investments (Cayco) Limited (Cayman Islands)- 89.9% of the voting control of One Madison Investments (Cayco) Limited is held by Metropolitan Life Insurance Company and 10.1% is held by Convent Station Euro Investments Four Company. 6. CRB Co, Inc.(MA)- AEW Estate Advisors, Inc. holds 49,000 preferred non-voting shares of CRB Co., Inc. and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 7. GA Holding Corp. (MA) 8. CRH Co., Inc. (MA) 9. L/C Development Corporation (CA) 10. New England Portfolio Advisors, Inc. (MA) 11. Benefit Services Corporation (GA) 12. One Madison Merchandising L.L.C. (CT) 13. Transmountain Land & Livestock Company (MT) 14. MetPark Funding, Inc. (DE) 15. HPZ Assets LLC (DE) 16. MetDent, Inc. (DE) 17. Missouri Reinsurance (Barbados), Inc. (Barbados) 18. Metropolitan Tower Realty Company, Inc. (DE) 19. Metropolitan Tower Life Insurance Company (DE) 20. Security Equity Life Insurance Company (NY) 21. MetLife Security Insurance Company of Louisiana (LA) 22. P.T. MetLife Sejahtera (Indonesia)-94.3% of P.T. MetLife Sejahtera is held by Metropolitan Life Insurance Company. 4

23. Met Life Holdings Luxembourg S.A. (Luxembourg) 24. Metropolitan Life Holdings Netherlands BV (Netherlands) 25. MetLife (India) Private Ltd. (India) 26. Metropolitan Marine Way Investments Limited (Canada) 27. MetLife Central European Services Spolka z Organiczona Odpowiedzialmoscia (Poland) 28. MetLife Investments Ireland Limited (Ireland) 29. MetLife Private Equity Holdings, LLC (DE) 30. MetLife Securities, Inc. (DE) 31. 23rd Street Investments, Inc. (DE) a) Mezzanine Investment Limited Partnership-BDR (DE). Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-BDR. 23rd Street Investments, Inc. is a 1% general partner. b) Mezzanine Investment Limited Partnership-LG (DE). 23rd Street Investments, Inc. is a 1% general partner of Mezzanine Investment Limited Partnership-LG. Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-LG. (1) Coating Technologies International, Inc. (DE) 32. Metropolitan Realty Management, Inc. (DE) a) Edison Supply and Distribution (DE) b) Cross & Brown Company (NY) (1) CBNJ, Inc.(NJ) 33. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 34. MetLife Holdings, Inc. a) MetLife Credit Corp. b) MetLife Funding, Inc. 5

35. Metropolitan Property & Casualty Insurance Company a) Metropolitan General Insurance Company (RI) b) Metropolitan Casualty Insurance Company (RI) c) Metropolitan Direct Property and Casualty Insurance Company (RI) d) Met P&C Managing General Agency, Inc.(TX) e) MetLife Auto & Home Insurance Agency, Inc. (RI) f) Metropolitan Group Property and Casualty Insurance Company (RI) (1) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) g) Metropolitan Lloyds, Inc. (TX) (1) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides 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. h) Economy Fire & Casualty Company (IL) (1) Economy Preferred Insurance Company (IL) (2) Economy Premier Assurance Company (IL) 36. SSRM Holdings, Inc. (DE) a) State Street Research & Management Company (DE) (1) State Street Research Investment Services, Inc. (MA) b) SSR Realty Advisors, Inc. (DE) (1) Metric Management, Inc.(DE) (2) Metric Assignor, Inc. (CA) (3) SSR AV, Inc. (DE) (4) Metric Capital Corporation (CA) (5) SSR Development Partners LLC (DE) (6) Metric Property Management, Inc. (DE)- 50% of Metric Property Management is held by Metric Realty and SSR Realty Advisors, Inc. 6

