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Brighthouse Separate Account A, et al. – ‘485BPOS’ on 4/14/17

On:  Friday, 4/14/17, at 3:34pm ET   ·   Effective:  5/1/17   ·   Accession #:  1193125-17-124635   ·   File #s:  811-03365, 333-200240

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/14/17  Brighthouse Separate Account A    485BPOS     5/01/17    4:1.2M                                   Donnelley … Solutions/FABrighthouse Separate Account A Group Flexible Payment Variable Annuity (Flexible Bonus/Retirement Companion/Smart Choice)

Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Group Flexible Payment Variable Annuity              366   2.11M 
                          Post-Effective Amendment No. 3                         
 3: EX-99.10    Consent of Independent Registered Public               1      5K 
                          Accounting Firm (Deloitte & Touche LLP)                
 4: EX-99.13    Powers of Attorney                                    24     81K 
 2: EX-99.8(VII)(B)  Amendment to Participation Agreement With T.      4     14K 
                          Rowe Price                                             


485BPOS   —   Group Flexible Payment Variable Annuity Post-Effective Amendment No. 3
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Brighthouse Separate Account A
2Brighthouse
"The Contracts
4Glossary
6Summary of the Contracts
"Purchase Payments
"Separate Account
7Distribution Expense Charge
"Mortality and Expense Risk Charge
"Transaction Fees
8Free Look Period
"Variable Annuity Payments
9Blic
"Restrictions on Transfers
10Fee Tables and Examples
14Financial and Performance Information
15Description of Brighthouse Life Insurance Company, the General Account, the Separate Account, the Funds and Service Providers
"The Insurance Company
"Planned Separation from MetLife, Inc
16The General Account
17The Funds
19Certain Payments We Receive with Regard to the Funds
21Principal Underwriter
22Servicing Agent
23Contract Charges
"Premium and Other Taxes
"Surrender Charge
25Administrative Fees
27Income Taxes
"Fund Expenses
"Deferred Compensation Plans
28Description of the Contracts
"General
"Assignment
29Transfers
34Cybersecurity
35Modification of the Contracts
36Crediting Accumulation Units in the Separate Account
"Separate Account Accumulation Unit Current Values
"Surrender from the Separate Account
37Payment of Surrender Amount
"Account Statements
38Assumed Investment Return
"Election of Annuity Date and Form of Annuity
39Election of Annuity Date
"Form of Annuity
41Frequency of Payment
"Level Payments Varying Annually
42Annuity Unit Values
"Death Before the Annuity Date
44Death After the Annuity Date
"Abandoned Property Requirements
45Federal Tax Considerations
"Qualified Annuity Contracts
49Death Benefits
54Voting Rights
55Additional Information
56Table of Contents of Statement of Additional Information
58Appendix A
78Appendix B
81Appendix C
82Appendix D
85Company
"MetLife Insurance Company USA
86Surrender Charges
"Net Investment Factor
"Annuity Payments
"Basis of Variable Benefits
87Determination of Amount of Monthly Variable Annuity Payments for First Year
"Determination of Amount of Monthly Variable Annuity Payments for Second and Subsequent Years
"Annuity Unit Value
88Underwriters, Distribution of the Contracts
"Calculation of Performance
89Safekeeping of Securities
"Independent Registered Public Accounting Firm
90Additional Federal Tax Considerations
"Types of Qualified Plans
"Erisa
91Federal Estate Taxes
"Generation-Skipping Transfer Tax
"Annuity Purchase Payments by Nonresident Aliens and Foreign Corporations
"Financial Statements
92Report of Independent Registered Public Accounting Firm
94American Funds
97Fidelity VIP
99Lmpvet
103Mist
117Oppenheimer VA
121VanEck VIP
"Vaneck Vip Long/Short Equity Index Sub-Account
127Invesco V.I
155FTVIPT Franklin Income VIP Sub-Account
157Invesco V.I. Equity and Income Sub-Account
159LMPVET ClearBridge Variable Large Cap Growth Sub-Account
161LMPVIT Western Asset Variable Global High Yield Bond Sub-Account
163MIST American Funds Growth Allocation Sub-Account
165MIST ClearBridge Aggressive Growth Sub-Account
167MIST JPMorgan Core Bond Sub-Account
169MIST Met/Franklin Low Duration Total Return Sub-Account
171MIST MFS Research International Sub-Account
173MIST Pyramis Managed Risk Sub-Account
175Msf
"MSF Baillie Gifford International Stock Sub-Account
177MSF Jennison Growth Sub-Account
179MSF MetLife Asset Allocation 40 Sub-Account
181MSF MSCI EAFE Index Sub-Account
183MSF Western Asset Management U.S. Government Sub-Account
185Pimco Vit
"PIMCO VIT Emerging Markets Bond Sub-Account
230Item 8. Financial Statements and Supplementary Data
232Consolidated Balance Sheets
233Consolidated Statements of Operations
234Consolidated Statements of Comprehensive Income (Loss)
235Consolidated Statements of Stockholder's Equity
236Consolidated Statements of Cash Flows
238Notes to the Consolidated Financial Statements
239Separate Accounts
240Insurance
241Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
242Reinsurance
243Variable Annuity Guarantees
244Investments
245Mortgage Loans
"Policy Loans
246Short-term investments
"Other Invested Assets
"Derivatives
"Freestanding Derivatives
248Fair Value
"Income Tax
250Goodwill
251Adoption of New Accounting Pronouncements
254Annuities
"Life
"Run-off
268Dac
269Dsi
276Fixed Maturity and Equity Securities AFS
"Methodology for Amortization of Premium and Accretion of Discount on Structured Securities
278Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities
280Mortgage Loans by Portfolio Segment
285Net Unrealized Investment Gains (Losses)
287Securities Lending
290Variable Interest Entities
"CSEs
292Net investment income
294Related Party Investment Transactions
295Interest rate derivatives
296Credit Derivatives
"Equity derivatives
299Net derivative gains (losses)
308Recurring Fair Value Measurements
310Valuation Controls and Procedures
"Securities, Short-term Investments and Long-term Debt of CSEs -- FVO
312Equity securities
315Direct and assumed guaranteed minimum benefits
321Nonrecurring Fair Value Measurements
336Insolvency assessments
338MetLife
341Schedule I
"Consolidated Summary of Investments -- Other Than Investments in Related Parties
342Schedule III
"Consolidated Supplementary Insurance Information
344Schedule IV
"Consolidated Reinsurance
346Item 24. Financial Statements and Exhibits
348Item 25. Directors and Officers of the Depositor
351Item 26. Persons Controlled by or Under Common Control With the Depositor or the Registrant
358Item 27. Number of Contract Owners
"Item 28. Indemnification
362Item 30. Location of Accounts and Records
"Item 31. Management Services
"Item 32. Undertakings
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As filed with the Securities and Exchange Commission on April 14, 2017 REGISTRATION NOS. 333-200240 811-03365 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PRE-EFFECTIVE AMENDMENT NO. [ ] POST-EFFECTIVE AMENDMENT NO. 3 [X] AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 641 [X] BRIGHTHOUSE SEPARATE ACCOUNT A (EXACT NAME OF REGISTRANT) BRIGHTHOUSE LIFE INSURANCE COMPANY (NAME OF DEPOSITOR) 11225 NORTH COMMUNITY HOUSE ROAD CHARLOTTE, NC 28277 (212) 578-9500 (ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE) ERIC T. STEIGERWALT PRESIDENT 11225 NORTH COMMUNITY HOUSE ROAD CHARLOTTE, NC 28277 (NAME AND ADDRESS OF AGENT FOR SERVICE) COPIES TO: W. THOMAS CONNER REED SMITH LLP 1301 K STREET, N.W. WASHINGTON, D.C. 20005-3373 APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: on May 1, 2017 or as soon thereafter as practicable. It is proposed that this filing will become effective (check appropriate box): [_] immediately upon filing pursuant to paragraph (b) of Rule 485. [X] on May 1, 2017 pursuant to paragraph (b) of Rule 485. [_] 60 days after filing pursuant to paragraph (a) (1) of Rule 485. [_] on (date) pursuant to paragraph (a) (1) of Rule 485. If appropriate, check the following box: [_] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Registered: Group Flexible Payment Variable Annuity Contracts ================================================================================
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GROUP FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS (FLEXIBLE BONUS (228), RETIREMENT COMPANION (328), SMART CHOICE) ISSUED BY BRIGHTHOUSE SEPARATE ACCOUNT A AND BRIGHTHOUSE LIFE INSURANCE COMPANY This Prospectus gives you important information about the group flexible payment fixed and variable annuity contracts (the "Contracts") issued by Brighthouse Separate Account A (the "Separate Account") by Brighthouse Life Insurance Company ("BLIC" or "we" or "us" or "our"). Please read it carefully before you invest and keep it for future reference. The Contracts are designed to provide annuity benefits through distributions made from certain retirement plans that qualify for special Federal income tax treatment ("Qualified Plans"). The Contracts are issued to an employer or organization, which is the owner ("Owner") of the Contract. After completing an enrollment form and arranging for your Purchase Payments to begin, you are a participant ("Participant") and, except as provided below, a certificate ("Certificate") will be provided to you that gives you a summary of the Contract provisions. The Certificate also serves as evidence of your participation in the plan (Plan). Certificates are not provided to Participants under deferred compensation or qualified corporate retirement plans. THE CONTRACTS ARE NOT CURRENTLY OFFERED FOR SALE; HOWEVER, CERTIFICATES MAY BE ISSUED TO NEW PARTICIPANTS UNDER EXISTING CONTRACTS. You decide how to allocate your Purchase Payments among the funds offered as investment options under the Contracts (the "Funds"). You may allocate your Purchase Payments to the General Account, which is a fixed account (not described in this Prospectus) that offers an interest rate guaranteed by us, or to the Separate Account. The Separate Account, in turn, invests in the following underlying Funds: AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund BRIGHTHOUSE FUNDS TRUST I -- CLASS A Brighthouse Small Cap Value Portfolio Invesco Small Cap Growth Portfolio MFS(R) Research International Portfolio Morgan Stanley Mid Cap Growth Portfolio PIMCO Total Return Portfolio T. Rowe Price Large Cap Value Portfolio BRIGHTHOUSE FUNDS TRUST II -- CLASS A BlackRock Bond Income Portfolio BlackRock Capital Appreciation Portfolio BlackRock Large Cap Value Portfolio Brighthouse/Artisan Mid Cap Value Portfolio Brighthouse/Wellington Core Equity Opportunities Portfolio MetLife Aggregate Bond Index Portfolio MetLife Mid Cap Stock Index Portfolio MetLife MSCI EAFE(R) Index Portfolio MetLife Russell 2000(R) Index Portfolio MetLife Stock Index Portfolio MFS(R) Total Return Portfolio MFS(R) Value Portfolio Neuberger Berman Genesis Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio Western Asset Management Strategic Bond Opportunities Portfolio DEUTSCHE VARIABLE SERIES I -- CLASS A Deutsche CROCI(R) International VIP FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- INITIAL CLASS Asset Manager Portfolio Contrafund(R) Portfolio Government Money Market Portfolio Growth Portfolio Overseas Portfolio T. ROWE PRICE GROWTH STOCK FUND, INC. THE ALGER PORTFOLIOS -- CLASS I-2 Alger Small Cap Growth Portfolio Certain Funds have been subject to a change. Please see "Appendix C - Additional Information Regarding the Funds." You can choose any combination of the Funds. Your Participant's Account will vary daily to reflect the investment experience of the Funds selected. These Funds are described in detail in the Fund prospectuses. Please read these prospectuses carefully before you invest. The Contracts: .. are not bank deposits .. are not FDIC insured .. are not insured by any federal government agency .. are not guaranteed by any bank or credit union .. may be subject to loss of principal If you would like more information about the Contracts, you can obtain a copy of the Statement of Additional Information ("SAI") dated May 1, 2017. The SAI is legally considered a part of this Prospectus as though it were included in the Prospectus. The Table of Contents of the SAI appears on page 54 of the Prospectus. The Securities and Exchange Commission ("SEC") has a website (http://www.sec.gov) which you may visit to view this Prospectus, the SAI, or additional material that also is legally considered a part of this Prospectus, as well as other information. THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES NOR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. May 1, 2017 1
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[Download Table] TABLE OF CONTENTS PAGE [Download Table] GLOSSARY................................................................... 3 SUMMARY OF THE CONTRACTS................................................... 5 FEE TABLES AND EXAMPLES.................................................... 9 [Download Table] FINANCIAL AND PERFORMANCE INFORMATION...................................... 13 DESCRIPTION OF BRIGHTHOUSE LIFE INSURANCE COMPANY, THE GENERAL ACCOUNT, THE SEPARATE ACCOUNT, THE FUNDS AND SERVICE PROVIDERS...................... 14 The Insurance Company................................................... 14 The General Account..................................................... 15 The Separate Account.................................................... 15 The Funds............................................................... 16 Principal Underwriter................................................... 20 Servicing Agent......................................................... 21 CONTRACT CHARGES........................................................... 22 Premium and Other Taxes................................................. 22 Surrender Charge........................................................ 22 Administrative Fees..................................................... 24 Transaction Fees........................................................ 24 Mortality and Expense Risk Charge....................................... 25 Distribution Expense Charge............................................. 25 Income Taxes............................................................ 26 Fund Expenses........................................................... 26 Free Look Period........................................................ 26 Deferred Compensation Plans............................................. 26 DESCRIPTION OF THE CONTRACTS............................................... 27 General................................................................. 27 Assignment.............................................................. 27 Purchase Payments....................................................... 27 Transfers............................................................... 28 Restrictions on Transfers............................................... 30 Loans (403(b) Plans only)............................................... 33 Cybersecurity........................................................... 33 Modification of the Contracts........................................... 34 ACCUMULATION PERIOD........................................................ 35 Crediting Accumulation Units in the Separate Account.................... 35 [Download Table] Separate Account Accumulation Unit Current Values...................... 35 Surrender from the Separate Account.................................... 35 Payment of Surrender Amount............................................ 36 Account Statements..................................................... 36 ANNUITY BENEFITS.......................................................... 37 Variable Annuity Payments.............................................. 37 Assumed Investment Return.............................................. 37 Election of Annuity Date and Form of Annuity........................... 37 Election of Annuity Date............................................... 38 Form of Annuity........................................................ 38 Frequency of Payment................................................... 40 Level Payments Varying Annually........................................ 40 Annuity Unit Values.................................................... 41 DEATH BENEFITS............................................................ 41 Death Before the Annuity Date.......................................... 41 Death After the Annuity Date........................................... 43 Abandoned Property Requirements........................................ 43 FEDERAL TAX CONSIDERATIONS................................................ 44 VOTING RIGHTS............................................................. 53 LEGAL PROCEEDINGS......................................................... 54 ADDITIONAL INFORMATION.................................................... 54 TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.................. 55 [Download Table] APPENDIX A -- CONDENSED FINANCIAL INFORMATION -- PART 1................... A-1 APPENDIX A -- CONDENSED FINANCIAL INFORMATION -- PART 2................... A-13 APPENDIX B -- PARTICIPATING INVESTMENT PORTFOLIOS......................... B-1 APPENDIX C -- ADDITIONAL INFORMATION REGARDING THE PORTFOLIOS............. C-1 APPENDIX D -- PREMIUM TAX TABLE........................................... D-1 BLIC does not intend to offer the Contracts anywhere or to anyone to whom they may not lawfully be offered or sold. BLIC has not authorized any information or representations about the Contracts other than the information in this Prospectus, the Fund prospectuses, or supplements to the prospectuses or any supplemental sales material BLIC authorizes. 2
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GLOSSARY These terms have the following meanings when used in this Prospectus: ACCUMULATION UNIT - A measuring unit used to determine the value of your interest in a Series of the Separate Account under a Contract at any time before Annuity payments commence. ANNUITANT - The person on whose life Annuity payments under a Contract are based. ANNUITY - A stream of income payments made to an Annuitant for a defined period of time. ANNUITIZATION OR ANNUITY DATE - The date on which Annuity payments begin. ANNUITY UNIT - A measuring unit used to determine the amount of Variable Annuity payments based on a Series of the Separate Account under a Contract after such payments have commenced. ASSUMED INVESTMENT RETURN - The investment rate selected by the Annuitant for use in determining the Variable Annuity payments. BENEFICIARY - The person who has the right to a Death Benefit upon your death. BUSINESS DAY - Each Monday through Friday except for days the New York Stock Exchange ("NYSE") is not open for trading. CERTIFICATE - The form you are given which describes your rights under the Contract. No Certificates are issued for certain deferred compensation or qualified corporate retirement plans. CERTIFICATE DATE - The date you are issued a Certificate. If you are not issued a Certificate, this is the date when your Account is established. CERTIFICATE YEAR - The 12-month period that begins on your Certificate Date and on each anniversary of this date. CONTRACT - The agreement between the Owner and BLIC covering your rights. FIXED ANNUITY - An Annuity providing guaranteed level payments. These payments are not based upon the investment experience of the Separate Account. FREE LOOK PERIOD - The 20-day period when you first receive your Certificate. During this time period, you may cancel your interest in the Contract for a full refund of all Purchase Payments (or the greater of Purchase Payments or your Participant's Account in some states). FUND - A diversified, open-end management investment company, or series thereof, registered under the Investment Company Act of 1940 ("1940 Act") which serves as the underlying investment medium for a Series in the Separate Account. GENERAL ACCOUNT - All assets of BLIC other than those in the Separate Account or any of its other segregated asset accounts. GOOD ORDER - A request or transaction generally is considered in Good Order if it complies with our administrative procedures and the required information is complete and accurate. A request or transaction may be rejected or delayed if not in Good Order. Good Order generally means the actual receipt by us of the instructions relating to the requested transaction in writing (or, when permitted, by telephone or Internet) along with all forms, information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes to the extent applicable to the transaction: your completed application; your contract number; the transaction amount (in dollars or percentage terms); the names and allocations to and/or from the Funds affected by the requested transaction; the signatures of all contract Owners (exactly as indicated on the contract), if necessary; Social Security Number or Tax I.D.; and any other information or supporting documentation that we may require, including any spousal or Joint Owner's consents. With respect to Purchase Payments, Good Order also generally includes receipt by us of sufficient funds to effect the purchase. We may, in our sole discretion, determine whether any particular transaction request is in Good Order, and we reserve the right to change or waive any Good Order requirement at any time. If you have any questions, you should contact us or your registered representative before submitting the form or request. NORMAL ANNUITY DATE - The date on which Annuity payments begin if you do not select another date. OWNER - The person who has title to the Contract. PARTICIPANT - You, the person who makes Purchase Payments, or the person for whom Purchase Payments are made. PARTICIPANT'S ACCOUNT - The sum of your interest in each Series of the Separate Account and your interest in the General Account. Your interest in the Series of the Separate Account is the sum of the values of the Accumulation Units. Your interest in the General Account is the 3
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accumulated value of the amounts allocated to the General Account plus credited interest as guaranteed in the Contract, less any prior withdrawals and/or amounts applied to Annuity options. PLAN - The 403(b) plan, deferred compensation plan, qualified retirement plan, or individual retirement annuity to which the Contract is issued. PURCHASE PAYMENT - The amounts paid by or for you to BLIC in order to provide benefits under the Contract. SEPARATE ACCOUNT - The segregated asset account entitled "Brighthouse Separate Account A" which has been established by us under Delaware law to receive and invest amounts allocated by you and other Participants under the Contracts and to provide Variable Annuity benefits under the Contracts. The Separate Account is registered as a unit investment trust under the 1940 Act. SERIES - Series are subdivisions of the Separate Account. Accumulation Unit values and Annuity Unit values are maintained separately for each Series corresponding to a designated Fund. SURRENDER CHARGE - A percentage charge which is deducted when you fully or partially surrender. The amount varies depending on how long Purchase Payments have been with BLIC. VALUATION DATE - Any Business Day used by the Separate Account to determine the value of part or all of its assets for purposes of determining Accumulation and Annuity Unit values for the Contract. Accumulation Unit values will be determined each Business Day as of the close of trading on the NYSE (currently 4 p.m. Eastern time.) There will be one Valuation Date in each calendar week for Annuity Unit values. BLIC will establish the Valuation Date at its discretion, but until notice to the contrary is given, that date will be the last Business Day in a week. VALUATION PERIOD - The period of time from one Valuation Date through the next Valuation Date. VARIABLE ANNUITY - An Annuity providing payments that will vary annually in accordance with the net investment experience of the applicable Series of the Separate Account. 4
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SUMMARY OF THE CONTRACTS THE CONTRACTS The Contracts may be offered to: .. Qualified Plans such as: * Section 403(b) tax-sheltered annuities; * Section 457 deferred compensation plans; * Section 401 pension and profit sharing plans; and * individual retirement annuities under Section 408 of the Internal Revenue Code (the "Code"). [SIDE BAR: Please see the section "Federal Tax Considerations" for more information.] Note: The dollars in a Qualified Plan are tax deferred. Contracts purchased for use with a Qualified Plan provide no additional tax deferral, and there should be reasons other than tax deferral for purchasing the Contract. This Prospectus describes all the material features of the Contracts. THIS PROSPECTUS APPLIES ONLY TO THE VARIABLE PORTION OF THE CONTRACT PURCHASE PAYMENTS Purchase Payments under the Contracts are made to the General Account, the Separate Account, or allocated between them. The minimum Purchase Payment is as little as $20, but there is an annual minimum of $240 (for IRAs, the minimum is $2,000 for an initial Purchase Payment and $50 for each additional payment). There is no initial sales charge; however, the charges and deductions described under "Contract Charges" will be deducted from the Participant's Account. [SIDE BAR: Please see "Transfers" for more information.] Amounts allocated to the General Account may be transferred to the Separate Account subject to certain limitations as to time and amount. Unless you have exercised a special option, the minimum transfer is the lesser of $500 or the balance of your Participant's Account allocated to the General Account or to the Separate Account. You can transfer amounts allocated to the Separate Account: .. between any of the Series, at any time and as many times as you choose .. to the General Account at any time before the amount has been applied to a Variable Annuity option See, however, restrictions on transfers in "Description of the Contracts - Restrictions on Transfers." [SIDE BAR: Please see "The Separate Account" and "The Funds" for more information.] SEPARATE ACCOUNT Purchase Payments allocated to the Separate Account are invested at net asset value in Accumulation Units in one or more Series of the Separate Account, each of which invests in one of the underlying Funds. 5
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[SIDE BAR: Please see "Contract Charges" for more information.] CHARGES AND DEDUCTIONS The following fees and expenses apply under the Contracts: DISTRIBUTION EXPENSE CHARGE BLIC assumes the risk that surrender charges will be insufficient to cover the actual costs of distribution. As compensation for assuming this risk, BLIC will make a deduction of .000274% on a daily basis (0.10% per year) from the value of the Separate Account assets funding the Contract. The distribution expense charge (sales load), together with any contingent deferred sales charge will never exceed 9% of Purchase Payments. MORTALITY AND EXPENSE RISK CHARGE BLIC charges a fee for bearing certain mortality and expense risks under the Contract. You pay the mortality and expense risk charge during the accumulation phase and the income phase. As compensation for assuming these risks, BLIC will make a daily deduction from the value of the Separate Account's assets equal to 1.25% per year. ADMINISTRATIVE FEE There is an administrative Fee of $21.50 plus $2.50 for each Series in which you invest. BLIC currently waives these administrative fees for any Certificate Year during which you contribute $2,000 or more to your Participant's Account or your Participant's Account has a value at the end of the Certificate Year of $10,000 or more. This reduction is permanent for Certificates issued before the termination or reduction of the waiver. (No such termination or reduction of the waiver is contemplated at this time). TRANSACTION FEES A charge of $10 may be deducted for: .. A transfer from any Series; .. A full or partial surrender (the charge is the lesser of $10 or 2% of the amount of the surrender); or .. Annuitization of all or a part of your Participant's Account. We currently waive the transaction charge for transfers from any Series, but reserve the right to impose the charge in the future. See, however, restrictions on transfers in "Description of the Contracts - Restrictions on Transfers." SURRENDER CHARGE (CONTINGENT DEFERRED SALES CHARGE) A surrender charge is deducted if you request a full or partial surrender of Purchase Payments from the Separate Account within 60 months after the Purchase Payment is made. The charge is 7% of the Purchase Payment and amounts credited to it. 6
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However, for 403(b) plans, we will not deduct any surrender charge once nine (9) full years have elapsed since your Certificate Date; and for the first surrender in each year, you may surrender up to 10% of the value of your interest in the Separate Account without a surrender charge. WITHDRAWALS FROM 403(b) PLANS MAY BE RESTRICTED BY THE CODE. The following expenses may be waived for certain deferred compensation plans: .. administrative fees .. transaction charges .. distribution fees .. surrender charges on certain surrenders PREMIUM TAXES State premium taxes (which range from 0% to 3.5% and are applicable only in certain jurisdictions) are payable to a state or government agency with respect to the Contract. They may be deducted on or after the date the tax is incurred. Currently, BLIC deducts these taxes upon annuitization. [SIDE BAR: Please see "Free Look Period" for more information.] FREE LOOK PERIOD You may cancel your interest in the Contract within 20 days after you receive your Certificate (or longer depending on state law) for a full refund of all Purchase Payments (or the greater of Purchase Payments or the Participant's Account in some states). Purchase Payments allocated to the Separate Account will be initially allocated to the Money Market Series during the Free Look Period. VARIABLE ANNUITY PAYMENTS You select the Annuity Date, an Annuity payment option and an assumed investment return. You may change any of your selections before your Annuity Date. Your monthly Annuity payments will start on the Annuity Date and will vary from year to year based on a comparison of the assumed investment returns you selected with the actual investment experience of the Series in which the Participant's Account is invested. If your monthly payments from a particular Series are less than $50, BLIC may change the frequency of your payments so that each payment will be at least $50 from that Series. [SIDE BAR: Please see "Surrender Charge" and "Federal Tax Considerations" for more information.] SURRENDER You may surrender all or part of your Participant's Account before the Annuity Date. You may not make a partial surrender if: .. it would cause your interest in any Series or the General Account to fall below $200 (unless you are surrendering your entire interest in a Series) 7
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However, if you are surrendering the entire amount allocated to a Series, these restrictions do not apply. You may be assessed a surrender charge. In addition, any amounts surrendered will be taxed as ordinary income and may be subject to a penalty tax under the Code. Certain restrictions apply for qualified contracts. LOANS - 403(B) PLANS ONLY You may be able to obtain a loan from the portion of your Participant's Account allocated to the General Account. Fees may be charged for loan set-up and administration. Currently, the loan set-up fee is $50. This amount is deducted from the loan proceeds. At this time, there is no fee for administration. Loan proceeds may be considered taxable distributions under the Code in the event of a default in repayments. BLIC: .. may terminate loans .. change the terms under which loans are made Any action taken by BLIC would not affect outstanding loans. [SIDE BAR: Please see "Death Benefits" for more information.] DEATH BENEFIT You name your Beneficiary(ies). If you die before attaining age 65 and prior to the Annuity Date, the amount of any lump sum settlement will be the greater of: .. the total of all Purchase Payments less any partial surrenders; or .. the value of the Participant's Account at settlement. If the death occurs on or after age 65, the death benefit will be equal to the Participant's Account. There is no death benefit after the payout phase begins, however, depending on the pay-out option you elect, any remaining guarantee will be paid to your Beneficiary. STATE VARIATIONS Contracts issued in your state may provide different features and benefits from, and impose different costs than, those described in this Prospectus because of state law variations. These differences include, among other things, free look rights, age issuance limitations, transfer rights and limitations, the right to assess transfer fees, requirements for unisex annuity rates and the availability of certain features of riders. However, please note that the maximum fees and charges for all features and benefits are set forth in the fee table in this Prospectus. This Prospectus describes all the material features of the Contract. If you would like to review a copy of the Contract and any endorsements, contact our administrative office. RESTRICTIONS ON TRANSFERS BLIC has adopted policies and procedures that attempt to detect transfer activity that may adversely affect Participants or the Funds. Upon detection of this activity, restrictions may be imposed on transfers. 8
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FEE TABLES AND EXAMPLES THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING, AND SURRENDERING THE CERTIFICATE. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY THE CERTIFICATE, SURRENDER THE CERTIFICATE, OR TRANSFER CASH VALUE BETWEEN INVESTMENT OPTIONS. STATE PREMIUM TAXES (WHICH RANGE FROM 0% TO 3.5% AND ARE APPLICABLE ONLY IN CERTAIN JURISDICTIONS -- SEE APPENDIX D) MAY ALSO BE DEDUCTED. -------------------------------------------------------------------------------- [Enlarge/Download Table] PARTICIPANT TRANSACTION EXPENSES TABLE SURRENDER CHARGE/1/ 7% (as a percentage of amounts accumulated with respect to a Purchase Payment) TRANSACTION FEE/2,3/ (each surrender, annuitization and transfer) $10.00 LOAN SET-UP FEE/4/ $50.00 -------------------------------------------------------------------------------- THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CERTIFICATE, NOT INCLUDING FUND FEES AND EXPENSES. -------------------------------------------------------------------------------- [Enlarge/Download Table] PERIODIC FEES AND EXPENSES TABLE ADMINISTRATIVE FEE/5/ $21.50 plus (deducted annually) $ 2.50 for each Series SEPARATE ACCOUNT ANNUAL EXPENSES (referred to as Separate Account Product Charges) (as a percentage of average Participant's Account value in the Separate Account) Mortality and Expense Risk Charge 1.25% Distribution Expense Charge 0.10% ----- Total Separate Account Annual Expenses/6/ 1.35% -------------------------------------------------------------------------------- THE NEXT TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CERTIFICATE. CERTAIN FUNDS MAY IMPOSE A REDEMPTION FEE IN THE FUTURE. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUSES FOR THE FUNDS AND IN THE FOLLOWING TABLES. PLEASE READ THE PROSPECTUSES CAREFULLY BEFORE MAKING YOUR ALLOCATIONS TO THE INVESTMENT OPTIONS. -------------------------------------------------------------------------------- [Enlarge/Download Table] Minimum Maximum ------- ------- Total Annual Fund Operating Expenses 0.25% 1.12% (expenses that are deducted from Fund assets, including management fees, 12b-1/Service fees, and other expenses) as of December 31, 2016 -------------------------------------------------------------------------------- Notes 1. Surrender charges decline based on date of Purchase Payment. (See "Contract Charges - Surrender Charge") [Download Table] Number of Complete Months from Receipt of Purchase Payment % Charge ------------------------------ -------- 60 months or less 7 More than 60 months 0 Amounts surrendered are attributed to Purchase Payments made (and any accumulation) on a first-in, first-out basis. 2. In the event of a surrender, the fee is the lesser of $10 or 2% of the amount surrendered. 3. In the event of a transfer, the fee applies to each transfer from a Series. We currently waive this fee. 4. For 403(b) Plans only, loans will be charged an initial set-up fee of $50.00. 5. The Administrative Fee is currently waived if you make purchase payments of $2,000 or more in a Certificate Year or if your Participant's Account value is $10,000 or more at the end of the Certificate Year. 6. Total Separate Account Expenses are 1.25% under the Retirement Companion version of the Contract. 9
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FUND FEES AND EXPENSES (as a percentage of average daily net assets) The following table is a summary. For more complete information on Fund fees and expenses, please refer to the prospectus for each Fund. [Enlarge/Download Table] DISTRIBUTION NET AND/OR ACQUIRED TOTAL FEE WAIVER TOTAL SERVICE FUND ANNUAL AND/OR ANNUAL MANAGEMENT (12B-1) OTHER FEES AND OPERATING EXPENSE OPERATING FUND FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES ----------------------------------------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES(R)--CLASS 2 ----------------------------------------------------------------------------------------------------------------- American Funds Global Small Capitalization Fund 0.70% 0.25% 0.04% -- 0.99% -- 0.99% ----------------------------------------------------------------------------------------------------------------- American Funds Growth Fund 0.33% 0.25% 0.02% -- 0.60% -- 0.60% ----------------------------------------------------------------------------------------------------------------- American Funds Growth-Income Fund 0.27% 0.25% 0.02% -- 0.54% -- 0.54% ----------------------------------------------------------------------------------------------------------------- BRIGHTHOUSE FUNDS TRUST I-- CLASS A ----------------------------------------------------------------------------------------------------------------- Brighthouse Small Cap Value Portfolio 0.75% -- 0.04% 0.06% 0.85% 0.01% 0.84% ----------------------------------------------------------------------------------------------------------------- Invesco Small Cap Growth Portfolio 0.85% -- 0.03% -- 0.88% 0.02% 0.86% ----------------------------------------------------------------------------------------------------------------- MFS(R) Research International Portfolio 0.70% -- 0.04% -- 0.74% 0.06% 0.68% ----------------------------------------------------------------------------------------------------------------- Morgan Stanley Mid Cap Growth Portfolio 0.65% -- 0.05% -- 0.70% 0.01% 0.69% ----------------------------------------------------------------------------------------------------------------- PIMCO Total Return Portfolio 0.48% -- 0.05% -- 0.53% 0.03% 0.50% ----------------------------------------------------------------------------------------------------------------- T. Rowe Price Large Cap Value Portfolio 0.57% -- 0.02% -- 0.59% 0.03% 0.56% ----------------------------------------------------------------------------------------------------------------- BRIGHTHOUSE FUNDS TRUST II-- CLASS A ----------------------------------------------------------------------------------------------------------------- BlackRock Bond Income Portfolio 0.33% -- 0.04% -- 0.37% -- 0.37% ----------------------------------------------------------------------------------------------------------------- BlackRock Capital Appreciation Portfolio 0.70% -- 0.02% -- 0.72% 0.09% 0.63% ----------------------------------------------------------------------------------------------------------------- BlackRock Large Cap Value Portfolio 0.63% -- 0.03% -- 0.66% 0.03% 0.63% ----------------------------------------------------------------------------------------------------------------- Brighthouse/Artisan Mid Cap Value Portfolio 0.82% -- 0.03% -- 0.85% -- 0.85% ----------------------------------------------------------------------------------------------------------------- Brighthouse/Wellington Core Equity Opportunities Portfolio 0.70% -- 0.02% -- 0.72% 0.11% 0.61% ----------------------------------------------------------------------------------------------------------------- MetLife Aggregate Bond Index Portfolio 0.25% -- 0.03% -- 0.28% 0.01% 0.27% ----------------------------------------------------------------------------------------------------------------- MetLife Mid Cap Stock Index Portfolio 0.25% -- 0.05% 0.01% 0.31% -- 0.31% ----------------------------------------------------------------------------------------------------------------- MetLife MSCI EAFE(R) Index Portfolio 0.30% -- 0.08% 0.01% 0.39% -- 0.39% ----------------------------------------------------------------------------------------------------------------- 10
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[Enlarge/Download Table] DISTRIBUTION NET AND/OR ACQUIRED TOTAL FEE WAIVER TOTAL SERVICE FUND ANNUAL AND/OR ANNUAL MANAGEMENT (12B-1) OTHER FEES AND OPERATING EXPENSE OPERATING FUND FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES ----------------------------------------------------------------------------------------------------------------- MetLife Russell 2000(R) Index Portfolio 0.25% -- 0.06% 0.01% 0.32% -- 0.32% ----------------------------------------------------------------------------------------------------------------- MetLife Stock Index Portfolio 0.25% -- 0.02% -- 0.27% 0.01% 0.26% ----------------------------------------------------------------------------------------------------------------- MFS(R) Total Return Portfolio 0.56% -- 0.05% -- 0.61% -- 0.61% ----------------------------------------------------------------------------------------------------------------- MFS(R) Value Portfolio 0.70% -- 0.02% -- 0.72% 0.14% 0.58% ----------------------------------------------------------------------------------------------------------------- Neuberger Berman Genesis Portfolio 0.81% -- 0.04% -- 0.85% 0.01% 0.84% ----------------------------------------------------------------------------------------------------------------- T. Rowe Price Large Cap Growth Portfolio 0.60% -- 0.02% -- 0.62% 0.02% 0.60% ----------------------------------------------------------------------------------------------------------------- T. Rowe Price Small Cap Growth Portfolio 0.47% -- 0.03% -- 0.50% -- 0.50% ----------------------------------------------------------------------------------------------------------------- Western Asset Management Strategic Bond Opportunities Portfolio 0.57% -- 0.03% 0.01% 0.61% 0.05% 0.56% ----------------------------------------------------------------------------------------------------------------- DEUTSCHE VARIABLE SERIES I-- CLASS A ----------------------------------------------------------------------------------------------------------------- Deutsche CROCI(R) International VIP 0.79% -- 0.33% -- 1.12% 0.28% 0.84% ----------------------------------------------------------------------------------------------------------------- FIDELITY(R) VARIABLE INSURANCE PRODUCTS--INITIAL CLASS ----------------------------------------------------------------------------------------------------------------- Asset Manager Portfolio 0.50% -- 0.12% 0.01% 0.63% -- 0.63% ----------------------------------------------------------------------------------------------------------------- Contrafund(R) Portfolio 0.55% -- 0.08% -- 0.63% -- 0.63% ----------------------------------------------------------------------------------------------------------------- Government Money Market Portfolio 0.17% -- 0.08% -- 0.25% -- 0.25% ----------------------------------------------------------------------------------------------------------------- Growth Portfolio 0.55% -- 0.09% -- 0.64% -- 0.64% ----------------------------------------------------------------------------------------------------------------- Overseas Portfolio 0.67% -- 0.13% -- 0.80% -- 0.80% ----------------------------------------------------------------------------------------------------------------- T. ROWE PRICE GROWTH STOCK FUND, INC. 0.52% -- 0.16% -- 0.68% -- 0.68% ----------------------------------------------------------------------------------------------------------------- THE ALGER PORTFOLIOS--CLASS I-2 ----------------------------------------------------------------------------------------------------------------- Alger Small Cap Growth Portfolio 0.81% -- 0.20% -- 1.01% -- 1.01% ----------------------------------------------------------------------------------------------------------------- The information shown in the table above was provided by the Funds. Certain Funds and their investment adviser have entered into expense reimbursement and/or fee waiver arrangements that will continue from May 1, 2017 through April 30, 2018. These arrangements can be terminated with respect to these Funds only with the approval of the Fund's board of directors or trustees. Please see the Funds' prospectuses for additional information regarding these arrangements. 11
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EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CERTIFICATE WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE PARTICIPANT TRANSACTION EXPENSES, ADMINISTRATIVE FEES, SEPARATE ACCOUNT ANNUAL EXPENSES, AND TOTAL ANNUAL FUND OPERATING EXPENSES. THE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CERTIFICATE FOR THE TIME PERIODS INDICATED. THE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND ASSUME THE: (A) MAXIMUM AND (B) MINIMUM FEES AND EXPENSES OF ANY OF THE FUNDS (BEFORE REIMBURSEMENT AND/OR WAIVER). ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS, YOUR COSTS WOULD BE: (1) IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF THE APPLICABLE TIME PERIOD: [Download Table] Time Periods 1 year 3 years 5 years 10 years ------------------------------------------------------------------------------------ maximum $971 $1,413 $1,951 $2,789 minimum $884 $1,150 $1,509 $1,889 (2) IF YOU ANNUITIZE AT THE END OF THE APPLICABLE TIME PERIOD: [Download Table] Time Periods 1 year 3 years 5 years 10 years ------------------------------------------------------------------------------------ maximum $271 $783 $1,321 $2,789 minimum $184 $520 $ 879 $1,889 (3) IF YOU DO NOT SURRENDER YOUR CERTIFICATE: [Download Table] Time Periods 1 year 3 years 5 years 10 years ------------------------------------------------------------------------------------ maximum $271 $783 $1,321 $2,789 minimum $184 $520 $ 879 $1,889 The Examples should not be considered a representation of past or future expenses or annual rates of return of any Fund. Actual expenses and annual rates of return may be more or less than those assumed for the purpose of the examples. 12
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FINANCIAL AND PERFORMANCE INFORMATION [SIDE BAR: All performance numbers are based upon historical earnings. These numbers are not intended to indicate future results. Yields and average annual total returns are determined in accordance with the computation methods required by the Securities and Exchange Commission (the "SEC") in the Form N-4 Registration Statement. These methods are described in detail in the Statement of Additional Information.] PERFORMANCE INFORMATION We periodically advertise Series performance relating to the various Funds. We will calculate performance by determining the percentage change in the value of an accumulation unit by dividing the increase (decrease) for that unit by the value of the accumulation unit at the beginning of the period. This performance number reflects the deduction of the Separate Account product charges and the Fund expenses. It does not reflect the deduction of any applicable Transaction Fee or surrender charge. The deduction of these charges would reduce the percentage increase or make greater any percentage decrease. Any advertisement will also include total return figures which reflect the deduction of the Separate Account product charges, account fees, surrender charges and the Transaction Fees. For periods starting prior to the date the Contract was first offered, the performance will be based on the historical performance of the corresponding Funds for the periods commencing from the date on which the particular Fund was made available through the Separate Account. In addition, certain Fund performance may be shown for the period commencing from the inception date of the Fund. These figures should not be interpreted to reflect actual historical performance of the Separate Account. We may, from time to time, include in our advertising and sales materials, performance information for Funds or Series related to the Funds and/or their investment advisers or subadvisers. Such related performance information also may reflect the deduction of certain Contract charges. We may also include in our advertising and sales materials, tax deferred compounding charts and other hypothetical illustrations, which may include comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets. You should know that for any performance we illustrate, future performance will vary and results shown are not necessarily representative of future results. FINANCIAL INFORMATION Financial Statements of the Separate Account and BLIC are contained in the SAI. Please see the section "Additional Information" of this Prospectus for information on how to obtain a copy of the SAI. 13