(7) Metric Realty (IL)- 50% of Metric Realty is held by SSR Realty Advisors, Inc. 37. Metropolitan Asset Management Corporation (DE) a) MetLife Capital Credit L.P. (DE) - 73.78% Limited Partnership interest of MetLife Capital Credit L.P. is held directly by Metropolitan Life Insurance Company and 10% General Partnership interest of MetLife Capital Credit L.P. is held by Metropolitan Asset Management Corporation. (1) MetLife Capital CFLI Holdings, LLC (DE) (a) MetLife Capital CFLI Leasing, LLC (DE) b) MetLife Capital Limited Partnership (DE)- 73.78% Limited Partnership interest is held directly by Metropolitan Life Insurance Company and 9.58% Limited Partnership and 16.64% General Partnership interests are held by Metropolitan Asset Management Corporation. c) MetLife Investments Asia Limited (Hong Kong)- One share of MetLife Investments Asia Limited is held by W&C Services, Inc., a nominee of Metropolitan Asset Management Corporation. d) MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments and MetLife Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. e) MetLife Investments, S.A.(Argentina)- 23rd Street Investments, Inc. holds one share of MetLife Investments and MetLife Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. f) MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds one share of MetLife Investments and MetLife Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. 38. MetLife General Insurance Agency, Inc. (DE) a) MetLife General Insurance Agency of Alabama, Inc. (DE) b) MetLife General Insurance Agency of Kentucky, Inc. (DE) c) MetLife General Insurance Agency of Mississippi, Inc. (DE) d) MetLife General Insurance Agency of North Carolina, Inc. (DE) e) MetLife General Insurance Agency of Texas, Inc.(DE) f) MetLife General Insurance Agency of Massachusetts, Inc. (MA) 39. MetLife New England Holdings, Inc. (DE) 7

a) New England Life Insurance Company (MA) (1) New England Life Holdings, Inc. (DE) (a) New England Securities Corporation (MA) (b) Hereford Insurance Agency, Inc. (MA) (c) Hereford Insurance Agency of Hawaii, Inc. (HI) (d) Fairfield Insurance Agency of Texas, Inc. (TX) (e) MetLife Advisers, LLC (MA) (f) N.L. Holding Corp. (DEL) (NY) (i) Nathan & Lewis Securities, Inc. (NY) (ii) Nathan & Lewis Associates-Arizona, Inc. (AZ) (iii) Nathan & Lewis of Nevada, Inc. (NV) (iv) Nathan & Lewis Associates, Inc. (NY) (A) Nathan and Lewis Insurance Agency of Massachusetts, Inc. (MA) (B) Nathan and Lewis Associates of Texas, Inc. (TX) (2) Newbury Insurance Company, Limited (Bermuda) (3) New England Pension and Annuity Company (DE) (4) Omega Reinsurance Corporation (AZ) 40. GenAmerica Financial Corporation (MO) a) GenAmerica Capital I (DE) b) General American Distributors, Inc. (MO) c) General American Life Insurance Company (MO) (1) Paragon Life Insurance Company (MO) (2) John S. McSwaney & Associates, Inc. (ND) (3) GenAmerica Management Corporation (MO)- 90% of the voting shares of GenAmerica Management Corporation are owned by General American Life Insurance Company. 8

(4) Krisman, Inc. (MO) (5) White Oak Royalty Company (OK) (6) Equity Intermediary Company (MO) (a) Reinsurance Group of America, Incorporated (MO)- 48.9% of Reinsurance Group of America, Incorporated is held by Equity Intermediary Company and 9.6% of the voting shares of Reinsurance Group of America, Incorporated is held directly by Metropolitan Life Insurance Company. (i) Reinsurance Company of Missouri, Incorporated (MO) (A) RGA Reinsurance Company (MO) (aa) Fairfield Management Group, Inc.(MO) (a.1) Reinsurance Partners, Inc. (MO) (a.2) Great Rivers Reinsurance Management, Inc. (MO) (a.3) RGA (U.K.) Underwriting Agency Limited (United Kingdom) (ii) Triad Re, Ltd. (Barbados)-67% of Triad Re, Ltd. is held by Reinsurance Group of America, Incorporated and 100% of the preferred stock of Triad Re, Ltd. is also held by Reinsurance Group of America Incorporated. (iii) RGA Sigma Reinsurance SPC (Cayman Islands) (iv) RGA Americas Reinsurance Company, Ltd. (Barbados) (v) RGA Reinsurance Company (Barbados) Ltd. (Barbados) (A) RGA Financial Group, L.L.C. (DE)- 80% of RGA Financial Group, L.L.C. is held by RGA Reinsurance Company (Barbados) Ltd. and 20% of RGA Financial Group, LLC is held by RGA Reinsurance Company (vi) RGA Life Reinsurance Company of Canada (Canada) (vii) RGA International Corporation (Nova Scotia) (A) RGA Financial Products Limited (Canada) (viii) RGA Holdings Limited (U.K) (United Kingdom) (ix) RGA UK Services Limited (United Kingdom) 9