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DESCRIPTION OF BRIGHTHOUSE LIFE INSURANCE COMPANY, THE GENERAL ACCOUNT, THE SEPARATE ACCOUNT, THE FUNDS AND SERVICE PROVIDERS THE INSURANCE COMPANY Brighthouse Life Insurance Company ("BLIC") is a stock life insurance company originally chartered in Connecticut in 1863 and currently subject to the laws of the State of Delaware. BLIC was previously known as MetLife Insurance Company of Connecticut but changed its name to MetLife Insurance Company USA when it changed its state of domicile from Connecticut to Delaware on November 14, 2014. We changed our name to Brighthouse Life Insurance Company on March 6, 2017. BLIC is licensed to conduct business in all states of the United States except New York, and in the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. BLIC is a subsidiary of, and controlled by, MetLife, Inc., a publicly-traded company (see "Planned Separation from MetLife, Inc. below"). MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and financial services to individuals and institutional customers. BLIC's executive offices are located at 11225 North Community House Road, Charlotte, NC 28277. Prior to November 17, 2014, the Contracts were issued by MetLife Investors USA Insurance Company ("MetLife Investors USA"). On November 14, 2014, following the close of business, MetLife Investors USA merged into BLIC (formerly known as MetLife Insurance Company USA) and BLIC replaced MetLife Investors USA as the issuer of the Contracts. PLANNED SEPARATION FROM METLIFE, INC. In January 2016, MetLife, Inc. announced its plan to pursue the separation of a substantial portion of its U.S. retail business. In preparation for the planned separation, in August 2016 MetLife, Inc. formed a new, wholly-owned Delaware holding company, Brighthouse Financial, Inc. (Brighthouse Financial), which filed a registration statement on Form 10 (the Form 10) with the SEC in October 2016, as amended in December 2016, reflecting MetLife Inc.'s current initiative to conduct the separation in the form of a spin-off. To effect the separation, first, MetLife, Inc. expects to undertake the restructuring described in more detail in the Form 10. The restructuring would result in future Brighthouse Financial subsidiaries, including the Company, being wholly-owned subsidiaries of Brighthouse Financial. Following the restructuring, MetLife, Inc. would distribute at least 80.1% of Brighthouse Financial's common stock to MetLife Inc.'s shareholders (the Distribution), and Brighthouse Financial would become a separate, publicly traded company. The separation remains subject to certain conditions including, among others, obtaining final approval from the MetLife, Inc. board of directors, receipt of a favorable IRS ruling and an opinion from MetLife, Inc.'s tax advisor regarding certain U.S. federal income tax matters, receipt of the approval of state insurance and other regulatory authorities and an SEC declaration of the effectiveness of the Form 10. 14
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Following the Distribution, if it occurs, the Company will be a wholly-owned subsidiary of, and ultimately controlled by, Brighthouse Financial. MetLife, Inc. currently plans to dispose of its remaining shares of Brighthouse Financial common stock as soon as practicable following the Distribution, but in no event later than five years after the Distribution. For more information about Brighthouse Financial and the Distribution, please see the most recent amendment to Brighthouse Financial's Form 10 (SEC File No. 001-37905), available via the SEC's EDGAR system on its website at https://www.sec.gov/edgar/searchedgar/companysearch.html. No assurances can be given regarding the final form the Distribution (or any alternative separation transaction) may take or the specific terms thereof, or that the Distribution (or any other form of separation) will in fact occur. However, any separation transaction will not affect the terms or conditions of your variable Contract. The Company will remain fully responsible for its contractual obligations to variable Contract owners, and you should carefully consider the potential impact of any separation transaction that may occur on the Company's financial strength and claims-paying ability. THE GENERAL ACCOUNT All of the assets of BLIC, except for those in the Separate Account and other segregated asset accounts, make up the assets of the General Account. You may allocate to the General Account. Amounts allocated to the General Account are credited with interest at an interest rate that is guaranteed by BLIC. The minimum interest rate depends on the date your Contract is issued but will not be less than 3%. Your registered representative can tell you the current and minimum rates that apply. Because of exemptive and exclusionary provisions, interests in the General Account have not been registered under the Securities Act of 1933 ("Securities Act") and the General Account has not been registered as an investment company under the 1940 Act. Instead of you bearing the risk of fluctuations in the value of the assets as is the case for amounts invested in the Separate Account, BLIC bears the full investment risk for amounts in the General Account. BLIC has sole discretion to invest the assets of the General Account, subject to applicable law. All guarantees as to Purchase Payments or Account value allocated to the General Account, interest credited to the General Account, and Fixed Annuity payments are subject to BLIC's financial strength and claim-paying ability. Please see the terms of your Certificate for more information. THE SEPARATE ACCOUNT The Board of Directors of MetLife Investors USA adopted a resolution to establish the Separate Account in accordance with the Delaware Insurance Code on May 29, 1980. Prior to March 6, 2017, the Separate Account was known as MetLife Investors USA Separate Account A. On November 14, 2014, following the close of business, MetLife Investors USA merged into BLIC (formerly known as MetLife Insurance Company USA) and the Separate Account became a separate account of BLIC. The purpose of the Separate Account is to hold the variable assets that underlie 15
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the Contracts and some other variable annuity contracts that BLIC offers. The Separate Account is registered with the SEC as a unit investment trust under the 1940 Act. The assets of the Separate Account are held in BLIC's name on behalf of the Separate Account and legally belong to BLIC. Although the Separate Account, and each of the Series that make up the Separate Account, are considered as part of BLIC's general business, the Separate Account's assets are solely for the benefit of those who invest in the Separate Account and no one else, including BLIC's creditors. All the income, gains, and losses (realized and unrealized) resulting from these assets are credited to or charged against the Contracts issued from this Separate Account without regard to BLIC's other business. Under state law and the terms of the Contract, the assets of the Separate Account will not be responsible for liabilities arising out of BLIC's other business. Furthermore, BLIC is obligated to pay all money it owes under the Contracts even if that amount exceeds the assets in the Separate Account. However, the amount of these payments is guaranteed only to the extent of the level amount calculated at the beginning of each Annuity year. Any obligations that exceed the assets in the Separate Account are payable by the General Account. The amount of the death benefit that exceeds the Contract Value is paid from the General Account. Benefit amounts paid from the General Account are subject to the claims-paying ability of BLIC and BLIC's long-term ability to make such payments and are not guaranteed by our parent company, MetLife, Inc., or by any other party. For other annuity contracts and life insurance policies that BLIC issues, all amounts owed under the contracts and policies are paid from the General Account. BLIC is regulated as an insurance company under state law, which generally imposes restrictions on the amount and type of investments in the General Account. However, there is no guarantee that BLIC will be able to meet all claims-paying obligations. There are risks to purchasing any insurance product. The Separate Account is divided into a number of investment Series of Accumulation and Annuity Units. Over twenty-five of these Series are available under the Contracts as investment choices. Each Series invests in the shares of only one of the Funds. The investment adviser to certain of the Funds offered with the Contracts or with other Variable Annuity contracts issued through the Separate Account may be regulated as Commodity Pool Operators. While it does not concede that the Separate Account is a commodity pool, BLIC has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodities Exchange Act ("CEA"), and is not subject to registration or regulation as a pool operator under the CEA. THE FUNDS The following Funds are available as investment options under the Contract. YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY BEFORE INVESTING. YOU CAN OBTAIN COPIES OF THE FUND PROSPECTUSES BY CALLING OR WRITING TO US AT: BRIGHTHOUSE LIFE INSURANCE COMPANY, 11225 NORTH COMMUNITY HOUSE ROAD, CHARLOTTE, NC 28277, (800) 343-8496. Certain Funds described in the prospectuses may not be available with your Contract. Appendix B contains a summary of investment objectives and the names of the subadviser, if any, for each Fund. AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Insurance Series(R) is a mutual fund with multiple portfolios. Capital Research and Management Company is the investment adviser to each portfolio. The following portfolios are available under the contract: American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund BRIGHTHOUSE FUNDS TRUST I -- CLASS A Brighthouse Funds Trust I is a mutual fund with multiple portfolios. Brighthouse Investment Advisers, LLC (Brighthouse Investment Advisers) is the investment manager of Brighthouse Funds Trust I. Brighthouse Investment Advisers has engaged subadvisers to provide investment advice for the individual Investment Portfolios. (See Appendix B for the names of the subadvisers.) The following portfolios are available under the contract: Brighthouse Small Cap Value Portfolio Invesco Small Cap Growth Portfolio MFS(R) Research International Portfolio Morgan Stanley Mid Cap Growth Portfolio PIMCO Total Return Portfolio T. Rowe Price Large Cap Value Portfolio BRIGHTHOUSE FUNDS TRUST II -- CLASS A Brighthouse Funds Trust II is a mutual fund with multiple portfolios. Brighthouse Investment Advisers is the investment adviser to the portfolios. Brighthouse Investment Advisers has engaged subadvisers to provide investment advice for the individual Investment Portfolios. 16
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(See Appendix B for the names of the subadvisers.) The following portfolios are available under the contract: BlackRock Bond Income Portfolio BlackRock Capital Appreciation Portfolio BlackRock Large Cap Value Portfolio Brighthouse/Artisan Mid Cap Value Portfolio Brighthouse/Wellington Core Equity Opportunities Portfolio MetLife Aggregate Bond Index Portfolio MetLife Mid Cap Stock Index Portfolio MetLife MSCI EAFE(R) Index Portfolio MetLife Russell 2000(R) Index Portfolio MetLife Stock Index Portfolio MFS(R) Total Return Portfolio MFS(R) Value Portfolio Neuberger Berman Genesis Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio Western Asset Management Strategic Bond Opportunities Portfolio DEUTSCHE VARIABLE SERIES I -- CLASS A Deutsche Variable Series I is a mutual fund with multiple portfolios. Deutsche Investment Management Americas Inc. is the investment adviser to each portfolio. The following portfolio is available under the contract: Deutsche CROCI(R) International VIP FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- INITIAL CLASS Fidelity(R) Variable Insurance Products is a mutual fund with multiple portfolios. Fidelity Management & Research Company is the investment manager. (See Appendix B for the name of the subadviser.) The following portfolios are available under the contract: Asset Manager Portfolio Contrafund(R) Portfolio Government Money Market Portfolio Growth Portfolio Overseas Portfolio T. ROWE PRICE GROWTH STOCK FUND, INC. T. Rowe Price Growth Stock Fund, Inc. is a mutual fund with multiple portfolios. T. Rowe Price Associates, Inc. serves as investment adviser to the portfolios. The following portfolio is available under the contract: T. Rowe Price Growth Stock Fund, Inc. THE ALGER PORTFOLIOS -- CLASS I-2 The Alger Portfolios is a mutual fund with multiple portfolios. Fred Alger Management, Inc. is the investment adviser to each portfolio. The following portfolio is available under the contract: Alger Small Cap Growth Portfolio 17
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[SIDE BAR: While the Series and their comparably named Funds may have names, investment objectives and management which are identical or similar to publicly available mutual funds, these are not those retail mutual funds. The Funds most likely will not have the same performance experience as any retail mutual fund. Moreover, a Series that invests in a retail fund will have lower investment performance than the retail fund due to Contract charges and expenses.] Shares of each Fund are purchased for the corresponding Series. These Funds invest in stocks, bonds and other investments. All dividends declared by the Funds are earned by the Separate Account and reinvested. Therefore, no dividends are distributed to you under the Contract. Instead, dividends generally increase the Accumulation or Annuity Unit Value. You pay no transaction expenses (i.e., front-end or back-end load sales charges) as a result of the Separate Account's purchase or sale of these Fund shares. The Funds listed above other than the T. Rowe Price Growth Stock Fund, Inc. are available only by purchasing annuities and life insurance policies offered by BLIC or by other insurance companies and are never sold directly to the public. The shares of each Fund are purchased, without sales charge, for the corresponding Series at the next net asset value per share determined by a Fund after your payment is received by BLIC. Fund shares will be redeemed by the Series to the extent necessary for BLIC to make annuity or other payments under the Contracts. Each of the Funds is a portfolio or series of an open-end management investment company registered with the SEC under the 1940 Act. Registration does not involve supervision by the SEC of the investment or investment policies of the Funds. There can be no guarantee that a Fund will meet its investment objectives. A Fund's performance may be affected by risks specific to certain types of investments, such as foreign securities, derivative instruments, non-investment grade securities, initial public offerings (IPOs) or companies with relatively small market capitalizations. IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow. [SIDE BAR: The Funds are more fully described in the Fund prospectuses and their Statements of Additional Information.] The Funds are available to other registered separate accounts offering variable annuity and variable life products in addition to BLIC's Separate Account. In the future, a conflict may develop between one or more separate accounts invested in the same Fund. The conflict could develop due to change in the law affecting variable annuity products or from differences in voting instructions of owners of the different separate accounts. BLIC monitors the Series for this type of conflict and will remedy the situation if such a conflict develops. This may include the withdrawal of amounts invested in the Funds by you and other Participants and Owners. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE FUNDS. An investment adviser (other than Brighthouse Investment Advisers, LLC) or subadviser of a Fund or its affiliates may make payments to us and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment of expenses for certain administrative, marketing, and support services with respect to the Contracts and, in BLIC's role as intermediary, with respect to the Funds. BLIC and its affiliates may profit from these payments. These payments may be derived, in whole or in part, from the advisory fee deducted from Fund assets. Contract Owners, through their indirect investment in the Funds, bear the 18
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costs of these advisory fees (see the Funds' prospectuses for more information). The amount of the payments we receive is based on a percentage of assets of the Funds attributable to the Contracts and certain other variable insurance products that we and our affiliates issue. These percentages differ and some advisers or subadvisers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser (other than Brighthouse Investment Advisers, LLC) or subadviser of a Fund or its affiliates may provide us with wholesaling services that assist in the distribution of the Contracts and may pay us and/or certain affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or subadviser (or its affiliate) with increased access to persons involved in the distribution of the Contracts. We and/or certain of our affiliated insurance companies have joint ownership interests in our affiliated investment adviser, Brighthouse Investment Advisers, LLC, which is formed as a "limited liability company." Our ownership interests in Brighthouse Investment Advisers, LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from the Funds. We will benefit accordingly from assets allocated to the Funds to the extent they result in profits to the adviser. (See "Fee Tables and Examples - Fund Expenses" for information on the management fees paid by the Funds and the SAI for the Funds for information on the management fees paid by the adviser to the subadvisers.) Certain Funds have adopted a Distribution Plan under Rule 12b-1 of the 1940 Act. A Fund's 12b-1 Plan, if any, is described in more detail in the Fund's prospectus. (See "Fee Tables and Examples - Fund Expenses" and "Principal Underwriter.") Any payments we receive pursuant to those 12b-1 Plans are paid to us or to our Distributor. Payments under a Fund's 12b-1 Plan decrease the Fund's investment return. HOW WE SELECT THE FUNDS. We select the Funds offered through the Contract based on a number of criteria, including asset class coverage, the strength of the adviser's or sub-adviser's reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Fund's adviser or sub-adviser is one of our affiliates or whether the Fund, its adviser, its sub-adviser(s), or an affiliate will make payment to us or our affiliates. For additional information on these arrangements, see "Certain Payments We Receive with Regard to the Funds" above. In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to Funds advised by our affiliates than those that are not, we may be more inclined to offer Funds advised by our affiliates in the variable insurance products we issue. In some cases, we have included Funds based on recommendations made by selling firms. These selling firms may receive payments from the Funds 19
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they recommend and may benefit accordingly from the allocation of Account value to such Funds. We review the Funds periodically and may remove a Fund or limit its availability to new Purchase Payments and/or transfers of Participant's Account value if we determine that the Fund no longer meets one or more of the selection criteria, and/or if the Fund has not attracted significant allocations from Participants. We make certain payments to American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series. (See "Principal Underwriter.") WE DO NOT PROVIDE INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR FUND. YOU BEAR THE RISK OF ANY DECLINE IN THE ACCOUNT VALUE OF YOUR CONTRACT RESULTING FROM THE PERFORMANCE OF THE FUNDS YOU HAVE CHOSEN. SUBSTITUTION OF FUND SHARES. BLIC may substitute shares of another fund for Fund shares if the shares of a Fund are no longer available or further investment in such shares is determined to be inappropriate by BLIC's management in view of the purposes of the Contracts. The substituted fund may have different fees and expenses. However, no substitution is allowed unless a majority of the Owners entitled to vote (those who have invested in the Series) and the SEC approves the substitution under the 1940 Act. Furthermore, we may close investment portfolios to allocation of purchase payments or Contract value, or both, at any time in our sole discretion. PRINCIPAL UNDERWRITER Brighthouse Securities, LLC ("Distributor"), 11225 North Community House Road, Charlotte, NC, 28277, a broker-dealer registered under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority ("FINRA"), an affiliate and principal underwriter for the Contracts. FINRA provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org. An investor brochure that includes information describing FINRA BrokerCheck is available through the Hotline or on-line. The Distributor is a Delaware limited liability company. Prior to March 6, 2017, the principal underwriter and distributor of the Contracts was MetLife Investors Distribution Company. BLIC has entered into a distribution agreement with Distributor for the distribution of the Certificates. We pay compensation to Distributor for sales of the Contracts and Certificates by the selling firm. We pay amounts to Distributor that may be used for its operating and other expenses, including the following sales expenses: compensation and bonuses for the Distributor's management team, advertising expenses, and other expenses of distributing the contracts. Distributor's management team also may be eligible for non-cash compensation items that we may provide jointly with Distributor. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items. 20
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We and Distributor have entered into selling agreements with unaffiliated selling firms for the sale of the Contracts. All selling firms receive commissions, and they may receive some form of non-cash compensation. These commissions and other incentives or payments are not charged directly to Participants or the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Contract or from our General Account. A portion of the payments made to selling firms may be passed on to their sales representatives in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. BLIC and Distributor may have entered into selling agreements with certain broker-dealer firms that have an affiliate that acts as investment adviser or subadviser to one or more Funds which are offered under the Contract. Currently, the investment advisory firms include Morgan Stanley Investment Management, Inc. Registered representatives of broker-dealer firms with an affiliated company acting as an adviser or a subadviser may favor these Funds when offering the Contract. We and Distributor pay compensation to all selling firms in the form of commissions and may provide certain types of non-cash compensation. The maximum commission payable for contract sales and additional Purchase Payments by selling firms is 8.5% of purchase payments. We also pay commissions when a Participant elects to begin receiving Annuity payments. (See "Annuity Benefits - Variable Annuity Payments.") From time to time, the Company pays organizations, associations and non-profit organizations fees to sponsor the Company's Variable Annuity Contracts. The Company may also obtain access to an organization's members to market Our Variable Annuity Contracts. These organizations are compensated for their sponsorship of Our Variable Annuity Contracts in various ways. Primarily, they receive a flat fee from the Company. The Company also compensates these organizations by funding their programs, scholarships, events or awards, such as a principal of the year award. The Company may also lease their office space or pay fees for display space at their events, purchase advertisements in their publications or reimburse or defray their expenses. The Company also may retain finders and consultants to introduce the Company to potential clients and for establishing and maintaining relationships between the Company and various organizations. The finders and consultants are primarily paid flat fees and may be reimbursed for their expenses. The Company or Our affiliates may also pay duly licensed individuals associated with these organizations cash compensation for the sales of the Contracts. SERVICING AGENT MetLife Group, Inc. and Metropolitan Life Insurance Company, with whom we were previously affiliated, provide BLIC with personnel, administrative and enrollment services, including: officers, office space, supplies, utilities, office equipment, travel expenses and periodic reports. 21
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CONTRACT CHARGES BLIC deducts the charges described below, and we may also deduct a charge for taxes, if applicable. Unless otherwise specified, charges are deducted proportionately from all Series, and the General Account in which you are invested. These charges may not be changed under the Contract, and BLIC may profit from these charges in the aggregate. PREMIUM AND OTHER TAXES BLIC reserves the right to deduct from Purchase Payments, surrenders, death benefits or Annuity payments any taxes relating to the Contracts (including, but not limited to, premium taxes) paid by us to any government entity. Examples of these taxes include, but are not limited to, premium tax, generation-skipping transfer tax or a similar excise tax under federal or state law which is imposed on payments we make to certain persons and income tax withholdings on surrenders and Annuity payments to the extent required by law. Premium taxes generally range from 0 to 3.5%, depending on the state. We will, at out sole discretion, determine when taxes relate to the Contracts. We may, at our sole discretion, pay taxes when due and deduct that amount from the Participant's Account value at a later date. Payment at any earlier date does not waive any right we may have to deduct amounts at a later date. It is our current practice not to charge premium taxes until Annuity payments begin. See Appendix D for more information. SURRENDER CHARGE [SIDE BAR: The surrender charge covers marketing expenses for the sale of Contracts, such as commissions to sales personnel and other promotion and acquisition expenses.] No sales charge is deducted from any Purchase Payment. However, a surrender charge (contingent deferred sales charge) may be imposed on a partial or full surrender of the Participant's Account. During the accumulation phase, you can withdraw part or all of the Participant's Account. For 403(b) Plans only, in the first surrender of each calendar year, you may surrender up to 10% of the value of your interest in the Separate Account without surrender charges, provided that the proceeds are paid solely to the Participant or the Beneficiary. If you withdraw money in excess of 10%, you might have to pay a surrender charge on the excess amount. Withdrawals from 403(b) Plans may be restricted by the Code. If the amount you withdraw is determined to include the withdrawal of any of your prior Purchase Payments, a surrender charge is assessed against each Purchase Payment withdrawn. To determine what portion (if any) of a withdrawal is subject to a surrender charge, amounts are withdrawn from your Contract in the following order: 1. Earnings in your Contract (earnings are equal to the Participant's Account, less Purchase Payments not previously withdrawn); then 2. For 403(b) Plans only, the free withdrawal amount described above (deducted from Purchase Payments not previously withdrawn, in the 22
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order such Purchase Payments were made, with the oldest Purchase Payment first, as described below); then 3. Purchase Payment not previously withdrawn, in the order such Purchase Payments were made: the oldest Purchase Payment first, the next Purchase Payment second, etc. until all Purchase Payments have been withdrawn. The following schedule shows the surrender charges that apply during the 60 months following each Purchase Payment: [Download Table] Number of Months Since Purchase Payment Date Surrender Charge --------------------------------------------- 60 months or less 7% More than 60 months 0% The Surrender Charge amount is the gross surrender amount multiplied by the Surrender Charge. gross surrender amount x Surrender Charge = Surrender Charge amount [SIDE BAR: The surrender charge covers marketing expenses for the sale of Contracts, such as commissions to sales personnel and other promotion and acquisition expenses.] If you make a partial surrender, you will receive a check in the amount requested. The surrender charge, if any, will be deducted from the Series from which the partial surrender was taken. If the amount in a particular Series is completely surrendered, the charge will be taken from the remaining Series in which you have an interest. A surrender charge, if any, will not be applied to the amounts deducted to cover the surrender charge. BLIC will not deduct any surrender charge once 9 years have elapsed since your Certificate Date. DIVORCE. A withdrawal pursuant to a divorce or separation instrument is subject to the same surrender charge provisions described in this section, if permissible under tax law. In addition, the withdrawal will reduce the Participant's Account and the death benefit. The withdrawal could have a significant negative impact on the death benefit. EXCEPTIONS TO SURRENDER CHARGE In some cases, BLIC will not charge you the surrender charge when you make a surrender. You do not pay the surrender charge: .. on transfers made within the Contract; .. on withdrawals of Purchase Payments you made over 60 months ago; .. If you die during the pay-in phase. Your Beneficiary(ies) will receive the full death benefit without deduction; .. If you are a 403(b) Plan Participant and you withdraw no more than 10% of your interest in any calendar year (subject to Code restrictions); .. If you are confined to a hospital for at least 30 consecutive days or a skilled nursing home for at least 90 consecutive days. The withdrawal must be in a lump sum and must be requested within 60 days after termination of confinement. This Contract feature is not available in Massachusetts and South Dakota; 23
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[SIDE BAR:Please note that deductions are made and expenses paid out of the underlying Funds' assets, as well. A description of these fees and expenses are described in each Fund's prospectus.] .. When you are an officer, director or full time employee of BLIC or its affiliates. In this case, the purchase of the Contract is for personal investment purposes only; .. on required minimum distributions from, or excess contributions to, a qualified contract (but only with respect to amounts required to be distributed from this contract); and .. If permitted in your state, if you are the Plan Participant and you make a direct transfer of your Participant's Account to another funding option or annuity contract issued by BLIC or one of its affiliates and BLIC or its affiliate agrees. ADMINISTRATIVE FEES An administrative fee of $21.50 plus $2.50 for each Series in which you have Accumulation Units is deducted from your Participant's Account on a yearly basis. The fee is prorated between Series in your Account based on their values on the date of the deduction. Contract administration expenses we incur include: .. the cost of Contract issuance; .. rent; .. stationery and postage; .. telephone and travel expenses; .. salaries; .. legal, administrative, actuarial and accounting fees; .. periodic reports; and .. office equipment, and custodial expenses. The administrative fee will be waived for any Certificate Year during which you contribute Purchase Payments of $2,000 or more or your Participant's Account is $10,000 or more at the end of the Certificate Year. TRANSACTION CHARGES A $10 transaction charge will be deducted from your Account for each transfer from a Series (see "Transfers") and upon annuitizaton of all or a portion of your Participant's Account (see "Annuity Benefits"). When you make a full or partial surrender, a transaction charge will be deducted from your Participant's Account in an amount equal to the lesser of: .. $10 or .. 2% of the amount surrendered. These charges are at cost. BLIC does not anticipate profiting from them. Transaction charges for transfers from one Series of the Separate Account to another Series of the Separate Account are currently waived. (See, however, "Description of the Contracts - Restrictions on Transfers.") 24
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MORTALITY AND EXPENSE RISK CHARGE BLIC charges a fee for bearing certain mortality and expense risks under the Contract. You pay the mortality and expense risk charge during the accumulation phase and the income phase. Examples of these risks include a guarantee of annuity rates, the death benefits, and assuming the risk that the expense charges and fees are less than actual administrative and operating expenses. As compensation for assuming these risks, BLIC will make a daily deduction from the value of the Separate Account's assets equal to 1.25% per year. If BLIC has gains from the receipt of the mortality and expense risk charges over its cost of assuming these risks, it may use the gains as it sees fit. This may include the reduction of expenses incurred in distributing the Contracts. BLIC may voluntarily waive a portion of the mortality and administrative expense risk charges. Any waiver of these expenses may be terminated at any time. DISTRIBUTION EXPENSE CHARGE BLIC also assumes the risk that surrender charges described above will be insufficient to cover the actual costs of distribution. These costs include: .. commissions, .. fees, .. registration costs, and .. direct and indirect selling expenses (including advertising, sales materials, illustrations, marketing personnel, printing, and related overhead) As compensation for assuming this risk, BLIC will make a deduction of .000274% on a daily basis (0.10% per year) from the value of the Separate Account assets funding the Contract (the staff of the SEC deems this charge a deferred sales charge). The distribution expense charge (sales load), together with any contingent deferred sales charge imposed as described under "Surrender Charge" above, will never exceed 9% of purchase payments. LOAN SET-UP FEE - 403(B) PLANS ONLY You may be able to obtain a loan from the portion of your Participant's Account allocated to the General Account. Fees may be charged for loan set-up and administration. Currently, the loan set-up fee is $50. This amount is deducted from the loan proceeds. At this time, there is no fee for administration. Loan proceeds may be considered taxable distributions under the Code in the event of a default in repayments. BLIC: .. may terminate loans .. change the terms under which loans are made Any action taken by BLIC would not affect outstanding loans. 25
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INCOME TAXES We reserve the right to deduct from the Contract for any income taxes which we incur because of the Contract. In general, we believe under current federal income tax law, we are entitled to hold reserves with respect to the Contract that offset Separate Account income. If this should change, it is possible we could incur income tax with respect to the Contract, and in that event we may deduct such tax from the Contract. At the present time, however, we are not incurring any such income tax or making any such deductions. FUND EXPENSES There are deductions from and expenses paid out of the assets of the various Funds, which are described in the fee table in this prospectus and in the Fund prospectuses. These deductions and expenses are not charges under the terms of the Contract but are represented in the share values of the investment options. FREE LOOK PERIOD You may cancel your interest in the Contract within a certain time period. This is known as a "free look." Your Free Look Period is the 20-day period (or longer in certain states) starting when you receive your Certificate. If you decide to cancel your interest in the Contract, BLIC must receive your request to cancel in writing at its administrative office within the 20-day period. If the Certificate is mailed to BLIC, it will be considered to be received on the postmark date. If the Certificate is sent by certified or registered mail, the date of certification or registration will be considered the date of its return to BLIC. The returned Certificate will be treated as if BLIC never issued it, and BLIC will refund your Purchase Payments or, if permitted by state law, the greater of the Purchase Payments or the Participant's Account. Purchase Payments that you make to the Separate Account will be allocated to the Government Money Market Portfolio for the number of days of the Free Look Period required by the state in which you live. At the end of the Free Look Period, the account value in the Government Money Market Portfolio will be reallocated to the Series of the Separate Account that you selected in your Contract application. DEFERRED COMPENSATION PLANS For qualified Section 457 deferred compensation Plans, BLIC may agree to reduce or waive the administrative fees, transaction charges, and the distribution expense fee. Also, deductions for sales charges may be reduced or waived if a surrender is the result of your: .. death, .. disability, .. retirement, .. termination of employment, .. unforseeable emergency, or .. transfer to another investment provider. 26
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DESCRIPTION OF THE CONTRACTS GENERAL The Contracts (known as Form 226R1) may be offered to Qualified Plans such as: .. Section 403(b) tax-sheltered annuities; .. Section 457 deferred compensation plans; .. Section 401 pension and profit sharing plans; and .. individual retirement annuities under Section 408 of the Code. The Contracts are designed to fulfill long-term financial needs. They should not be considered as short-term or temporary investments. A group Contract is issued to an employer or organization which is the Owner. This Contract covers all present and future Participants. After completing an enrollment form and arranging for Purchase Payments to begin, except as provided below, you and all other Participants will receive a Certificate that gives you a summary of the Contract provisions. This Certificate also serves as evidence of your participation in the Plan. NO CERTIFICATES ARE ISSUED TO PARTICIPANTS UNDER DEFERRED COMPENSATION OR QUALIFIED CORPORATE RETIREMENT PLANS. The group Contracts may be restricted by the Plan as to your exercise of certain rights provided under the Contracts. You should refer to the Plan for information concerning these restrictions. Due to IRS regulations affecting 403(b) plans, we will only issue new Certificates where your employer currently permits salary reduction contributions to be made to the Certificate. ASSIGNMENT If permitted by the Plan, you may assign your interest in the Contract by providing BLIC with written notice. Where a Contract is issued in connection with a non-governmental deferred compensation plan, all rights and powers under the Contract are vested in the Owner, not you. BLIC will not be bound by the assignment until written notice of the assignment is recorded by us. We will not be liable for any payment or other action we take in accordance with the Contract before we record the assignment. AN ASSIGNMENT MAY BE A TAXABLE EVENT. PURCHASE PAYMENTS You may make Purchase Payments yearly, semi-yearly, quarterly, monthly, or in periods agreed to by BLIC. You may change when you make Purchase Payments if permitted by the Plan. The minimum Purchase Payment is $20, with a yearly minimum of $240 (for IRAs, the minimum is $2,000 for an initial Purchase Payment and $50 for each additional payment), or such lesser amount as is required by federal tax law. Purchase Payments may be allocated to the Separate Account, the General Account, or between them 27
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according to your decision. You will periodically receive a confirmation of Purchase Payments which have been received. We accept Purchase Payments made by check or cashier's check. We do not accept cash, money orders or traveler's checks. We reserve the right to refuse Purchase Payments made via a personal check in excess of $100,000. Purchase payments over $100,000 may be accepted in other forms, including but not limited to, EFT/wire transfers, certified checks, corporate checks, and checks written on financial institutions. The form in which we receive a Purchase Payment may determine how soon subsequent disbursement requests may be fulfilled. (See "Payment of Surrender Amount.") If you send a Purchase Payment or transaction request to an address other than the one we have designated for receipt of such Purchase Payments or requests, we may return the Purchase Payment to you, or there may be a delay in applying the Purchase Payment or transaction to your Participant's Account. TRANSFERS ACCUMULATION UNITS Except as otherwise limited under "Restrictions on Transfers" below, you may transfer Accumulation Units from one Series to another or from a Series to the General Account at any time. You may not make a transfer from the General Account to Accumulation Units of a Series of more than 20% of your interest in the General Account in any one year. It is important to note that it will take over 10 years (assuming no additional purchase payments or transfers into the General Account and discounting any accrued interest) to make a complete transfer of your interest from the General Account to Accumulation Units of a Series because of the transfer allowance restriction indicated above. This is because the 20% transfer allowance is based on a declining interest in the General Account rather than transfers based upon a fixed number of years. For example (based upon the assumptions above), if your initial interest in the General Account is $100, the 20% transfer allowance only allows you to transfer up to $20 the first year. If you transfer the maximum transfer allowance that year, you may only transfer up to $16 the following year based on the 20% transfer allowance of the $80 interest remaining in the General Account for the year. It is important to consider when deciding to invest in the General Account whether this 20% transfer allowance restriction fits your risk tolerance and time horizon. Your transfer instructions must be in writing or, if permitted by BLIC, by telephone, Internet or other means approved by BLIC. Requests for service may be made: .. By telephone at (1-800-560-5001), between the hours of 7:30 AM and 5:30 PM Central Time Monday through Thursday and 7:30 AM and 5:00 PM Central Time on Friday; or 28
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.. In writing to us at the Annuity Service Center at 4700 Westown Parkway, Ste. 200, West Des Moines, Iowa 50266. Your transfer request must be in Good Order. If BLIC permits transfers by telephone, you will be required to complete an authorization on the Certificate enrollment or on another form that BLIC may require. We will use reasonable procedures such as requiring certain identifying information, tape recording the telephone instructions, and providing written confirmation of the transaction, in order to confirm that instructions communicated by telephone, fax, Internet or other means are genuine. Any telephone, fax or Internet instructions reasonably believed by us to be genuine will be your responsibility, including losses arising from any errors in the communication of instructions. As a result of this policy, you will bear the risk of loss. If we do not employ reasonable procedures to confirm that instructions communicated by telephone, fax or Internet are genuine, we may be liable for any losses due to unauthorized or fraudulent transactions. All other requests and elections under your contract must be in writing signed by the proper party, must include any necessary documentation and must be received at our Annuity Service Center to be effective. If acceptable to us, requests or elections relating to Beneficiaries and ownership will take effect as of the date signed unless we have already acted in reliance on the prior status. We are not responsible for the validity of any written request or action. Because telephone or Internet transactions will be available to anyone who provides certain information about you or your Contract, you should protect that information. We may not be able to verify that you are the person providing telephone or Internet instructions, or that you have authorized any such person to act for you. Telephone or computer systems may not always be available. Any telephone or computer system can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request in writing to Brighthouse Life Insurance Company, 11225 North Community House Road, Charlotte, NC 28277. Transfers will be effected on the first Valuation Date after receipt of written, telephone or Internet instructions. Accumulation Unit values are determined as of the close of trading on the NYSE. The NYSE usually closes at 4:00 p.m. Eastern time but may close earlier or later. If your transfer instructions are received up to that time your transfer will be effected at the value calculated on that Valuation Date. If your instructions are received after the close of trading on a valuation day, your transfer instructions will be carried out at the value next calculated. ANNUITY UNITS You may convert Annuity Units from one Series to another at any time. You may not convert Annuity Units from a Series to the General Account. However, any amounts that you have in the General Account 29
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that have not been applied to a fixed annuity income option may be transferred to Annuity Units in one or more Series for Variable Annuity payments. Conversions of Annuity Units may only be requested in writing and will be effective on the first valuation following receipt of the instructions. MINIMUM TRANSFER A minimum of $500 must be transferred from any Series or from the General Account. The value of the Accumulation and Annuity Units transferred will be calculated as of the close of business on the day that the transfer occurs. RESTRICTIONS ON TRANSFERS RESTRICTIONS ON FREQUENT TRANSFERS. Frequent requests from Participants to make transfers may dilute the value of a Fund's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Fund and the reflection of that change in the Fund's share price ("arbitrage trading"). Frequent transfers involving arbitrage trading may adversely affect the long-term performance of the Funds, which may in turn adversely affect Participants and other persons who may have an interest in the Contracts (e.g., annuitants and beneficiaries). We have policies and procedures that attempt to detect and deter frequent transfers in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be presented in the international, small-cap, and high-yield Funds (i.e., Alger Small Cap Growth Portfolio, American Funds Global Small Capitalization Fund, Brighthouse Small Cap Value Portfolio, Deutsche CROCI(R) International VIP, Invesco Small Cap Growth Portfolio, MetLife MSCI EAFE(R) Index Portfolio, MetLife Russell 2000(R) Index Portfolio, MFS(R) Research International Portfolio, Neuberger Berman Genesis Portfolio, Overseas Portfolio, T. Rowe Price Small Cap Growth Portfolio, Western Asset Management Strategic Bond Opportunities Portfolio - (the "Monitored Portfolios") and we monitor transfer activity in those Monitored Portfolios. In addition, as described below, we treat all American Funds Insurance Series portfolios ("American Funds portfolios") as Monitored Portfolios. We employ various means to monitor transfer activity, such as examining the frequency and size of transfers into and out of the Monitored Portfolios within given periods of time. For example, we currently monitor transfer activity to determine if, for each category of international, small-cap, and high-yield Portfolios, in a 12-month period there were, (1) six or more transfers involving the given category; (2) cumulative gross transfers involving the given category that exceed the current Participant's Account value; and (3) two or more "round-trips" involving any Fund in the given category. A round-trip generally is defined as a transfer in followed by a transfer out within the next seven calendar days or a transfer out followed by a transfer in within the next seven calendar days, in either case subject to certain other criteria. WE DO NOT BELIEVE THAT OTHER FUNDS PRESENT A SIGNIFICANT OPPORTUNITY TO ENGAGE IN 30
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ARBITRAGE TRADING AND THEREFORE DO NOT MONITOR TRANSFER ACTIVITY IN THOSE FUNDS. We may change the Monitored Portfolios at any time without notice in our sole discretion. As a condition to making their Funds available in our products, American Funds requires us to treat all American Funds portfolios as Monitored Portfolios under our current frequent transfer policies and procedures. Further, American Funds requires us to impose additional specified monitoring criteria for all American Funds portfolios available under the Contract, regardless of the potential for arbitrage trading. We are required to monitor transfer activity in American Funds portfolios to determine if there were two or more transfers in followed by transfers out, in each case of a certain dollar amount or greater, in any 30-day period. A first violation of the American Funds monitoring policy will result in a written notice of violation; each additional violation will result in the imposition of a six-month restriction, during which period we will require all transfer requests to or from an American Funds portfolio to be submitted with an original signature. Further, as Monitored Portfolios, all American Funds portfolios also will be subject to our current frequent transfer policies, procedures and restrictions (described below), and transfer restrictions may be imposed upon a violation of either monitoring policy. Our policies and procedures may result in transfer restrictions being applied to deter frequent transfers. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, we require future transfer requests to or from any Monitored Portfolios under that Contract to be submitted in writing with an original signature. A first occurrence will result in a warning letter; a second occurrence will result in the imposition of this restriction for a six-month period; a third occurrence will result in the permanent imposition of the restriction. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Funds that we believe are susceptible to arbitrage trading or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Contract Owners to avoid such detection. Our ability to restrict such transfer activity also may be limited by provisions of the Contract. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect Contract Owners and other persons with interests in the Contracts. We do not accommodate frequent transfers in any Fund and there are no arrangements in place to permit any Contract Owner to engage in frequent transfers; we apply our policies and procedures without exception, waiver, or special arrangement. The Funds may have adopted their own policies and procedures with respect to frequent transfers in their respective shares, and we reserve the right to enforce these policies and procedures. For example, Funds may assess a redemption fee (which we reserve the right to collect) on shares 31
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held for a relatively short period. The prospectuses for the Funds describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual authority or the operational capacity to apply the frequent transfer policies and procedures of the Funds, we have entered into a written agreement, as required by SEC regulation, with each Fund or its principal underwriter that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Contract Owners, and to execute instructions from the Fund to restrict or prohibit further purchases or transfers by specific Contract Owners who violate the frequent transfer policies established by the Fund. In addition, Contract Owners and other persons with interests in the Contracts should be aware that the purchase and redemption orders received by the Funds generally are "omnibus" orders from intermediaries such as retirement plans or separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance products and/or individual retirement plan participants. The omnibus nature of these orders may limit the Funds in their ability to apply their frequent transfer policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Funds (and thus Participants) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Funds. If a Fund believes that an omnibus order reflects one or more transfer requests from Participants engaged in frequent trading, the Fund may reject the entire omnibus order. In accordance with applicable law, we reserve the right to modify or terminate the transfer privilege at any time. We also reserve the right to defer or restrict the transfer privilege at any time that we are unable to purchase or redeem shares of any of the Funds, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on frequent transfers (even if an entire omnibus order is rejected due to the frequent transfers of a single Participant). You should read the Portfolio prospectuses for more details. RESTRICTIONS ON LARGE TRANSFERS/REALLOCATIONS. Large transfers/reallocations may increase brokerage and administrative costs of the Funds and may disrupt portfolio management strategy, requiring a Fund to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations. We do not monitor for large transfers/reallocations to or from Funds except where the portfolio manager of a particular Fund has brought large transfer/reallocation activity to our attention for investigation on a case-by-case basis. For example, some portfolio managers have asked us to monitor for "block transfers" where transfer/reallocation requests have been submitted on behalf of multiple Contract Owners by a third party such as an investment 32
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adviser. When we detect such large trades, we may impose restrictions similar to those described above where future transfer/reallocation requests from that third party must be submitted in writing with an original signature. A first occurrence will result in a warning letter; a second occurrence will result in the imposition of this restriction for a six-month period; a third occurrence will result in the permanent imposition of the restriction. LOANS -- 403(B) PLANS ONLY If you are in a 403(b) Plan, you may obtain a loan under the Contract from the value of your Participant's Account allocated to the General Account. Accumulation Units in the Separate Account are taken into account in determining the maximum amount of the loan. You would then be permitted to transfer Accumulation Units from the Separate Account to the General Account before the loan is made. Your Participant's Account serves as the only security for the loan. BLIC may terminate a loan at its discretion in the event of a request for surrender. The Code imposes limits on the amounts, duration, and repayment schedule for all 403(b) plan loans. If the Plan is subject to the requirements of Title 1 of the Employee Retirement Income Security Act of 1974 ("ERISA"), eligibility for, and the terms and conditions of the loan may be further limited by the terms of the Plan and will be determined by the plan administrator or other designated Plan official. Loan proceeds may cause you to incur tax liability (see "Federal Tax Considerations"). BLIC may modify or terminate the granting of loans at any time, provided that any modification or termination will not affect outstanding loans. Fees may be charged for loan set-up and administration. Currently, the loan set-up fee is $50. This amount is deducted from the loan proceeds. At this time, there is no fee for administration. CYBERSECURITY Our variable annuity contract business is largely conducted through digital communications and data storage networks and systems operated by us and our service providers or other business partners (e.g., the Funds and the firms involved in the distribution and sale of our variable annuity contracts). For example, many routine operations, such as processing Owners' requests and elections and day-to-day record keeping, are all executed through computer networks and systems. We have established administrative and technical controls and a business continuity plan to protect our operations against cybersecurity breaches. Despite these protocols, a cybersecurity breach could have a material, negative impact on BLIC and the Separate Account, as well as Contract Owners and their Contracts. Our operations also could be negatively affected by a cybersecurity breach at a third party, such as a governmental or regulatory authority or another participant in the financial markets. 33
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Cybersecurity breaches can be intentional or unintentional events, and can occur through unauthorized access to computer systems, networks or devices; infection from computer viruses or other malicious software code; or attacks that shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality. Cybersecurity breaches can interfere with our processing of contract transactions, including the processing of transfer orders from our website or with the Funds; impact our ability to calculate Accumulation Unit values; cause the release and possible destruction of confidential Contract Owner or business information; or impede order processing or cause other operational issues. Although we continually make efforts to identify and reduce our exposure to cybersecurity risk, there is no guarantee that we will be able to successfully manage this risk at all times. MODIFICATION OF THE CONTRACTS BLIC must make Annuity payments involving life contingencies at no less than the minimum guaranteed Annuity rates incorporated into the Contracts, even if actual mortality experience is different. BLIC is legally bound under the Contract to maintain these Annuity purchase rates. BLIC must also abide by the Contract's provisions concerning: .. death benefits .. deductions from Purchase Payments .. deductions from Participant's Accounts for transaction charges .. deductions from the Separate Account for actuarial risk and administrative expense risk fees .. guaranteed rates with respect to fixed benefits BLIC and the Owner may change the Contract by mutual agreement at any time. No such change may affect any Participant's Account where the Participant's interest is nonforfeitable, without the written consent of that Participant. Changes must be made in writing. Any changes must comply with state laws where the Contract is delivered. BLIC may change such provisions without your consent to the extent permitted by the Contract, but only: .. with respect to any Purchase Payments received as a tax free transfer under the Code after the effective date of the change; .. with respect to benefits and values provided by Purchase Payments made after the effective date of the change to the extent that such Purchase Payments in any Certificate Year exceed the first year's Purchase Payments; or .. to the extent necessary to conform the Contract to any Federal or state law, regulation or ruling. 34
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We will notify you of any Contract changes. If you have any questions about any of the provisions of your Contract, you may write or call: Brighthouse Life Insurance Company 11225 North Community House Road, Charlotte, NC 28277 Phone: (800) 283-4536 [SIDE BAR: ACCUMULATION PERIOD] CREDITING ACCUMULATION UNITS IN THE SEPARATE ACCOUNT BLIC will credit Accumulation Units to a Series upon receipt of your Purchase Payment or transfer. If payments on your behalf are not made in a timely manner, there may be a delay in when amounts are credited. BLIC determines the number of Accumulation Units to be credited to a Series by dividing the net amount allocated to a Series out of your Purchase Payment by the value of an Accumulation Unit in the Series next computed following receipt of the Purchase Payment or transfer. SEPARATE ACCOUNT ACCUMULATION UNIT CURRENT VALUES [SIDE BAR: The Net Investment Factor is an index of the percentage change (adjusted for distributions by the Fund and the deduction of the mortality and expense risk and distribution expense charges) in the net asset value of the Fund in which a Series is invested, since the preceding Valuation Date. The net investment factor may be greater or less than 1 depending upon the Fund's investment performance.] The current value of Accumulation Units of a particular Series depends upon the investment experience of the Fund in which the Series invests its assets and the deduction of the separate account charge as described below. Purchase Payments and transfer requests are credited to a Participant's Account on the basis of the Accumulation Unit value next determined after receipt of a Purchase Payment or transfer request. The value of Accumulation Units is determined each Business Day as of the close of trading on the NYSE (currently 4:00 p.m. Eastern time). The value is calculated by multiplying the value of an Accumulation Unit in the Series on the immediately preceding Valuation Date by the net investment factor for the period since that day. The net investment factor is determined for any Business Day by dividing (i) the net asset value of a share of the Fund which is represented by such Series at the close of business on such day, plus the per share amount of any distributions made by such Fund on such day by (ii) the net asset value of a share of such Fund determined as of the close of business on the preceding Business Day and then subtracting from the result the daily factors for mortality and expense risks (.003699%) for each calendar day between the preceding Business Day and the end of the current Business Day. You bear the risk that the aggregate current value invested in the Series may at any time be less than, equal to or more than the amount that you originally allocated to the Series. SURRENDER FROM THE SEPARATE ACCOUNT You may surrender all or a portion of the cash value of your Participant's Account at any time prior to the Annuity Date. A surrender may result in adverse Federal income tax consequences to you including current taxation on the distribution and a penalty tax on the early withdrawal and may be restricted by the plan or Federal tax law. These consequences are discussed in more detail under "Federal Tax Considerations." You should consult your tax adviser before making a withdrawal. 35
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The surrender value of your Participant's Account in the Separate Account prior to the Annuity Date is determined by multiplying the number of Accumulation Units for each Series credited to your Contract by the current value of an Accumulation Unit in the Series and subtracting any applicable surrender charges. BLIC will determine the value of the number of Accumulation Units withdrawn at the next computed Accumulation Unit value. If you request a partial surrender from more than one Series you must specify the allocation of the partial surrender among the Series. You may not make a partial surrender if the surrender would cause your interest in any Series or the General Account to have an after-surrender value of less than $200. However, if you are withdrawing the entire amount allocated to a Series these restrictions do not apply. PAYMENT OF SURRENDER AMOUNT Payment of any amount surrendered from a Series will be made to you within seven days of the date that BLIC receives your written request. You may submit a written withdrawal request, which must be received at the administrative office on or before the Normal Annuity Date, that indicates that the withdrawal should be processed as of the Normal Annuity Date, in which case the request will be deemed to have been received on, and the withdrawal amount will be priced according to, the accumulation unit value calculated as of the Normal Annuity Date. BLIC may suspend surrenders when: .. The SEC restricts trading on the NYSE or NYSE is closed for other than weekends or holidays. .. The SEC permits the suspension of withdrawals. .. The SEC determines that an emergency exists that makes disposal of portfolio securities or valuation of assets of the Funds not reasonably practicable. We may withhold payment of surrender, withdrawal or loan proceeds if any portion of those proceeds would be derived from a Contract Owner's check that has not yet cleared (i.e., that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communications to verify that payment from the Contract Owner's check has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Contract Owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. ACCOUNT STATEMENTS You will receive a written account statement each calendar quarter in which a transaction occurs before the Annuity Date. Even if you do not engage in any transactions you will receive at least one written account statement per year. The statement shows: .. all transactions for the period being reported 36
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.. the number of Accumulation Units that are credited to your Participant's Account in each Series .. the current Accumulation Unit value for each Series .. your Participant's Account as of the end of the reporting period BLIC is careful to ensure the accuracy of calculations and transfers to and within the Separate Account. However, errors may still occur. You should review your statements and confirmations of transactions carefully and promptly advise BLIC of any discrepancy. Allocations and transfers reflected in a statement will be considered final at the end of 60 days from the date of the statement. [SIDE BAR: ANNUITY BENEFITS] VARIABLE ANNUITY PAYMENTS The value of your Participant's Account in each Series may be applied to provide you with Variable Annuity payments. The dollar amount of the Variable Annuity payments that you receive will reflect the investment experience of the Series, but will not be affected by adverse mortality experience which may exceed the mortality risk charge established under the Contract. ASSUMED INVESTMENT RETURN Unless you elect otherwise, the Assumed Investment Return is 4.25% per year. If the laws and regulations of your State allow, you may elect an Assumed Investment Return of 3.50%, 5% or 6%. The Assumed Investment Return does not bear any relationship to the actual net investment experience of the Series. Your choice of Assumed Investment Return affects the pattern of your Annuity payments. Your Annuity payments will vary from the Assumed Investment Return depending on whether the investment experience of the Series in which you have an interest is better or worse than the Assumed Investment Return. The higher your Assumed Investment Return, the higher your first Annuity payment will be. Your next payments will only increase in proportion to the amount by which the investment experience of your chosen Series exceeds the Assumed Investment Return and Separate Account charges. Likewise, your payments will decrease if the investment experience of your chosen Series is less than the Assumed Investment Return and Separate Account charges. A lower Assumed Investment Return will result in a lower initial Annuity payment, but subsequent Annuity payments will increase more rapidly or decline more slowly as changes occur in the investment experience of the Series. Conversely, a higher Assumed Investment Return would result in a higher initial payment than a lower Assumed Investment Return, but later payments will rise more slowly or fall more rapidly. [SIDE BAR: There are two people who are involved in payments under your Annuity: - you - the Beneficiary] ELECTION OF ANNUITY DATE AND FORM OF ANNUITY You choose the Annuity Date and the form of Annuity payment. 37
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ELECTION OF ANNUITY DATE If you do not choose an Annuity Date at least thirty-one days before Annuitization, your Normal Annuity Date automatically will be the later of: .. the month in which you attain age 75, or .. the date you are required to take a distribution under the terms of the Plan to which the Contract was issued. You may select an optional Annuity Date that is earlier than the Normal Annuity Date described above. This Annuity Date may be the first day of any month before the Normal Annuity Date. Please note that Qualified Contracts may require a different Normal Annuity Date and may prohibit the selection of certain optional Annuity Dates. FORM OF ANNUITY Currently, BLIC provides you with five forms of Annuity payments. Each Annuity payment option, except Option 5, is available on both a Fixed Annuity payment and Variable Annuity payment basis. Option 5 is available on a Fixed Annuity payment basis only. OPTION 1 -- LIFE ANNUITY You receive Annuity payments monthly during your lifetime. These payments stop with the last payment due before your death. Because BLIC does not guarantee a minimum number of payments under this arrangement, this option offers the maximum level of monthly payments, involving a life contingency. OPTION 2 -- LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS CERTAIN You receive a guaranteed minimum number of monthly Annuity payments during your lifetime. In addition, BLIC guarantees that your Beneficiary will receive monthly payments for the remainder of the period certain, if you die during that period. OPTION 3 -- INSTALLMENT REFUND LIFE ANNUITY An Annuity payable monthly during the lifetime of an individual. You receive a guaranteed minimum number of monthly payments which are equal to the amount of your Participant's Account allocated to this option divided by the first monthly payment. If you die before receiving the minimum number of payments, the remaining payments will be made to your Beneficiary. OPTION 4 -- JOINT AND LAST SURVIVOR LIFE ANNUITY You receive Annuity payments monthly during the lifetime of you and another payee (the joint payee) and payments are made during the lifetime of the survivor of the two of you. BLIC stops making payments with the last payment before the death of the last surviving payee. BLIC does not guarantee a minimum number of payments under this arrangement. For 38
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example, you or the other payee might receive only one Annuity payment if both of you die before the second Annuity payment. The election of this option is ineffective if either of you dies before Annuitization. In that case, the survivor becomes the sole payee, and BLIC does not pay death proceeds because of the death of the other payee. OPTION 5 -- PAYMENTS FOR A DESIGNATED PERIOD (FIXED ANNUITY ONLY) BLIC makes Annuity payments monthly to you or to the Beneficiary at your death, for a selected number of years ranging from five to thirty. The amount of each payment will be based on an interest rate determined by BLIC that will not be less than an assumed rate of return of 3.50% per year. You may not commute Fixed Annuity payments to a lump sum under this option. If your Contract is a Qualified Contract, this option may not always satisfy minimum required distribution rules. Consult a tax advisor before electing this option. Due to underwriting, administrative or Code considerations, there may be limitations on payments to the survivor under Option 4 and/or the duration of the guarantee period under Options 2 and 5. If you do not choose a form of Annuity payment, Option 2, a life annuity with a guaranteed minimum of 120 monthly payments, will automatically be applied under the Contract. You may make changes in the optional form of Annuity payment at any time until 31 days before the Annuity date. The first year's Annuity payment described in Options 1 - 4 is calculated on the basis of: .. the mortality table specified in the Contract, .. the age, and where permitted, the sex of the Annuitant, .. the type of Annuity payment option selected, and .. the assumed investment return selected. Your Annuity payments will depend on your choices. For lifetime options, the age of the Annuitant will also be considered. For example, if you select an Annuity Option that guarantees payments for your lifetime and your spouse's lifetime, your payments will be lower than if you selected an Annuity Option with payments over only your lifetime. Annuity Options that guarantee that payments will be made for a certain number of years regardless of whether you are alive (such as a Life Annuity with 120, 180, or 240 Monthly Payments Certain and Installment Life Refund Annuity) result in payments smaller than with Annuity Options without such guarantee (such as Life Annuity and Joint and Last Survivor Life Annuity). In addition, to the extent the Annuity Option has a guarantee period, choosing a shorter guarantee period will result in each payment being larger. 39
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If you were issued a certificate before state law mandated unisex annuity rates (if applicable in your state) and that certificate had annuity rates that took the annuitant's sex into account, the annuity rates we use for that certificate will not be less than the guaranteed rates in the certificate when it was issued. The Fixed Annuity payments described in Option 5 are calculated on the basis of: .. the number of years in the payment period, and .. the interest rate guaranteed with respect to the option. Fixed Annuities are funded through the General Account of BLIC. FREQUENCY OF PAYMENT Your payments under all options will be made on a monthly basis unless you and BLIC have agreed to a different arrangement (choosing less frequent payments will result in each payment being larger). Payments from each Series must be at least $50. If a payment from a Series will be less than $50, BLIC has the right to decrease the frequency of payments so that each payment from a Series will be at least $50. LEVEL PAYMENTS VARYING ANNUALLY Your Variable Annuity payments are determined yearly rather than monthly. As a result, you will receive a uniform monthly Annuity payment for each Annuity year. The level of payments for each year is based on the investment performance of the Series up to the Valuation Date as of which the payments are determined for the year. As a result, the amounts of the Annuity payments will vary with the investment performance of the Series from year to year rather than from month to month. Your monthly Variable Annuity payments for the first year will be calculated on the last Valuation Date of the second calendar week before the Annuity date. The amount of your monthly Variable Annuity payments will be calculated using a formula described in the Contract. On each anniversary of the Annuity date, BLIC will determine the total monthly payments for the year then beginning. These payments will be determined by multiplying the number of Annuity units in each Series from which payments are to be made by the annuity unit value of that Series for the valuation period in which the first payment for that period is due. After calculating the amount due to you, BLIC transfers the amount of the year's Variable Annuity payments to a General Account at the beginning of the year. Although the amount in the Separate Account is credited to you and transferred to the General Account, you do not have any property rights in this amount. You do have a contractual right to receive your Annuity payments. The monthly Annuity payments for the year are made from the General Account with interest using the standard assumed investment return of 4.25% or the Assumed Investment Return that you selected. As a result, 40
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BLIC will experience profits or losses on the amounts placed in the General Account in providing level monthly payments to you during the year that meet the Assumed Investment Return that you selected. For example, if the net investment income and gains in the General Account are lower than the Assumed Investment Return selected, BLIC will experience a loss. You will not benefit from any increases or be disadvantaged from any decreases in any Annuity Unit Values during the year because the Annuity payments for that year are set at the beginning of the year. These increases and decreases will be reflected in the calculation of Annuity payments for the following year. ANNUITY UNIT VALUES This is how BLIC calculates the Annuity Unit Value for each Series: .. First, BLIC determines the change in investment experience (including any investment-related charge) for the underlying Fund from the previous trading day to the current trading day. .. Next, it subtracts the daily equivalent of your insurance-related charge (general administrative expense and mortality and expense risk charges) for each day since the last day the Annuity Unit Value was calculated. .. Then, it divides the result by the quantity of one plus the weekly equivalent of your Assumed Investment Return. .. Finally, the previous Annuity Unit Value is multiplied by this result. [SIDE BAR: DEATH BENEFITS] DEATH BEFORE THE ANNUITY DATE If you die before the Annuity Date, your Beneficiary(ies) will receive a death benefit that is equal to the Participant's Account. If you are younger than age 65 at the time of your death, your Beneficiary(ies) will be entitled to receive a lump sum settlement equal to the greater of: .. your Purchase Payments less partial withdrawals or amounts already applied to Annuity payments (including any applicable surrender charge); or .. your Participant's Account. Your Beneficiary(ies) receive the death benefit as either: 1) A lump sum that must be made within five (5) years of your death; or 2) Annuity income under Annuity Income Options One, Two or Five described in Article 7 of the Contract. If your Beneficiary(ies) chooses one of the Annuity income options: .. Payments must begin within one year of your death (However, if your spouse is the sole designated beneficiary under a Qualified Contract, 41
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your spouse may delay commencement of payments to the date that you would have reached 70 1/2.) .. The guaranteed period under Option Two or the designated period under Option Five may not be longer than the Beneficiary's life expectancy under applicable tables specified by the IRS. .. The Participant's Account on the date of the first Annuity payment will be used to determine the amount of the death benefit. The death benefit will be determined when BLIC receives both due proof of death and an election for the payment method. Note that if BLIC is notified of your death before any requested transaction is completed (including transactions under a dollar cost averaging or reallocation program), we will cancel the request. If your spouse is your sole Beneficiary under an IRA, he or she may choose to succeed to your rights as Participant rather than to take the death benefit. Any Code reference to "spouse" includes those persons who are married spouses under state law, regardless of sex. All Contract provisions will be interpreted and administered in accordance with the requirements of the Code. If you have more than one Beneficiary living at the time of your death, each will share the proceeds of the death benefit equally unless you elect otherwise. Until the Beneficiary (or the first Beneficiary if there are multiple Beneficiaries) submits the necessary documentation in Good Order, the account balance attributable to his/her portion of the death benefit remains in the Funds and is subject to investment risk. If you outlive all of your Beneficiaries, the death benefit will be paid to your estate in a lump sum. No Beneficiary shall have the right to assign or transfer any future payments under the Options, except as provided in the election or by law. You will also be considered to have outlived your Beneficiary(ies) in the following situations: .. Your Beneficiary(ies) and you die at the same time. .. Your Beneficiary(ies) dies within 15 days of your death and proof of your death is received by BLIC before the date due. Proof of death includes a certified death certificate, or attending physician's statement, a decree of a court of competent jurisdiction as to the finding of death, or other documents that BLIC agrees to accept as proof of death. 42
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DEATH AFTER THE ANNUITY DATE If the Annuitant dies on or after the Annuity Date, the amounts payable to the Beneficiary(ies) or other properly designated payees will consist of any continuing payments under the Annuity Payment option in effect. In this case, the Beneficiary will: .. have all the remaining rights and powers under a Contract, and .. be subject to all the terms and conditions of the Contract. If none of your Beneficiaries survive the Annuitant, the value of any remaining payments certain on the death of Annuitant, calculated on the basis of the assumed investment return that you previously chose, will be paid in a lump sum to the Annuitant's estate unless other provisions have been made and approved by BLIC. This value is calculated on the next day of payment following receipt of due proof of death. Unless otherwise restricted, a Beneficiary receiving variable payments under Option Two or Three may elect at any time to receive the present value of the remaining number of Annuity payments certain in a lump sum payment after the death of an Annuitant. The present value of the remaining Annuity payments will be calculated on the basis of the assumed investment return previously selected. This lump sum payment election is not available to a Beneficiary receiving Fixed Annuity payments. ABANDONED PROPERTY REQUIREMENTS Every state has unclaimed property laws which generally declare non-ERISA annuity contracts to be abandoned after a period of inactivity of three to five years from the contract's maturity date (the last day on which annuity payments may begin under the Contract) or the date the death benefit is due and payable. For example, if the payment of a death benefit has been triggered, but, after a thorough search, we are still unable to locate the Beneficiary of the death benefit, or the Beneficiary does not come forward to claim the death benefit in a timely manner, the death benefit will be paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or you last resided, as shown on our books and records, or to our state of domicile. ("Escheatment" is the formal, legal name for this process.) However, the state is obligated to pay the death benefit (without interest) if your Beneficiary steps forward to claim it with the proper documentation. To prevent your Contract's proceeds from being paid to the state abandoned or unclaimed property office, it is important that you update your Beneficiary designations, including addresses, if and as they change. Please contact us to make such changes. 43
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FEDERAL TAX CONSIDERATIONS INTRODUCTION The following information on taxes is a general discussion of the subject. It is not intended as tax advice. The Code and the provisions of the Code that govern the Contract are complex and subject to change. The applicability of Federal income tax rules may vary with your particular circumstances. This discussion does not include all the Federal income tax rules that may affect You and your Contract. Nor does this discussion address other Federal tax consequences (such as estate and gift taxes, sales to foreign individuals or entities), or state or local tax consequences, which may affect your investment in the Contract. As a result, You should always consult a tax adviser for complete information and advice applicable to your individual situation. We are not responsible for determining if your employer's plan or arrangement satisfies the requirements of the Code and/or ERISA. We do not expect to incur Federal, state or local income taxes on the earnings or realized capital gains attributable to the Separate Account. However, if we do incur such taxes in the future, we reserve the right to charge amounts allocated to the Separate Account for these taxes. To the extent permitted under Federal tax law, we may claim the benefit of the corporate dividends received deduction and of certain foreign tax credits attributable to taxes paid by certain of the portfolios to foreign jurisdictions. Any Code reference to "spouse" includes those persons who enter into lawful marriages under state law, regardless of sex. QUALIFIED ANNUITY CONTRACTS INTRODUCTION The Contract may be purchased through certain types of retirement plans that receive favorable treatment under the Code ("tax qualified plans"). Tax-qualified plans include arrangements described in Code Sections 401(a), 401(k), 403(a), 403(b) or tax sheltered annuities ("TSA"), 408 or "IRAs" (including SEP and SIMPLE IRAs), 408A or "Roth IRAs" or 457 (b) or 457(b) governmental plans. Extensive special tax rules apply to qualified plans and to the annuity Contracts used in connection with these plans. Therefore, the following discussion provides only general information about the use of the Contract with the various types of qualified plans. Adverse tax consequences may result if You do not ensure that contributions, distributions and other transactions with respect to the Contract comply with the law. The rights to any benefit under the plan will be subject to the terms and conditions of the plan itself as well as the terms and conditions of the Contract. 44
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We exercise no control over whether a particular retirement plan or a particular contribution to the plan satisfies the applicable requirements of the Code, or whether a particular individual is entitled to participate or benefit under a plan. All qualified plans and arrangements receive tax deferral under the Code. Since there are no additional tax benefits in funding such retirement arrangements with an annuity, there should be reasons other than tax deferral for acquiring the annuity within the plan. Such non-tax benefits may include additional insurance benefits, such as the availability of a guaranteed income for life. A Contract may also be available in connection with an employer's non-qualified deferred compensation plan or qualified governmental excess benefit arrangement to provide benefits to certain employees in the plan. The tax rules regarding these plans are complex; please consult your tax adviser about your particular situation. ACCUMULATION The tax rules applicable to qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Both the amount of the contribution that may be made and the tax deduction or exclusion that You may claim for that contribution under qualified plans are limited under the Code. See the SAI for a description of qualified plan types and annual current contribution limitations which are subject to change from year-to-year. Purchase payments or contributions to IRAs or tax qualified retirement plans of an employer may be taken from current income on a before tax basis or after tax basis. Purchase payments made on a "before tax" basis entitle You to a tax deduction or are not subject to current income tax. Purchase payments made on an "after tax" basis do not reduce your taxable income or give You a tax deduction. Contributions may also consist of transfers or rollovers as described below and are not subject to the annual limitations on contributions. The Contract will accept as a single purchase payment a transfer or rollover from another IRA or rollover from an eligible retirement plan of an employer (i.e., 401(a), 401(k), 403(a), 403(b) or governmental 457(b) plan.) It will also accept a rollover or transfer from a SIMPLE IRA after the taxpayer has participated in such arrangement for at least two years. As part of the single purchase payment, the IRA Contract will also accept an IRA contribution subject to the Code limits for the year of purchase. For income annuities established as "pay-outs" of SIMPLE IRAs, the Contract will only accept a single purchase payment consisting of a transfer or rollover from another SIMPLE IRA. For income annuities established in accordance with a distribution option under a retirement plan of an employer (e.g., 401(a), 401(k), 403(a), 403(b) or 457(b) plan), the Contract will only accept as its single purchase payment a transfer from such employer retirement plan. 45
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TAXATION OF ANNUITY DISTRIBUTIONS If contributions are made on a "before tax" basis, You generally pay income taxes on the full amount of money You receive under the Contract. Withdrawals attributable to any after-tax contributions are basis in the Contract and not subject to income tax (except for the portion of the withdrawal allocable to earnings, if any). Under current Federal income tax rules, the taxable portion of distributions under annuity contracts and qualified plans (including IRAs) is not eligible for the reduced tax rate applicable to long-term capital gains and qualifying dividends. With respect to IRA Contracts, we will withhold a portion of the taxable amount of your withdrawal for income taxes, unless You elect otherwise. The amount we will withhold is determined by the Code. WITHDRAWALS PRIOR TO AGE 59 1/2 A taxable withdrawal from a qualified plan which is subject to income tax may also be subject to a 10% Federal income tax penalty for "early" distribution if taken prior to age 59 1/2, unless an exception described below applies. The penalty rate is 25% for SIMPLE plan Contracts if the withdrawal occurs within the first 2 years of your participation in the plan. These exceptions include distributions made: (a) on account of your death or disability, or (b) as part of a series of substantially equal periodic payments payable for your life (or life expectancy) or joint lives (or joint life expectancies) of You and your designated beneficiary and You are separated from employment. If You receive systematic payments that You intend to qualify for the "substantially equal periodic payments" exception noted above, any modifications (except due to death or disability) to your payment before age 59 1/2 or within five years after beginning these payments, whichever is later, will result in the retroactive imposition of the 10% Federal income tax penalty with interest. Such modifications may include, but are not limited to, additional purchase payments to the Contract (including tax-free transfers or rollovers and additional withdrawals from the Contract. The 10% Federal income tax penalty on early distribution does not apply to governmental 457(b) plan Contracts. However, it does apply to distributions from 457(b) plans of employers which are state or local governments to the extent that the distribution is attributable to rollovers accepted from other types of eligible retirement plans. A withdrawal or distribution from a qualified annuity Contract other than an IRA (including SEPs and SIMPLEs) will avoid the penalty if: (1) the distribution is on separation from employment after age 55; (2) the distribution is made pursuant to a qualified domestic relations order ("QDRO"); (3) the distribution is to pay deductible medical expenses; or (4) if the distribution is to pay IRS levies (and made after December 31, 1999). 46
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In addition to death, disability and as part of a series of substantially equal periodic payments as indicated above, a withdrawal or distribution from an IRA (including SEPs and SIMPLEs) will avoid the penalty (1) if the distribution is to pay deductible medical expenses; (2) if the distribution is to pay IRS levies (and made after December 31, 1999); (3) if the distribution is used to pay for medical insurance (if You are unemployed), qualified higher education expenses, or for a qualified first time home purchase up to $10,000. Other exceptions may be applicable under certain circumstances and special rules apply or may become applicable in connection with the exceptions enumerated above. ROLLOVERS Your Contract is non-forfeitable (i.e., not subject to the claims of your creditors) and non-transferable (i.e., You may not transfer it to someone else). Nevertheless, Contracts held in certain employer plans subject to ERISA may be transferred in part pursuant to a QDRO. Under certain circumstances, You may be able to transfer amounts distributed from your Contract to another eligible retirement plan or IRA. For 457(b) plans maintained by non-governmental employers, if certain conditions are met, amounts may be transferred into another 457(b) plan maintained by a non-governmental employer. You may make rollovers and direct transfers into your SIMPLE IRA annuity Contract from another SIMPLE IRA annuity contract or account. Rollovers from another qualified plan can generally be made to your SIMPLE IRA after You have participated in the SIMPLE IRA for at least two years. Rollovers and direct transfers from a SIMPLE IRA can only be made to another SIMPLE IRA or account during the first two years that You participate in the SIMPLE IRA plan. After this two year period, rollovers and transfers may be made from your SIMPLE IRA into a Traditional IRA or account, as well as into another SIMPLE IRA. Generally, a distribution may be eligible for rollover but certain types of distributions cannot be rolled over, such as distributions received on account of: (a) minimum distribution requirements, (b) financial hardship, or (c) for a period of ten or more years or for life. 20% WITHHOLDING ON ELIGIBLE ROLLOVER DISTRIBUTIONS For certain qualified employer plans, we are required to withhold 20% of the taxable portion of your withdrawal that constitutes an "eligible rollover distribution" for Federal income taxes. The amount we withhold is determined by the Code. You may avoid withholding if You directly transfer a withdrawal from this Contract to another qualified plan or IRA. Similarly, You may be able to avoid withholding on a transfer into this 47
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Contract from an existing qualified plan You may have with another provider by arranging to have the transfer made directly to us. For taxable withdrawals that are not "eligible rollover distributions," the Code imposes different withholding rules to determine the withholding percentage. DEATH BENEFITS The death benefit is taxable to the recipient in the same manner as if paid to the Contract owner or plan participant (under the rules for withdrawals or income payments, whichever is applicable). Distributions required from a qualified annuity Contract following your death depend on whether You die before You had converted your Contract to an annuity form and started taking annuity payments (your Annuity Starting Date). If You die on or after your Annuity Starting Date, the remaining portion of the interest in the Contract must be distributed at least as rapidly as under the method of distribution being used as of the date of death. If You die before your Annuity Starting Date, the entire interest in the Contract must be distributed within five (5) years after the date of death, or as periodic payments over a period not extending beyond the life or life expectancy of the designated beneficiary (provided such payments begin within one year of your death). Your designated beneficiary is the person to whom benefit rights under the Contract pass by reason of death; the beneficiary must be a natural person in order to elect a periodic payment option based on life expectancy or a period exceeding five years. If the annuity is payable to (or for the benefit of) your surviving spouse, that portion of the Contract may be continued with your spouse as the owner. If your Contract permits, your beneficiary spouse may delay the start of these payments until December 31 of the year in which You would have reached age 70 1/2. Alternatively, your spouse may be able to rollover the death proceeds into another eligible retirement plan in which he or she participates, if permitted under the receiving plan, he or she may elect to rollover the death proceeds into his or her own IRA, or he or she may elect to transfer the death proceeds into an inherited IRA. If your beneficiary is not your spouse and your plan and Contract permit, your beneficiary may be able to rollover the death proceeds via a direct trustee-to-trustee transfer into an inherited IRA. However, a non-spouse beneficiary may not treat the inherited IRA as his or her own IRA. Additionally, for Contracts issued in connection with qualified plans subject to ERISA, the spouse or ex-spouse of the owner may have rights in the Contract. In such a case, the owner may need the consent of the spouse or ex-spouse to change annuity options or make a withdrawal from the Contract. 48
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REQUIRED MINIMUM DISTRIBUTIONS Generally, You must begin receiving amounts from your retirement plan by April 1 following the latter of: (a) the calendar year in which You reach age 70 1/2, or (b) the calendar year You retire, provided You do not own more than 5% of the outstanding stock, capital, or profits of your employer. For IRAs (including SEPs and SIMPLEs), You must begin receiving withdrawals by April 1 of the year after You reach age 70 1/2 even if You have not retired. A tax penalty of 50% applies to the shortfall of any required minimum distributions You fail to receive. You may not satisfy minimum distributions for one employer's qualified plan (i.e., 401(a), 403(a), 457(b)) with distributions from another qualified plan of the same or a different employer. However, an aggregation rule does apply in the case of IRAs (including SEPs and SIMPLEs) or 403(b) plans. The minimum required distribution is calculated with respect to each IRA, but the aggregate distribution may be taken from any one or more of your IRAs/SEPs. Similarly, the amount of required minimum distribution is calculated separately with respect to each 403(b) arrangement, but the aggregate amount of the required distribution may be taken from any one or more of the your 403(b) plan contracts. For SIMPLE IRAs, the aggregate amount of the required distribution may be taken from any one or more of your SIMPLE IRAs. Complex rules apply to the calculation of these withdrawals. In general, income tax regulations permit income payments to increase based not only with respect to the investment experience of the portfolios but also with respect to actuarial gains. The regulations also require that the value of benefits under a deferred annuity including certain death benefits in excess of Contract value must be added to the amount credited to your account in computing the amount required to be distributed over the applicable period. We will provide You with additional information regarding the amount that is subject to minimum distribution under this rule. You should consult your own tax adviser as to how these rules affect your own distribution under this rule. If You intend to receive your minimum distributions which are payable over the joint lives of You and a beneficiary who is not your spouse (or over a period not exceeding the joint life expectancy of You and your non-spousal beneficiary), be advised that Federal tax rules may require that payments be made over a shorter period or may require that payments to the beneficiary be reduced after your death to meet the minimum distribution incidental benefit rules and avoid the 50% excise tax. You should consult your own tax adviser as to how these rules affect your own Contract. 49