(x) RGA Capital Limited U.K. (United Kingdom) (xi) RGA Reinsurance (UK) Limited (United Kingdom) (xii) RGA South African Holdings (Pty) Ltd. (South Africa) (A) RGA Reinsurance Company of South Africa Limited (South Africa) (xiii)RGA Australian Holdings PTY Limited (Australia) (A) RGA Reinsurance Company of Australia Limited (Australia) (B) RGA Asia Pacific PTY, Limited (Australia) (xiv) General American Argentina Seguros de Vida, S.A. (Argentina) (xv) RGA Argentina S.A. (Argentina) (xvi) Regal Atlantic Company (Bermuda) Ltd.(Bermuda) (xvii)Malaysia Life Reinsurance Group Berhad (Malaysia)- 30% interest of Malaysia Life Reinsurance Group Berhad is held by Reinsurance Group of America, Incorporated. 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 Structures is a general partnership in which Metropolitan Life Insurance Company owns a 50% interest. 2) 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. 3) Metropolitan Life Insurance Company indirectly owns 100% of the non-voting preferred stock of Nathan and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting common stock of this company is held by an individual who has agreed to vote such shares at the direction of N.L. HOLDING CORP. (DEL), an indirect wholly owned subsidiary of Metropolitan. 4) 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. The various MILPs own, directly or indirectly, 100% of the voting stock of the following: Coating Technologies International, Inc. 10

5) New England Life Insurance Company ("NELICO"), owns 100% of the voting stock of Omega Reinsurance Corporation. NELICO does not have a financial interest in this subsidiary. 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. 11 ITEM 30. INDEMNIFICATION MetLife, Inc. has secured a Financial Institutions Bond in the amount of $50,000,000 subject to a $5,000,000 deductible. MetLife maintains a directors' and officers' liability policy with a maximum coverage of $300 million under which Metropolitan Life Insurance Company ("Metropolitan"), which is the Depositor and the Registrant's underwriter (the "Underwriter"), as well as certain other subsidiaries of Metropolitan are covered. A provision in Metropolitan's by-laws provides for the indemnification (under certain circumstances) of individuals serving as directors or officers of Metropolitan. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Metropolitan pursuant to the foregoing provisions, or otherwise, Metropolitan Life Insurance Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification may be against public policy as expressed in the Act and may be, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Metropolitan of expenses incurred or paid by a director, officer or controlling person or Metropolitan Life Insurance Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Metropolitan will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 31. PRINCIPAL UNDERWRITERS (a) Other Activity. The principal underwriter for the registrant is Metropolitan Life Insurance Company. Metropolitan Life Insurance Company acts in the following capacities with respect to the following investment companies: Metropolitan Tower Life Separate Account One (principal underwriter) Metropolitan Tower Life Separate Account Two (principal underwriter) Metropolitan Life Separate Account E (principal underwriter and depositor) Metropolitan Series Fund, Inc. (principal underwriter and sub-investment manager) New England Variable Annuity Fund I (depositor)

New England Life Retirement Investment Account (depositor) The New England Variable Account (depositor) (b) Management. See response to Item 28 above. (c) Compensation from the Registrant. <TABLE> <CAPTION> (3) Compensation on (2) Events Occasioning (1) Net Underwriting the Deduction of a (4) (5) Name of Principal Discounts and Deferred Sales Brokerage Other Underwriter Commissions Load Commissions Compensation ---------- ----------- ---- ----------- ------------ <S> <C> <C> <C> <C> Metropolitan Life Insurance Company -- -- -- -- </TABLE> Commissions are paid by the Company directly to agents who are registered representatives of the Principal Underwriter or to broker-dealers that have entered into a selling agreement with the principal underwriter with respect to sales of the Contracts. ITEM 32. LOCATION OF ACCOUNTS AND RECORDS The following companies will maintain possession of the documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder: (a) Registrant (b) Metropolitan Life Insurance Company One Madison Avenue New York, NY 10010 ITEM 33. MANAGEMENT SERVICES Not applicable ITEM 34. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the "Equity Options" riders described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life under the riders. Metropolitan Life bases its representation on its assessment of all of the facts and circumstances, including such relevant factors as: the nature and extent of such services, expenses and risks, the need for Metropolitan Life to earn a profit, the degree to which the riders include innovative features, and regulatory standards for exemptive relief under the Investment Company Act of 1940 used prior to October 1996, including the range of industry practice. This representation applies to all riders issued pursuant to this Registration Statement, including those sold on the terms specifically described in the prospectus contained herein, or any variations therein based on supplements, amendments, endorsements or other riders to such riders or any related base policies or prospectus, or otherwise.

SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Metropolitan Life Separate Account UL, certifies that it meets all of the requirements for effectiveness of this amended Registration Statement under Rule 485(b) under the Securities Act and has caused this Amendment to the Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 28th day of April, 2003. Metropolitan Life Separate Account UL By: Metropolitan Life Insurance Company By: /s/ Gary A. Beller ------------------------------------ Gary A. Beller, Esq. Senior Executive Vice President and General Counsel Attest: /s/ James D. Gaughan -------------------- James D. Gaughan Assistant Secretary

SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, Metropolitan Life Insurance Company certifies that it meets all of the requirements for effectiveness of this amended Registration Statement under Rule 485(b) under the Securities Act and has caused this Amendment to the Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 28th day of April, 2003. Metropolitan Life Insurance Company BY: /s/ Gary A. Beller. ------------------------ Gary A. Beller, Esq. Senior Executive Vice President and General Counsel Attest: /s/ James D. Gaughan -------------------- James D. Gaughan Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons, in the capacities indicated, on April 28, 2003. SIGNATURE TITLE Chairman of the Board, President and * Chief Executive Officer ---------------------- Robert H. Benmosche Vice-Chairman of the Board and * Chief Financial Officer (Principal ---------------------- Financial Officer) Stewart G. Nagler * Senior Vice President and Controller ---------------------- (Principal Accounting Officer) Virginia M. Wilson * ---------------------- Curtis H. Barnette * Director ---------------------- Vice Chairman of the Board and Gerald Clark Chief Investment Officer * ---------------------- John C. Danforth Director * ---------------------- Burton A. Dole, Jr. Director * ---------------------- James R. Houghton Director

* ---------------------- Harry P. Kamen Director * ---------------------- Helene L. Kaplan Director ---------------------- Catherine R. Kinney Director * ---------------------- Charles M. Leighton Director ---------------------- John J. Phelan, Jr. Director * ---------------------- Hugh B. Price Director * ---------------------- William C. Steere, Jr. Director /s/ Christopher P. Nicholas ------------------------------- Christopher P. Nicholas, Esq. Attorney- in - fact * Executed by Christopher P. Nicholas, Esq. on behalf of those indicated pursuant to Powers of Attorney filed with Post-Effective Amendment No. 5 to the Registration Statement of Separate Account UL (File No. 033-47927) filed April 30, 1997 except for Robert H. Benmosche's power of attorney, which is incorporated by reference to the Registration Statement of Separate Account UL (File No. 333-40161) filed on November 13, 1997, Stewart G. Nagler's power of attorney which is included in the filing of Post-Effective Amendment No. 6 to the Registration Statement of Separate Account UL (File No. 033-47927) filed on December 23, 1997, Virginia M. Wilson's power of attorney, which is incorporated by reference to Pre-Effective Amendment No. 2 to the Registration Statement of Metropolitan Life Separate Account E (File No. 333-80547) filed on November 1, 1999, William C. Steere's power of attorney, which is incorporated by reference to the filing of Post-Effective Amendment No. 8 of Separate Account UL (File No. 033-57320) on April 23, 1999, and John C. Danforth's power of attorney, which is incorporated by reference to the filing of Post-Effective Amendment No. 27 of Separate Account E (File No. 002-90380) on April 3, 2001.

[METLIFE LOGO] Exhibit (k) (iii) April 28, 2003 Metropolitan Life Separate Account UL Metropolitan Life Insurance Company One Madison Avenue New York, NY 10010 Ladies and Gentlemen: I hereby consent to the use of my name under the caption "Legal Matters" in the statement of additional information contained in the Post-Effective amendment to the Registration Statement on Form N-6 for Equity Options, issued through Metropolitan Life Separate Account UL (File No. 333-40161). Very truly yours, /s/ Anne M. Goggin Anne M. Goggin Chief Counsel- Individual Business

Exhibit (n) (i) INDEPENDENT AUDITORS' CONSENT We consent to the use in this Post-Effective Amendment No. 7 to Registration Statement No. 333-40161/ 811-06025 of Metropolitan Life Separate Account UL on Form N-6 of our report dated March 26, 2003, relating to Metropolitan Life Separate Account UL appearing in the Prospectus, which is a part of such Registration Statement, and our report dated February 19, 2003, relating to Metropolitan Life Insurance Company, appearing in the Statement of Additional Information, which is also part of such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Prospectus and Statement of Additional Information which are part of such Registration Statement. Deloitte & Touche LLP New York, New York April 24, 2003

Exhibit (n)(ii) CONSENT OF FOLEY & LARDNER We hereby consent to the reference to this firm under "Legal Matters" in the statement of additional information contained in Post-Effective Amendment No. 7 to this registration statement (File No. 333-40161). April 29, 2003 By: /s/ Thomas C. Lauerman, Partner ------------------------------- FOLEY & LARDNER