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ADDITIONAL INFORMATION REGARDING TSA (ERISA AND NON-ERISA) 403(B) SPECIAL RULES REGARDING EXCHANGES In order to satisfy tax regulations, contract exchanges within a 403(b) plan must, at a minimum, meet the following requirements: (1) the plan must allow the exchange; (2) the exchange must not result in a reduction in a participant's or a beneficiary's accumulated benefit: (3) the receiving contract includes distribution restrictions that are no less stringent than those imposed on the contract being exchanged; and (4) if the issuer receiving the exchanges is not part of the plan, the employer enters into an agreement with the issuer to provide information to enable the contract provider to comply with Code requirements. Such information would include details concerning severance from employment, hardship withdrawals, loans and tax basis. You should consult your tax or legal counsel for any advice relating to Contract exchanges or any other matter relating to these regulations. WITHDRAWALS If You are under age 59 1/2, You generally cannot withdraw money from your TSA Contract unless the withdrawal: 1. Related to purchase payments made prior to 1989 and pre-1989 earnings on those purchase payments; 2. Is exchanged to another permissible investment under your 403(b) plan; 3. Relates to contributions to an annuity contract that are not salary reduction elective deferrals , if your plan allows it; 4. Occurs after You die, leave your job or become disabled (as defined by the Code); 5. Is for financial hardship (but only to the extent of elective deferrals), if your plan allows it; 6. Relates to distributions attributable to certain TSA plan terminations, if the conditions of the Code are met; 7. Relates to rollover or after-tax contributions; or 8. Is for the purchase of permissive service credit under a governmental defined benefit plan. In addition, a Section 403(b) Contract is permitted to distribute retirement benefits attributable to pre-tax contributions other than elective deferrals to the participant no earlier than upon the earlier of the participant's severance from employment or upon the prior occurrence of some event, such as after a fixed number of years, the attainment of a stated age or disability. ADDITIONAL INFORMATION REGARDING IRAS PURCHASE PAYMENTS Traditional IRA purchase payments (except for permissible rollovers and direct transfers) are generally not permitted after you attain age 70 1/2. Except for permissible rollovers and direct transfers, purchase payments for individuals are limited in the aggregate to the lesser of 100% of 50
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compensation or the deductible amount established each year under the Code. A purchase payment up to the deductible amount can also be made for a non-working spouse provided the couple's compensation is at least equal to their aggregate contributions. Individuals age 50 and older are permitted to make additional "catch-up" contributions if they have sufficient compensation. If you or your spouse are an active participant in a retirement plan of an employer, your deductible contributions may be limited. If you exceed purchase payment limits You may be subject to a tax penalty. WITHDRAWALS If and to the extent that Traditional IRA purchase payments are made on an "after tax" basis, withdrawals would be included in income except for the portion that represents a return of non-deductible purchase payments. This portion is generally determined based upon the ratio of all non-deductible purchase payments to the total value of all your Traditional IRAs (including SEP IRAs and SIMPLE IRAs). We withhold a portion of the amount of your withdrawal for income taxes, unless You elect otherwise. The amount we withhold is determined by the Code. DISTINCTION FOR PUERTO RICO CODE An annuity Contract may be purchased by an employer for an employee under a qualified pension, profit sharing, stock bonus, annuity, or a "cash or deferred" arrangement plan established pursuant to Section 1081.01 of the 2011 PR Code. To be tax qualified under the 2011 PR Code, a plan must comply with the requirements of Section 1081.01(a) of the 2011 PR Code which includes certain participation requirements, among other requirements. A trust created to hold assets for a qualified plan is exempt from tax on its investment income. CONTRIBUTIONS The employer is entitled to a current income tax deduction for contributions made to a qualified plan, subject to statutory limitations on the amount that may be contributed each year. The plan contributions by the employer are not required to be included in the current income of the employee. DISTRIBUTIONS Any amount received or made available to the employee under the qualified plan is includible in the gross income of the employee in the taxable year in which received or made available. In such case, the amount paid or contributed by the employer shall not constitute consideration paid by the employee for the Contract for purposes of determining the amount of annuity payments required to be included in the employee's gross income. Thus, amounts actually distributed or made available to any employee under the qualified plan will be included in their entirety in the employee's gross income. The value of accrued benefits in a qualified retirement plan with respect to which the special 8% tax under Puerto Rico Act No. 77-2014 was prepaid will be considered as part of the participant's tax basis in his retirement plan account. Thus, any distributions attributable to the benefits for which such taxes were prepaid will not be subject to income taxes when the same are subsequently received by the participant. However, the 51
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investment income and the appreciation in value, if any, accrued on the benefits with respect to which the special tax was prepaid, will be taxed as provided by the tax rules in effect at the time of distribution. Lump-sum proceeds from a Puerto Rico qualified retirement plan due to separation from service will generally be taxed at a 20% capital gain tax rate to be withheld at the source. A special rate of 10% may apply instead, if the plan satisfies the following requirements: (1) the plan's trust is organized under the laws of Puerto Rico, or has a Puerto Rico resident trustee and uses such trustee as paying agent; and (2) 10% of all plan's trust assets (calculated based on the average balance of the investments of the trust) attributable to participants who are Puerto Rico residents must be invested in "property located in Puerto Rico" for a three-year period. If these two requirements are not satisfied, the distribution will generally be subject to the 20% tax rate. The three-year period includes the year of the distribution and the two immediately preceding years. In the case of a defined contribution plan that maintains separate accounts for each participant, the described 10% investment requirement may be satisfied in the accounts of a participant that chooses to invest in such fashion rather than at the trust level. Property located in Puerto Rico includes shares of stock of a Puerto Rico Registered Investment Company (RIC), fixed or variable annuities issued by a domestic insurance company or by a foreign insurance company that derives more than 80% of its gross income from sources within Puerto Rico and bank deposits. The PR 2011 Code does not impose a penalty tax in cases of early (premature) distributions from a qualified plan. You should consult with a personal tax adviser regarding the tax consequences of purchasing an annuity Contract and/or any proposed distribution if You are a resident of Puerto Rico. ROLLOVER Deferral of the recognition of income continues upon the receipt of a distribution by a participant from a qualified plan, if the distribution is contributed to another qualified retirement plan or traditional individual retirement account for the employee's benefit no later than sixty (60) days after the distribution. ERISA CONSIDERATIONS In the context of a Puerto Rico qualified retirement plan trust, the IRS has held that the transfer of assets and liabilities from a qualified retirement plan trust under the Code to that type of plan would generally be treated as a distribution includible in gross income for U.S. income tax purposes even if the Puerto Rico retirement plan is a plan described in ERISA Section 1022(i)(1). By contrast, a transfer from a qualified retirement plan trust under the Code to a Puerto Rico qualified retirement plan trust that has made an election under ERISA Section 1022(i)(2) is not treated as a distribution from the transferor plan for U.S. income tax purposes because a Puerto Rico retirement plan that has made an election under ERISA Section 1022(i)(2) is treated as a qualified retirement plan for purposes 52
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Code Section 401(a). The IRS has determined that the above described rules prescribing the inclusion in income of transfers of assets and liabilities to a Puerto Rico retirement plan trust described in ERISA Section 1022(i)(1) would be applicable to transfers taking effect after December 31, 2012. Notwithstanding the above, the IRS has recently held that a Puerto Rico retirement plan described in ERISA Section 1022(i)(1) may participate in a 81-100 group trust because it permits said plan to diversify its investments without adverse tax consequences to the group trust or its investors. Similar to the IRS Revenue Ruling 2013-17, the U.S. Department of Labor issued DOL Technical Release No. 2013-04 on September 18, 2013 providing that, where the Secretary of Labor has authority to regulate with respect to the provisions of ERISA dealing with the use of the term "spouse", spouse will be read to refer to any individuals who are lawfully married under any state law, including same-sex spouses, and without regard to whether their state of domicile recognizes same-sex marriage. Thus, for ERISA purposes as well as Federal tax purposes, an employee benefit plan participant who marries a person of the same sex in a jurisdiction that recognizes same-sex marriage will continue to be treated as married even if the couple moves to a jurisdiction that does not recognize same-sex marriage. VOTING RIGHTS As the owner of the Separate Account, BLIC is the legal owner of the shares of the Funds. Based upon BLIC's current view of applicable law, we will vote shares of the Funds (which are deemed attributable to the Contracts) based on instructions received from those having voting interests under the Contract concerning Fund shares and who are entitled to vote on Fund proposals at all regular and special shareholders meetings. The persons who have voting interests under a particular plan may include the plan administrator or the Participant if voting is passed through to such individuals. Your plan administrator can provide you with information in this regard. BLIC will vote all shares of the underlying Funds as directed. BLIC will send to those with voting interests, at a last known address, all periodic reports, proxy materials and written requests for instructions on how to vote those shares. When BLIC receives these instructions, it will vote all of the shares in proportion to the instructions. If BLIC does not receive voting instructions, from a recipient, it will vote their interest in the same proportion as represented by the votes it has received. The effect of this proportional voting is that a small number of those with voting interests may control the outcome of a vote. If BLIC determines that it is permitted to vote the shares in its own right due to changes in the law or in the interpretation of the law it may do so. BLIC is under no duty to inquire into voting instructions or into the authority of the person issuing such instructions. All instructions will be valid unless BLIC has actual knowledge that they are not. 53
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When Annuity payments begin, the Annuitant will have all voting rights in regard to Fund shares. There are certain circumstances under which BLIC may disregard voting instructions. However, in this event, a summary of our action and the reasons for such action will appear in the next semiannual report. The number of votes that each person having the right to vote receives is determined on a record date that is set no more than 90 days before the meeting. Voting instructions will be requested at least 10 days before the meeting. Only Owners or Annuitants on the record date may vote. The number of shares to which you are entitled to vote is calculated by dividing the portion of your Participant's Account allocated to that Fund on the record date by the net asset value of a Fund share on the same date. LEGAL PROCEEDINGS BLIC, like other life insurance companies, is involved on occasion 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. BLIC does not believe any such litigation or proceedings will have a material adverse effect upon the Separate Account or upon the ability of Distributor to perform its contract with the Separate Account or of BLIC to meet its obligations under the contracts. ADDITIONAL INFORMATION You may contact BLIC at the address and phone number listed on page 28 for further information. A copy of the SAI, dated May 1, 2017, which provides more detailed information about the Contracts, may be obtained by completing and mailing the form on the following page. The table of contents for the Statement of Additional Information is provided below. A Registration Statement has been filed with the SEC under the Securities Act for the Contracts offered by this Prospectus. This Prospectus does not contain all of the information in the Registration Statement. Please refer to this Registration Statement for further information about the Separate Account, BLIC and the Contracts. Any statements in this Prospectus about the contents of the Contracts and other legal instruments are only summaries. Please see the filed versions of these documents for a complete statement of any terms. 54
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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION The Insurance Company Surrender Charges Net Investment Factor Annuity Payments Basis of Variable Benefits Determination of Amount of Monthly Variable Annuity Payments for First Year Determination of Amount of Monthly Variable Annuity Payments for Second and Subsequent Years Annuity Unit Value Underwriters, Distribution of the Contracts Calculation of Performance Voting Rights Safekeeping of Securities Servicing Agent Independent Registered Public Accounting Firm Additional Federal Tax Considerations Qualified Annuity Contracts Types of Qualified Contracts ERISA Federal Estate Taxes Generation-Skipping Transfer Tax Annuity Purchase Payments by Nonresident Aliens and Foreign Corporations Financial Statements 55
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If you would like the Statement of Additional Information dated May 1, 2017, for the annuity contract issued by Brighthouse Life Insurance Company, at no charge, please print and fill in all information and mail to: Brighthouse Life Insurance Company Attn: Variable Products 11225 North Community House Road Charlotte, NC 28277 [Download Table] --------------------------------------------- Name --------------------------------------------- Address --------------------------------------------- City State Zip Code BOOK-702 (05/17) SAI-USAFLEXBONUS 17 ---------- --------------------------------------------------------------------
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APPENDIX A CONDENSED FINANCIAL INFORMATION PART 1 The following table sets forth condensed financial information on Accumulation Units with respect to Contracts issued under this prospectus that are subject to a daily Separate Account deduction of 1.35%. [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ------------------------------------------------------------------------------------------ ALGER SMALL CAP GROWTH PORTFOLIO - CLASS I-2 01/01/2007 to 12/31/2007 9.57 11.07 5,891,694 01/01/2008 to 12/31/2008 11.07 5.83 5,755,192 01/01/2009 to 12/31/2009 5.83 8.37 5,514,037 01/01/2010 to 12/31/2010 8.37 10.35 5,077,642 01/01/2011 to 12/31/2011 10.35 9.89 4,710,473 01/01/2012 to 12/31/2012 9.89 10.98 4,352,356 01/01/2013 to 12/31/2013 10.98 14.54 3,990,480 01/01/2014 to 12/31/2014 14.54 14.41 3,625,507 01/01/2015 to 12/31/2015 14.41 13.74 3,207,055 01/01/2016 to 12/31/2016 13.74 14.40 2,917,845 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION FUND - CLASS 2 01/01/2007 to 12/31/2007 29.64 35.51 664,762 01/01/2008 to 12/31/2008 35.51 16.28 757,735 01/01/2009 to 12/31/2009 16.28 25.91 793,690 01/01/2010 to 12/31/2010 25.91 31.29 692,613 01/01/2011 to 12/31/2011 31.29 24.96 608,210 01/01/2012 to 12/31/2012 24.96 29.10 549,030 01/01/2013 to 12/31/2013 29.10 36.83 497,651 01/01/2014 to 12/31/2014 36.83 37.11 444,456 01/01/2015 to 12/31/2015 37.11 36.71 413,860 01/01/2016 to 12/31/2016 36.71 36.98 359,488 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GROWTH FUND - CLASS 2 01/01/2007 to 12/31/2007 161.27 178.74 199,191 01/01/2008 to 12/31/2008 178.74 98.80 230,814 01/01/2009 to 12/31/2009 98.80 135.89 225,889 01/01/2010 to 12/31/2010 135.89 159.11 197,917 01/01/2011 to 12/31/2011 159.11 150.27 169,705 01/01/2012 to 12/31/2012 150.27 174.76 151,416 01/01/2013 to 12/31/2013 174.76 224.32 137,400 01/01/2014 to 12/31/2014 224.32 240.15 121,838 01/01/2015 to 12/31/2015 240.15 253.18 110,968 01/01/2016 to 12/31/2016 253.18 273.48 97,922 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GROWTH-INCOME FUND - CLASS 2 01/01/2007 to 12/31/2007 117.23 121.48 212,107 01/01/2008 to 12/31/2008 121.48 74.48 247,002 01/01/2009 to 12/31/2009 74.48 96.44 255,289 ------------------------------------------------------------------------------------------ A-1
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------- AMERICAN FUNDS GROWTH-INCOME FUND - CLASS 2 (CONTINUED) 01/01/2010 to 12/31/2010 96.44 106.02 241,144 01/01/2011 to 12/31/2011 106.02 102.69 226,239 01/01/2012 to 12/31/2012 102.69 119.02 216,725 01/01/2013 to 12/31/2013 119.02 156.76 208,850 01/01/2014 to 12/31/2014 156.76 171.10 196,811 01/01/2015 to 12/31/2015 171.10 171.26 175,054 01/01/2016 to 12/31/2016 171.26 188.44 159,397 ---------------------------------------------------------------------------------------- DEUTSCHE CROCI(R) INTERNATIONAL VIP - CLASS A 01/01/2007 to 12/31/2007 11.12 12.57 3,082,699 01/01/2008 to 12/31/2008 12.57 6.42 2,789,082 01/01/2009 to 12/31/2009 6.42 8.46 2,672,474 01/01/2010 to 12/31/2010 8.46 8.48 2,447,082 01/01/2011 to 12/31/2011 8.48 6.97 2,222,356 01/01/2012 to 12/31/2012 6.97 8.30 2,020,827 01/01/2013 to 12/31/2013 8.30 9.85 1,870,650 01/01/2014 to 12/31/2014 9.85 8.57 1,716,481 01/01/2015 to 12/31/2015 8.57 7.99 1,547,893 01/01/2016 to 12/31/2016 7.99 7.94 1,399,467 ---------------------------------------------------------------------------------------- FIDELITY VIP ASSET MANAGER/SM/ - INITIAL CLASS 01/01/2007 to 12/31/2007 10.74 12.24 7,434,895 01/01/2008 to 12/31/2008 12.24 8.60 6,755,499 01/01/2009 to 12/31/2009 8.60 10.96 6,155,071 01/01/2010 to 12/31/2010 10.96 12.36 5,419,609 01/01/2011 to 12/31/2011 12.36 11.88 4,844,552 01/01/2012 to 12/31/2012 11.88 13.18 4,319,513 01/01/2013 to 12/31/2013 13.18 15.05 3,896,807 01/01/2014 to 12/31/2014 15.05 15.71 3,599,721 01/01/2015 to 12/31/2015 15.71 15.52 3,253,267 01/01/2016 to 12/31/2016 15.52 15.79 2,985,926 ---------------------------------------------------------------------------------------- FIDELITY VIP CONTRAFUND(R) - INITIAL CLASS 01/01/2007 to 12/31/2007 19.03 22.08 13,255,971 01/01/2008 to 12/31/2008 22.08 12.52 13,549,154 01/01/2009 to 12/31/2009 12.52 16.76 12,583,716 01/01/2010 to 12/31/2010 16.76 19.39 11,454,929 01/01/2011 to 12/31/2011 19.39 18.64 10,240,819 01/01/2012 to 12/31/2012 18.64 21.41 9,341,071 01/01/2013 to 12/31/2013 21.41 27.74 8,490,723 01/01/2014 to 12/31/2014 27.74 30.63 7,690,600 01/01/2015 to 12/31/2015 30.63 30.42 6,888,452 01/01/2016 to 12/31/2016 30.42 32.42 6,187,883 ---------------------------------------------------------------------------------------- A-2
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------------- FIDELITY VIP GROWTH - INITIAL CLASS 01/01/2007 to 12/31/2007 13.30 16.66 9,779,300 01/01/2008 to 12/31/2008 16.66 8.68 9,064,321 01/01/2009 to 12/31/2009 8.68 10.99 8,488,348 01/01/2010 to 12/31/2010 10.99 13.47 7,853,052 01/01/2011 to 12/31/2011 13.47 13.31 7,170,100 01/01/2012 to 12/31/2012 13.31 15.06 6,645,597 01/01/2013 to 12/31/2013 15.06 20.26 6,024,227 01/01/2014 to 12/31/2014 20.26 22.25 5,562,134 01/01/2015 to 12/31/2015 22.25 23.53 5,018,655 01/01/2016 to 12/31/2016 23.53 23.40 4,576,456 ----------------------------------------------------------------------------------------------- FIDELITY VIP GOVERNMENT MONEY MARKET - INITIAL CLASS (FORMERLY FIDELITY VIP MONEY MARKET - INITIAL CLASS) 01/01/2007 to 12/31/2007 7.15 7.41 4,202,396 01/01/2008 to 12/31/2008 7.41 7.54 4,726,587 01/01/2009 to 12/31/2009 7.54 7.49 4,304,049 01/01/2010 to 12/31/2010 7.49 7.41 3,880,302 01/01/2011 to 12/31/2011 7.41 7.31 3,604,218 01/01/2012 to 12/31/2012 7.31 7.23 3,266,490 01/01/2013 to 12/31/2013 7.23 7.13 3,074,432 01/01/2014 to 12/31/2014 7.13 7.04 2,775,755 01/01/2015 to 12/31/2015 7.04 6.94 2,527,316 01/01/2016 to 12/31/2016 6.94 6.86 2,384,306 ----------------------------------------------------------------------------------------------- FIDELITY VIP INDEX 500 - INITIAL CLASS 01/01/2007 to 12/31/2007 16.37 17.03 6,793,561 01/01/2008 to 12/31/2008 17.03 10.58 5,925,742 01/01/2009 to 12/31/2009 10.58 13.22 5,187,366 01/01/2010 to 12/31/2010 13.22 15.00 4,473,766 01/01/2011 to 12/31/2011 15.00 15.10 3,900,585 01/01/2012 to 12/31/2012 15.10 17.27 3,463,716 01/01/2013 to 12/31/2013 17.27 22.53 3,034,899 01/01/2014 to 12/31/2014 22.53 25.25 2,728,777 01/01/2015 to 12/31/2015 25.25 25.24 2,423,194 01/01/2016 to 12/31/2016 25.24 27.86 2,184,820 ----------------------------------------------------------------------------------------------- MIST - INVESCO SMALL CAP GROWTH - CLASS A 01/01/2007 to 12/31/2007 14.80 16.27 33,616 01/01/2008 to 12/31/2008 16.27 9.85 35,689 01/01/2009 to 12/31/2009 9.85 13.05 38,931 01/01/2010 to 12/31/2010 13.05 16.28 38,951 01/01/2011 to 12/31/2011 16.28 15.92 49,265 ----------------------------------------------------------------------------------------------- A-3
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD -------------------------------------------------------------------------------------- MIST - INVESCO SMALL CAP GROWTH - CLASS A (CONTINUED) 01/01/2012 to 12/31/2012 15.92 18.62 37,289 01/01/2013 to 12/31/2013 18.62 25.81 43,008 01/01/2014 to 12/31/2014 25.81 27.55 41,911 01/01/2015 to 12/31/2015 27.55 26.80 43,090 01/01/2016 to 12/31/2016 26.80 29.54 41,994 -------------------------------------------------------------------------------------- MIST - METLIFE SMALL CAP VALUE PORTFOLIO - CLASS A 01/01/2007 to 12/31/2007 18.42 17.66 416,807 01/01/2008 to 12/31/2008 17.66 12.25 517,443 01/01/2009 to 12/31/2009 12.25 15.33 480,776 01/01/2010 to 12/31/2010 15.33 18.17 410,887 01/01/2011 to 12/31/2011 18.17 16.37 357,960 01/01/2012 to 12/31/2012 16.37 19.10 315,401 01/01/2013 to 12/31/2013 19.10 25.02 281,699 01/01/2014 to 12/31/2014 25.02 25.17 232,259 01/01/2015 to 12/31/2015 25.17 23.54 203,412 01/01/2016 to 12/31/2016 23.54 30.55 192,780 -------------------------------------------------------------------------------------- MIST - MFS(R) RESEARCH INTERNATIONAL - CLASS A 01/01/2007 to 12/31/2007 16.29 18.25 464,094 01/01/2008 to 12/31/2008 18.25 10.40 645,979 01/01/2009 to 12/31/2009 10.40 13.53 725,312 01/01/2010 to 12/31/2010 13.53 14.91 704,722 01/01/2011 to 12/31/2011 14.91 13.17 711,230 01/01/2012 to 12/31/2012 13.17 15.20 681,940 01/01/2013 to 12/31/2013 15.20 17.93 657,489 01/01/2014 to 12/31/2014 17.93 16.50 623,682 01/01/2015 to 12/31/2015 16.50 16.04 559,637 01/01/2016 to 12/31/2016 16.04 15.72 503,428 -------------------------------------------------------------------------------------- MIST - MORGAN STANLEY MID CAP GROWTH - CLASS A 05/03/2010 to 12/31/2010 13.51 15.71 255,187 01/01/2011 to 12/31/2011 15.71 14.47 233,241 01/01/2012 to 12/31/2012 14.47 15.64 215,418 01/01/2013 to 12/31/2013 15.64 21.49 193,355 01/01/2014 to 12/31/2014 21.49 21.47 173,270 01/01/2015 to 12/31/2015 21.47 20.17 160,359 01/01/2016 to 12/31/2016 20.17 18.25 148,099 -------------------------------------------------------------------------------------- MIST - PIMCO TOTAL RETURN - CLASS A 01/01/2007 to 12/31/2007 8.60 9.15 3,107,389 01/01/2008 to 12/31/2008 9.15 13.51 4,213,750 -------------------------------------------------------------------------------------- A-4
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------------------- MIST - PIMCO TOTAL RETURN - CLASS A (CONTINUED) 01/01/2009 to 12/31/2009 13.51 10.61 4,201,202 01/01/2010 to 12/31/2010 10.61 11.35 4,279,742 01/01/2011 to 12/31/2011 11.35 11.58 3,918,425 01/01/2012 to 12/31/2012 11.58 12.52 3,749,817 01/01/2013 to 12/31/2013 12.52 12.14 3,285,635 01/01/2014 to 12/31/2014 12.14 12.52 2,919,823 01/01/2015 to 12/31/2015 12.52 12.38 2,457,540 01/01/2016 to 12/31/2016 12.38 12.56 2,148,038 ---------------------------------------------------------------------------------------------------- MIST - T.ROWE PRICE LARGE CAP VALUE - CLASS A (FORMERLY LORD ABBETT GROWTH AND INCOME - CLASS A) 01/01/2007 to 12/31/2007 31.59 30.80 5,816,218 01/01/2008 to 12/31/2008 30.80 19.39 5,393,174 01/01/2009 to 12/31/2009 19.39 22.70 4,899,632 01/01/2010 to 12/31/2010 22.70 26.28 4,432,352 01/01/2011 to 12/31/2011 26.28 24.95 3,985,555 01/01/2012 to 12/31/2012 24.95 29.11 3,644,435 01/01/2013 to 12/31/2013 29.11 38.51 3,321,629 01/01/2014 to 12/31/2014 38.51 43.15 3,025,516 01/01/2015 to 12/31/2015 43.15 41.16 2,681,680 01/01/2016 to 12/31/2016 41.16 47.19 2,428,489 ---------------------------------------------------------------------------------------------------- MSF - BARCLAYS AGGREGATE BOND INDEX - CLASS A 01/01/2007 to 12/31/2007 13.55 14.29 366,229 01/01/2008 to 12/31/2008 14.29 14.94 503,693 01/01/2009 to 12/31/2009 14.94 15.50 528,637 01/01/2010 to 12/31/2010 15.50 16.22 515,107 01/01/2011 to 12/31/2011 16.22 17.20 482,591 01/01/2012 to 12/31/2012 17.20 17.63 480,941 01/01/2013 to 12/31/2013 17.63 16.99 420,029 01/01/2014 to 12/31/2014 16.99 17.74 419,324 01/01/2015 to 12/31/2015 17.74 17.54 383,834 01/01/2016 to 12/31/2016 17.54 17.72 345,787 ---------------------------------------------------------------------------------------------------- MSF - BLACKROCK BOND INCOME - CLASS A 01/01/2007 to 12/31/2007 49.72 52.14 90,214 01/01/2008 to 12/31/2008 52.14 49.68 113,490 01/01/2009 to 12/31/2009 49.68 53.65 108,244 01/01/2010 to 12/31/2010 53.65 57.35 97,632 01/01/2011 to 12/31/2011 57.35 60.29 84,849 01/01/2012 to 12/31/2012 60.29 63.97 84,176 01/01/2013 to 12/31/2013 63.97 62.63 69,840 ---------------------------------------------------------------------------------------------------- A-5
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------- MSF - BLACKROCK BOND INCOME - CLASS A (CONTINUED) 01/01/2014 to 12/31/2014 62.63 66.16 76,732 01/01/2015 to 12/31/2015 66.16 65.66 70,363 01/01/2016 to 12/31/2016 65.66 66.81 60,376 ----------------------------------------------------------------------------------------- MSF - BLACKROCK CAPITAL APPRECIATION - CLASS A (FORMERLY MSF - BLACKROCK LEGACY LARGE CAP GROWTH - CLASS A) 01/01/2007 to 12/31/2007 28.33 33.18 25,875 01/01/2008 to 12/31/2008 33.18 20.78 47,717 01/01/2009 to 12/31/2009 20.78 28.05 48,908 01/01/2010 to 12/31/2010 28.05 33.15 38,917 01/01/2011 to 12/31/2011 33.15 29.78 34,481 01/01/2012 to 12/31/2012 29.78 33.60 32,933 01/01/2013 to 12/31/2013 33.60 44.50 33,708 01/01/2014 to 12/31/2014 44.50 47.81 33,666 01/01/2015 to 12/31/2015 47.81 50.13 36,568 01/01/2016 to 12/31/2016 50.13 49.50 29,407 ----------------------------------------------------------------------------------------- MSF - BLACKROCK LARGE CAP VALUE - CLASS A 01/01/2007 to 12/31/2007 14.62 14.92 203,478 01/01/2008 to 12/31/2008 14.92 9.58 250,147 01/01/2009 to 12/31/2009 9.58 10.51 253,918 01/01/2010 to 12/31/2010 10.51 11.33 239,093 01/01/2011 to 12/31/2011 11.33 11.44 233,330 01/01/2012 to 12/31/2012 11.44 12.89 203,789 01/01/2013 to 12/31/2013 12.89 16.80 196,278 01/01/2014 to 12/31/2014 16.80 18.22 198,465 01/01/2015 to 12/31/2015 18.22 16.90 190,693 01/01/2016 to 12/31/2016 16.90 19.76 171,681 ----------------------------------------------------------------------------------------- MSF - FI MID CAP OPPORTUNITIES - CLASS A 01/01/2007 to 12/31/2007 19.82 21.18 227,669 01/01/2008 to 12/31/2008 21.18 9.34 261,434 01/01/2009 to 12/31/2009 9.34 12.34 260,602 01/01/2010 to 12/31/2010 12.34 13.36 0 ----------------------------------------------------------------------------------------- MSF - MET/ARTISAN MID CAP VALUE - CLASS A 01/01/2007 to 12/31/2007 41.08 37.75 516,563 01/01/2008 to 12/31/2008 37.75 20.11 499,127 01/01/2009 to 12/31/2009 20.11 28.09 478,574 01/01/2010 to 12/31/2010 28.09 31.88 434,802 01/01/2011 to 12/31/2011 31.88 33.58 393,641 01/01/2012 to 12/31/2012 33.58 37.05 346,562 01/01/2013 to 12/31/2013 37.05 50.03 338,125 ----------------------------------------------------------------------------------------- A-6
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------------------- MSF - MET/ARTISAN MID CAP VALUE - CLASS A (CONTINUED) 01/01/2014 to 12/31/2014 50.03 50.31 298,768 01/01/2015 to 12/13/2015 50.31 44.95 263,961 01/01/2016 to 12/31/2016 44.95 54.53 235,121 ---------------------------------------------------------------------------------------------------- MSF - MET/WELLINGTON CORE EQUITY OPPORTUNITIES - CLASS A (MSF - WMC CORE EQUITY OPPORTUNITIES - CLASS A) 01/01/2007 to 12/31/2007 38.95 40.19 263,401 01/01/2008 to 12/31/2008 40.19 24.05 337,871 01/01/2009 to 12/31/2009 24.05 31.31 336,634 01/01/2010 to 12/31/2010 31.31 34.60 305,513 01/01/2011 to 12/31/2011 34.60 32.76 269,378 01/01/2012 to 12/31/2012 32.76 36.47 240,840 01/01/2013 to 12/31/2013 36.47 48.11 219,114 01/01/2014 to 12/31/2014 48.11 52.51 195,595 01/01/2015 to 12/31/2015 52.51 53.05 172,278 01/01/2016 to 12/31/2016 53.05 56.18 155,625 ---------------------------------------------------------------------------------------------------- MSF - METLIFE MID CAP STOCK INDEX - CLASS A 01/01/2007 to 12/31/2007 15.93 16.94 761,353 01/01/2008 to 12/31/2008 16.94 10.67 933,376 01/01/2009 to 12/31/2009 10.67 14.42 1,097,615 01/01/2010 to 12/31/2010 14.42 17.97 1,152,810 01/01/2011 to 12/31/2011 17.97 17.39 1,153,633 01/01/2012 to 12/31/2012 17.39 20.17 1,178,450 01/01/2013 to 12/31/2013 20.17 26.50 1,192,706 01/01/2014 to 12/31/2014 26.50 28.63 1,156,150 01/01/2015 to 12/31/2015 28.63 27.58 1,060,425 01/01/2016 to 12/31/2016 27.58 32.77 1,003,209 ---------------------------------------------------------------------------------------------------- MSF - METLIFE STOCK INDEX - CLASS A 01/01/2007 to 12/31/2007 45.82 47.57 675,856 01/01/2008 to 12/31/2008 47.57 29.52 1,196,677 01/01/2009 to 12/31/2009 29.52 36.76 1,181,819 01/01/2010 to 12/31/2010 36.76 41.64 1,134,947 01/01/2011 to 12/31/2011 41.64 41.84 1,058,394 01/01/2012 to 12/31/2012 41.84 47.78 1,015,815 01/01/2013 to 12/31/2013 47.78 62.24 977,832 01/01/2014 to 12/31/2014 62.24 69.61 914,216 01/01/2015 to 12/31/2015 69.61 69.48 826,493 01/01/2016 to 12/31/2016 69.48 76.54 774,887 ---------------------------------------------------------------------------------------------------- MSF - MFS(R) TOTAL RETURN - CLASS A 01/01/2007 to 12/31/2007 47.90 49.32 203,395 ---------------------------------------------------------------------------------------------------- A-7
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD -------------------------------------------------------------------------------- MSF - MFS(R) TOTAL RETURN - CLASS A (CONTINUED) 01/01/2008 to 12/31/2008 49.32 37.88 242,106 01/01/2009 to 12/31/2009 37.88 44.32 236,951 01/01/2010 to 12/31/2010 44.32 48.14 202,835 01/01/2011 to 12/31/2011 48.14 48.64 182,215 01/01/2012 to 12/31/2012 48.64 53.54 167,290 01/01/2013 to 12/31/2013 53.54 62.86 159,287 01/01/2014 to 12/31/2014 62.86 67.37 146,167 01/01/2015 to 12/31/2015 67.37 66.37 126,811 01/01/2016 to 12/31/2016 66.37 71.50 113,748 -------------------------------------------------------------------------------- MSF - MFS(R) VALUE - CLASS A 01/01/2007 to 12/31/2007 15.10 14.33 387,453 01/01/2008 to 12/31/2008 14.33 9.41 432,253 01/01/2009 to 12/31/2009 9.41 11.21 477,350 01/01/2010 to 12/31/2010 11.21 12.33 469,533 01/01/2011 to 12/31/2011 12.33 12.27 475,614 01/01/2012 to 12/31/2012 12.27 14.12 468,500 01/01/2013 to 12/31/2013 14.12 18.90 462,130 01/01/2014 to 12/31/2014 18.90 20.67 442,820 01/01/2015 to 12/31/2015 20.67 20.36 403,787 01/01/2016 to 12/31/2016 20.36 22.98 365,296 -------------------------------------------------------------------------------- MSF - MSCI EAFE(R) INDEX - CLASS A 01/01/2007 to 12/31/2007 15.83 17.30 890,137 01/01/2008 to 12/31/2008 17.30 9.89 1,082,509 01/01/2009 to 12/31/2009 9.89 12.55 1,190,238 01/01/2010 to 12/31/2010 12.55 13.40 1,201,156 01/01/2011 to 12/31/2011 13.40 11.57 1,181,644 01/01/2012 to 12/31/2012 11.57 13.50 1,200,375 01/01/2013 to 12/31/2013 13.50 16.23 1,156,352 01/01/2014 to 12/31/2014 16.23 15.05 1,134,965 01/01/2015 to 12/31/2015 15.05 14.69 1,035,254 01/01/2016 to 12/31/2016 14.69 14.69 961,598 -------------------------------------------------------------------------------- MSF - NEUBERGER BERMAN GENESIS - CLASS A 01/01/2007 to 12/31/2007 21.69 20.66 547,498 01/01/2008 to 12/31/2008 20.66 12.56 578,098 01/01/2009 to 12/31/2009 12.56 14.02 595,779 01/01/2010 to 12/31/2010 14.02 16.81 568,716 01/01/2011 to 12/31/2011 16.81 17.55 552,249 01/01/2012 to 12/31/2012 17.55 19.05 520,656 01/01/2013 to 12/31/2013 19.05 26.03 497,783 -------------------------------------------------------------------------------- A-8
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------------------- MSF - NEUBERGER BERMAN GENESIS - CLASS A (CONTINUED) 01/01/2014 to 12/31/2014 26.03 25.69 459,734 01/01/2015 to 12/31/2015 25.69 25.49 385,782 01/01/2016 to 12/31/2016 25.49 29.85 346,518 ---------------------------------------------------------------------------------------------------- MSF - RUSSELL 2000(R) INDEX - CLASS A 01/01/2007 to 12/31/2007 18.98 18.44 355,849 01/01/2008 to 12/31/2008 18.44 12.10 397,753 01/01/2009 to 12/31/2009 12.10 15.04 434,045 01/01/2010 to 12/31/2010 15.04 18.83 466,860 01/01/2011 to 12/31/2011 18.83 17.82 474,458 01/01/2012 to 12/31/2012 17.82 20.46 479,291 01/01/2013 to 12/31/2013 20.46 27.96 490,621 01/01/2014 to 12/31/2014 27.96 28.98 473,023 01/01/2015 to 12/31/2015 28.98 27.37 430,951 01/01/2016 to 12/31/2016 27.37 32.75 408,771 ---------------------------------------------------------------------------------------------------- MSF - T. ROWE PRICE LARGE CAP GROWTH - CLASS A (FORMERLY MIST - RCM TECHNOLOGY - CLASS A) 01/01/2007 to 12/31/2007 5.02 6.52 214,957 01/01/2008 to 12/31/2008 6.52 3.58 253,169 01/01/2009 to 12/31/2009 3.58 5.63 395,082 01/01/2010 to 12/31/2010 5.63 7.12 480,648 01/01/2011 to 12/31/2011 7.12 6.34 324,023 01/01/2012 to 12/31/2012 6.34 7.03 291,511 01/01/2013 to 12/31/2013 7.03 9.36 280,940 01/01/2014 to 12/31/2014 9.36 10.07 304,446 01/01/2015 to 12/31/2015 10.07 11.01 426,508 01/01/2016 to 12/31/2016 11.01 11.05 425,579 ---------------------------------------------------------------------------------------------------- MSF - T. ROWE PRICE SMALL CAP GROWTH - CLASS A 01/01/2007 to 12/31/2007 15.08 16.34 45,674 01/01/2008 to 12/31/2008 16.34 10.28 60,781 01/01/2009 to 12/31/2009 10.28 14.10 96,481 01/01/2010 to 12/31/2010 14.10 18.77 115,650 01/01/2011 to 12/31/2011 18.77 18.84 134,679 01/01/2012 to 12/31/2012 18.84 21.60 124,345 01/01/2013 to 12/31/2013 21.60 30.80 146,538 01/01/2014 to 12/31/2014 30.80 32.49 132,846 01/01/2015 to 12/31/2015 32.49 32.92 169,625 01/01/2016 to 12/31/2016 32.92 36.29 146,941 ---------------------------------------------------------------------------------------------------- A-9
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------------- MSF - WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES - CLASS A 01/01/2016 to 12/31/2016 31.91 33.14 171,236 ---------------------------------------------------------------------------------------------- MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES - (FORMERLY MIST - LORD ABBETT BOND DEBENTURE - CLASS A) 01/01/2007 to 12/31/2007 18.86 19.88 253,278 01/01/2008 to 12/31/2008 19.88 16.01 310,940 01/01/2009 to 12/31/2009 16.01 21.66 302,830 01/01/2010 to 12/31/2010 21.66 24.18 280,087 01/01/2011 to 12/31/2011 24.18 25.01 249,802 01/01/2012 to 12/31/2012 25.01 27.93 244,193 01/01/2013 to 12/31/2013 27.93 29.80 222,634 01/01/2014 to 12/31/2014 29.80 30.91 213,961 01/01/2015 to 12/31/2015 30.91 29.92 211,983 01/01/2016 to 12/31/2016 29.92 30.85 -- ---------------------------------------------------------------------------------------------- A-10
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APPENDIX A CONDENSED FINANCIAL INFORMATION PART 2 The following table sets forth condensed financial information on Accumulation Units with respect to Contracts issued under this prospectus that are subject to a daily Separate Account deduction of 1.25%. [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ------------------------------------------------------------------------------------------ ALGER SMALL CAP GROWTH PORTFOLIO - CLASS I-2 01/01/2007 to 12/31/2007 9.61 11.13 242,115 01/01/2008 to 12/31/2008 11.13 5.87 219,694 01/01/2009 to 12/31/2009 5.87 8.43 206,871 01/01/2010 to 12/31/2010 8.43 10.44 184,281 01/01/2011 to 12/31/2011 10.44 9.98 175,667 01/01/2012 to 12/31/2012 9.98 11.09 164,846 01/01/2013 to 12/31/2013 11.09 14.70 145,728 01/01/2014 to 12/31/2014 14.70 14.58 125,176 01/01/2015 to 12/31/2015 14.58 13.92 107,598 01/01/2016 to 12/31/2016 13.92 14.61 103,339 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION FUND - CLASS 2 01/01/2007 to 12/31/2007 29.90 35.85 17,949 01/01/2008 to 12/31/2008 35.85 16.46 13,488 01/01/2009 to 12/31/2009 16.46 26.21 15,756 01/01/2010 to 12/31/2010 26.21 31.69 16,767 01/01/2011 to 12/31/2011 31.69 25.31 17,323 01/01/2012 to 12/31/2012 25.13 29.53 15,451 01/01/2013 to 12/31/2013 29.53 37.41 14,973 01/01/2014 to 12/31/2014 37.41 37.73 15,396 01/01/2015 to 12/31/2015 37.73 37.36 13,978 01/01/2016 to 12/31/2016 37.36 37.67 10,415 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GROWTH FUND - CLASS 2 01/01/2007 to 12/31/2007 165.00 183.06 2,562 01/01/2008 to 12/31/2008 183.06 101.29 4,021 01/01/2009 to 12/31/2009 101.29 139.45 4,630 01/01/2010 to 12/31/2010 139.45 163.45 6,826 01/01/2011 to 12/31/2011 163.45 154.52 6,901 01/01/2012 to 12/31/2012 154.52 179.89 7,847 01/01/2013 to 12/31/2013 179.89 231.13 7,928 01/01/2014 to 12/31/2014 231.13 247.69 8,083 01/01/2015 to 12/31/2015 247.69 261.38 8,050 01/01/2016 to 12/31/2016 261.38 282.63 6,746 ------------------------------------------------------------------------------------------ AMERICAN FUNDS GROWTH-INCOME FUND - CLASS 2 01/01/2007 to 12/31/2007 119.94 124.42 2,214 01/01/2008 to 12/31/2008 124.42 76.36 2,280 ------------------------------------------------------------------------------------------ A-11
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------------- AMERICAN FUNDS GROWTH-INCOME FUND - CLASS 2 (CONTINUED) 01/01/2009 to 12/31/2009 76.36 98.97 2,527 01/01/2010 to 12/31/2010 98.97 108.91 4,982 01/01/2011 to 12/31/2011 108.91 105.60 5,438 01/01/2012 to 12/31/2012 105.60 122.51 6,351 01/01/2013 to 12/31/2013 122.51 161.52 6,828 01/01/2014 to 12/31/2014 161.52 176.47 6,836 01/01/2015 to 12/31/2015 176.47 176.82 6,756 01/01/2016 to 12/31/2016 176.82 194.74 5,818 ----------------------------------------------------------------------------------------------- FIDELITY VIP ASSET MANAGER/SM/ - INITIAL CLASS 01/01/2007 to 12/31/2007 10.78 12.30 124,552 01/01/2008 to 12/31/2008 12.30 8.66 106,448 01/01/2009 to 12/31/2009 8.66 11.04 96,266 01/01/2010 to 12/31/2010 11.04 12.46 81,009 01/01/2011 to 12/31/2011 12.46 11.99 63,391 01/01/2012 to 12/31/2012 11.99 13.32 62,354 01/01/2013 to 12/31/2013 13.32 15.22 58,402 01/01/2014 to 12/31/2014 15.22 15.90 53,221 01/01/2015 to 12/31/2015 15.90 15.73 48,154 01/01/2016 to 12/31/2016 15.73 16.01 48,433 ----------------------------------------------------------------------------------------------- FIDELITY VIP CONTRAFUND(R) - INITIAL CLASS 01/01/2007 to 12/31/2007 19.11 22.19 267,064 01/01/2008 to 12/31/2008 22.19 12.60 252,530 01/01/2009 to 12/31/2009 12.60 16.88 249,519 01/01/2010 to 12/31/2010 16.88 19.55 243,566 01/01/2011 to 12/31/2011 19.55 18.82 227,820 01/01/2012 to 12/31/2012 18.82 21.63 220,796 01/01/2013 to 12/31/2013 21.63 28.05 204,045 01/01/2014 to 12/31/2014 28.05 31.01 198,328 01/01/2015 to 12/31/2015 31.01 30.83 180,386 01/01/2016 to 12/31/2016 30.83 32.88 172,984 ----------------------------------------------------------------------------------------------- FIDELITY VIP GOVERNMENT MONEY MARKET - INITIAL CLASS (FORMERLY FIDELITY VIP MONEY MARKET - INITIAL CLASS) 01/01/2007 to 12/31/2007 7.18 7.45 154,082 01/01/2008 to 12/31/2008 7.45 7.58 173,542 01/01/2009 to 12/31/2009 7.58 7.54 136,663 01/01/2010 to 12/31/2010 7.54 7.47 118,421 01/01/2011 to 12/31/2011 7.47 7.38 139,733 01/01/2012 to 12/31/2012 7.38 7.30 156,790 01/01/2013 to 12/31/2013 7.30 7.21 126,865 ----------------------------------------------------------------------------------------------- A-12
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------------- FIDELITY VIP GOVERNMENT MONEY MARKET - INITIAL CLASS (FORMERLY FIDELITY VIP MONEY MARKET - INITIAL CLASS) (CONTINUED) 01/01/2014 to 12/31/2014 7.21 7.12 109,213 01/01/2015 to 12/31/2015 7.12 7.04 96,445 01/01/2016 to 12/31/2016 7.04 6.96 171,094 ----------------------------------------------------------------------------------------------- FIDELITY VIP GROWTH - INITIAL CLASS 01/01/2007 to 12/31/2007 13.36 16.75 227,521 01/01/2008 to 12/31/2008 16.75 8.74 207,815 01/01/2009 to 12/31/2009 8.74 11.07 189,135 01/01/2010 to 12/31/2010 11.07 13.58 179,245 01/01/2011 to 12/31/2011 13.58 13.44 166,443 01/01/2012 to 12/31/2012 13.44 15.22 160,847 01/01/2013 to 12/31/2013 15.22 20.49 146,083 01/01/2014 to 12/31/2014 20.49 22.52 136,627 01/01/2015 to 12/31/2015 22.52 23.84 124,680 01/01/2016 to 12/31/2016 23.84 23.73 111,964 ----------------------------------------------------------------------------------------------- FIDELITY VIP INDEX 500 - INITIAL CLASS 01/01/2007 to 12/31/2007 16.44 17.12 157,031 01/01/2008 to 12/31/2008 17.12 10.65 129,789 01/01/2009 to 12/31/2009 10.65 13.31 108,906 01/01/2010 to 12/31/2010 13.31 15.12 87,733 01/01/2011 to 12/31/2011 15.12 15.24 72,290 01/01/2012 to 12/31/2012 15.24 17.45 65,057 01/01/2013 to 12/31/2013 17.45 22.79 55,057 01/01/2014 to 12/31/2014 22.79 25.56 48,213 01/01/2015 to 12/31/2015 25.56 25.58 40,006 01/01/2016 to 12/31/2016 25.58 28.25 36,269 ----------------------------------------------------------------------------------------------- FIDELITY VIP OVERSEAS - INITIAL CLASS 01/01/2007 to 12/31/2007 12.59 14.58 142,084 01/01/2008 to 12/31/2008 14.58 8.09 129,929 01/01/2009 to 12/31/2009 8.09 10.11 127,780 01/01/2010 to 12/31/2010 10.11 11.30 121,653 01/01/2011 to 12/31/2011 11.30 9.24 119,049 01/01/2012 to 12/31/2012 9.24 11.02 116,094 01/01/2013 to 12/31/2013 11.02 14.19 102,607 01/01/2014 to 12/31/2014 14.19 12.89 93,963 01/01/2015 to 12/31/2015 12.89 13.19 82,415 01/01/2016 to 12/31/2016 13.19 12.36 72,418 ----------------------------------------------------------------------------------------------- MIST - INVESCO SMALL CAP GROWTH - CLASS A 01/01/2007 to 12/31/2007 14.88 16.37 1,420 ----------------------------------------------------------------------------------------------- A-13
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD -------------------------------------------------------------------------------------- MIST - INVESCO SMALL CAP GROWTH - CLASS A (CONTINUED) 01/01/2008 to 12/31/2008 16.37 9.92 1,040 01/01/2009 to 12/31/2009 9.92 13.15 1,628 01/01/2010 to 12/31/2010 13.15 16.43 9,151 01/01/2011 to 12/31/2011 16.43 16.09 1,930 01/01/2012 to 12/31/2012 16.09 18.83 1,576 01/01/2013 to 12/31/2013 18.83 26.13 1,469 01/01/2014 to 12/31/2014 26.13 27.92 5,592 01/01/2015 to 12/31/2015 27.92 27.18 5,521 01/01/2016 to 12/31/2016 27.18 29.99 3,457 -------------------------------------------------------------------------------------- MIST - METLIFE SMALL CAP VALUE PORTFOLIO - CLASS A 01/01/2007 to 12/31/2007 18.50 17.76 7,584 01/01/2008 to 12/31/2008 17.76 12.33 9,323 01/01/2009 to 12/31/2009 12.33 15.44 11,362 01/01/2010 to 12/31/2010 15.44 18.33 11,533 01/01/2011 to 12/31/2011 18.33 16.52 12,268 01/01/2012 to 12/31/2012 16.52 19.30 11,321 01/01/2013 to 12/31/2013 19.30 25.32 11,470 01/01/2014 to 12/31/2014 25.32 25.49 10,828 01/01/2015 to 12/31/2015 25.49 23.87 7,991 01/01/2016 to 12/31/2016 23.87 31.01 8,559 -------------------------------------------------------------------------------------- MIST - MORGAN STANLEY MID CAP GROWTH - CLASS A 05/03/2010 to 12/31/2010 13.69 15.93 3,624 01/01/2011 to 12/31/2011 15.93 14.68 2,979 01/01/2012 to 12/31/2012 14.68 15.89 2,750 01/01/2013 to 12/31/2013 15.89 21.85 2,974 01/01/2014 to 12/31/2014 21.85 21.86 2,743 01/01/2015 to 12/31/2015 21.86 20.56 2,818 01/01/2016 to 12/31/2016 20.56 18.62 2,908 -------------------------------------------------------------------------------------- MIST - PIMCO TOTAL RETURN - CLASS A 01/01/2007 to 12/31/2007 12.87 13.70 68,395 01/01/2008 to 12/31/2008 13.70 13.62 90,312 01/01/2009 to 12/31/2009 13.62 15.93 85,660 01/01/2010 to 12/31/2010 15.93 17.05 77,391 01/01/2011 to 12/31/2011 17.05 17.42 77,314 01/01/2012 to 12/31/2012 17.42 18.84 77,709 01/01/2013 to 12/31/2013 18.84 18.29 80,636 01/01/2014 to 12/31/2014 18.29 18.87 75,627 01/01/2015 to 12/31/2015 18.87 18.69 74,611 01/01/2016 to 12/31/2016 18.69 18.98 63,093 -------------------------------------------------------------------------------------- A-14
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------------------- MIST - T. ROWE PRICE LARGE CAP VALUE - CLASS A (FORMERLY LORD ABBETT GROWTH AND INCOME - CLASS A) 01/01/2007 to 12/31/2007 30.14 30.96 186,701 01/01/2008 to 12/31/2008 30.96 19.51 168,557 01/01/2009 to 12/31/2009 19.51 22.87 161,255 01/01/2010 to 12/31/2010 22.87 26.49 146,046 01/01/2011 to 12/31/2011 26.49 25.18 136,440 01/01/2012 to 12/31/2012 25.18 29.41 129,457 01/01/2013 to 12/31/2013 29.41 38.95 118,445 01/01/2014 to 12/31/2014 38.95 43.68 117,815 01/01/2015 to 12/31/2015 43.68 41.71 104,025 01/01/2016 to 12/31/2016 41.71 47.86 93,785 ----------------------------------------------------------------------------------------------------- MSF - BARCLAYS AGGREGATE BOND INDEX - CLASS A 01/01/2007 to 12/31/2007 13.66 14.42 9,466 01/01/2008 to 12/31/2008 14.42 15.09 11,875 01/01/2009 to 12/31/2009 15.09 15.68 12,769 01/01/2010 to 12/31/2010 15.68 16.42 9,887 01/01/2011 to 12/31/2011 16.42 17.43 10,040 01/01/2012 to 12/31/2012 17.43 17.88 9,719 01/01/2013 to 12/31/2013 17.88 17.25 8,931 01/01/2014 to 12/31/2014 17.25 18.03 9,444 01/01/2015 to 12/31/2015 18.03 17.85 9,033 01/01/2016 to 12/31/2016 17.85 18.04 14,534 ----------------------------------------------------------------------------------------------------- MSF - BLACKROCK BOND INCOME - CLASS A 01/01/2007 to 12/31/2007 50.90 53.43 3,336 01/01/2008 to 12/31/2008 53.43 50.95 4.893 01/01/2009 to 12/31/2009 50.95 55.09 4,876 01/01/2010 to 12/31/2010 55.09 58.94 5,412 01/01/2011 to 12/31/2011 58.94 62.03 5,672 01/01/2012 to 12/31/2012 62.03 65.87 5,648 01/01/2013 to 12/31/2013 65.87 64.56 4,302 01/01/2014 to 12/31/2014 64.56 68.27 3,997 01/01/2015 to 12/31/2015 68.27 67.82 4,388 01/01/2016 to 12/31/2016 67.82 69.07 4,712 ----------------------------------------------------------------------------------------------------- MSF - BLACKROCK CAPITAL APPRECIATION - CLASS A 01/01/2007 to 12/31/2007 28.67 33.62 636 01/01/2008 to 12/31/2008 33.62 21.08 517 01/01/2009 to 12/31/2009 21.08 28.47 1,222 01/01/2010 to 12/31/2010 28.47 33.69 1,396 01/01/2011 to 12/31/2011 33.69 30.30 1,519 ----------------------------------------------------------------------------------------------------- A-15
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD --------------------------------------------------------------------------------------------------- MSF - BLACKROCK CAPITAL APPRECIATION - CLASS A (CONTINUED) 01/01/2012 to 12/31/2012 30.30 34.22 6,180 01/01/2013 to 12/31/2013 34.22 45.36 5,993 01/01/2014 to 12/31/2014 45.36 48.78 1,819 01/01/2015 to 12/31/2015 48.78 51.20 2,078 01/01/2016 to 12/31/2016 51.20 50.61 1,851 --------------------------------------------------------------------------------------------------- MSF - BLACKROCK LARGE CAP VALUE - CLASS A 01/01/2007 to 12/31/2007 14.69 15.00 6,142 01/01/2008 to 12/31/2008 15.00 9.64 6,255 01/01/2009 to 12/31/2009 9.64 10.59 9,688 01/01/2010 to 12/31/2010 10.59 11.42 12,674 01/01/2011 to 12/31/2011 11.42 11.55 16,966 01/01/2012 to 12/31/2012 11.55 13.03 21,517 01/01/2013 to 12/31/2013 13.03 17.00 22,893 01/01/2014 to 12/31/2014 17.00 18.45 25,128 01/01/2015 to 12/31/2015 18.45 17.13 21,543 01/01/2016 to 12/31/2016 17.13 20.05 17,204 --------------------------------------------------------------------------------------------------- MSF - FI MID CAP OPPORTUNITIES - CLASS A 01/01/2007 to 12/31/2007 20.02 21.41 2,394 01/01/2008 to 12/31/2008 21.41 9.46 2,761 01/01/2009 to 12/31/2009 9.46 12.49 3,242 01/01/2010 to 12/31/2010 12.49 13.54 0 --------------------------------------------------------------------------------------------------- MSF - MET/ARTISAN MID CAP VALUE - CLASS A 01/01/2007 to 12/31/2007 41.64 38.31 5,146 01/01/2008 to 12/31/2008 38.31 20.43 5,391 01/01/2009 to 12/31/2009 20.43 28.56 6,512 01/01/2010 to 12/31/2010 28.56 32.45 5,974 01/01/2011 to 12/31/2011 32.45 34.21 5,922 01/01/2012 to 12/31/2012 34.21 37.79 5,862 01/01/2013 to 12/31/2013 37.79 51.08 4,798 01/01/2014 to 12/31/2014 51.08 51.41 4,900 01/01/2015 to 12/31/2015 51.41 45.98 5,193 01/01/2016 to 12/31/2016 45.98 55.84 5,044 --------------------------------------------------------------------------------------------------- MSF - MET/WELLINGTON CORE EQUITY OPPORTUNITIES - CLASS A (FORMERLY MSF - WMC CORE EQUITY OPPORTUNITIES - CLASS A) 01/01/2007 to 12/31/2007 39.43 40.72 4,597 01/01/2008 to 12/31/2008 40.72 24.39 5,728 01/01/2009 to 12/31/2009 24.39 31.79 5,649 01/01/2010 to 12/31/2010 31.79 35.16 11,679 01/01/2011 to 12/31/2011 35.16 33.33 12,367 --------------------------------------------------------------------------------------------------- A-16
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD --------------------------------------------------------------------------------------------------- MSF - MET/WELLINGTON CORE EQUITY OPPORTUNITIES - CLASS A (FORMERLY MSF - WMC CORE EQUITY OPPORTUNITIES - CLASS A) (CONTINUED) 01/01/2012 to 12/31/2012 33.33 37.14 12,728 01/01/2013 to 12/31/2013 37.14 49.04 12,898 01/01/2014 to 12/31/2014 49.04 53.58 13,306 01/01/2015 to 12/31/2015 53.58 54.19 13,462 01/01/2016 to 12/31/2016 54.19 57.44 11,859 --------------------------------------------------------------------------------------------------- MSF - METLIFE MID CAP STOCK INDEX - CLASS A 01/01/2007 to 12/31/2007 16.04 17.07 38,884 01/01/2008 to 12/31/2008 17.07 10.76 43,316 01/01/2009 to 12/31/2009 10.76 14.56 50,545 01/01/2010 to 12/31/2010 14.56 18.15 53,129 01/01/2011 to 12/31/2011 18.15 17.59 47,683 01/01/2012 to 12/31/2012 17.59 20.43 53,824 01/01/2013 to 12/31/2013 20.43 26.86 56,449 01/01/2014 to 12/31/2014 26.86 29.04 59,072 01/01/2015 to 12/31/2015 29.04 28.01 59,412 01/01/2016 to 12/31/2016 28.01 33.31 51,236 --------------------------------------------------------------------------------------------------- MSF - METLIFE STOCK INDEX - CLASS A 01/01/2007 to 12/31/2007 46.54 48.37 22,249 01/01/2008 to 12/31/2008 48.37 30.04 20,414 01/01/2009 to 12/31/2009 30.04 37.45 22,938 01/01/2010 to 12/31/2010 37.45 42.47 25,261 01/01/2011 to 12/31/2011 42.47 42.72 18,793 01/01/2012 to 12/31/2012 42.72 48.83 19,490 01/01/2013 to 12/31/2013 48.83 63.66 17,605 01/01/2014 to 12/31/2014 63.66 71.28 16,659 01/01/2015 to 12/31/2015 71.28 71.21 15,437 01/01/2016 to 12/31/2016 71.21 78.53 15,990 --------------------------------------------------------------------------------------------------- MSF - MFS(R) TOTAL RETURN - CLASS A 01/01/2007 to 12/31/2007 48.85 50.35 2,059 01/01/2008 to 12/31/2008 50.35 38.71 2,414 01/01/2009 to 12/31/2009 38.71 45.34 3,975 01/01/2010 to 12/31/2010 45.34 49.29 4,177 01/01/2011 to 12/31/2011 49.29 49.85 4,202 01/01/2012 to 12/31/2012 49.85 54.94 4,003 01/01/2013 to 12/31/2013 54.94 64.56 4,284 01/01/2014 to 12/31/2014 64.56 69.26 4,226 01/01/2015 to 12/31/2015 69.26 68.30 4,550 01/01/2016 to 12/31/2016 68.30 73.65 4,161 --------------------------------------------------------------------------------------------------- A-17
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ------------------------------------------------------------------------- MSF - MFS(R) VALUE - CLASS A 01/01/2007 to 12/31/2007 15.23 14.47 6,093 01/01/2008 to 12/31/2008 14.47 9.50 5,068 01/01/2009 to 12/31/2009 9.50 11.34 6,102 01/01/2010 to 12/31/2010 11.34 12.48 9,119 01/01/2011 to 12/31/2011 12.48 12.43 10,806 01/01/2012 to 12/31/2012 12.43 14.32 12,523 01/01/2013 to 12/31/2013 14.32 19.19 14,129 01/01/2014 to 12/31/2014 19.19 21.00 15,100 01/01/2015 to 12/31/2015 21.00 20.71 15,689 01/01/2016 to 12/31/2016 20.71 23.40 15,137 ------------------------------------------------------------------------- MSF - MSCI EAFE(R) INDEX - CLASS A 01/01/2007 to 12/31/2007 15.96 17.46 22,743 01/01/2008 to 12/31/2008 17.46 9.99 29,217 01/01/2009 to 12/31/2009 9.99 12.69 37,041 01/01/2010 to 12/31/2010 12.69 13.56 55,099 01/01/2011 to 12/31/2011 13.56 11.72 63,230 01/01/2012 to 12/31/2012 11.72 13.69 63,476 01/01/2013 to 12/31/2013 13.69 16.48 65,950 01/01/2014 to 12/31/2014 16.48 15.30 70,496 01/01/2015 to 12/31/2015 15.30 14.94 69,822 01/01/2016 to 12/31/2016 14.94 14.95 71,365 ------------------------------------------------------------------------- MSF - NEUBERGER BERMAN GENESIS - CLASS A 01/01/2007 to 12/31/2007 21.83 20.82 8,606 01/01/2008 to 12/31/2008 20.82 12.66 7,441 01/01/2009 to 12/31/2009 12.66 14.15 8,115 01/01/2010 to 12/31/2010 14.15 16.99 7,925 01/01/2011 to 12/31/2011 16.99 17.75 9,973 01/01/2012 to 12/31/2012 17.75 19.29 8,857 01/01/2013 to 12/31/2013 19.29 26.39 7,627 01/01/2014 to 12/31/2014 26.39 26.06 7,296 01/01/2015 to 12/31/2015 26.06 25.89 7,135 01/01/2016 to 12/31/2016 25.89 30.34 7,384 ------------------------------------------------------------------------- MSF - RUSSELL 2000(R) INDEX - CLASS A 01/01/2007 to 12/31/2007 19.14 18.61 10,116 ]01/01/2008 to 12/31/2008 18.61 12.22 11,755 01/01/2009 to 12/31/2009 12.22 15.21 13,195 01/01/2010 to 12/31/2010 15.21 19.06 15,140 01/01/2011 to 12/31/2011 19.06 18.06 15,113 01/01/2012 to 12/31/2012 18.06 20.75 17,427 ------------------------------------------------------------------------- A-18
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ---------------------------------------------------------------------------------------------------- MSF - RUSSELL 2000(R) INDEX - CLASS A (CONTINUED) 01/01/2013 to 12/31/2013 20.75 28.39 18,780 01/01/2014 to 12/31/2014 28.39 29.45 18,870 01/01/2015 to 12/31/2015 29.45 27.84 19,323 01/01/2016 to 12/31/2016 27.84 33.35 19,374 ---------------------------------------------------------------------------------------------------- MSF - T. ROWE PRICE LARGE CAP GROWTH - CLASS A (FORMERLY MIST - RCM TECHNOLOGY - CLASS A) 01/01/2007 to 12/31/2007 5.05 6.56 3,662 01/01/2008 to 12/31/2008 6.56 3.61 4,044 01/01/2009 to 12/31/2009 3.61 5.68 7,372 01/01/2010 to 12/31/2010 5.68 7.19 10,981 01/01/2011 to 12/31/2011 7.19 6.41 12,061 01/01/2012 to 12/31/2012 6.41 7.11 13,211 01/01/2013 to 12/31/2013 7.11 23.27 -- 01/01/2014 to 12/31/2014 23.27 25.07 -- 01/01/2015 to 12/31/2015 25.07 27.43 -- 01/01/2016 to 12/31/2016 27.43 27.57 -- ---------------------------------------------------------------------------------------------------- MSF - T. ROWE PRICE SMALL CAP GROWTH - CLASS A 01/01/2007 to 12/31/2007 15.22 18.44 5,760 01/01/2008 to 12/31/2008 18.44 10.41 7,538 01/01/2009 to 12/31/2009 10.41 16.06 8,272 01/01/2010 to 12/31/2010 16.06 21.48 15,126 01/01/2011 to 12/31/2011 21.48 21.67 18,409 01/01/2012 to 12/31/2012 21.67 24.95 17,593 01/01/2013 to 12/31/2013 24.95 35.74 17,787 01/01/2014 to 12/31/2014 35.74 37.87 17,646 01/01/2015 to 12/31/2015 37.87 38.55 16,474 01/01/2016 to 12/31/2016 38.55 42.70 13,951 ---------------------------------------------------------------------------------------------------- MSF - WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES - CLASS A 01/01/2016 to 12/31/2016 32.61 33.89 15,211 ---------------------------------------------------------------------------------------------------- MSF - WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES - CLASS A (FORMERLY MIST - LORD ABBETT BOND DEBENTURE - CLASS A) 01/01/2007 to 12/31/2007 19.07 20.12 13,384 01/01/2008 to 12/31/2008 20.12 16.21 21,351 01/01/2009 to 12/31/2009 16.21 21.95 18,927 01/01/2010 to 12/31/2010 21.95 24.54 20,182 01/01/2011 to 12/31/2011 24.54 25.40 19,862 01/01/2012 to 12/31/2012 25.40 28.40 17,282 01/01/2013 to 12/31/2013 28.40 30.33 16,171 ---------------------------------------------------------------------------------------------------- A-19
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APPENDIX A CONDENSED FINANCIAL INFORMATION (CONTINUED) [Enlarge/Download Table] AUV AT AUV AT ACCUM UNITS BEGINNING END END OF PERIOD OF PERIOD OF PERIOD ----------------------------------------------------------------------------------------------------- MSF - WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES - CLASS A (FORMERLY MIST - LORD ABBETT BOND DEBENTURE - CLASS A) (CONTINUED) 01/01/2014 to 12/31/2014 30.33 31.49 18,860 01/01/2015 to 12/31/2015 31.49 30.52 16,673 01/01/2016 to 12/31/2016 30.52 31.47 -- ----------------------------------------------------------------------------------------------------- T. ROWE PRICE GROWTH STOCK FUND 01/01/2007 to 12/31/2007 81.07 88.67 28,721 01/01/2008 to 12/31/2008 88.67 50.75 24,876 01/01/2009 to 12/31/2009 50.75 72.05 24,043 01/01/2010 to 12/31/2010 72.05 83.50 85,875 01/01/2011 to 12/31/2011 83.50 81.96 73,401 01/01/2012 to 12/31/2012 81.96 96.60 66,302 01/01/2013 to 12/31/2013 96.60 133.27 62,571 01/01/2014 to 12/31/2014 133.27 143.75 52,254 01/01/2015 to 12/31/2015 143.75 157.95 44,692 01/01/2016 to 12/31/2016 157.95 158.76 40,267 ----------------------------------------------------------------------------------------------------- A-20
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APPENDIX B PARTICIPATING INVESTMENT PORTFOLIOS Below are the investment objectives of each Fund available under the Contract. The Fund prospectuses contain more complete information, including a description of the investment objectives, policies, restrictions and risks. THERE CAN BE NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE ACHIEVED. [Enlarge/Download Table] FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 -------------------------------------------------------------------------------------------------------------------- American Funds Global Small Capital Research and Management Capitalization Fund Seeks long-term growth of capital. Company -------------------------------------------------------------------------------------------------------------------- Capital Research and Management American Funds Growth Fund Seeks growth of capital. Company -------------------------------------------------------------------------------------------------------------------- Seeks long-term growth of capital and Capital Research and Management American Funds Growth-Income Fund income. Company -------------------------------------------------------------------------------------------------------------------- BRIGHTHOUSE FUNDS TRUST I -- CLASS A -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, LLC Subadvisers: Delaware Investments Fund Advisers; Wells Capital Brighthouse Small Cap Value Portfolio Seeks long-term capital appreciation. Management Incorporated -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, Invesco Small Cap Growth Portfolio Seeks long-term growth of capital. LLC Subadviser: Invesco Advisers, Inc. -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, MFS(R) Research International LLC Subadviser: Massachusetts Portfolio Seeks capital appreciation. Financial Services Company -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, Morgan Stanley Mid Cap Growth LLC Subadviser: Morgan Stanley Portfolio Seeks capital appreciation. Investment Management Inc. -------------------------------------------------------------------------------------------------------------------- Seeks maximum total return, consistent with the preservation of Brighthouse Investment Advisers, capital and prudent investment LLC Subadviser: Pacific Investment PIMCO Total Return Portfolio management. Management Company LLC -------------------------------------------------------------------------------------------------------------------- Seeks long-term capital appreciation by investing in common stocks Brighthouse Investment Advisers, T. Rowe Price Large Cap Value believed to be undervalued. Income is LLC Subadviser: T. Rowe Price Portfolio a secondary objective. Associates, Inc. -------------------------------------------------------------------------------------------------------------------- BRIGHTHOUSE FUNDS TRUST II -- CLASS A -------------------------------------------------------------------------------------------------------------------- Seeks a competitive total return Brighthouse Investment Advisers, primarily from investing in LLC Subadviser: BlackRock Advisors, BlackRock Bond Income Portfolio fixed-income securities. LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, BlackRock Capital Appreciation LLC Subadviser: BlackRock Advisors, Portfolio Seeks long-term growth of capital. LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, LLC Subadviser: BlackRock Advisors, BlackRock Large Cap Value Portfolio Seeks long-term growth of capital. LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, Brighthouse/Artisan Mid Cap Value LLC Subadviser: Artisan Partners Portfolio Seeks long-term capital growth. Limited Partnership -------------------------------------------------------------------------------------------------------------------- Seeks to provide a growing stream of income over time and, secondarily, Brighthouse Investment Advisers, Brighthouse/Wellington Core Equity long-term capital appreciation and LLC Subadviser: Wellington Management Opportunities Portfolio current income. Company LLP -------------------------------------------------------------------------------------------------------------------- Seeks to track the performance of the Brighthouse Investment Advisers, Bloomberg Barclays U.S. Aggregate LLC Subadviser: MetLife Investment MetLife Aggregate Bond Index Portfolio Bond Index. Advisors, LLC -------------------------------------------------------------------------------------------------------------------- B-1
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[Enlarge/Download Table] FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- Seeks to track the performance of the Brighthouse Investment Advisers, Standard & Poor's MidCap 400(R) LLC Subadviser: MetLife Investment MetLife Mid Cap Stock Index Portfolio Composite Stock Price Index. Advisors, LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, Seeks to track the performance of the LLC Subadviser: MetLife Investment MetLife MSCI EAFE(R) Index Portfolio MSCI EAFE(R) Index. Advisors, LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, MetLife Russell 2000(R) Index Seeks to track the performance of the LLC Subadviser: MetLife Investment Portfolio Russell 2000(R) Index. Advisors, LLC -------------------------------------------------------------------------------------------------------------------- Seeks to track the performance of the Brighthouse Investment Advisers, Standard & Poor's 500(R) Composite LLC Subadviser: MetLife Investment MetLife Stock Index Portfolio Stock Price Index. Advisors, LLC -------------------------------------------------------------------------------------------------------------------- Seeks a favorable total return Brighthouse Investment Advisers, through investment in a diversified LLC Subadviser: Massachusetts MFS(R) Total Return Portfolio portfolio. Financial Services Company -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, LLC Subadviser: Massachusetts MFS(R) Value Portfolio Seeks capital appreciation. Financial Services Company -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, Seeks high total return, consisting LLC Subadviser: Neuberger Berman Neuberger Berman Genesis Portfolio principally of capital appreciation. Investment Advisers LLC -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, T. Rowe Price Large Cap Growth LLC Subadviser: T. Rowe Price Portfolio Seeks long-term growth of capital. Associates, Inc. -------------------------------------------------------------------------------------------------------------------- Brighthouse Investment Advisers, T. Rowe Price Small Cap Growth LLC Subadviser: T. Rowe Price Portfolio Seeks long-term capital growth. Associates, Inc. -------------------------------------------------------------------------------------------------------------------- Seeks to maximize total return Brighthouse Investment Advisers, Western Asset Management Strategic consistent with preservation of LLC Subadviser: Western Asset Bond Opportunities Portfolio capital. Management Company -------------------------------------------------------------------------------------------------------------------- DEUTSCHE VARIABLE SERIES I -- CLASS A -------------------------------------------------------------------------------------------------------------------- Deutsche Investment Management Deutsche CROCI(R) International VIP Seeks long-term growth of capital. Americas Inc. -------------------------------------------------------------------------------------------------------------------- FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- INITIAL CLASS -------------------------------------------------------------------------------------------------------------------- Seeks to obtain high total return with reduced risk over the long term Fidelity Management & Research by allocating its assets among Company Subadvisers: FMR Co., Inc.; stocks, bonds, and short-term Fidelity Investments Money Asset Manager Portfolio instruments. Management, Inc. -------------------------------------------------------------------------------------------------------------------- Fidelity Management & Research Contrafund(R) Portfolio Seeks long-term capital appreciation. Company Subadviser: FMR Co., Inc. -------------------------------------------------------------------------------------------------------------------- Seeks as high a level of current Fidelity Management & Research income as is consistent with Company Subadviser: Fidelity Government Money Market Portfolio preservation of capital and liquidity. Investments Money Management, Inc. -------------------------------------------------------------------------------------------------------------------- Fidelity Management & Research Growth Portfolio Seeks to achieve capital appreciation. Company Subadviser: FMR Co., Inc. -------------------------------------------------------------------------------------------------------------------- Fidelity Management & Research Overseas Portfolio Seeks long-term growth of capital. Company Subadviser: FMR Co., Inc. -------------------------------------------------------------------------------------------------------------------- B-2
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[Enlarge/Download Table] FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- Seeks long-term capital growth T. ROWE PRICE GROWTH STOCK FUND, INC. through investments in stock. T. Rowe Price Associates, Inc. -------------------------------------------------------------------------------------------------------------------- THE ALGER PORTFOLIOS -- CLASS I-2 -------------------------------------------------------------------------------------------------------------------- Alger Small Cap Growth Portfolio Seeks long-term capital appreciation. Fred Alger Management, Inc. -------------------------------------------------------------------------------------------------------------------- Certain Funds have been subject to a change. Please see "Appendix C - Additional Information Regarding the Funds." B-3
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APPENDIX C ADDITIONAL INFORMATION REGARDING THE FUNDS Certain Funds were subject to a name change. The chart below identifies the former name and new name of each of these Funds, and where applicable, the former name and the new name of the trust of which the Fund is a part. FUND NAME CHANGES The following former Funds were renamed: FORMER NAME NEW NAME ------------------------------------- ------------------------------------- MET INVESTORS SERIES TRUST BRIGHTHOUSE FUNDS TRUST I MetLife Small Cap Value Portfolio -- Brighthouse Small Cap Value Portfolio Class A -- Class A METROPOLITAN SERIES FUND BRIGHTHOUSE FUNDS TRUST II Barclays Aggregate Bond Index MetLife Aggregate Bond Index Portfolio -- Class A Portfolio -- Class A Met/Artisan Mid Cap Value Portfolio Brighthouse/Artisan Mid Cap Value -- Class A Portfolio -- Class A Met/Wellington Core Equity Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class A Opportunities Portfolio -- Class A MSCI EAFE(R) Index Portfolio -- MetLife MSCI EAFE(R) Index Portfolio Class A -- Class A Russell 2000(R) Index Portfolio -- MetLife Russell 2000(R) Index Class A Portfolio -- Class A C-1
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APPENDIX D PREMIUM TAX TABLE If You are a resident of one of the following jurisdictions, the percentage amount listed by that jurisdiction is the premium tax rate applicable to your Contract. [Download Table] QUALIFIED NON-QUALIFIED CONTRACTS CONTRACTS - --------- ------------- California/(1)/... 0.50% 2.35% Florida/(2)/...... 1.00% 1.00% Maine/(3)/........ 0.00% 2.00% Nevada/(4)/....... 0.00% 3.50% Puerto Rico/(5)/.. 1.00% 1.00% South Dakota/(6)/. 0.00% 1.25% West Virginia..... 1.00% 1.00% Wyoming/(4)/...... 0.00% 1.00% -------- /(1)/ California applies the qualified tax rate to plans that qualify under the following Code sections: 401(a), 403(b), 404, 408(b) and 501(a). /(2)/ Annuity premiums are exempt from taxation provided the tax savings are passed back to the contract holders. Otherwise, they are taxable at 1%. /(3)/ Maine applies the qualified tax rate to plans that qualify under the following Code sections: 401, 403, 403(b), 404, 408, 457 and 501. /(4)/ Nevada and Wyoming apply the qualified tax rate to plans that qualify under the following Code sections: 401, 403, 404, 408, 457 and 501. /(5)/ We will not deduct premium taxes paid by Us to Puerto Rico from purchase payments, account balances, withdrawals, death benefits or income payments. /(6)/ Special rate applies for large case annuity policies. Rate is 0.08% for that portion of the annuity considerations received on a contract exceeding $500,000 annually. Special rate on large case policies is not subject to retaliation. South Dakota applies the qualified tax rate to plans that qualify under the following Code sections: 401, 403(b), 404, 408, 457 and 501(a). D-1
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STATEMENT OF ADDITIONAL INFORMATION BRIGHTHOUSE SEPARATE ACCOUNT A GROUP FLEXIBLE PAYMENT FIXED AND VARIABLE ANNUITY CONTRACTS BRIGHTHOUSE INSURANCE COMPANY MAY 1, 2017 THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS. A COPY OF THE PROSPECTUS, DATED MAY 1, 2017, MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO BRIGHTHOUSE INSURANCE COMPANY, 11225 NORTH COMMUNITY HOUSE ROAD, CHARLOTTE, NC 28277 OR BY TELEPHONING (800) 283-4536. NOTE: CERTAIN TERMS USED IN THIS STATEMENT OF ADDITIONAL INFORMATION HAVE SPECIAL MEANINGS. IF A TERM IS NOT DEFINED HEREIN, IT HAS THE MEANING GIVEN TO IT IN THE PROSPECTUS. SAI-USAFLEXBONUS 05/17
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[Download Table] TABLE OF CONTENTS PAGE THE INSURANCE COMPANY........................................... 3 SURRENDER CHARGES............................................... 4 NET INVESTMENT FACTOR........................................... 4 ANNUITY PAYMENTS................................................ 4 Basis of Variable Benefits.................................... 4 Determination of Amount of Monthly Variable Annuity Payments for First Year....................................... 5 Determination of Amount of Monthly Variable Annuity Payments for Second and Subsequent Years.............................................. 5 Annuity Unit Value............................................ 5 UNDERWRITERS, DISTRIBUTION OF THE CONTRACTS..................... 6 CALCULATION OF PERFORMANCE...................................... 6 VOTING RIGHTS................................................... 6 SAFEKEEPING OF SECURITIES....................................... 7 SERVICING AGENT................................................. 7 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................................................. 7 ADDITIONAL FEDERAL TAX CONSIDERATIONS........................... 8 Qualified Annuity Contracts................................... 8 Types of Qualified Plans...................................... 8 ERISA......................................................... 8 Federal Estate Taxes.......................................... 9 Generation-Skipping Transfer Tax.............................. 9 Annuity Purchase Payments by Nonresident Aliens and Foreign Corporations.................................................. 9 FINANCIAL STATEMENTS............................................ 9 2
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COMPANY Brighthouse Life Insurance Company (BLIC or the Company), prior to March 6, 2017 known as MetLife Insurance Company USA, is a stock life insurance company originally chartered in Connecticut in 1863 and currently subject to the laws of the State of Delaware. BLIC is licensed to conduct business in all states of the United States, except New York, and in the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. BLIC currently is a direct, wholly-owned subsidiary of MetLife, Inc., (MetLife) a publicly-traded company (see "Planned Separation from MetLife, Inc." below). MetLife, through its subsidiaries and affiliates, is a leading provider of insurance and financial services to individuals and institutional customers. BLIC's principal executive offices are located at 11225 North Community House Road, Charlotte, NC 28277. BRIGHTHOUSE LIFE INSURANCE COMPANY HISTORY MetLife Insurance Company USA: From the close of business on November 14, 2014 to March 6, 2017, BLIC was called MetLife Insurance Company USA (MetLife USA). MetLife USA was established following the close of business on November 14, 2014, when MetLife Investors USA Insurance Company, a wholly-owned subsidiary of MetLife Insurance Company of Connecticut, MetLife Investors Insurance Company and Exeter Reassurance Company, Ltd. were merged into MetLife Insurance Company of Connecticut, and MetLife Insurance Company of Connecticut was then renamed MetLife Insurance Company USA. Simultaneously, MetLife Insurance Company USA changed its domicile from Connecticut to the state of Delaware. As a result of this merger, MetLife USA assumed legal ownership of all of the assets of these predecessor companies, including assets held in the separate accounts, and became responsible for administering the contracts and paying any benefits due under all contracts issued by each of its corporate predecessors. These predecessor companies that issued contracts on and prior to November 14, 2014 were the following: .. MetLife Insurance Company of Connecticut: MetLife Insurance Company of Connecticut (MICC), originally chartered in Connecticut in 1863, was known as Travelers Insurance Company prior to May 1, 2006. MICC changed its name to MetLife Insurance Company USA and its state of domicile to Delaware after November 14, 2014 as described under "MetLife Insurance Company USA" above. . MetLife Life and Annuity Company of Connecticut: MetLife Life and Annuity Company of Connecticut (MLAC), originally chartered in Connecticut in 1973, was known as Travelers Life and Annuity Company prior to May 1, 2006. On or about December 7, 2007, MLAC merged with and into MICC. .. MetLife Investors USA Insurance Company: MetLife Investors USA Insurance Company (MLI USA), originally chartered in Delaware in 1960, was known as Security First Life Insurance Company prior to January 8, 2001. MLI USA was merged into BLIC after the close of business on November 14, 2014, as described under "MetLife Insurance Company USA" above. .. MetLife Investors Insurance Company: MetLife Investors Insurance Company (MLI), originally chartered in Missouri in 1981, was known as Cova Financial Services Life Insurance Company prior to February 12, 2001. MLI was merged into BLIC after the close of business on November 14, 2014, as described under "MetLife Insurance Company USA" above. . MetLife Investors Insurance Company of California: MetLife Investors Insurance Company of California (MLI-CA), originally chartered in California in 1972, was known as Cova Financial Life Insurance Company prior to February 12, 2001. On November 9, 2006 MLI-CA merged with and into MLI. PLANNED SEPARATION FROM METLIFE, INC. In January 2016, MetLife announced its plan to pursue the separation of a substantial portion of its U.S. retail business. In preparation for the planned separation, in August 2016 MetLife formed a new, wholly-owned Delaware holding company, Brighthouse Financial, Inc. (Brighthouse Financial), which filed a registration statement on Form 10 (the Form 10) with the U.S. Securities and Exchange Commission (the SEC) in October 2016, as amended in December 2016, reflecting MetLife's current initiative to conduct the separation in the form of a spin-off. To effect the separation, first, MetLife expects to undertake the restructuring described in more detail in the Form 10. The restructuring would result in future Brighthouse Financial subsidiaries, including BLIC, being wholly-owned subsidiaries of Brighthouse Financial. Following the 3
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restructuring, MetLife, Inc. would distribute at least 80.1% of Brighthouse Financial's common stock to MetLife's shareholders (the Distribution), and Brighthouse Financial would become a separate, publicly traded company. The separation remains subject to certain conditions including, among others, obtaining final approval from the MetLife board of directors, receipt of a favorable IRS ruling and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, receipt of the approval of state insurance and other regulatory authorities and an SEC declaration of the effectiveness of the Form 10. Following the Distribution, if it occurs, BLIC will be a wholly-owned subsidiary of, and ultimately controlled by, Brighthouse Financial. MetLife currently plans to dispose of its remaining shares of Brighthouse Financial common stock as soon as practicable following the Distribution, but in no event later than five years after the Distribution. For more information about Brighthouse Financial and the Distribution, please see the most recent amendment to Brighthouse Financial's Form 10 (SEC File No. 001-37905), available via the SEC's EDGAR system on its website at https://www.sec.gov/edgar/searchedgar/companysearch.html. No assurances can be given regarding the final form the Distribution (or any alternative separation transaction) may take or the specific terms thereof, or that the Distribution (or any other form of separation) will in fact occur. However, any separation transaction will not affect the terms or conditions of your variable contract. BLIC will remain fully responsible for its contractual obligations to variable contract owners, and you should carefully consider the potential impact of any separation transaction that may occur on BLIC's financial strength and claims-paying ability. SURRENDER CHARGES Subject to the individual's retirement plan requirements, all or a portion of the Participant's account may be surrendered at any time prior to the annuity date. Unless a certificate has been in effect for more than nine full calendar years after the Certificate Date, a surrender charge (contingent deferred sales charge) will be deducted in the event the Participant requests a full or partial surrender from the Separate Account. The charge is based on a percentage of the amount surrendered. For 403(b) Plans only, no surrender charge will be applied for that part of the first surrender from the Separate Account in a calendar year that does not exceed 10% of the value of the Participant's Account. The surrender charge amounts to 7% for surrenders attributable to purchase payments received within 60 months prior to the date of the surrender. In no event will the sum of these surrender charges and the distribution expense charge exceed 9% of the purchase payments. NET INVESTMENT FACTOR The Separate Account net investment factor is an index of the percentage change (adjusted for distributions by the Fund and the deduction of the actuarial risk fee) in the net asset value of each Fund in which the Series in invested, since the preceding Business Day. The Separate Account net investment factor for each Series of Accumulation Units is determined for any Business Day by dividing (i) the net asset value of a share of the Fund which is represented by such Series at the close of business on such day, plus the per share amount of any distributions made by such Fund on such day by (ii) the net asset value of a share of such Fund determined as of the close of business on the preceding Business Day and then subtracting from the result the daily factors for mortality and expense risks (.003699%) for each calendar day between the preceding Business Day and the end of the current Business Day. ANNUITY PAYMENTS BASIS OF VARIABLE BENEFITS The Variable Annuity benefits rates used in determining Annuity Payments under the Contracts are based on actuarial assumptions, reflected in tables in the Contracts, as to the expected mortality and adjusted age and the form of Annuity selected. The mortality basis for these tables is Annuity 2000 Mortality Table, projected to the year 2020 on Projection Scale G, with interest at 4.25% for all functions involving life contingencies and the portion of any period certain beyond 10 years, and 3.25% for the first 10 years of any certain period. Adjusted age in those tables means actual age to the nearest birthday at the time the first payment is due, adjusted according to the following table: [Download Table] YEAR OF BIRTH AGE ADJUSTMENT BEFORE 1945 ACTUAL AGE 1946 - 1965 Age Minus 1 Year 1966 - 1985 Age Minus 2 Years 1986 - 2005 Age Minus 3 Years 4
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DETERMINATION OF AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS FOR FIRST YEAR The Separate Account value used to establish the monthly variable annuity payment for the first year consists of the value of accumulation units of each Series of the Separate Account credited to a Participant on the last valuation date of the second calendar week before the annuity date. The Contract contains tables showing monthly payment factors and annuity premium rates per $1,000 of Separate Account value to be applied under Options 1 through 4. At the beginning of the first payment year, an amount is transferred from the Separate Account to BLIC's General Account and level monthly annuity payments for the year are made out of the General Account. The amount to be transferred is determined by multiplying the annuity premium rate per $1,000 set forth in the Contract tables by the number of thousands of dollars of Separate Account value credited to a Participant. The level monthly payment for the first payment year is then determined by multiplying the amount transferred (the "Annuity Premium") by the monthly payment factor in the same table. In the event the Contract involved has Separate Account accumulation units in more than one Series, the total monthly annuity payment for the first year is the sum of the monthly annuity payments, determined in the same manner as above, for each Series. At the time the first year's monthly payments are determined, a number of annuity units for each Separate Account Series is also established for the annuitant by dividing the first year monthly payment from that series by the Separate Account annuity unit values for the series on the last valuation date of the second calendar week before the first annuity payment is due. The number of annuity units remains fixed during the annuity period unless annuity units are converted to or from another series. DETERMINATION OF AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS FOR SECOND AND SUBSEQUENT YEARS As of each anniversary of the annuity date, BLIC will determine the amount of the monthly variable annuity payments for the year then beginning. Separate determinations will be made for each Separate Account Series in which the annuitant has annuity units, with the total annuity payment being the sum of the payments derived from the Series. The amount of monthly payments for any Separate Account Series for any year after the first will be determined by multiplying the number of annuity units for that Series by the annuity unit value for that Series for the valuation period in which the first payment for the year is due. It will be BLIC's practice to mail variable annuity payments no later than seven days after the last day of the valuation period upon which they are based or the monthly anniversary thereof. The objective of a variable annuity contract is to provide level payments during periods when the economy is relatively stable and to reflect as increased payments only the excess of investment results flowing from inflation or an increase in productivity. The achievement of this objective will depend, in part, upon the validity of the assumption that the net investment return of the Separate Account equals the assumed investment return during periods of stable prices. Subsequent years' payments will be smaller than, equal to or greater than the first year's payments depending on whether the actual net investment return for the Separate Account is smaller than equal to or greater than the Assumed Investment Return. ANNUITY UNIT VALUE The initial value of an Annuity Unit is $5 for each Series for the first Valuation Period as of which the first Variable Annuity Payment from such Series is made. The value of an Annuity Unit for each Series on any later date is determined by multiplying the value of an Annuity Unit at the end of the preceding Valuation Period by the "Annuity change factor" for the second preceding Valuation Period. The Annuity change factor is an adjusted measurement of the investment performance of the Fund since the end of the preceding Valuation Period. The Annuity change factor is determined by dividing the value of an Accumulation Unit at the end of the Valuation Period by the value of an Accumulation Unit at the end of the preceding Valuation Period and multiplying the result by a neutralization factor. Variable Annuity Payments for each year after the first reflect variations in the investment performance of the Separate Account above and below an Assumed Investment Return. This assumed investment rate is included for purposes of actuarial computations and does not relate to the actual investment performance of the underlying Fund. Therefore, the Assumed Investment Return must be "neutralized" in computing the Annuity change factor. For weekly Valuation Periods and a 4.25% Assumed Investment Return, the neutralization factor is 0.9991999. 5
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UNDERWRITERS, DISTRIBUTION OF THE CONTRACTS Information about the distribution of the Contracts is contained in the prospectus. (See "Principal Underwriter.") Additional information is provided below. The Contracts are not currently offered for sale. However, new Participants may be added under existing Contracts and, where applicable, we will continue to issue Certificates to new Participants. Brighthouse Securities, LLC (Distributor) serves as principal underwriter for the Contracts. Distributor and the Company are affiliates because they are both under common control of MetLife, Inc. Distributor's home office is located at 11225 North Community House Road, Charlotte, NC 28277. Distributor is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority (FINRA). Distributor has entered into selling agreements with other broker-dealers ("selling firms") and compensates them for their services. MetLife Investors Distribution Company (MLIDC) served as principal underwriter and distributor prior to March 6, 2017. The following table shows the amount of commissions paid to and the amount of commissions retained by MLIDC over the past three years: [Download Table] AGGREGATE AMOUNT OF COMMISSIONS RETAINED BY AGREGATE AMOUNT OF DISTRIBUTOR COMMISSIONS PAID TO AFTER PAYMENTS TO SELLING FISCAL YEAR DISTRIBUTOR FIRMS ----------- ------------------------- ------------------------- 2016...................... $568,161,672 $0 2015...................... $568,720,128 $0 2014...................... $463,545,565 $0 Distributor passes through commissions to selling firms for their sales. In addition we pay compensation to Distributor to offset its expenses, including compensation costs, marketing and distribution expenses, advertising, wholesaling, printing, and other expenses of distributing the contracts. CALCULATION OF PERFORMANCE Average annual total return was computed by finding the average annual compounded rates of return over the 1, 5 and 10 year periods that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1+T)/(n)/ = ERV Where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5, or 10 year periods (or fractional portion thereof). The computation of average annual total returns does take into consideration recurring charges and any non-recurring charges applicable to a Contract which is surrendered in full at the end of the stated holding period. In addition, certain Fund performance may be shown for the period commencing from the inception date of the Fund. These figures should not be interpreted to reflect actual historical performance of the Separate Account. We may, from time to time, include in our advertising and sales materials, performance information for Funds or Series related to the Funds and/or their investment advisers or subadvisers. Such related performance information also may reflect the deduction of certain Contract charges. We may also include in our advertising and sales materials, tax deferred compounding charts and other hypothetical illustrations, which may include comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets. You should know that for any performance we illustrate, future performance will vary and results shown are not necessarily representative of future results. VOTING RIGHTS As the owner of the Separate Account, BLIC is the legal owner of the shares of the Funds. Based upon BLIC's current view of applicable law, we will vote shares of the Funds (which are deemed attributable to the Contracts) based on instructions received from those having voting interests under the Contract concerning Fund shares and who are entitled to vote on Fund proposals at all regular and special shareholders meetings. The persons who have voting 6
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interests under a particular plan may include the plan administrator or the Participant if voting is passed through to such individuals. Your plan administrator can provide you with information in this regard. BLIC will vote all shares of the underlying Funds as directed. BLIC will send to those with voting interests, at a last known address, all periodic reports, proxy materials and written requests for instructions on how to vote those shares. When BLIC receives these instructions, it will vote of the shares in proportion to the instructions. If BLIC does not receive voting instructions, from a recipient, it will vote their interest in the same proportion as represented by the votes it has received. The effect of this proportional voting is that a small number of those with voting interests may control the outcome of the vote. If BLIC determines that it is permitted to vote the shares in its own right due to changes in the law or in the interpretation of the law it may do so. BLIC is under no duty to inquire into voting instructions or into the authority of the person issuing such instructions. All instructions will be valid unless BLIC has actual knowledge that they are not. When Annuity payments begin, the Annuitant will have all voting rights in regard to Fund shares. There are certain circumstances under which BLIC may disregard voting instructions. However, in this event, a summary of our action and the reasons for such action will appear in the next semiannual report. The number of votes that each person having the right to vote receives is determined on a record date that is set no more than 90 days before the meeting. Voting instructions will be requested at least 30 days before the meeting. Only Owners or Annuitants on the record date may vote. The number of shares to which a Participant is entitled to vote is calculated by dividing the portion of his or her Participant's Account allocated to that Fund on the record date by the net asset value of a Fund share on the same date. SAFEKEEPING OF SECURITIES Custody of all assets of the Separate Account are held by BLIC. The assets of each Separate Account Series will be kept physically segregated by BLIC and held separate from the assets of any other firm, person, or corporation. Additional protection for the assets of the Separate Account is afforded by fidelity bonds covering all of BLIC's officers and employees. SERVICING AGENT Administrative services agreements have been entered into between BLIC and each of MetLife Group, Inc. and Metropolitan Life Insurance Company under which the latter have agreed to perform certain of the personnel and administrative services relating to the Contracts and for the Separate Account. BLIC has paid fees to MetLife Group and Metropolitan Life Insurance Company for these services. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements and financial highlights comprising each of the Sub-Accounts of Brighthouse Separate Account A (formerly MetLife Investors USA Separate Account A) included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements and related financial statement schedules of Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) and subsidiaries included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial statement schedules are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is 30 Rockefeller Plaza, New York, New York 10112-0015. 7
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ADDITIONAL FEDERAL TAX CONSIDERATIONS QUALIFIED ANNUITY CONTRACTS Annuity contracts purchased through tax qualified plans are subject to limitations imposed by the Code and regulations as a condition of tax qualification. There are various types of tax qualified plans which have certain beneficial tax consequences for Contract owners and plan participants. TYPES OF QUALIFIED PLANS The following list includes individual account-type plans which may hold an annuity Contract as described in the Prospectus. Except for Traditional IRAs, they are established by an employer for participation of its employees. IRA Established by an individual, or employer as part of an employer plan. SIMPLE Established by a for-profit employer with fewer than 100 employees, based on IRA accounts for each participant. SEP Established by a for-profit employer, based on IRA accounts for each participant. Generally, Employer only contributions. If the SEP IRA permits non-SEP contributions, Employee can make regular IRA contributions (including IRA catch up contributions) to the SEP IRA, up to the maximum annual limit. 401(K), 401(A) Established by for-profit employers, Section 501(c)(3) tax exempt and non-tax exempt entities, Indian Tribes. 403(B) TAX SHELTERED ANNUITY ("TSA") Established by Section 501(c)(3) tax exempt entities, public schools (K-12), public colleges, universities, churches, synagogues and mosques. 457(B) GOVERNMENTAL SPONSOR Established by state and local governments, public schools (K-12), public colleges and universities. 457(B) NON-GOVERNMENTAL SPONSOR Established by a tax-exempt entity. Under a non-governmental plan, which must be a tax-exempt entity under Section 501(c) of the Code, all such investments of the plan are owned by and are subject to the claims of the general creditors of the sponsoring employer. In general, all amounts received under a non-governmental Section 457(b) plan are taxable and are subject to Federal income tax withholding as wages. Additional information regarding 457(b) plans A 457(b) plan may provide a one-time election to make special one-time "catch-up" contributions in one or more of the participant's last three taxable years ending before the participant's normal retirement age under the plan. Participants in governmental 457(b) plans may make two types of catch up contributions, the age 50 or older catch-up and the special one-time catch-up contribution. However, both catch up contribution types cannot be made in the same taxable year. In general, contribution limits with respect to elective deferral and to age 50 plus catch-up contributions are not aggregated with contributions under the other types of qualified plans for the purposes of determining the limitations applicable to participants. 403(A) If your benefit under the 403(b) plan is worth more than $5,000, the Code requires that your annuity protect your spouse if You die before You receive any payments under the annuity or if You die while payments are being made. You may waive these requirements with the written consent of your spouse. In general, designating a beneficiary other than your spouse is considered a waiver and requires your spouse's written consent. Waiving these requirements may cause your monthly benefit to increase during your lifetime. Special rules apply to the withdrawal of excess contributions. ERISA If your plan is subject to ERISA and You are married, the income payments, withdrawal provisions, and methods of payment of the death benefit under your Contract may be subject to your spouse's rights as described below. Generally, the spouse must give qualified consent whenever You elect to: (a) Choose income payments other than on a qualified joint and survivor annuity basis ("QJSA") (one under which we make payments to You during your lifetime and then make payments reduced by no more than 50% to your spouse for his or her remaining life, if any): or choose to waive the qualified pre-retirement survivor annuity benefit ("QPSA") (the benefit payable to the surviving spouse of a participant who dies with a vested 8
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interest in an accrued retirement benefit under the plan before payment of the benefit has begun); (b) Make certain withdrawals under plans for which a qualified consent is required; (c) Name someone other than the spouse as your beneficiary; or (d) Use your accrued benefit as security for a loan exceeding $5,000. Generally, there is no limit to the number of your elections as long as a qualified consent is given each time. The consent to waive the QJSA must meet certain requirements, including that it be in writing, that it acknowledges the identity of the designated beneficiary and the form of benefit selected, dated, signed by your spouse, witnessed by a notary public or plan representative, and that it be in a form satisfactory to us. The waiver of the QJSA generally must be executed during the 180 day period (90 days for certain loans) ending on the date on which income payments are to commence, or the withdrawal or the loan is to be made, as the case may be. If You die before benefits commence, your surviving spouse will be your beneficiary unless he or she has given a qualified consent otherwise. The qualified consent to waive the QPSA benefit and the beneficiary designation must be made in writing that acknowledges the designated beneficiary, dated, signed by your spouse, witnessed by a notary public or plan representative and in a form satisfactory to us. Generally, there is no limit to the number of beneficiary designations as long as a qualified consent accompanies each designation. The waiver of and the qualified consent for the QPSA benefit generally may not be given until the plan year in which You attain age 35. The waiver period for the QPSA ends on the date of your death. If the present value of your benefit is worth $5,000 or less, your plan generally may provide for distribution of your entire interest in a lump sum without spousal consent. Comparison of Plan Limits for Individual Contributions: [Download Table] -------------------------------------------------------- PLAN TYPE ELECTIVE CONTRIBUTION CATCH-UP CONTRIBUTION -------------------------------------------------------- IRA $5,500 $1,000 -------------------------------------------------------- SIMPLE $12,500 $3,000 -------------------------------------------------------- 401(k) $18,000 $6,000 -------------------------------------------------------- 401(a) (Employer contributions only) -------------------------------------------------------- 403(b)(TSA) $18,000 $6,000 -------------------------------------------------------- 457(b) $18,000 $6,000 -------------------------------------------------------- Dollar limits are for 2017 and subject to cost-of-living adjustments in future years. Employer-sponsored individual account plans (other than 457(b) plans) may provide for additional employer contributions such that total annual plan contributions do not to exceed the greater of $54,000 or 25% of an employee's compensation for 2017. FEDERAL ESTATE TAXES While no attempt is being made to discuss the Federal estate tax implications of the Contract, You should bear in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent's gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning adviser for more information. GENERATION-SKIPPING TRANSFER TAX Under certain circumstances, the Code may impose a "generation-skipping transfer tax" when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the contract owner. Regulations issued under the Code may require us to deduct the tax from your contract, or from any applicable payment, and pay it directly to the IRS. ANNUITY PURCHASE PAYMENTS BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS The discussion above provides general information regarding U.S. Federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. Federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S., state and foreign taxation with respect to an annuity contract purchase. FINANCIAL STATEMENTS The financial statements and financial highlights comprising each of the Sub-Accounts of the Separate Account and the consolidated financial statements of the Company are included herein. The financial statements of the Company included herein should be considered only as bearing upon the ability of the Company to meet its obligations under the Contract. 9
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Contract Owners of MetLife Investors USA Separate Account A and Board of Directors of MetLife Insurance Company USA We have audited the accompanying statements of assets and liabilities of MetLife Investors USA Separate Account A (the "Separate Account") of MetLife Insurance Company USA (the "Company") comprising each of the individual Sub-Accounts listed in Note 2.A as of December 31, 2016, the related statements of operations for the year then ended, the statements of changes in net assets for the respective stated periods in the two years then ended, and the financial highlights in Note 8 for the respective stated periods in the five years then ended. These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of investments owned as of December 31, 2016, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Sub-Accounts constituting the Separate Account of the Company as of December 31, 2016, the results of their operations for the year then ended, the changes in their net assets for the respective stated periods in the two years then ended, and the financial highlights for the respective stated periods in the five years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 24, 2017
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2016 [Enlarge/Download Table] AMERICAN FUNDS ALGER AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL SMALL CAP GROWTH BOND GLOBAL GROWTH CAPITALIZATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............... $ 46,089,499 $ 132,721,144 $ 277,038,719 $ 106,488,755 Due from MetLife Insurance Company USA........................... -- -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets........................ 46,089,499 132,721,144 277,038,719 106,488,755 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Accrued fees............................ -- 73 123 176 Due to MetLife Insurance Company USA........................... -- 1 2 1 -------------------- ------------------- ------------------- ------------------- Total Liabilities................... -- 74 125 177 -------------------- ------------------- ------------------- ------------------- NET ASSETS................................. $ 46,089,499 $ 132,721,070 $ 277,038,594 $ 106,488,578 ==================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units...... $ 46,089,499 $ 132,712,550 $ 276,980,586 $ 106,484,505 Net assets from contracts in payout..... -- 8,520 58,008 4,073 -------------------- ------------------- ------------------- ------------------- Total Net Assets.................... $ 46,089,499 $ 132,721,070 $ 277,038,594 $ 106,488,578 ==================== =================== =================== =================== The accompanying notes are an integral part of these financial statements. 1
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] AMERICAN FUNDS AMERICAN FUNDS BLACKROCK GLOBAL DEUTSCHE I CROCI GROWTH GROWTH-INCOME ALLOCATION V.I. INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 724,894,410 $ 363,982,523 $ 2,582,140 $ 11,250,311 Due from MetLife Insurance Company USA........................ -- 1 -- -- ------------------- -------------------- ------------------- -------------------- Total Assets.................... 724,894,410 363,982,524 2,582,140 11,250,311 ------------------- -------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 97 135 101 -- Due to MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- ------------------- -------------------- Total Liabilities............... 97 135 101 -- ------------------- -------------------- ------------------- -------------------- NET ASSETS.............................. $ 724,894,313 $ 363,982,389 $ 2,582,039 $ 11,250,311 =================== ==================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 724,847,909 $ 363,931,294 $ 2,582,039 $ 11,250,311 Net assets from contracts in payout.. 46,404 51,095 -- -- ------------------- -------------------- ------------------- -------------------- Total Net Assets................ $ 724,894,313 $ 363,982,389 $ 2,582,039 $ 11,250,311 =================== ==================== =================== ==================== FEDERATED HIGH FEDERATED FIDELITY VIP FIDELITY VIP INCOME BOND KAUFMAN ASSET MANAGER CONTRAFUND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 27,578 $ 47,595 $ 70,694,337 $ 573,685,540 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- ------------------- -------------------- Total Assets.................... 27,578 47,595 70,694,337 573,685,540 ------------------- -------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 3 6 5 101 Due to MetLife Insurance Company USA........................ 1 -- -- -- ------------------- -------------------- ------------------- -------------------- Total Liabilities............... 4 6 5 101 ------------------- -------------------- ------------------- -------------------- NET ASSETS.............................. $ 27,574 $ 47,589 $ 70,694,332 $ 573,685,439 =================== ==================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 27,574 $ 47,589 $ 70,694,332 $ 573,685,103 Net assets from contracts in payout.. -- -- -- 336 ------------------- -------------------- ------------------- -------------------- Total Net Assets................ $ 27,574 $ 47,589 $ 70,694,332 $ 573,685,439 =================== ==================== =================== ==================== FIDELITY VIP FIDELITY VIP EQUITY-INCOME FUNDSMANAGER 50% SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 4,741,279 $ 4,491,693,364 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets.................... 4,741,279 4,491,693,364 ------------------- ------------------- LIABILITIES: Accrued fees......................... -- -- Due to MetLife Insurance Company USA........................ -- 7 ------------------- ------------------- Total Liabilities............... -- 7 ------------------- ------------------- NET ASSETS.............................. $ 4,741,279 $ 4,491,693,357 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 4,741,279 $ 4,491,693,357 Net assets from contracts in payout.. -- -- ------------------- ------------------- Total Net Assets................ $ 4,741,279 $ 4,491,693,357 =================== =================== The accompanying notes are an integral part of these financial statements. 2
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The accompanying notes are an integral part of these financial statements. 3
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] FIDELITY VIP FIDELITY VIP GOVERNMENT FIDELITY VIP FIDELITY VIP FUNDSMANAGER 60% MONEY MARKET GROWTH INDEX 500 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 3,173,600,538 $ 18,955,238 $ 144,530,570 $ 61,915,734 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- -------------------- ------------------- Total Assets.................... 3,173,600,538 18,955,238 144,530,570 61,915,734 ------------------- -------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... -- 14 7 7 Due to MetLife Insurance Company USA........................ 7 3 -- 1 ------------------- -------------------- -------------------- ------------------- Total Liabilities............... 7 17 7 8 ------------------- -------------------- -------------------- ------------------- NET ASSETS.............................. $ 3,173,600,531 $ 18,955,221 $ 144,530,563 $ 61,915,726 =================== ==================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 3,173,600,531 $ 18,955,221 $ 144,530,563 $ 61,915,726 Net assets from contracts in payout.. -- -- -- -- ------------------- -------------------- -------------------- ------------------- Total Net Assets................ $ 3,173,600,531 $ 18,955,221 $ 144,530,563 $ 61,915,726 =================== ==================== ==================== =================== FIDELITY VIP FIDELITY VIP FTVIPT FRANKLIN FTVIPT FRANKLIN MID CAP OVERSEAS INCOME VIP MUTUAL SHARES VIP SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 409,695,258 $ 3,832,068 $ 260,175,225 $ 134,905,148 Due from MetLife Insurance Company USA........................ 2 -- 1 1 -------------------- ------------------- -------------------- ------------------- Total Assets.................... 409,695,260 3,832,068 260,175,226 134,905,149 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 68 -- 90 57 Due to MetLife Insurance Company USA........................ -- -- -- -- -------------------- ------------------- -------------------- ------------------- Total Liabilities............... 68 -- 90 57 -------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 409,695,192 $ 3,832,068 $ 260,175,136 $ 134,905,092 ==================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 409,685,344 $ 3,832,068 $ 260,143,065 $ 134,896,309 Net assets from contracts in payout.. 9,848 -- 32,071 8,783 -------------------- ------------------- -------------------- ------------------- Total Net Assets................ $ 409,695,192 $ 3,832,068 $ 260,175,136 $ 134,905,092 ==================== =================== ==================== =================== FTVIPT FRANKLIN FTVIPT TEMPLETON SMALL CAP VALUE VIP FOREIGN VIP SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 128,271,026 $ 68,504,833 Due from MetLife Insurance Company USA........................ -- -- -------------------- -------------------- Total Assets.................... 128,271,026 68,504,833 -------------------- -------------------- LIABILITIES: Accrued fees......................... 38 71 Due to MetLife Insurance Company USA........................ 1 -- -------------------- -------------------- Total Liabilities............... 39 71 -------------------- -------------------- NET ASSETS.............................. $ 128,270,987 $ 68,504,762 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 128,270,713 $ 68,486,288 Net assets from contracts in payout.. 274 18,474 -------------------- -------------------- Total Net Assets................ $ 128,270,987 $ 68,504,762 ==================== ==================== The accompanying notes are an integral part of these financial statements. 4
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The accompanying notes are an integral part of these financial statements. 5
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] FTVIPT TEMPLETON INVESCO V.I. INVESCO V.I. INVESCO V.I. GLOBAL BOND VIP AMERICAN FRANCHISE CORE EQUITY EQUITY AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 213,840,371 $ 12,502 $ 171,213 $ 654,269,953 Due from MetLife Insurance Company USA........................ -- -- 1 -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 213,840,371 12,502 171,214 654,269,953 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Accrued fees......................... 40 7 7 35 Due to MetLife Insurance Company USA........................ -- -- -- 1 -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 40 7 7 36 -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 213,840,331 $ 12,495 $ 171,207 $ 654,269,917 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 213,826,782 $ 12,495 $ 171,207 $ 654,240,577 Net assets from contracts in payout.. 13,549 -- -- 29,340 -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 213,840,331 $ 12,495 $ 171,207 $ 654,269,917 ==================== ==================== ==================== ==================== LMPVET INVESCO V.I. INVESCO V.I. IVY VIP CLEARBRIDGE VARIABLE GROWTH AND INCOME INTERNATIONAL GROWTH ASSET STRATEGY AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 1,017 $ 243,849,679 $ 233,211 $ 293,536,804 Due from MetLife Insurance Company USA........................ 1 -- -- 4 -------------------- --------------------- -------------------- -------------------- Total Assets.................... 1,018 243,849,679 233,211 293,536,808 -------------------- --------------------- -------------------- -------------------- LIABILITIES: Accrued fees......................... 1 48 30 187 Due to MetLife Insurance Company USA........................ -- 1 -- -- -------------------- --------------------- -------------------- -------------------- Total Liabilities............... 1 49 30 187 -------------------- --------------------- -------------------- -------------------- NET ASSETS.............................. $ 1,017 $ 243,849,630 $ 233,181 $ 293,536,621 ==================== ===================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 1,017 $ 243,842,509 $ 233,181 $ 293,522,396 Net assets from contracts in payout.. -- 7,121 -- 14,225 -------------------- --------------------- -------------------- -------------------- Total Net Assets................ $ 1,017 $ 243,849,630 $ 233,181 $ 293,536,621 ==================== ===================== ==================== ==================== LMPVET LMPVET CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE APPRECIATION DIVIDEND STRATEGY SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 405,981,620 $ 200,725,444 Due from MetLife Insurance Company USA........................ -- -- -------------------- -------------------- Total Assets.................... 405,981,620 200,725,444 -------------------- -------------------- LIABILITIES: Accrued fees......................... 63 95 Due to MetLife Insurance Company USA........................ 3 1 -------------------- -------------------- Total Liabilities............... 66 96 -------------------- -------------------- NET ASSETS.............................. $ 405,981,554 $ 200,725,348 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 405,975,125 $ 200,710,905 Net assets from contracts in payout.. 6,429 14,443 -------------------- -------------------- Total Net Assets................ $ 405,981,554 $ 200,725,348 ==================== ==================== The accompanying notes are an integral part of these financial statements. 6
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The accompanying notes are an integral part of these financial statements. 7
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] LMPVET LMPVET LMPVET LMPVET ENTRUST CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE PERMAL ALTERNATIVE LARGE CAP GROWTH LARGE CAP VALUE SMALL CAP GROWTH SELECT VIT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- ------------------- ASSETS: Investments at fair value.............. $ 3,173,437 $ 8,591,643 $ 102,811,217 $ 12,975,801 Due from MetLife Insurance Company USA.......................... -- -- 2 -- -------------------- -------------------- -------------------- ------------------- Total Assets....................... 3,173,437 8,591,643 102,811,219 12,975,801 -------------------- -------------------- -------------------- ------------------- LIABILITIES: Accrued fees........................... 66 72 93 30 Due to MetLife Insurance Company USA.......................... -- -- -- -- -------------------- -------------------- -------------------- ------------------- Total Liabilities.................. 66 72 93 30 -------------------- -------------------- -------------------- ------------------- NET ASSETS................................ $ 3,173,371 $ 8,591,571 $ 102,811,126 $ 12,975,771 ==================== ==================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 3,166,941 $ 8,591,571 $ 102,808,645 $ 12,975,771 Net assets from contracts in payout.... 6,430 -- 2,481 -- -------------------- -------------------- -------------------- ------------------- Total Net Assets................... $ 3,173,371 $ 8,591,571 $ 102,811,126 $ 12,975,771 ==================== ==================== ==================== =================== LMPVET QS LMPVET QS LMPVIT WESTERN VARIABLE LMPVET QS VARIABLE ASSET VARIABLE GLOBAL CONSERVATIVE GROWTH VARIABLE GROWTH MODERATE GROWTH HIGH YIELD BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- --------------------- ASSETS: Investments at fair value.............. $ 38,835,930 $ 83,823,272 $ 921,089 $ 87,931,069 Due from MetLife Insurance Company USA.......................... -- 1 -- -- ------------------- ------------------- ------------------- --------------------- Total Assets....................... 38,835,930 83,823,273 921,089 87,931,069 ------------------- ------------------- ------------------- --------------------- LIABILITIES: Accrued fees........................... 43 60 10 123 Due to MetLife Insurance Company USA.......................... -- -- 1 2 ------------------- ------------------- ------------------- --------------------- Total Liabilities.................. 43 60 11 125 ------------------- ------------------- ------------------- --------------------- NET ASSETS................................ $ 38,835,887 $ 83,823,213 $ 921,078 $ 87,930,944 =================== =================== =================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 38,835,887 $ 83,732,124 $ 921,078 $ 87,919,451 Net assets from contracts in payout.... -- 91,089 -- 11,493 ------------------- ------------------- ------------------- --------------------- Total Net Assets................... $ 38,835,887 $ 83,823,213 $ 921,078 $ 87,930,944 =================== =================== =================== ===================== MFS VIT MFS VIT INVESTORS TRUST NEW DISCOVERY SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value.............. $ 8,836 $ 41,234 Due from MetLife Insurance Company USA.......................... -- -- ------------------- ------------------- Total Assets....................... 8,836 41,234 ------------------- ------------------- LIABILITIES: Accrued fees........................... 8 -- Due to MetLife Insurance Company USA.......................... 1 -- ------------------- ------------------- Total Liabilities.................. 9 -- ------------------- ------------------- NET ASSETS................................ $ 8,827 $ 41,234 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 8,827 $ 41,234 Net assets from contracts in payout.... -- -- ------------------- ------------------- Total Net Assets................... $ 8,827 $ 41,234 =================== =================== The accompanying notes are an integral part of these financial statements. 8
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The accompanying notes are an integral part of these financial statements. 9
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MIST ALLIANZ GLOBAL MIST AMERICAN MIST AB GLOBAL INVESTORS DYNAMIC FUNDS BALANCED MFS VIT RESEARCH DYNAMIC ALLOCATION MULTI-ASSET PLUS ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 21,617 $ 3,143,878,521 $ 82,224,276 $ 3,152,568,112 Due from MetLife Insurance Company USA........................ -- -- 8 -- -------------------- ------------------- -------------------- ------------------- Total Assets..................... 21,617 3,143,878,521 82,224,284 3,152,568,112 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 9 167 146 139 Due to MetLife Insurance Company USA........................ -- 1 -- 1 -------------------- ------------------- -------------------- ------------------- Total Liabilities................ 9 168 146 140 -------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 21,608 $ 3,143,878,353 $ 82,224,138 $ 3,152,567,972 ==================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 21,608 $ 3,143,759,653 $ 82,224,138 $ 3,152,270,825 Net assets from contracts in payout.. -- 118,700 -- 297,147 -------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 21,608 $ 3,143,878,353 $ 82,224,138 $ 3,152,567,972 ==================== =================== ==================== =================== MIST AMERICAN MIST AMERICAN MIST AQR FUNDS GROWTH MIST AMERICAN FUNDS MODERATE GLOBAL RISK ALLOCATION FUNDS GROWTH ALLOCATION BALANCED SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 1,744,990,942 $ 654,182,554 $ 1,590,453,893 $ 2,395,534,315 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- ------------------- ------------------- Total Assets..................... 1,744,990,942 654,182,554 1,590,453,893 2,395,534,315 ------------------- -------------------- ------------------- ------------------- LIABILITIES: Accrued fees......................... 112 114 136 115 Due to MetLife Insurance Company USA........................ 1 -- 1 1 ------------------- -------------------- ------------------- ------------------- Total Liabilities................ 113 114 137 116 ------------------- -------------------- ------------------- ------------------- NET ASSETS.............................. $ 1,744,990,829 $ 654,182,440 $ 1,590,453,756 $ 2,395,534,199 =================== ==================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 1,744,519,191 $ 654,168,472 $ 1,589,532,371 $ 2,395,150,516 Net assets from contracts in payout.. 471,638 13,968 921,385 383,683 ------------------- -------------------- ------------------- ------------------- Total Net Assets................. $ 1,744,990,829 $ 654,182,440 $ 1,590,453,756 $ 2,395,534,199 =================== ==================== =================== =================== MIST BLACKROCK GLOBAL TACTICAL MIST BLACKROCK STRATEGIES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 4,999,248,857 $ 231,879,613 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets..................... 4,999,248,857 231,879,613 ------------------- ------------------- LIABILITIES: Accrued fees......................... 156 206 Due to MetLife Insurance Company USA........................ 3 2 ------------------- ------------------- Total Liabilities................ 159 208 ------------------- ------------------- NET ASSETS.............................. $ 4,999,248,698 $ 231,879,405 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 4,999,064,588 $ 231,840,541 Net assets from contracts in payout.. 184,110 38,864 ------------------- ------------------- Total Net Assets................. $ 4,999,248,698 $ 231,879,405 =================== =================== The accompanying notes are an integral part of these financial statements. 10
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The accompanying notes are an integral part of these financial statements. 11
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MIST MIST MIST CLARION MIST CLEARBRIDGE GOLDMAN SACHS HARRIS OAKMARK GLOBAL REAL ESTATE AGGRESSIVE GROWTH MID CAP VALUE INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 263,186,843 $ 461,921,224 $ 136,116,600 $ 576,095,647 Due from MetLife Insurance Company USA........................ -- 3 -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 263,186,843 461,921,227 136,116,600 576,095,647 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Accrued fees......................... 241 217 118 204 Due to MetLife Insurance Company USA........................ 5 -- -- 2 ------------------- ------------------- ------------------- ------------------- Total Liabilities................ 246 217 118 206 ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 263,186,597 $ 461,921,010 $ 136,116,482 $ 576,095,441 =================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 263,120,853 $ 461,818,083 $ 136,074,866 $ 575,928,749 Net assets from contracts in payout.. 65,744 102,927 41,616 166,692 ------------------- ------------------- ------------------- ------------------- Total Net Assets................. $ 263,186,597 $ 461,921,010 $ 136,116,482 $ 576,095,441 =================== =================== =================== =================== MIST INVESCO BALANCED-RISK MIST INVESCO MIST INVESCO MIST INVESCO ALLOCATION COMSTOCK MID CAP VALUE SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 940,598,361 $ 742,413,539 $ 268,931,642 $ 296,393,495 Due from MetLife Insurance Company USA........................ -- 1 -- 1 ------------------- ------------------- ------------------- -------------------- Total Assets..................... 940,598,361 742,413,540 268,931,642 296,393,496 ------------------- ------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 199 165 177 258 Due to MetLife Insurance Company USA........................ 1 -- -- -- ------------------- ------------------- ------------------- -------------------- Total Liabilities................ 200 165 177 258 ------------------- ------------------- ------------------- -------------------- NET ASSETS.............................. $ 940,598,161 $ 742,413,375 $ 268,931,465 $ 296,393,238 =================== =================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 940,569,896 $ 742,267,690 $ 268,880,547 $ 296,312,950 Net assets from contracts in payout.. 28,265 145,685 50,918 80,288 ------------------- ------------------- ------------------- -------------------- Total Net Assets................. $ 940,598,161 $ 742,413,375 $ 268,931,465 $ 296,393,238 =================== =================== =================== ==================== MIST JPMORGAN MIST JPMORGAN GLOBAL ACTIVE CORE BOND ALLOCATION SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 339,144,946 $ 1,042,207,167 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets..................... 339,144,946 1,042,207,167 ------------------- ------------------- LIABILITIES: Accrued fees......................... 116 154 Due to MetLife Insurance Company USA........................ 2 2 ------------------- ------------------- Total Liabilities................ 118 156 ------------------- ------------------- NET ASSETS.............................. $ 339,144,828 $ 1,042,207,011 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 339,138,571 $ 1,042,198,117 Net assets from contracts in payout.. 6,257 8,894 ------------------- ------------------- Total Net Assets................. $ 339,144,828 $ 1,042,207,011 =================== =================== The accompanying notes are an integral part of these financial statements. 12
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The accompanying notes are an integral part of these financial statements. 13
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MIST MET/ABERDEEN MIST MIST JPMORGAN MIST LOOMIS SAYLES EMERGING MET/ARTISAN SMALL CAP VALUE GLOBAL MARKETS MARKETS EQUITY INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 26,376,861 $ 148,612,546 $ 370,235,848 $ 233,724 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- ------------------- -------------------- ------------------- Total Assets..................... 26,376,861 148,612,546 370,235,848 233,724 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 229 128 182 34 Due to MetLife Insurance Company USA........................ -- 1 5 -- -------------------- ------------------- -------------------- ------------------- Total Liabilities................ 229 129 187 34 -------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 26,376,632 $ 148,612,417 $ 370,235,661 $ 233,690 ==================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 26,367,236 $ 148,612,417 $ 370,166,494 $ 233,690 Net assets from contracts in payout.. 9,396 -- 69,167 -- -------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 26,376,632 $ 148,612,417 $ 370,235,661 $ 233,690 ==================== =================== ==================== =================== MIST MIST MET/FRANKLIN MET/EATON VANCE LOW DURATION MIST MET/TEMPLETON MIST MET/WELLINGTON FLOATING RATE TOTAL RETURN INTERNATIONAL BOND LARGE CAP RESEARCH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 64,827,854 $ 144,974,984 $ 39,493,721 $ 15,301,575 Due from MetLife Insurance Company USA........................ -- -- 1 -- ------------------- ------------------- -------------------- -------------------- Total Assets..................... 64,827,854 144,974,984 39,493,722 15,301,575 ------------------- ------------------- -------------------- -------------------- LIABILITIES: Accrued fees......................... 177 147 102 151 Due to MetLife Insurance Company USA........................ 2 1 -- 1 ------------------- ------------------- -------------------- -------------------- Total Liabilities................ 179 148 102 152 ------------------- ------------------- -------------------- -------------------- NET ASSETS.............................. $ 64,827,675 $ 144,974,836 $ 39,493,620 $ 15,301,423 =================== =================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 64,810,084 $ 144,959,506 $ 39,493,620 $ 15,301,423 Net assets from contracts in payout.. 17,591 15,330 -- -- ------------------- ------------------- -------------------- -------------------- Total Net Assets................. $ 64,827,675 $ 144,974,836 $ 39,493,620 $ 15,301,423 =================== =================== ==================== ==================== MIST METLIFE MIST METLIFE ASSET ALLOCATION 100 BALANCED PLUS SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ASSETS: Investments at fair value............ $ 557,781,087 $ 6,925,324,585 Due from MetLife Insurance Company USA........................ 1 -- -------------------- ------------------- Total Assets..................... 557,781,088 6,925,324,585 -------------------- ------------------- LIABILITIES: Accrued fees......................... 90 100 Due to MetLife Insurance Company USA........................ -- 2 -------------------- ------------------- Total Liabilities................ 90 102 -------------------- ------------------- NET ASSETS.............................. $ 557,780,998 $ 6,925,324,483 ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 557,300,339 $ 6,925,058,932 Net assets from contracts in payout.. 480,659 265,551 -------------------- ------------------- Total Net Assets................. $ 557,780,998 $ 6,925,324,483 ==================== =================== The accompanying notes are an integral part of these financial statements. 14
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The accompanying notes are an integral part of these financial statements. 15
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MIST METLIFE MIST MIST MULTI-INDEX MIST METLIFE MFS RESEARCH MORGAN STANLEY TARGETED RISK SMALL CAP VALUE INTERNATIONAL MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------ ------------------ ------------------ ------------------ ASSETS: Investments at fair value.............. $ 847,575,178 $ 266,605,657 $ 247,880,088 $ 201,153,320 Due from MetLife Insurance Company USA.......................... -- -- -- 2 ------------------ ------------------ ------------------ ------------------ Total Assets....................... 847,575,178 266,605,657 247,880,088 201,153,322 ------------------ ------------------ ------------------ ------------------ LIABILITIES: Accrued fees........................... 145 151 186 204 Due to MetLife Insurance Company USA.......................... 12 -- 2 -- ------------------ ------------------ ------------------ ------------------ Total Liabilities.................. 157 151 188 204 ------------------ ------------------ ------------------ ------------------ NET ASSETS................................ $ 847,575,021 $ 266,605,506 $ 247,879,900 $ 201,153,118 ================== ================== ================== ================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 847,571,780 $ 266,421,941 $ 247,767,998 $ 201,116,036 Net assets from contracts in payout.... 3,241 183,565 111,902 37,082 ------------------ ------------------ ------------------ ------------------ Total Net Assets................... $ 847,575,021 $ 266,605,506 $ 247,879,900 $ 201,153,118 ================== ================== ================== ================== MIST MIST MIST OPPENHEIMER PANAGORA GLOBAL PIMCO INFLATION MIST GLOBAL EQUITY DIVERSIFIED RISK PROTECTED BOND PIMCO TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value.............. $ 59,761,404 $ 102,758,068 $ 622,764,886 $ 1,446,213,361 Due from MetLife Insurance Company USA.......................... 4 -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets....................... 59,761,408 102,758,068 622,764,886 1,446,213,361 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Accrued fees........................... 162 174 184 144 Due to MetLife Insurance Company USA.......................... -- 3 2 1 ------------------- ------------------- ------------------- ------------------- Total Liabilities.................. 162 177 186 145 ------------------- ------------------- ------------------- ------------------- NET ASSETS................................ $ 59,761,246 $ 102,757,891 $ 622,764,700 $ 1,446,213,216 =================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 59,761,246 $ 102,734,833 $ 622,602,529 $ 1,445,876,901 Net assets from contracts in payout.... -- 23,058 162,171 336,315 ------------------- ------------------- ------------------- ------------------- Total Net Assets................... $ 59,761,246 $ 102,757,891 $ 622,764,700 $ 1,446,213,216 =================== =================== =================== =================== MIST PYRAMIS MIST PYRAMIS GOVERNMENT INCOME MANAGED RISK SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value.............. $ 648,756,137 $ 415,940,452 Due from MetLife Insurance Company USA.......................... -- -- ------------------- ------------------- Total Assets....................... 648,756,137 415,940,452 ------------------- ------------------- LIABILITIES: Accrued fees........................... 189 113 Due to MetLife Insurance Company USA.......................... 2 1 ------------------- ------------------- Total Liabilities.................. 191 114 ------------------- ------------------- NET ASSETS................................ $ 648,755,946 $ 415,940,338 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 648,703,575 $ 415,940,338 Net assets from contracts in payout.... 52,371 -- ------------------- ------------------- Total Net Assets................... $ 648,755,946 $ 415,940,338 =================== =================== The accompanying notes are an integral part of these financial statements. 16
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The accompanying notes are an integral part of these financial statements. 17
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MIST SCHRODERS MIST SSGA GROWTH MIST SSGA MIST T. ROWE PRICE GLOBAL MULTI-ASSET AND INCOME ETF GROWTH ETF LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 577,424,982 $ 1,290,390,369 $ 454,752,075 $ 747,778,983 Due from MetLife Insurance Company USA........................ -- -- -- 41 ------------------- ------------------- -------------------- ------------------- Total Assets..................... 577,424,982 1,290,390,369 454,752,075 747,779,024 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 159 144 67 234 Due to MetLife Insurance Company USA........................ 2 1 -- -- ------------------- ------------------- -------------------- ------------------- Total Liabilities................ 161 145 67 234 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 577,424,821 $ 1,290,390,224 $ 454,752,008 $ 747,778,790 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 577,368,770 $ 1,290,050,799 $ 454,359,160 $ 747,410,048 Net assets from contracts in payout.. 56,051 339,425 392,848 368,742 ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 577,424,821 $ 1,290,390,224 $ 454,752,008 $ 747,778,790 =================== =================== ==================== =================== MIST T. ROWE PRICE MIST TCW MSF BAILLIE GIFFORD MSF BARCLAYS MID CAP GROWTH CORE FIXED INCOME INTERNATIONAL STOCK AGGREGATE BOND INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 462,784,038 $ 292,789 $ 221,819,889 $ 308,499,181 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- ------------------- ------------------- -------------------- Total Assets..................... 462,784,038 292,789 221,819,889 308,499,181 ------------------- ------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 69 51 141 203 Due to MetLife Insurance Company USA........................ 1 -- 4 3 ------------------- ------------------- ------------------- -------------------- Total Liabilities................ 70 51 145 206 ------------------- ------------------- ------------------- -------------------- NET ASSETS.............................. $ 462,783,968 $ 292,738 $ 221,819,744 $ 308,498,975 =================== =================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 462,673,127 $ 292,738 $ 221,809,173 $ 308,469,959 Net assets from contracts in payout.. 110,841 -- 10,571 29,016 ------------------- ------------------- ------------------- -------------------- Total Net Assets................. $ 462,783,968 $ 292,738 $ 221,819,744 $ 308,498,975 =================== =================== =================== ==================== MSF BLACKROCK MSF BLACKROCK BOND INCOME CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 74,475,534 $ 14,099,196 Due from MetLife Insurance Company USA........................ -- 2 -------------------- -------------------- Total Assets..................... 74,475,534 14,099,198 -------------------- -------------------- LIABILITIES: Accrued fees......................... 203 216 Due to MetLife Insurance Company USA........................ 1 -- -------------------- -------------------- Total Liabilities................ 204 216 -------------------- -------------------- NET ASSETS.............................. $ 74,475,330 $ 14,098,982 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 74,425,136 $ 14,098,982 Net assets from contracts in payout.. 50,194 -- -------------------- -------------------- Total Net Assets................. $ 74,475,330 $ 14,098,982 ==================== ==================== The accompanying notes are an integral part of these financial statements. 18
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MSF BLACKROCK MSF BLACKROCK ULTRA-SHORT MSF FRONTIER MSF LARGE CAP VALUE TERM BOND MID CAP GROWTH JENNISON GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 5,024,851 $ 343,711,548 $ 66,475,244 $ 447,002,701 Due from MetLife Insurance Company USA........................ 2 -- -- -- ------------------- -------------------- ------------------- ------------------- Total Assets..................... 5,024,853 343,711,548 66,475,244 447,002,701 ------------------- -------------------- ------------------- ------------------- LIABILITIES: Accrued fees......................... 35 321 85 146 Due to MetLife Insurance Company USA........................ -- 1 -- -- ------------------- -------------------- ------------------- ------------------- Total Liabilities................ 35 322 85 146 ------------------- -------------------- ------------------- ------------------- NET ASSETS.............................. $ 5,024,818 $ 343,711,226 $ 66,475,159 $ 447,002,555 =================== ==================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 5,024,818 $ 343,615,553 $ 66,444,875 $ 446,649,164 Net assets from contracts in payout.. -- 95,673 30,284 353,391 ------------------- -------------------- ------------------- ------------------- Total Net Assets................. $ 5,024,818 $ 343,711,226 $ 66,475,159 $ 447,002,555 =================== ==================== =================== =================== MSF MET/DIMENSIONAL MSF LOOMIS SAYLES MSF LOOMIS SAYLES MSF MET/ARTISAN INTERNATIONAL SMALL SMALL CAP CORE SMALL CAP GROWTH MID CAP VALUE COMPANY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 14,400,813 $ 292,677 $ 217,144,144 $ 57,870,072 Due from MetLife Insurance Company USA........................ 1 -- 1 -- ------------------- ------------------- -------------------- -------------------- Total Assets..................... 14,400,814 292,677 217,144,145 57,870,072 ------------------- ------------------- -------------------- -------------------- LIABILITIES: Accrued fees......................... 179 54 83 137 Due to MetLife Insurance Company USA........................ -- -- -- 1 ------------------- ------------------- -------------------- -------------------- Total Liabilities................ 179 54 83 138 ------------------- ------------------- -------------------- -------------------- NET ASSETS.............................. $ 14,400,635 $ 292,623 $ 217,144,062 $ 57,869,934 =================== =================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 14,400,635 $ 292,623 $ 216,961,267 $ 57,869,934 Net assets from contracts in payout.. -- -- 182,795 -- ------------------- ------------------- -------------------- -------------------- Total Net Assets................. $ 14,400,635 $ 292,623 $ 217,144,062 $ 57,869,934 =================== =================== ==================== ==================== MSF MET/WELLINGTON CORE EQUITY MSF METLIFE OPPORTUNITIES ASSET ALLOCATION 20 SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ASSETS: Investments at fair value............ $ 787,904,084 $ 101,585,701 Due from MetLife Insurance Company USA........................ -- -- ------------------- -------------------- Total Assets..................... 787,904,084 101,585,701 ------------------- -------------------- LIABILITIES: Accrued fees......................... 367 100 Due to MetLife Insurance Company USA........................ -- 1 ------------------- -------------------- Total Liabilities................ 367 101 ------------------- -------------------- NET ASSETS.............................. $ 787,903,717 $ 101,585,600 =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 787,600,524 $ 101,585,600 Net assets from contracts in payout.. 303,193 -- ------------------- -------------------- Total Net Assets................. $ 787,903,717 $ 101,585,600 =================== ==================== The accompanying notes are an integral part of these financial statements. 20
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MSF METLIFE MSF METLIFE MSF METLIFE MSF METLIFE ASSET ALLOCATION 40 ASSET ALLOCATION 60 ASSET ALLOCATION 80 MID CAP STOCK INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 3,966,089,387 $ 6,424,608,808 $ 5,638,281,108 $ 151,623,770 Due from MetLife Insurance Company USA........................ -- -- 10 -- -------------------- -------------------- ------------------- -------------------- Total Assets..................... 3,966,089,387 6,424,608,808 5,638,281,118 151,623,770 -------------------- -------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 103 106 66 158 Due to MetLife Insurance Company USA........................ 1 -- -- -- -------------------- -------------------- ------------------- -------------------- Total Liabilities................ 104 106 66 158 -------------------- -------------------- ------------------- -------------------- NET ASSETS.............................. $ 3,966,089,283 $ 6,424,608,702 $ 5,638,281,052 $ 151,623,612 ==================== ==================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 3,963,168,880 $ 6,421,678,260 $ 5,636,135,110 $ 151,623,612 Net assets from contracts in payout.. 2,920,403 2,930,442 2,145,942 -- -------------------- -------------------- ------------------- -------------------- Total Net Assets................. $ 3,966,089,283 $ 6,424,608,702 $ 5,638,281,052 $ 151,623,612 ==================== ==================== =================== ==================== MSF METLIFE MSF MFS MSF MSCI STOCK INDEX TOTAL RETURN MSF MFS VALUE EAFE INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 594,987,004 $ 41,309,229 $ 284,625,481 $ 104,406,822 Due from MetLife Insurance Company USA........................ 1 -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets..................... 594,987,005 41,309,229 284,625,481 104,406,822 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Accrued fees......................... 90 204 227 151 Due to MetLife Insurance Company USA........................ -- -- 6 2 -------------------- ------------------- ------------------- ------------------- Total Liabilities................ 90 204 233 153 -------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 594,986,915 $ 41,309,025 $ 284,625,248 $ 104,406,669 ==================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 594,875,254 $ 41,305,838 $ 284,562,792 $ 104,406,669 Net assets from contracts in payout.. 111,661 3,187 62,456 -- -------------------- ------------------- ------------------- ------------------- Total Net Assets................. $ 594,986,915 $ 41,309,025 $ 284,625,248 $ 104,406,669 ==================== =================== =================== =================== MSF NEUBERGER MSF BERMAN GENESIS RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 133,113,670 $ 143,701,639 Due from MetLife Insurance Company USA........................ 1 1 ------------------- ------------------- Total Assets..................... 133,113,671 143,701,640 ------------------- ------------------- LIABILITIES: Accrued fees......................... 133 117 Due to MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Liabilities................ 133 117 ------------------- ------------------- NET ASSETS.............................. $ 133,113,538 $ 143,701,523 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 133,083,848 $ 143,701,523 Net assets from contracts in payout.. 29,690 -- ------------------- ------------------- Total Net Assets................. $ 133,113,538 $ 143,701,523 =================== =================== The accompanying notes are an integral part of these financial statements. 22
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] MSF VAN ECK MSF WESTERN ASSET MSF T. ROWE PRICE MSF T. ROWE PRICE GLOBAL NATURAL MANAGEMENT STRATEGIC LARGE CAP GROWTH SMALL CAP GROWTH RESOURCES BOND OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 203,478,745 $ 12,987,984 $ 88,041,313 $ 1,050,068,835 Due from MetLife Insurance Company USA........................ 8 1 1 15 ------------------- -------------------- ------------------- -------------------- Total Assets..................... 203,478,753 12,987,985 88,041,314 1,050,068,850 ------------------- -------------------- ------------------- -------------------- LIABILITIES: Accrued fees......................... 166 93 65 352 Due to MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- ------------------- -------------------- Total Liabilities................ 166 93 65 352 ------------------- -------------------- ------------------- -------------------- NET ASSETS.............................. $ 203,478,587 $ 12,987,892 $ 88,041,249 $ 1,050,068,498 =================== ==================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 203,449,228 $ 12,987,892 $ 88,041,249 $ 1,049,776,857 Net assets from contracts in payout.. 29,359 -- -- 291,641 ------------------- -------------------- ------------------- -------------------- Total Net Assets................. $ 203,478,587 $ 12,987,892 $ 88,041,249 $ 1,050,068,498 =================== ==================== =================== ==================== MSF WESTERN ASSET MANAGEMENT NEUBERGER OPPENHEIMER VA OPPENHEIMER VA U.S. GOVERNMENT BERMAN GENESIS CORE BOND GOVERNMENT MONEY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 250,345,434 $ 6,569 $ 5,722 $ 3,398 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Assets..................... 250,345,434 6,569 5,722 3,398 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 248 5 3 2 Due to MetLife Insurance Company USA........................ 3 -- -- -- ------------------- ------------------- -------------------- ------------------- Total Liabilities................ 251 5 3 2 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 250,345,183 $ 6,564 $ 5,719 $ 3,396 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 250,280,337 $ 6,564 $ 5,719 $ 3,396 Net assets from contracts in payout.. 64,846 -- -- -- ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 250,345,183 $ 6,564 $ 5,719 $ 3,396 =================== =================== ==================== =================== OPPENHEIMER VA MAIN STREET OPPENHEIMER VA SMALL CAP MAIN STREET SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 115,192,973 $ 102,246 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets..................... 115,192,973 102,246 ------------------- ------------------- LIABILITIES: Accrued fees......................... 29 -- Due to MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Liabilities................ 29 -- ------------------- ------------------- NET ASSETS.............................. $ 115,192,944 $ 102,246 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 115,192,944 $ 102,246 Net assets from contracts in payout.. -- -- ------------------- ------------------- Total Net Assets................. $ 115,192,944 $ 102,246 =================== =================== The accompanying notes are an integral part of these financial statements. 24
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016 [Enlarge/Download Table] PIMCO VIT PIMCO VIT COMMODITYREALRETURN EMERGING MARKETS PIMCO VIT PIONEER VCT STRATEGY BOND UNCONSTRAINED BOND MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 464,890 $ 645,778 $ 560,086 $ 67,321,630 Due from MetLife Insurance Company USA........................ -- -- -- 2 -------------------- -------------------- -------------------- ------------------- Total Assets.................... 464,890 645,778 560,086 67,321,632 -------------------- -------------------- -------------------- ------------------- LIABILITIES: Accrued fees......................... 40 35 34 93 Due to MetLife Insurance Company USA........................ -- -- 1 -- -------------------- -------------------- -------------------- ------------------- Total Liabilities............... 40 35 35 93 -------------------- -------------------- -------------------- ------------------- NET ASSETS.............................. $ 464,850 $ 645,743 $ 560,051 $ 67,321,539 ==================== ==================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 464,850 $ 645,743 $ 560,051 $ 67,321,539 Net assets from contracts in payout.. -- -- -- -- -------------------- -------------------- -------------------- ------------------- Total Net Assets................ $ 464,850 $ 645,743 $ 560,051 $ 67,321,539 ==================== ==================== ==================== =================== PIONEER VCT T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE REAL ESTATE SHARES GOVERNMENT MONEY GROWTH STOCK INTERNATIONAL STOCK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 252,092 $ 532,685 $ 6,392,651 $ 383,184 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- -------------------- -------------------- Total Assets.................... 252,092 532,685 6,392,651 383,184 ------------------- -------------------- -------------------- -------------------- LIABILITIES: Accrued fees......................... 63 -- -- 9 Due to MetLife Insurance Company USA........................ 2 -- 1 -- ------------------- -------------------- -------------------- -------------------- Total Liabilities............... 65 -- 1 9 ------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 252,027 $ 532,685 $ 6,392,650 $ 383,175 =================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 252,027 $ 532,685 $ 6,392,650 $ 383,175 Net assets from contracts in payout.. -- -- -- -- ------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 252,027 $ 532,685 $ 6,392,650 $ 383,175 =================== ==================== ==================== ==================== TAP 1919 VARIABLE SOCIALLY RESPONSIVE UIF GLOBAL BALANCED INFRASTRUCTURE SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ASSETS: Investments at fair value............ $ 143,977 $ 504,004 Due from MetLife Insurance Company USA........................ -- -- -------------------- ------------------- Total Assets.................... 143,977 504,004 -------------------- ------------------- LIABILITIES: Accrued fees......................... 31 65 Due to MetLife Insurance Company USA........................ -- -- -------------------- ------------------- Total Liabilities............... 31 65 -------------------- ------------------- NET ASSETS.............................. $ 143,946 $ 503,939 ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 140,770 $ 503,939 Net assets from contracts in payout.. 3,176 -- -------------------- ------------------- Total Net Assets................ $ 143,946 $ 503,939 ==================== =================== The accompanying notes are an integral part of these financial statements. 26
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2016 [Enlarge/Download Table] VANECK VIP LONG/SHORT EQUITY INDEX SUB-ACCOUNT -------------------- ASSETS: Investments at fair value................................................................................. $ 460,292 Due from MetLife Insurance Company USA............................................................................................. 1 -------------------- Total Assets......................................................................................... 460,293 -------------------- LIABILITIES: Accrued fees.............................................................................................. 25 Due to MetLife Insurance Company USA............................................................................................. -- -------------------- Total Liabilities.................................................................................... 25 -------------------- NET ASSETS................................................................................................... $ 460,268 ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units........................................................................ $ 460,268 Net assets from contracts in payout....................................................................... -- -------------------- Total Net Assets..................................................................................... $ 460,268 ==================== The accompanying notes are an integral part of these financial statements. 28
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] AMERICAN FUNDS ALGER AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL SMALL CAP GROWTH BOND GLOBAL GROWTH CAPITALIZATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 2,362,918 $ 2,553,358 $ 262,845 -------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 594,785 1,580,647 3,355,854 1,220,788 Administrative charges............... -- 360,070 703,209 231,933 -------------------- ------------------- ------------------- -------------------- Total expenses..................... 594,785 1,940,717 4,059,063 1,452,721 -------------------- ------------------- ------------------- -------------------- Net investment income (loss).... (594,785) 422,201 (1,505,705) (1,189,876) -------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 6,358,504 501,718 23,983,060 20,135,180 Realized gains (losses) on sale of investments........................ (1,762,600) 272,828 1,989,612 214,264 -------------------- ------------------- ------------------- -------------------- Net realized gains (losses)..... 4,595,904 774,546 25,972,672 20,349,444 -------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (2,062,118) 1,209,210 (27,161,768) (18,427,737) -------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 2,533,786 1,983,756 (1,189,096) 1,921,707 -------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 1,939,001 $ 2,405,957 $ (2,694,801) $ 731,831 ==================== =================== =================== ==================== AMERICAN FUNDS AMERICAN FUNDS BLACKROCK GLOBAL DEUTSCHE I CROCI GROWTH GROWTH-INCOME ALLOCATION V.I. INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 5,452,879 $ 5,169,546 $ 31,700 $ 1,204,759 -------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 8,624,417 4,363,417 22,384 152,749 Administrative charges............... 1,717,015 802,587 4,635 -- -------------------- ------------------- -------------------- ------------------- Total expenses..................... 10,341,432 5,166,004 27,019 152,749 -------------------- ------------------- -------------------- ------------------- Net investment income (loss).... (4,888,553) 3,542 4,681 1,052,010 -------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 64,569,797 38,951,558 -- -- Realized gains (losses) on sale of investments........................ 11,851,170 4,275,096 (6,529) (793,511) -------------------- ------------------- -------------------- ------------------- Net realized gains (losses)..... 76,420,967 43,226,654 (6,529) (793,511) -------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (17,514,843) (9,886,897) 64,672 (391,004) -------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 58,906,124 33,339,757 58,143 (1,184,515) -------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 54,017,571 $ 33,343,299 $ 62,824 $ (132,505) ==================== =================== ==================== =================== FEDERATED HIGH FEDERATED INCOME BOND KAUFMAN SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 1,635 $ -- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 370 640 Administrative charges............... -- -- ------------------- -------------------- Total expenses..................... 370 640 ------------------- -------------------- Net investment income (loss).... 1,265 (640) ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 3,201 Realized gains (losses) on sale of investments........................ (65) 199 ------------------- -------------------- Net realized gains (losses)..... (65) 3,400 ------------------- -------------------- Change in unrealized gains (losses) on investments..................... 2,081 (1,780) ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 2,016 1,620 ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 3,281 $ 980 =================== ==================== The accompanying notes are an integral part of these financial statements. 30
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP ASSET MANAGER CONTRAFUND EQUITY-INCOME FUNDSMANAGER 50% SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 1,049,636 $ 4,144,324 $ 101,998 $ 55,981,452 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 979,246 6,725,287 66,173 89,219,632 Administrative charges................ -- 866,577 -- -- -------------------- -------------------- -------------------- -------------------- Total expenses...................... 979,246 7,591,864 66,173 89,219,632 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... 70,390 (3,447,540) 35,825 (33,238,180) -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 3,154,767 45,281,039 314,347 61,561,775 Realized gains (losses) on sale of investments......................... (121,692) 11,253,026 (91,104) 5,863,112 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 3,033,075 56,534,065 223,243 67,424,887 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (1,946,628) (18,019,471) 452,684 70,790,241 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 1,086,447 38,514,594 675,927 138,215,128 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 1,156,837 $ 35,067,054 $ 711,752 $ 104,976,948 ==================== ==================== ==================== ==================== FIDELITY VIP FIDELITY VIP GOVERNMENT FIDELITY VIP FIDELITY VIP FUNDSMANAGER 60% MONEY MARKET GROWTH INDEX 500 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 39,756,961 $ 49,197 $ 56,169 $ 871,491 ------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 68,870,585 432,259 1,994,466 817,329 Administrative charges................ -- -- -- -- ------------------- -------------------- -------------------- -------------------- Total expenses...................... 68,870,585 432,259 1,994,466 817,329 ------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... (29,113,624) (383,062) (1,938,297) 54,162 ------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 122,600,072 -- 14,663,210 64,387 Realized gains (losses) on sale of investments......................... 65,729,431 -- 5,374,219 2,701,386 ------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 188,329,503 -- 20,037,429 2,765,773 ------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (63,123,246) -- (19,372,389) 3,139,146 ------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 125,206,257 -- 665,040 5,904,919 ------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 96,092,633 $ (383,062) $ (1,273,257) $ 5,959,081 =================== ==================== ==================== ==================== FIDELITY VIP FIDELITY VIP MID CAP OVERSEAS SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 1,226,938 $ 57,280 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 4,395,958 51,634 Administrative charges................ 985,076 -- -------------------- -------------------- Total expenses...................... 5,381,034 51,634 -------------------- -------------------- Net investment income (loss)..... (4,154,096) 5,646 -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 24,963,139 6,789 Realized gains (losses) on sale of investments......................... 1,427,156 (4,638) -------------------- -------------------- Net realized gains (losses)...... 26,390,295 2,151 -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 17,481,724 (292,991) -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 43,872,019 (290,840) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 39,717,923 $ (285,194) ==================== ==================== The accompanying notes are an integral part of these financial statements. 32
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] FTVIPT FRANKLIN FTVIPT FRANKLIN FTVIPT FRANKLIN FTVIPT TEMPLETON INCOME VIP MUTUAL SHARES VIP SMALL CAP VALUE VIP FOREIGN VIP SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 12,538,874 $ 2,509,072 $ 945,163 $ 1,284,041 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 2,789,012 1,430,161 1,260,599 1,021,784 Administrative charges................ 629,018 316,737 288,545 164,732 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 3,418,030 1,746,898 1,549,144 1,186,516 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... 9,120,844 762,174 (603,981) 97,525 -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... -- 10,336,219 17,369,446 1,150,089 Realized gains (losses) on sale of investments......................... (1,197,852) 1,399,723 823,576 (622,986) -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... (1,197,852) 11,735,942 18,193,022 527,103 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 21,806,114 4,805,146 11,896,218 2,954,153 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 20,608,262 16,541,088 30,089,240 3,481,256 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 29,729,106 $ 17,303,262 $ 29,485,259 $ 3,578,781 ==================== ==================== ==================== ==================== FTVIPT TEMPLETON INVESCO V.I. INVESCO V.I. INVESCO V.I. GLOBAL BOND VIP AMERICAN FRANCHISE CORE EQUITY EQUITY AND INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ -- $ -- $ 1,284 $ 10,043,474 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 2,292,831 182 2,355 6,839,566 Administrative charges................ 526,190 -- -- 1,526,928 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 2,819,021 182 2,355 8,366,494 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... (2,819,021) (182) (1,071) 1,676,980 -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 180,806 1,110 11,513 19,411,529 Realized gains (losses) on sale of investments......................... (3,262,508) 6 4,014 6,913,259 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... (3,081,702) 1,116 15,527 26,324,788 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 8,927,333 (893) (647) 49,249,179 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 5,845,631 223 14,880 75,573,967 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 3,026,610 $ 41 $ 13,809 $ 77,250,947 ==================== ==================== ==================== ==================== INVESCO V.I. INVESCO V.I. GROWTH AND INCOME INTERNATIONAL GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 16 $ 2,872,075 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 38 2,720,781 Administrative charges................ -- 614,950 -------------------- -------------------- Total expenses...................... 38 3,335,731 -------------------- -------------------- Net investment income (loss)..... (22) (463,656) -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 131 -- Realized gains (losses) on sale of investments......................... 508 2,563,228 -------------------- -------------------- Net realized gains (losses)...... 639 2,563,228 -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (349) (7,183,922) -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 290 (4,620,694) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 268 $ (5,084,350) ==================== ==================== The accompanying notes are an integral part of these financial statements. 34
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] LMPVET LMPVET LMPVET IVY VIP CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE ASSET STRATEGY AGGRESSIVE GROWTH APPRECIATION DIVIDEND STRATEGY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 1,643 $ 1,854,637 $ 5,193,655 $ 2,740,576 ------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,003 3,308,705 4,494,092 2,164,250 Administrative charges............... 732 713,843 984,873 476,602 ------------------- -------------------- -------------------- -------------------- Total expenses..................... 3,735 4,022,548 5,478,965 2,640,852 ------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... (2,092) (2,167,911) (285,310) 99,724 ------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 14,959,018 8,787,739 -- Realized gains (losses) on sale of investments........................ (29,559) 5,231,016 9,921,449 4,502,131 ------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... (29,559) 20,190,034 18,709,188 4,502,131 ------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments..................... 19,774 (18,916,437) 12,788,762 19,079,369 ------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... (9,785) 1,273,597 31,497,950 23,581,500 ------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ (11,877) $ (894,314) $ 31,212,640 $ 23,681,224 =================== ==================== ==================== ==================== LMPVET LMPVET LMPVET LMPVET ENTRUST CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE PERMAL ALTERNATIVE LARGE CAP GROWTH LARGE CAP VALUE SMALL CAP GROWTH SELECT VIT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 16,137 $ 126,032 $ -- $ 5,147 -------------------- -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 51,690 117,087 1,124,895 129,978 Administrative charges............... 8,378 19,416 242,281 27,890 -------------------- -------------------- -------------------- ------------------- Total expenses..................... 60,068 136,503 1,367,176 157,868 -------------------- -------------------- -------------------- ------------------- Net investment income (loss)..... (43,931) (10,471) (1,367,176) (152,721) -------------------- -------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 258,677 171,309 3,986,765 -- Realized gains (losses) on sale of investments........................ 121,277 82,435 1,295,117 (79,247) -------------------- -------------------- -------------------- ------------------- Net realized gains (losses)...... 379,954 253,744 5,281,882 (79,247) -------------------- -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (188,699) 594,251 637,725 (159,883) -------------------- -------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 191,255 847,995 5,919,607 (239,130) -------------------- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 147,324 $ 837,524 $ 4,552,431 $ (391,851) ==================== ==================== ==================== =================== LMPVET QS VARIABLE LMPVET QS CONSERVATIVE GROWTH VARIABLE GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 914,476 $ 1,179,697 -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 419,036 911,416 Administrative charges............... 94,354 203,941 -------------------- ------------------- Total expenses..................... 513,390 1,115,357 -------------------- ------------------- Net investment income (loss)..... 401,086 64,340 -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 3,079,407 Realized gains (losses) on sale of investments........................ 439,055 908,716 -------------------- ------------------- Net realized gains (losses)...... 439,055 3,988,123 -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 1,355,038 1,529,479 -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 1,794,093 5,517,602 -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 2,195,179 $ 5,581,942 ==================== =================== The accompanying notes are an integral part of these financial statements. 36
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] LMPVET QS LMPVIT WESTERN VARIABLE ASSET VARIABLE GLOBAL MFS VIT MFS VIT MODERATE GROWTH HIGH YIELD BOND INVESTORS TRUST NEW DISCOVERY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- --------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 18,261 $ 5,305,218 $ 74 $ -- -------------------- --------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 13,636 1,012,225 119 543 Administrative charges............... 2,461 217,886 -- -- -------------------- --------------------- ------------------- -------------------- Total expenses..................... 16,097 1,230,111 119 543 -------------------- --------------------- ------------------- -------------------- Net investment income (loss).... 2,164 4,075,107 (45) (543) -------------------- --------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 12,030 -- 948 1,780 Realized gains (losses) on sale of investments........................ 93,381 (1,878,440) 173 35 -------------------- --------------------- ------------------- -------------------- Net realized gains (losses)..... 105,411 (1,878,440) 1,121 1,815 -------------------- --------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (54,300) 9,237,046 (484) 1,685 -------------------- --------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 51,111 7,358,606 637 3,500 -------------------- --------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 53,275 $ 11,433,713 $ 592 $ 2,957 ==================== ===================== =================== ==================== MIST ALLIANZ GLOBAL MIST AMERICAN MIST AB GLOBAL INVESTORS DYNAMIC FUNDS BALANCED MFS VIT RESEARCH DYNAMIC ALLOCATION MULTI-ASSET PLUS ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 164 $ 50,731,097 $ 36,043 $ 50,441,227 -------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 295 36,777,457 819,803 39,738,813 Administrative charges............... -- 7,979,779 185,964 7,780,713 -------------------- ------------------- ------------------- -------------------- Total expenses..................... 295 44,757,236 1,005,767 47,519,526 -------------------- ------------------- ------------------- -------------------- Net investment income (loss).... (131) 5,973,861 (969,724) 2,921,701 -------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 2,108 32,693,374 -- 262,537,468 Realized gains (losses) on sale of investments........................ 1,753 19,025,020 (35,898) 13,233,629 -------------------- ------------------- ------------------- -------------------- Net realized gains (losses)..... 3,861 51,718,394 (35,898) 275,771,097 -------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (2,546) 9,838,368 1,607,504 (91,485,327) -------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 1,315 61,556,762 1,571,606 184,285,770 -------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 1,184 $ 67,530,623 $ 601,882 $ 187,207,471 ==================== =================== =================== ==================== MIST AMERICAN FUNDS GROWTH MIST AMERICAN ALLOCATION FUNDS GROWTH SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 22,329,038 $ 1,845,153 ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 22,476,214 7,889,256 Administrative charges............... 4,278,668 1,563,886 ------------------- ------------------- Total expenses..................... 26,754,882 9,453,142 ------------------- ------------------- Net investment income (loss).... (4,425,844) (7,607,989) ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 173,885,187 158,016,892 Realized gains (losses) on sale of investments........................ 10,875,441 9,109,380 ------------------- ------------------- Net realized gains (losses)..... 184,760,628 167,126,272 ------------------- ------------------- Change in unrealized gains (losses) on investments..................... (60,183,857) (113,400,426) ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 124,576,771 53,725,846 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 120,150,927 $ 46,117,857 =================== =================== The accompanying notes are an integral part of these financial statements. 38
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MIST AMERICAN MIST AQR MIST BLACKROCK FUNDS MODERATE GLOBAL RISK GLOBAL TACTICAL MIST BLACKROCK ALLOCATION BALANCED STRATEGIES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 30,244,827 $ -- $ 73,694,587 $ 15,050,635 -------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 20,054,628 28,155,958 58,392,165 2,912,058 Administrative charges............... 3,944,879 6,112,777 12,647,962 558,329 -------------------- ------------------- ------------------- -------------------- Total expenses..................... 23,999,507 34,268,735 71,040,127 3,470,387 -------------------- ------------------- ------------------- -------------------- Net investment income (loss).... 6,245,320 (34,268,735) 2,654,460 11,580,248 -------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 102,738,871 -- 415,501,718 -- Realized gains (losses) on sale of investments........................ 4,407,233 (47,850,610) 1,407,383 (3,986,750) -------------------- ------------------- ------------------- -------------------- Net realized gains (losses)..... 107,146,104 (47,850,610) 416,909,101 (3,986,750) -------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (30,620,445) 257,505,457 (270,413,192) 18,199,885 -------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 76,525,659 209,654,847 146,495,909 14,213,135 -------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 82,770,979 $ 175,386,112 $ 149,150,369 $ 25,793,383 ==================== =================== =================== ==================== MIST MIST MIST CLARION MIST CLEARBRIDGE GOLDMAN SACHS HARRIS OAKMARK GLOBAL REAL ESTATE AGGRESSIVE GROWTH MID CAP VALUE INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 5,689,822 $ 1,904,589 $ 1,116,854 $ 11,982,379 -------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,478,679 6,314,227 1,796,620 7,431,652 Administrative charges............... 687,711 1,178,598 334,859 1,401,474 -------------------- ------------------- ------------------- -------------------- Total expenses..................... 4,166,390 7,492,825 2,131,479 8,833,126 -------------------- ------------------- ------------------- -------------------- Net investment income (loss).... 1,523,432 (5,588,236) (1,014,625) 3,149,253 -------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- 10,427,889 37,808,030 Realized gains (losses) on sale of investments........................ 1,382,227 22,877,688 (4,103,366) (11,489,689) -------------------- ------------------- ------------------- -------------------- Net realized gains (losses)..... 1,382,227 22,877,688 6,324,523 26,318,341 -------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (4,178,951) (14,020,970) 9,272,110 6,566,866 -------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... (2,796,724) 8,856,718 15,596,633 32,885,207 -------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ (1,273,292) $ 3,268,482 $ 14,582,008 $ 36,034,460 ==================== =================== =================== ==================== MIST INVESCO BALANCED-RISK MIST INVESCO ALLOCATION COMSTOCK SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 1,246,922 $ 17,315,242 ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 9,450,825 8,118,905 Administrative charges............... 2,097,722 1,709,918 ------------------- ------------------- Total expenses..................... 11,548,547 9,828,823 ------------------- ------------------- Net investment income (loss).... (10,301,625) 7,486,419 ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 53,012,772 Realized gains (losses) on sale of investments........................ (2,513,753) 10,612,442 ------------------- ------------------- Net realized gains (losses)..... (2,513,753) 63,625,214 ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 91,035,525 32,001,192 ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 88,521,772 95,626,406 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 78,220,147 $ 103,112,825 =================== =================== The accompanying notes are an integral part of these financial statements. 40
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MIST JPMORGAN MIST INVESCO MIST INVESCO MIST JPMORGAN GLOBAL ACTIVE MID CAP VALUE SMALL CAP GROWTH CORE BOND ALLOCATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 1,560,899 $ -- $ 9,459,334 $ 22,147,328 ------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,137,911 3,680,465 4,393,629 11,819,261 Administrative charges............... 620,822 706,460 850,802 2,606,012 ------------------- ------------------- -------------------- ------------------- Total expenses..................... 3,758,733 4,386,925 5,244,431 14,425,273 ------------------- ------------------- -------------------- ------------------- Net investment income (loss)..... (2,197,834) (4,386,925) 4,214,903 7,722,055 ------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 12,023,141 53,135,762 -- 17,755,242 Realized gains (losses) on sale of investments........................ 1,072,199 (3,255,635) (155,743) 110,809 ------------------- ------------------- -------------------- ------------------- Net realized gains (losses)...... 13,095,340 49,880,127 (155,743) 17,866,051 ------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 22,991,597 (18,425,902) (2,012,185) (9,890,380) ------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 36,086,937 31,454,225 (2,167,928) 7,975,671 ------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 33,889,103 $ 27,067,300 $ 2,046,975 $ 15,697,726 =================== =================== ==================== =================== MIST MET/ABERDEEN MIST MIST JPMORGAN MIST LOOMIS SAYLES EMERGING MET/ARTISAN SMALL CAP VALUE GLOBAL MARKETS MARKETS EQUITY INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 434,384 $ 2,565,861 $ 3,699,000 $ 2,271 ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 348,354 1,999,125 4,846,361 2,203 Administrative charges............... 58,673 384,602 948,439 565 ------------------- ------------------- ------------------- ------------------- Total expenses..................... 407,027 2,383,727 5,794,800 2,768 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... 27,357 182,134 (2,095,800) (497) ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 1,580,556 4,908,603 -- -- Realized gains (losses) on sale of investments........................ 410,095 4,691,819 (3,800,343) (407) ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... 1,990,651 9,600,422 (3,800,343) (407) ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 4,123,036 (5,021,627) 42,924,968 (17,443) ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 6,113,687 4,578,795 39,124,625 (17,850) ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 6,141,044 $ 4,760,929 $ 37,028,825 $ (18,347) =================== =================== =================== =================== MIST MIST MET/FRANKLIN MET/EATON VANCE LOW DURATION FLOATING RATE TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 2,552,404 $ 4,314,336 ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 861,282 1,937,406 Administrative charges............... 158,795 371,633 ------------------- ------------------- Total expenses..................... 1,020,077 2,309,039 ------------------- ------------------- Net investment income (loss)..... 1,532,327 2,005,297 ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- Realized gains (losses) on sale of investments........................ (526,227) (1,131,686) ------------------- ------------------- Net realized gains (losses)...... (526,227) (1,131,686) ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 3,593,742 1,355,961 ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 3,067,515 224,275 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 4,599,842 $ 2,229,572 =================== =================== The accompanying notes are an integral part of these financial statements. 42
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MIST MET/TEMPLETON MIST MET/WELLINGTON MIST METLIFE MIST METLIFE INTERNATIONAL BOND LARGE CAP RESEARCH ASSET ALLOCATION 100 BALANCED PLUS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 342,997 $ 12,552,713 $ 193,989,835 -------------------- -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 496,319 217,503 7,521,041 77,898,430 Administrative charges............... 98,780 37,623 1,385,310 16,933,783 -------------------- -------------------- -------------------- ------------------- Total expenses..................... 595,099 255,126 8,906,351 94,832,213 -------------------- -------------------- -------------------- ------------------- Net investment income (loss).... (595,099) 87,871 3,646,362 99,157,622 -------------------- -------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 103,701 1,009,211 71,611,482 75,092,839 Realized gains (losses) on sale of investments........................ (1,111,932) 495,887 6,103,032 8,453,422 -------------------- -------------------- -------------------- ------------------- Net realized gains (losses)..... (1,008,231) 1,505,098 77,714,514 83,546,261 -------------------- -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 1,285,705 (634,599) (42,750,032) 262,223,058 -------------------- -------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 277,474 870,499 34,964,482 345,769,319 -------------------- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ (317,625) $ 958,370 $ 38,610,844 $ 444,926,941 ==================== ==================== ==================== =================== MIST METLIFE MIST MIST MULTI-INDEX MIST METLIFE MFS RESEARCH MORGAN STANLEY TARGETED RISK SMALL CAP VALUE INTERNATIONAL MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 9,856,708 $ 2,555,004 $ 5,119,943 $ -- ------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 8,357,124 3,274,753 3,414,916 2,419,104 Administrative charges............... 1,871,270 589,464 617,875 508,485 ------------------- -------------------- ------------------- -------------------- Total expenses..................... 10,228,394 3,864,217 4,032,791 2,927,589 ------------------- -------------------- ------------------- -------------------- Net investment income (loss).... (371,686) (1,309,213) 1,087,152 (2,927,589) ------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 6,504,133 -- -- Realized gains (losses) on sale of investments........................ 284,022 (1,441,719) (1,908,775) 2,940,257 ------------------- -------------------- ------------------- -------------------- Net realized gains (losses)..... 284,022 5,062,414 (1,908,775) 2,940,257 ------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... 23,166,215 59,471,093 (5,640,472) (20,657,747) ------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 23,450,237 64,533,507 (7,549,247) (17,717,490) ------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 23,078,551 $ 63,224,294 $ (6,462,095) $ (20,645,079) =================== ==================== =================== ==================== MIST MIST OPPENHEIMER PANAGORA GLOBAL GLOBAL EQUITY DIVERSIFIED RISK SUB-ACCOUNT SUB-ACCOUNT ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 551,818 $ 1,670,165 ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 696,796 568,067 Administrative charges............... 149,868 123,803 ------------------- -------------------- Total expenses..................... 846,664 691,870 ------------------- -------------------- Net investment income (loss).... (294,846) 978,295 ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 3,028,728 1,840,977 Realized gains (losses) on sale of investments........................ 477,524 (24,958) ------------------- -------------------- Net realized gains (losses)..... 3,506,252 1,816,019 ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (4,061,196) (2,298,273) ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... (554,944) (482,254) ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ (849,790) $ 496,041 =================== ==================== The accompanying notes are an integral part of these financial statements. 44
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MIST PIMCO INFLATION MIST MIST PYRAMIS MIST PYRAMIS PROTECTED BOND PIMCO TOTAL RETURN GOVERNMENT INCOME MANAGED RISK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 39,078,371 $ 15,114,830 $ 2,977,945 ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 8,329,456 19,829,371 8,205,419 4,653,570 Administrative charges............... 1,568,702 3,681,539 1,787,609 990,321 ------------------- ------------------- ------------------- ------------------- Total expenses..................... 9,898,158 23,510,910 9,993,028 5,643,891 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... (9,898,158) 15,567,461 5,121,802 (2,665,946) ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- -- 1,004,608 Realized gains (losses) on sale of investments........................ (10,740,646) (9,752,580) 484,438 122,005 ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... (10,740,646) (9,752,580) 484,438 1,126,613 ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 40,944,062 11,149,277 (5,834,587) 14,310,453 ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 30,203,416 1,396,697 (5,350,149) 15,437,066 ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 20,305,258 $ 16,964,158 $ (228,347) $ 12,771,120 =================== =================== =================== =================== MIST SCHRODERS MIST SSGA GROWTH MIST SSGA MIST T. ROWE PRICE GLOBAL MULTI-ASSET AND INCOME ETF GROWTH ETF LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 8,027,854 $ 31,171,594 $ 9,616,385 $ 19,957,364 ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 6,635,082 16,470,020 5,795,709 9,280,758 Administrative charges............... 1,434,620 3,289,078 1,125,640 1,360,601 ------------------- ------------------- ------------------- ------------------- Total expenses..................... 8,069,702 19,759,098 6,921,349 10,641,359 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... (41,848) 11,412,496 2,695,036 9,316,005 ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 7,829,635 75,636,956 28,849,155 81,270,170 Realized gains (losses) on sale of investments........................ 1,292,242 1,052,483 1,860,377 16,194,001 ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... 9,121,877 76,689,439 30,709,532 97,464,171 ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 14,289,470 (34,109,060) (11,006,299) (12,601,645) ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 23,411,347 42,580,379 19,703,233 84,862,526 ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 23,369,499 $ 53,992,875 $ 22,398,269 $ 94,178,531 =================== =================== =================== =================== MIST T. ROWE PRICE MIST TCW MID CAP GROWTH CORE FIXED INCOME SUB-ACCOUNT SUB-ACCOUNT ------------------ ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 1,323 ------------------ ------------------- EXPENSES: Mortality and expense risk and other charges...................... 6,172,633 1,995 Administrative charges............... 1,161,143 440 ------------------ ------------------- Total expenses..................... 7,333,776 2,435 ------------------ ------------------- Net investment income (loss)..... (7,333,776) (1,112) ------------------ ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 71,526,189 -- Realized gains (losses) on sale of investments........................ 6,058,041 (86) ------------------ ------------------- Net realized gains (losses)...... 77,584,230 (86) ------------------ ------------------- Change in unrealized gains (losses) on investments..................... (49,804,269) (1,515) ------------------ ------------------- Net realized and change in unrealized gains (losses) on investments..................... 27,779,961 (1,601) ------------------ ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 20,446,185 $ (2,713) ================== =================== The accompanying notes are an integral part of these financial statements. 46
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MSF BAILLIE GIFFORD MSF BARCLAYS MSF BLACKROCK MSF BLACKROCK INTERNATIONAL STOCK AGGREGATE BOND INDEX BOND INCOME CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 3,124,711 $ 8,499,133 $ 2,143,053 $ -- -------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 2,915,899 3,806,697 953,728 187,916 Administrative charges............... 567,711 756,032 167,591 29,569 -------------------- -------------------- ------------------- -------------------- Total expenses..................... 3,483,610 4,562,729 1,121,319 217,485 -------------------- -------------------- ------------------- -------------------- Net investment income (loss).... (358,899) 3,936,404 1,021,734 (217,485) -------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- -- 1,209,457 Realized gains (losses) on sale of investments........................ 1,625,583 (40,488) (7,093) 189,288 -------------------- -------------------- ------------------- -------------------- Net realized gains (losses)..... 1,625,583 (40,488) (7,093) 1,398,745 -------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... 7,350,769 (2,592,464) (212,769) (1,411,365) -------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 8,976,352 (2,632,952) (219,862) (12,620) -------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 8,617,453 $ 1,303,452 $ 801,872 $ (230,105) ==================== ==================== =================== ==================== MSF BLACKROCK MSF BLACKROCK ULTRA-SHORT MSF FRONTIER MSF LARGE CAP VALUE TERM BOND MID CAP GROWTH JENNISON GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 72,678 $ 11,092 $ -- $ 117,811 ------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 56,653 5,011,497 937,998 6,211,086 Administrative charges............... 1,942 945,912 173,282 1,131,234 ------------------- ------------------- -------------------- ------------------- Total expenses..................... 58,595 5,957,409 1,111,280 7,342,320 ------------------- ------------------- -------------------- ------------------- Net investment income (loss).... 14,083 (5,946,317) (1,111,280) (7,224,509) ------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 341,375 7,341 8,784,013 61,040,589 Realized gains (losses) on sale of investments........................ (156,674) 49,949 (433,894) 5,556,083 ------------------- ------------------- -------------------- ------------------- Net realized gains (losses)..... 184,701 57,290 8,350,119 66,596,672 ------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 531,674 390,465 (4,923,796) (68,013,517) ------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 716,375 447,755 3,426,323 (1,416,845) ------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 730,458 $ (5,498,562) $ 2,315,043 $ (8,641,354) =================== =================== ==================== =================== MSF LOOMIS SAYLES MSF LOOMIS SAYLES SMALL CAP CORE SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 8,723 $ -- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 190,087 2,698 Administrative charges............... 32,038 690 -------------------- ------------------- Total expenses..................... 222,125 3,388 -------------------- ------------------- Net investment income (loss).... (213,402) (3,388) -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 1,208,694 36,612 Realized gains (losses) on sale of investments........................ 44,571 (12,047) -------------------- ------------------- Net realized gains (losses)..... 1,253,265 24,565 -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 1,063,527 (5,480) -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 2,316,792 19,085 -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 2,103,390 $ 15,697 ==================== =================== The accompanying notes are an integral part of these financial statements. 48
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MSF MET/DIMENSIONAL MSF MET/WELLINGTON MSF MET/ARTISAN INTERNATIONAL SMALL CORE EQUITY MSF METLIFE MID CAP VALUE COMPANY OPPORTUNITIES ASSET ALLOCATION 20 SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................. $ 1,779,254 $ 1,114,995 $ 12,066,782 $ 3,162,991 -------------------- -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges....................... 2,744,306 771,834 9,110,796 1,301,530 Administrative charges................ 475,467 145,179 1,736,517 245,259 -------------------- -------------------- -------------------- ------------------- Total expenses...................... 3,219,773 917,013 10,847,313 1,546,789 -------------------- -------------------- -------------------- ------------------- Net investment income (loss)..... (1,440,519) 197,982 1,219,469 1,616,202 -------------------- -------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 22,940,002 3,654,706 35,483,887 3,277,528 Realized gains (losses) on sale of investments......................... (349,232) (1,695,195) (601,363) (809,528) -------------------- -------------------- -------------------- ------------------- Net realized gains (losses)...... 22,590,770 1,959,511 34,882,524 2,468,000 -------------------- -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments...................... 17,360,148 (120,230) (1,075,951) (1,234,614) -------------------- -------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments...................... 39,950,918 1,839,281 33,806,573 1,233,386 -------------------- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations........... $ 38,510,399 $ 2,037,263 $ 35,026,042 $ 2,849,588 ==================== ==================== ==================== =================== MSF METLIFE MSF METLIFE MSF METLIFE MSF METLIFE ASSET ALLOCATION 40 ASSET ALLOCATION 60 ASSET ALLOCATION 80 MID CAP STOCK INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 145,507,570 $ 203,430,736 $ 165,044,038 $ 1,360,471 -------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 54,157,824 85,356,301 76,194,576 1,671,516 Administrative charges................ 10,249,383 16,151,713 14,005,812 240,989 -------------------- -------------------- ------------------- -------------------- Total expenses...................... 64,407,207 101,508,014 90,200,388 1,912,505 -------------------- -------------------- ------------------- -------------------- Net investment income (loss)..... 81,100,363 101,922,722 74,843,650 (552,034) -------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 267,842,974 586,839,040 668,110,960 9,836,643 Realized gains (losses) on sale of investments......................... (31,873,123) (55,792,780) (46,598,135) 1,826,117 -------------------- -------------------- ------------------- -------------------- Net realized gains (losses)...... 235,969,851 531,046,260 621,512,825 11,662,760 -------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments...................... (140,238,049) (294,350,528) (352,024,646) 11,268,443 -------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 95,731,802 236,695,732 269,488,179 22,931,203 -------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 176,832,165 $ 338,618,454 $ 344,331,829 $ 22,379,169 ==================== ==================== =================== ==================== MSF METLIFE MSF MFS STOCK INDEX TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 10,284,792 $ 1,156,621 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 7,718,778 562,738 Administrative charges................ 1,227,491 80,650 -------------------- -------------------- Total expenses...................... 8,946,269 643,388 -------------------- -------------------- Net investment income (loss)..... 1,338,523 513,233 -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 25,252,378 1,760,590 Realized gains (losses) on sale of investments......................... 18,796,058 849,000 -------------------- -------------------- Net realized gains (losses)...... 44,048,436 2,609,590 -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 6,384,703 (168,660) -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 50,433,139 2,440,930 -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 51,771,662 $ 2,954,163 ==================== ==================== The accompanying notes are an integral part of these financial statements. 50
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] MSF MSCI MSF NEUBERGER MSF MSF MFS VALUE EAFE INDEX BERMAN GENESIS RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 5,475,380 $ 2,441,127 $ 292,274 $ 1,353,038 ------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,485,188 1,288,121 1,743,533 1,657,725 Administrative charges............... 635,085 212,763 292,481 284,076 ------------------- ------------------- -------------------- ------------------- Total expenses..................... 4,120,273 1,500,884 2,036,014 1,941,801 ------------------- ------------------- -------------------- ------------------- Net investment income (loss)..... 1,355,107 940,243 (1,743,740) (588,763) ------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 23,911,092 -- -- 7,315,476 Realized gains (losses) on sale of investments........................ (405,054) (241,323) 4,670,391 3,307,819 ------------------- ------------------- -------------------- ------------------- Net realized gains (losses)...... 23,506,038 (241,323) 4,670,391 10,623,295 ------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 5,602,006 (858,390) 16,403,111 12,954,748 ------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 29,108,044 (1,099,713) 21,073,502 23,578,043 ------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 30,463,151 $ (159,470) $ 19,329,762 $ 22,989,280 =================== =================== ==================== =================== MSF VAN ECK MSF WESTERN ASSET MSF T. ROWE PRICE MSF T. ROWE PRICE GLOBAL NATURAL MANAGEMENT STRATEGIC LARGE CAP GROWTH SMALL CAP GROWTH RESOURCES BOND OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 2,856 $ 17,815 $ 512,882 $ 16,508,031 ------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 2,809,406 161,122 1,112,116 8,464,400 Administrative charges............... 514,506 14,698 217,934 1,785,441 ------------------- ------------------- ------------------- -------------------- Total expenses..................... 3,323,912 175,820 1,330,050 10,249,841 ------------------- ------------------- ------------------- -------------------- Net investment income (loss)..... (3,321,056) (158,005) (817,168) 6,258,190 ------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 25,799,820 1,608,225 -- -- Realized gains (losses) on sale of investments........................ (1,624,992) 129,282 (8,797,189) 1,831,076 ------------------- ------------------- ------------------- -------------------- Net realized gains (losses)...... 24,174,828 1,737,507 (8,797,189) 1,831,076 ------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (21,885,537) (343,061) 41,329,617 30,665,968 ------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments..................... 2,289,291 1,394,446 32,532,428 32,497,044 ------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ (1,031,765) $ 1,236,441 $ 31,715,260 $ 38,755,234 =================== =================== =================== ==================== MSF WESTERN ASSET MANAGEMENT NEUBERGER U.S. GOVERNMENT BERMAN GENESIS SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 6,339,405 $ 4 ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,134,930 64 Administrative charges............... 662,883 -- ------------------- ------------------- Total expenses..................... 3,797,813 64 ------------------- ------------------- Net investment income (loss)..... 2,541,592 (60) ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 468 Realized gains (losses) on sale of investments........................ (359,178) 627 ------------------- ------------------- Net realized gains (losses)...... (359,178) 1,095 ------------------- ------------------- Change in unrealized gains (losses) on investments..................... (3,071,886) 214 ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... (3,431,064) 1,309 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ (889,472) $ 1,249 =================== =================== The accompanying notes are an integral part of these financial statements. 52
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] OPPENHEIMER VA OPPENHEIMER VA OPPENHEIMER VA MAIN STREET OPPENHEIMER VA CORE BOND GOVERNMENT MONEY SMALL CAP MAIN STREET SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 263 $ -- $ 272,289 $ 1,176 ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 98 48 1,196,875 1,440 Administrative charges............... -- -- 269,062 -- ------------------- ------------------- ------------------- ------------------- Total expenses..................... 98 48 1,465,937 1,440 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... 165 (48) (1,193,648) (264) ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- 4,186,348 12,502 Realized gains (losses) on sale of investments........................ (587) -- 2,313,742 2,222 ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... (587) -- 6,500,090 14,724 ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 571 -- 11,237,743 (4,604) ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... (16) -- 17,737,833 10,120 ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 149 $ (48) $ 16,544,185 $ 9,856 =================== =================== =================== =================== PIMCO VIT PIMCO VIT COMMODITYREALRETURN EMERGING MARKETS PIMCO VIT PIONEER VCT STRATEGY BOND UNCONSTRAINED BOND MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 3,293 $ 26,654 $ 6,133 $ 297,602 ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,839 5,563 4,767 713,512 Administrative charges............... 908 1,233 1,076 157,278 ------------------- ------------------- ------------------- ------------------- Total expenses..................... 4,747 6,796 5,843 870,790 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... (1,454) 19,858 290 (573,188) ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- -- 3,977,103 Realized gains (losses) on sale of investments........................ (4,882) (739) (3,758) 216,903 ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... (4,882) (739) (3,758) 4,194,006 ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 50,041 34,366 18,128 5,084,247 ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 45,159 33,627 14,370 9,278,253 ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 43,705 $ 53,485 $ 14,660 $ 8,705,065 =================== =================== =================== =================== PIONEER VCT T. ROWE PRICE REAL ESTATE SHARES GOVERNMENT MONEY SUB-ACCOUNT SUB-ACCOUNT ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 7,757 $ 91 ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 3,230 5,111 Administrative charges............... 586 -- ------------------- ------------------- Total expenses..................... 3,816 5,111 ------------------- ------------------- Net investment income (loss)..... 3,941 (5,020) ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 43,343 -- Realized gains (losses) on sale of investments........................ 4,077 -- ------------------- ------------------- Net realized gains (losses)...... 47,420 -- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... (40,983) -- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments..................... 6,437 -- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 10,378 $ (5,020) =================== =================== The accompanying notes are an integral part of these financial statements. 54
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31, 2016 [Enlarge/Download Table] TAP 1919 VARIABLE T. ROWE PRICE T. ROWE PRICE SOCIALLY RESPONSIVE GROWTH STOCK INTERNATIONAL STOCK BALANCED SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 4,697 $ 4,670 $ 1,344 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 57,273 3,638 2,023 Administrative charges................. -- -- 378 -------------------- -------------------- -------------------- Total expenses...................... 57,273 3,638 2,401 -------------------- -------------------- -------------------- Net investment income (loss)...... (52,576) 1,032 (1,057) -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 133,875 3,687 8,987 Realized gains (losses) on sale of investments......................... 278,969 4,407 (670) -------------------- -------------------- -------------------- Net realized gains (losses)....... 412,844 8,094 8,317 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (355,528) (3,274) (2,565) -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 57,316 4,820 5,752 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 4,740 $ 5,852 $ 4,695 ==================== ==================== ==================== VANECK VIP UIF GLOBAL LONG/SHORT INFRASTRUCTURE EQUITY INDEX SUB-ACCOUNT SUB-ACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 9,603 $ 564 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 4,882 4,114 Administrative charges................. 1,131 968 -------------------- -------------------- Total expenses...................... 6,013 5,082 -------------------- -------------------- Net investment income (loss)...... 3,590 (4,518) -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 27,840 -- Realized gains (losses) on sale of investments......................... (2,302) (92) -------------------- -------------------- Net realized gains (losses)....... 25,538 (92) -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 25,505 11,722 -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments...................... 51,043 11,630 -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 54,633 $ 7,112 ==================== ==================== The accompanying notes are an integral part of these financial statements. 56
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] ALGER SMALL CAP GROWTH AMERICAN FUNDS BOND SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (594,785) $ (745,798) $ 422,201 $ 497,074 Net realized gains (losses).... 4,595,904 14,305,544 774,546 3,091,093 Change in unrealized gains (losses) on investments...... (2,062,118) (15,807,878) 1,209,210 (5,130,676) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 1,939,001 (2,248,132) 2,405,957 (1,542,509) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 675,935 982,185 2,031,146 2,549,990 Net transfers (including fixed account)..................... (1,615,754) (2,181,134) (3,839,661) 6,226,955 Contract charges............... (5,793) (6,826) (1,722,627) (1,620,152) Transfers for contract benefits and terminations............. (3,112,099) (5,533,752) (12,665,730) (10,348,245) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (4,057,711) (6,739,527) (16,196,872) (3,191,452) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. (2,118,710) (8,987,659) (13,790,915) (4,733,961) NET ASSETS: Beginning of year.............. 48,208,209 57,195,868 146,511,985 151,245,946 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 46,089,499 $ 48,208,209 $ 132,721,070 $ 146,511,985 ================ ================ ================ ================ AMERICAN FUNDS AMERICAN FUNDS GLOBAL GROWTH GLOBAL SMALL CAPITALIZATION SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (1,505,705) $ (1,442,852) $ (1,189,876) $ (1,679,644) Net realized gains (losses).... 25,972,672 37,168,106 20,349,444 12,999,511 Change in unrealized gains (losses) on investments...... (27,161,768) (18,663,205) (18,427,737) (11,981,529) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations........... (2,694,801) 17,062,049 731,831 (661,662) ----------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 4,790,556 8,154,795 2,020,273 4,542,847 Net transfers (including fixed account)..................... (592,274) (9,737,155) 2,205 (3,590,780) Contract charges............... (3,241,277) (3,279,955) (1,093,814) (1,148,993) Transfers for contract benefits and terminations............. (21,872,968) (23,759,563) (8,327,183) (8,098,216) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions..... (20,915,963) (28,621,878) (7,398,519) (8,295,142) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets............. (23,610,764) (11,559,829) (6,666,688) (8,956,804) NET ASSETS: Beginning of year.............. 300,649,358 312,209,187 113,155,266 122,112,070 ----------------- ---------------- ---------------- ----------------- End of year.................... $ 277,038,594 $ 300,649,358 $ 106,488,578 $ 113,155,266 ================= ================ ================ ================= AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (4,888,553) $ (6,935,778) $ 3,542 $ (733,838) Net realized gains (losses).... 76,420,967 196,247,508 43,226,654 64,791,817 Change in unrealized gains (losses) on investments...... (17,514,843) (146,627,691) (9,886,897) (63,748,822) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 54,017,571 42,684,039 33,343,299 309,157 ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 3,082,401 3,783,989 8,063,591 9,348,694 Net transfers (including fixed account)..................... (21,988,289) (47,304,037) (3,356,757) (8,758,646) Contract charges............... (8,107,246) (8,362,747) (3,704,672) (3,640,399) Transfers for contract benefits and terminations............. (56,205,378) (57,907,122) (28,813,651) (29,713,943) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (83,218,512) (109,789,917) (27,811,489) (32,764,294) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets............. (29,200,941) (67,105,878) 5,531,810 (32,455,137) NET ASSETS: Beginning of year.............. 754,095,254 821,201,132 358,450,579 390,905,716 ---------------- ---------------- ----------------- ---------------- End of year.................... $ 724,894,313 $ 754,095,254 $ 363,982,389 $ 358,450,579 ================ ================ ================= ================ BLACKROCK GLOBAL ALLOCATION V.I. SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 4,681 $ 4,717 Net realized gains (losses).... (6,529) 82,858 Change in unrealized gains (losses) on investments...... 64,672 (117,457) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 62,824 (29,882) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 597,472 1,505,766 Net transfers (including fixed account)..................... 387,508 91,370 Contract charges............... (982) (22) Transfers for contract benefits and terminations............. (31,654) (8,918) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... 952,344 1,588,196 ---------------- ---------------- Net increase (decrease) in net assets............. 1,015,168 1,558,314 NET ASSETS: Beginning of year.............. 1,566,871 8,557 ---------------- ---------------- End of year.................... $ 2,582,039 $ 1,566,871 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 58
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] DEUTSCHE I CROCI INTERNATIONAL FEDERATED HIGH INCOME BOND SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 1,052,010 $ 399,912 $ 1,265 $ 1,118 Net realized gains (losses)..... (793,511) (579,969) (65) (32) Change in unrealized gains (losses) on investments....... (391,004) (737,267) 2,081 (2,104) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (132,505) (917,324) 3,281 (1,018) ----------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 288,372 455,999 -- -- Net transfers (including fixed account)...................... (360,557) (518,722) -- -- Contract charges................ (1,130) (1,324) -- -- Transfers for contract benefits and terminations.............. (1,040,468) (1,373,333) (737) (328) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (1,113,783) (1,437,380) (737) (328) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (1,246,288) (2,354,704) 2,544 (1,346) NET ASSETS: Beginning of year............... 12,496,599 14,851,303 25,030 26,376 ----------------- ---------------- ----------------- ---------------- End of year..................... $ 11,250,311 $ 12,496,599 $ 27,574 $ 25,030 ================= ================ ================= ================ FEDERATED KAUFMAN FIDELITY VIP ASSET MANAGER SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (640) $ (694) $ 70,390 $ 142,045 Net realized gains (losses)..... 3,400 7,411 3,033,075 6,355,845 Change in unrealized gains (losses) on investments....... (1,780) (4,370) (1,946,628) (7,290,851) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 980 2,347 1,156,837 (792,961) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... -- -- 1,112,917 1,297,955 Net transfers (including fixed account)...................... -- -- (1,269,515) (1,397,500) Contract charges................ -- -- (9,018) (10,137) Transfers for contract benefits and terminations.............. (1,349) (1,642) (6,429,011) (7,942,998) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (1,349) (1,642) (6,594,627) (8,052,680) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (369) 705 (5,437,790) (8,845,641) NET ASSETS: Beginning of year............... 47,958 47,253 76,132,122 84,977,763 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 47,589 $ 47,958 $ 70,694,332 $ 76,132,122 ================ ================= ================ ================= FIDELITY VIP CONTRAFUND FIDELITY VIP EQUITY-INCOME SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (3,447,540) $ (2,562,222) $ 35,825 $ 92,266 Net realized gains (losses)..... 56,534,065 77,014,113 223,243 492,597 Change in unrealized gains (losses) on investments....... (18,019,471) (78,548,435) 452,684 (872,283) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 35,067,054 (4,096,544) 711,752 (287,420) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 11,378,837 16,903,242 15,146 6,296 Net transfers (including fixed account)...................... (9,211,526) (12,721,493) (82,227) (22,066) Contract charges................ (4,391,890) (4,357,580) -- -- Transfers for contract benefits and terminations.............. (41,080,267) (45,753,127) (862,529) (414,001) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (43,304,846) (45,928,958) (929,610) (429,771) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (8,237,792) (50,025,502) (217,858) (717,191) NET ASSETS: Beginning of year............... 581,923,231 631,948,733 4,959,137 5,676,328 ---------------- ---------------- ---------------- ---------------- End of year..................... $ 573,685,439 $ 581,923,231 $ 4,741,279 $ 4,959,137 ================ ================ ================ ================ FIDELITY VIP FUNDSMANAGER 50% SUB-ACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (33,238,180) $ (29,328,922) Net realized gains (losses)..... 67,424,887 124,978,786 Change in unrealized gains (losses) on investments....... 70,790,241 (184,114,448) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 104,976,948 (88,464,584) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 4,366,399 5,122,409 Net transfers (including fixed account)...................... 199,882,002 1,098,161,273 Contract charges................ -- -- Transfers for contract benefits and terminations.............. (224,234,667) (146,575,016) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (19,986,266) 956,708,666 ----------------- ---------------- Net increase (decrease) in net assets.............. 84,990,682 868,244,082 NET ASSETS: Beginning of year............... 4,406,702,675 3,538,458,593 ----------------- ---------------- End of year..................... $ 4,491,693,357 $ 4,406,702,675 ================= ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 60
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] FIDELITY VIP FIDELITY VIP FUNDSMANAGER 60% GOVERNMENT MONEY MARKET SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ------------------------------------ 2016 2015 2016 2015 ----------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (29,113,624) $ (36,299,838) $ (383,062) $ (1,242,699) Net realized gains (losses)..... 188,329,503 321,264,515 -- -- Change in unrealized gains (losses) on investments....... (63,123,246) (341,468,121) -- -- ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 96,092,633 (56,503,444) (383,062) (1,242,699) ----------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 4,334,728 5,739,011 171,061,807 1,101,475,974 Net transfers (including fixed account)...................... -- -- (199,693,702) (1,099,121,860) Contract charges................ -- -- (2,003) (2,168) Transfers for contract benefits and terminations.............. (615,536,279) (254,963,609) (1,681,832) (2,402,882) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (611,201,551) (249,224,598) (30,315,730) (50,936) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets.............. (515,108,918) (305,728,042) (30,698,792) (1,293,635) NET ASSETS: Beginning of year............... 3,688,709,449 3,994,437,491 49,654,013 50,947,648 ----------------- ---------------- ----------------- ----------------- End of year..................... $ 3,173,600,531 $ 3,688,709,449 $ 18,955,221 $ 49,654,013 ================= ================ ================= ================= FIDELITY VIP GROWTH FIDELITY VIP INDEX 500 SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (1,938,297) $ (1,823,562) $ 54,162 $ 383,693 Net realized gains (losses)..... 20,037,429 12,828,947 2,765,773 3,436,622 Change in unrealized gains (losses) on investments....... (19,372,389) (1,625,997) 3,139,146 (3,771,822) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (1,273,257) 9,379,388 5,959,081 48,493 ----------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,848,497 3,026,405 -- -- Net transfers (including fixed account)...................... (3,710,183) (3,594,229) (1,234,171) (1,524,316) Contract charges................ (17,387) (19,183) (19,250) (20,878) Transfers for contract benefits and terminations.............. (13,243,026) (15,540,392) (5,014,111) (6,445,104) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (15,122,099) (16,127,399) (6,267,532) (7,990,298) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (16,395,356) (6,748,011) (308,451) (7,941,805) NET ASSETS: Beginning of year............... 160,925,919 167,673,930 62,224,177 70,165,982 ----------------- ---------------- ---------------- ---------------- End of year..................... $ 144,530,563 $ 160,925,919 $ 61,915,726 $ 62,224,177 ================= ================ ================ ================ FIDELITY VIP MID CAP FIDELITY VIP OVERSEAS SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (4,154,096) $ (4,880,547) $ 5,646 $ 2,967 Net realized gains (losses)..... 26,390,295 58,069,876 2,151 62,514 Change in unrealized gains (losses) on investments....... 17,481,724 (64,627,750) (292,991) 67,570 ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 39,717,923 (11,438,421) (285,194) 133,051 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 6,290,246 13,586,880 75,925 85,003 Net transfers (including fixed account)...................... (4,482,079) (15,198,467) (60,736) (66,066) Contract charges................ (4,982,252) (5,058,447) (50) (56) Transfers for contract benefits and terminations.............. (28,133,233) (26,884,651) (513,669) (478,886) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (31,307,318) (33,554,685) (498,530) (460,005) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 8,410,605 (44,993,106) (783,724) (326,954) NET ASSETS: Beginning of year............... 401,284,587 446,277,693 4,615,792 4,942,746 ---------------- ---------------- ---------------- ---------------- End of year..................... $ 409,695,192 $ 401,284,587 $ 3,832,068 $ 4,615,792 ================ ================ ================ ================ FTVIPT FRANKLIN INCOME VIP SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 9,120,844 $ 9,124,908 Net realized gains (losses)..... (1,197,852) 215,818 Change in unrealized gains (losses) on investments....... 21,806,114 (32,921,031) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 29,729,106 (23,580,305) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 3,516,704 6,188,051 Net transfers (including fixed account)...................... (1,827,109) 1,880,863 Contract charges................ (2,797,532) (2,771,258) Transfers for contract benefits and terminations.............. (21,748,149) (23,325,163) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (22,856,086) (18,027,507) ---------------- ---------------- Net increase (decrease) in net assets.............. 6,873,020 (41,607,812) NET ASSETS: Beginning of year............... 253,302,116 294,909,928 ---------------- ---------------- End of year..................... $ 260,175,136 $ 253,302,116 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 62
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] FTVIPT FRANKLIN FTVIPT FRANKLIN MUTUAL SHARES VIP SMALL CAP VALUE VIP SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 762,174 $ 2,328,191 $ (603,981) $ (850,014) Net realized gains (losses)..... 11,735,942 13,465,264 18,193,022 18,995,244 Change in unrealized gains (losses) on investments....... 4,805,146 (24,403,194) 11,896,218 (28,752,630) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 17,303,262 (8,609,739) 29,485,259 (10,607,400) ----------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,354,399 1,838,448 2,594,857 4,215,265 Net transfers (including fixed account)...................... 704,098 (3,377,923) (6,026,344) (781,824) Contract charges................ (1,338,635) (1,367,141) (1,581,543) (1,481,816) Transfers for contract benefits and terminations.............. (11,329,519) (13,381,381) (7,199,878) (6,848,145) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (10,609,657) (16,287,997) (12,212,908) (4,896,520) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. 6,693,605 (24,897,736) 17,272,351 (15,503,920) NET ASSETS: Beginning of year............... 128,211,487 153,109,223 110,998,636 126,502,556 ----------------- ---------------- ----------------- ---------------- End of year..................... $ 134,905,092 $ 128,211,487 $ 128,270,987 $ 110,998,636 ================= ================ ================= ================ FTVIPT FTVIPT TEMPLETON FOREIGN VIP TEMPLETON GLOBAL BOND VIP SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 97,525 $ 1,051,957 $ (2,819,021) $ 15,830,436 Net realized gains (losses)..... 527,103 2,317,086 (3,081,702) (1,172,195) Change in unrealized gains (losses) on investments....... 2,954,153 (9,120,445) 8,927,333 (28,472,303) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 3,578,781 (5,751,402) 3,026,610 (13,814,062) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 357,216 576,811 3,333,851 6,081,866 Net transfers (including fixed account)...................... 3,646,293 4,480,127 2,514,265 (1,987,591) Contract charges................ (858,486) (869,949) (2,766,762) (2,898,185) Transfers for contract benefits and terminations.............. (4,221,347) (6,041,062) (14,901,348) (14,898,325) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (1,076,324) (1,854,073) (11,819,994) (13,702,235) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. 2,502,457 (7,605,475) (8,793,384) (27,516,297) NET ASSETS: Beginning of year............... 66,002,305 73,607,780 222,633,715 250,150,012 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 68,504,762 $ 66,002,305 $ 213,840,331 $ 222,633,715 ================ ================= ================ ================= INVESCO V.I. AMERICAN FRANCHISE INVESCO V.I. CORE EQUITY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (182) $ (211) $ (1,071) $ (728) Net realized gains (losses)..... 1,116 151 15,527 37,852 Change in unrealized gains (losses) on investments....... (893) 555 (647) (50,167) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 41 495 13,809 (13,043) ---------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... -- -- -- -- Net transfers (including fixed account)...................... -- -- 38 (187) Contract charges................ -- -- -- -- Transfers for contract benefits and terminations.............. (2,482) (666) (14,006) (47,382) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (2,482) (666) (13,968) (47,569) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (2,441) (171) (159) (60,612) NET ASSETS: Beginning of year............... 14,936 15,107 171,366 231,978 ---------------- ----------------- ---------------- ---------------- End of year..................... $ 12,495 $ 14,936 $ 171,207 $ 171,366 ================ ================= ================ ================ INVESCO V.I. EQUITY AND INCOME SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 1,676,980 $ 6,137,924 Net realized gains (losses)..... 26,324,788 69,239,795 Change in unrealized gains (losses) on investments....... 49,249,179 (101,201,542) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 77,250,947 (25,823,823) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 16,956,615 23,895,518 Net transfers (including fixed account)...................... (5,664,468) (2,573,368) Contract charges................ (7,077,278) (6,909,703) Transfers for contract benefits and terminations.............. (46,507,739) (50,488,085) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (42,292,870) (36,075,638) ---------------- ---------------- Net increase (decrease) in net assets.............. 34,958,077 (61,899,461) NET ASSETS: Beginning of year............... 619,311,840 681,211,301 ---------------- ---------------- End of year..................... $ 654,269,917 $ 619,311,840 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 64
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] INVESCO V.I. GROWTH AND INCOME INVESCO V.I. INTERNATIONAL GROWTH SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (22) $ 107 $ (463,656) $ (203,655) Net realized gains (losses)..... 639 1,081 2,563,228 3,594,236 Change in unrealized gains (losses) on investments....... (349) (1,491) (7,183,922) (13,655,170) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 268 (303) (5,084,350) (10,264,589) ----------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 990 -- 3,607,230 5,828,134 Net transfers (including fixed account)...................... (3,917) 271 7,408,564 3,468,834 Contract charges................ (358) (386) (3,200,081) (3,276,594) Transfers for contract benefits and terminations.............. (2,475) -- (15,272,513) (15,245,977) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (5,760) (115) (7,456,800) (9,225,603) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (5,492) (418) (12,541,150) (19,490,192) NET ASSETS: Beginning of year............... 6,509 6,927 256,390,780 275,880,972 ----------------- ---------------- ---------------- ----------------- End of year..................... $ 1,017 $ 6,509 $ 243,849,630 $ 256,390,780 ================= ================ ================ ================= LMPVET CLEARBRIDGE IVY VIP ASSET STRATEGY VARIABLE AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (2,092) $ (1,770) $ (2,167,911) $ (3,355,443) Net realized gains (losses)..... (29,559) 31,853 20,190,034 41,012,225 Change in unrealized gains (losses) on investments....... 19,774 (59,235) (18,916,437) (47,157,658) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (11,877) (29,152) (894,314) (9,500,876) ---------------- ----------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 49,073 232,557 12,769,827 18,529,707 Net transfers (including fixed account)...................... (42,838) 74,337 6,572,083 4,621,482 Contract charges................ (16) (1) (3,214,606) (3,138,770) Transfers for contract benefits and terminations.............. (78,861) (5,064) (22,574,903) (26,081,942) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (72,642) 301,829 (6,447,599) (6,069,523) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (84,519) 272,677 (7,341,913) (15,570,399) NET ASSETS: Beginning of year............... 317,700 45,023 300,878,534 316,448,933 ---------------- ----------------- ----------------- ---------------- End of year..................... $ 233,181 $ 317,700 $ 293,536,621 $ 300,878,534 ================ ================= ================= ================ LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE VARIABLE APPRECIATION VARIABLE DIVIDEND STRATEGY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (285,310) $ (889,265) $ 99,724 $ 520,496 Net realized gains (losses)..... 18,709,188 21,134,497 4,502,131 3,696,314 Change in unrealized gains (losses) on investments....... 12,788,762 (19,592,266) 19,079,369 (15,985,006) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 31,212,640 652,966 23,681,224 (11,768,196) ----------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 13,233,628 16,816,788 6,793,180 8,055,708 Net transfers (including fixed account)...................... (6,775,239) (10,726,406) (600,819) 984,487 Contract charges................ (4,841,666) (4,654,271) (2,314,431) (2,144,487) Transfers for contract benefits and terminations.............. (27,170,816) (28,285,511) (13,256,121) (14,278,679) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (25,554,093) (26,849,400) (9,378,191) (7,382,971) ----------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets.............. 5,658,547 (26,196,434) 14,303,033 (19,151,167) NET ASSETS: Beginning of year............... 400,323,007 426,519,441 186,422,315 205,573,482 ----------------- ---------------- ---------------- ----------------- End of year..................... $ 405,981,554 $ 400,323,007 $ 200,725,348 $ 186,422,315 ================= ================ ================ ================= LMPVET CLEARBRIDGE VARIABLE LARGE CAP GROWTH SUB-ACCOUNT ----------------------------------- 2016 2015 ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (43,931) $ (57,633) Net realized gains (losses)..... 379,954 767,463 Change in unrealized gains (losses) on investments....... (188,699) (376,334) ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 147,324 333,496 ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 360 17,666 Net transfers (including fixed account)...................... (243,618) (373,004) Contract charges................ (13,427) (14,880) Transfers for contract benefits and terminations.............. (605,126) (707,021) ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (861,811) (1,077,239) ---------------- ----------------- Net increase (decrease) in net assets.............. (714,487) (743,743) NET ASSETS: Beginning of year............... 3,887,858 4,631,601 ---------------- ----------------- End of year..................... $ 3,173,371 $ 3,887,858 ================ ================= (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 66
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE VARIABLE LARGE CAP VALUE VARIABLE SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (10,471) $ (28,812) $ (1,367,176) $ (1,536,289) Net realized gains (losses).... 253,744 558,819 5,281,882 4,745,658 Change in unrealized gains (losses) on investments...... 594,251 (911,526) 637,725 (9,601,052) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 837,524 (381,519) 4,552,431 (6,391,683) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 159,294 281,091 4,335,272 5,532,165 Net transfers (including fixed account)..................... 915,334 7,723 (154,058) (5,112,272) Contract charges............... (85,407) (84,738) (1,244,198) (1,292,699) Transfers for contract benefits and terminations............. (753,495) (1,048,413) (6,274,238) (7,082,395) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 235,726 (844,337) (3,337,222) (7,955,201) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 1,073,250 (1,225,856) 1,215,209 (14,346,884) NET ASSETS: Beginning of year.............. 7,518,321 8,744,177 101,595,917 115,942,801 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 8,591,571 $ 7,518,321 $ 102,811,126 $ 101,595,917 ================ ================ ================ ================ LMPVET ENTRUST PERMAL LMPVET QS ALTERNATIVE SELECT VIT VARIABLE CONSERVATIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (152,721) $ 7,753 $ 401,086 $ 242,251 Net realized gains (losses).... (79,247) 80,328 439,055 942,532 Change in unrealized gains (losses) on investments...... (159,883) (765,231) 1,355,038 (2,209,185) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (391,851) (677,150) 2,195,179 (1,024,402) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,840,979 8,874,963 449,435 1,035,737 Net transfers (including fixed account)..................... 1,159,704 1,570,693 1,119,642 (446,803) Contract charges............... (2,243) (117) (473,039) (480,958) Transfers for contract benefits and terminations............. (824,579) (215,662) (2,695,104) (3,179,272) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 3,173,861 10,229,877 (1,599,066) (3,071,296) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 2,782,010 9,552,727 596,113 (4,095,698) NET ASSETS: Beginning of year.............. 10,193,761 641,034 38,239,774 42,335,472 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 12,975,771 $ 10,193,761 $ 38,835,887 $ 38,239,774 ================ ================ ================ ================ LMPVET QS LMPVET QS VARIABLE GROWTH VARIABLE MODERATE GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 64,340 $ (32,392) $ 2,164 $ (2,671) Net realized gains (losses).... 3,988,123 11,860,631 105,411 148,483 Change in unrealized gains (losses) on investments...... 1,529,479 (14,921,753) (54,300) (187,401) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 5,581,942 (3,093,514) 53,275 (41,589) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 874,902 1,743,349 49,844 250 Net transfers (including fixed account)..................... 1,003,629 (333,878) (4,788) 7,338 Contract charges............... (943,812) (934,408) (469) (578) Transfers for contract benefits and terminations............. (6,334,763) (6,500,454) (454,192) (611,851) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (5,400,044) (6,025,391) (409,605) (604,841) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 181,898 (9,118,905) (356,330) (646,430) NET ASSETS: Beginning of year.............. 83,641,315 92,760,220 1,277,408 1,923,838 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 83,823,213 $ 83,641,315 $ 921,078 $ 1,277,408 ================ ================ ================ ================ LMPVIT WESTERN ASSET VARIABLE GLOBAL HIGH YIELD BOND SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 4,075,107 $ 4,385,322 Net realized gains (losses).... (1,878,440) (1,035,530) Change in unrealized gains (losses) on investments...... 9,237,046 (10,052,056) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 11,433,713 (6,702,264) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,324,881 2,032,189 Net transfers (including fixed account)..................... (2,102,281) 1,146,826 Contract charges............... (959,444) (935,203) Transfers for contract benefits and terminations............. (8,407,408) (9,541,753) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (10,144,252) (7,297,941) ---------------- ---------------- Net increase (decrease) in net assets.............. 1,289,461 (14,000,205) NET ASSETS: Beginning of year.............. 86,641,483 100,641,688 ---------------- ---------------- End of year.................... $ 87,930,944 $ 86,641,483 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 68
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MFS VIT INVESTORS TRUST MFS VIT NEW DISCOVERY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (45) $ (44) $ (543) $ (583) Net realized gains (losses).... 1,121 1,258 1,815 1,340 Change in unrealized gains (losses) on investments...... (484) (1,317) 1,685 (2,076) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations........... 592 (103) 2,957 (1,319) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- -- -- Net transfers (including fixed account)..................... -- -- -- -- Contract charges............... -- -- -- -- Transfers for contract benefits and terminations............. (640) (641) (1,011) -- ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions..... (640) (641) (1,011) -- ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets............. (48) (744) 1,946 (1,319) NET ASSETS: Beginning of year.............. 8,875 9,619 39,288 40,607 ---------------- ----------------- ---------------- ----------------- End of year.................... $ 8,827 $ 8,875 $ 41,234 $ 39,288 ================ ================= ================ ================= MIST AB MFS VIT RESEARCH GLOBAL DYNAMIC ALLOCATION SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (131) $ (175) $ 5,973,861 $ 62,557,398 Net realized gains (losses).... 3,861 2,246 51,718,394 145,593,523 Change in unrealized gains (losses) on investments...... (2,546) (2,225) 9,838,368 (234,232,346) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 1,184 (154) 67,530,623 (26,081,425) ---------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- 91,389,346 88,836,606 Net transfers (including fixed account)..................... -- -- (13,114,222) (30,105,880) Contract charges............... -- -- (52,207,471) (50,699,748) Transfers for contract benefits and terminations............. (5,787) (206) (155,091,820) (150,068,994) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (5,787) (206) (129,024,167) (142,038,016) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets............. (4,603) (360) (61,493,544) (168,119,441) NET ASSETS: Beginning of year.............. 26,211 26,571 3,205,371,897 3,373,491,338 ---------------- ----------------- ---------------- ---------------- End of year.................... $ 21,608 $ 26,211 $ 3,143,878,353 $ 3,205,371,897 ================ ================= ================ ================ MIST ALLIANZ GLOBAL MIST AMERICAN FUNDS INVESTORS DYNAMIC MULTI-ASSET PLUS BALANCED ALLOCATION SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (969,724) $ 103,026 $ 2,921,701 $ (4,482,300) Net realized gains (losses).... (35,898) 80,869 275,771,097 215,019,789 Change in unrealized gains (losses) on investments...... 1,607,504 (2,070,984) (91,485,327) (279,267,105) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 601,882 (1,887,089) 187,207,471 (68,729,616) ----------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 16,857,944 21,268,070 75,145,456 46,401,519 Net transfers (including fixed account)..................... 8,788,221 24,102,547 17,486,675 (16,326,577) Contract charges............... (1,007,330) (433,447) (41,225,539) (41,218,470) Transfers for contract benefits and terminations............. (3,883,641) (1,169,475) (203,968,674) (220,038,847) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... 20,755,194 43,767,695 (152,562,082) (231,182,375) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets............. 21,357,076 41,880,606 34,645,389 (299,911,991) NET ASSETS: Beginning of year.............. 60,867,062 18,986,456 3,117,922,583 3,417,834,574 ----------------- ---------------- ----------------- ---------------- End of year.................... $ 82,224,138 $ 60,867,062 $ 3,152,567,972 $ 3,117,922,583 ================= ================ ================= ================ MIST AMERICAN FUNDS GROWTH ALLOCATION SUB-ACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (4,425,844) $ (4,545,361) Net realized gains (losses).... 184,760,628 138,651,523 Change in unrealized gains (losses) on investments...... (60,183,857) (173,607,348) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 120,150,927 (39,501,186) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 14,790,852 15,507,428 Net transfers (including fixed account)..................... (7,001,718) 39,796,000 Contract charges............... (22,193,183) (21,662,684) Transfers for contract benefits and terminations............. (101,195,265) (105,961,009) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (115,599,314) (72,320,265) ----------------- ---------------- Net increase (decrease) in net assets............. 4,551,613 (111,821,451) NET ASSETS: Beginning of year.............. 1,740,439,216 1,852,260,667 ----------------- ---------------- End of year.................... $ 1,744,990,829 $ 1,740,439,216 ================= ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 70
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST AMERICAN FUNDS MIST AMERICAN FUNDS GROWTH MODERATE ALLOCATION SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (7,607,989) $ (4,210,525) $ 6,245,320 $ (742,833) Net realized gains (losses).... 167,126,272 77,901,351 107,146,104 91,723,600 Change in unrealized gains (losses) on investments...... (113,400,426) (42,270,399) (30,620,445) (125,905,095) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 46,117,857 31,420,427 82,770,979 (34,924,328) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 15,004,069 19,736,314 37,516,663 24,909,931 Net transfers (including fixed account)..................... (2,350,119) (12,600,811) 32,849,220 (20,846,417) Contract charges............... (7,912,275) (7,636,584) (21,143,513) (21,032,171) Transfers for contract benefits and terminations............. (37,390,190) (38,877,732) (109,118,456) (124,685,275) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (32,648,515) (39,378,813) (59,896,086) (141,653,932) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. 13,469,342 (7,958,386) 22,874,893 (176,578,260) NET ASSETS: Beginning of year.............. 640,713,098 648,671,484 1,567,578,863 1,744,157,123 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 654,182,440 $ 640,713,098 $ 1,590,453,756 $ 1,567,578,863 ================ ================ ================ ================ MIST BLACKROCK MIST AQR GLOBAL RISK BALANCED GLOBAL TACTICAL STRATEGIES SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (34,268,735) $ 115,377,395 $ 2,654,460 $ 7,123,089 Net realized gains (losses).... (47,850,610) 251,089,847 416,909,101 243,465,110 Change in unrealized gains (losses) on investments...... 257,505,457 (667,747,163) (270,413,192) (328,370,852) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 175,386,112 (301,279,921) 149,150,369 (77,782,653) ---------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 18,022,447 28,201,013 115,567,257 134,048,740 Net transfers (including fixed account)..................... (61,831,482) (121,209,615) (57,324,406) (31,355,267) Contract charges............... (41,914,869) (43,556,032) (82,433,198) (81,264,355) Transfers for contract benefits and terminations............. (125,669,688) (131,915,961) (253,893,832) (239,100,989) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (211,393,592) (268,480,595) (278,084,179) (217,671,871) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets............. (36,007,480) (569,760,516) (128,933,810) (295,454,524) NET ASSETS: Beginning of year.............. 2,431,541,679 3,001,302,195 5,128,182,508 5,423,637,032 ---------------- ----------------- ---------------- ---------------- End of year.................... $ 2,395,534,199 $ 2,431,541,679 $ 4,999,248,698 $ 5,128,182,508 ================ ================= ================ ================ MIST BLACKROCK HIGH YIELD MIST CLARION GLOBAL REAL ESTATE SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 11,580,248 $ 15,488,328 $ 1,523,432 $ 7,184,764 Net realized gains (losses).... (3,986,750) (855,525) 1,382,227 2,505,984 Change in unrealized gains (losses) on investments...... 18,199,885 (27,072,455) (4,178,951) (18,548,113) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 25,793,383 (12,439,652) (1,273,292) (8,857,365) ----------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 3,939,058 5,471,471 3,372,054 6,581,398 Net transfers (including fixed account)..................... 8,925,766 (735,390) (2,622,191) (10,655,221) Contract charges............... (2,708,304) (2,632,432) (3,088,944) (3,206,471) Transfers for contract benefits and terminations............. (14,990,899) (16,959,483) (21,750,625) (25,491,389) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (4,834,379) (14,855,834) (24,089,706) (32,771,683) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. 20,959,004 (27,295,486) (25,362,998) (41,629,048) NET ASSETS: Beginning of year.............. 210,920,401 238,215,887 288,549,595 330,178,643 ----------------- ---------------- ---------------- ---------------- End of year.................... $ 231,879,405 $ 210,920,401 $ 263,186,597 $ 288,549,595 ================= ================ ================ ================ MIST CLEARBRIDGE AGGRESSIVE GROWTH SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (5,588,236) $ (7,967,160) Net realized gains (losses).... 22,877,688 32,724,227 Change in unrealized gains (losses) on investments...... (14,020,970) (55,137,738) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 3,268,482 (30,380,671) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 3,397,099 7,906,450 Net transfers (including fixed account)..................... (19,419,615) 76,581 Contract charges............... (5,138,876) (5,848,656) Transfers for contract benefits and terminations............. (33,772,189) (44,740,100) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (54,933,581) (42,605,725) ---------------- ---------------- Net increase (decrease) in net assets............. (51,665,099) (72,986,396) NET ASSETS: Beginning of year.............. 513,586,109 586,572,505 ---------------- ---------------- End of year.................... $ 461,921,010 $ 513,586,109 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 72
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST MIST GOLDMAN SACHS MID CAP VALUE HARRIS OAKMARK INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (1,014,625) $ (1,537,088) $ 3,149,253 $ 9,400,785 Net realized gains (losses).... 6,324,523 41,886,183 26,318,341 65,880,374 Change in unrealized gains (losses) on investments...... 9,272,110 (57,110,020) 6,566,866 (112,473,465) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 14,582,008 (16,760,925) 36,034,460 (37,192,306) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 919,911 1,725,815 6,425,156 10,330,585 Net transfers (including fixed account)..................... (6,678,370) (6,624,559) (17,956,920) 16,006,472 Contract charges............... (1,261,981) (1,388,967) (6,093,836) (6,520,686) Transfers for contract benefits and terminations............. (10,641,399) (16,267,720) (37,856,237) (50,590,499) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (17,661,839) (22,555,431) (55,481,837) (30,774,128) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (3,079,831) (39,316,356) (19,447,377) (67,966,434) NET ASSETS: Beginning of year.............. 139,196,313 178,512,669 595,542,818 663,509,252 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 136,116,482 $ 139,196,313 $ 576,095,441 $ 595,542,818 ================ ================ ================ ================ MIST INVESCO BALANCED-RISK ALLOCATION MIST INVESCO COMSTOCK SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (10,301,625) $ 11,979,804 $ 7,486,419 $ 11,114,213 Net realized gains (losses).... (2,513,753) 56,997,141 63,625,214 41,574,493 Change in unrealized gains (losses) on investments...... 91,035,525 (115,525,978) 32,001,192 (109,029,930) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 78,220,147 (46,549,033) 103,112,825 (56,341,224) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 50,176,000 56,430,784 10,601,201 17,077,620 Net transfers (including fixed account)..................... 89,247,502 (17,727,649) (12,378,231) (9,876,271) Contract charges............... (13,936,272) (12,556,466) (8,170,800) (8,381,443) Transfers for contract benefits and terminations............. (40,178,930) (34,902,367) (50,036,257) (56,194,121) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 85,308,300 (8,755,698) (59,984,087) (57,374,215) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 163,528,447 (55,304,731) 43,128,738 (113,715,439) NET ASSETS: Beginning of year.............. 777,069,714 832,374,445 699,284,637 813,000,076 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 940,598,161 $ 777,069,714 $ 742,413,375 $ 699,284,637 ================ ================ ================ ================ MIST INVESCO MID CAP VALUE MIST INVESCO SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (2,197,834) $ (2,735,590) $ (4,386,925) $ (4,819,029) Net realized gains (losses).... 13,095,340 15,336,973 49,880,127 83,195,090 Change in unrealized gains (losses) on investments...... 22,991,597 (40,654,275) (18,425,902) (87,413,658) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 33,889,103 (28,052,892) 27,067,300 (9,037,597) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 6,933,353 8,288,062 5,647,259 6,534,317 Net transfers (including fixed account)..................... 1,237,691 24,500,627 (6,176,045) 14,266,774 Contract charges............... (3,157,009) (3,034,527) (2,926,164) (2,932,490) Transfers for contract benefits and terminations............. (14,253,523) (15,827,029) (19,107,037) (25,585,352) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (9,239,488) 13,927,133 (22,561,987) (7,716,751) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 24,649,615 (14,125,759) 4,505,313 (16,754,348) NET ASSETS: Beginning of year.............. 244,281,850 258,407,609 291,887,925 308,642,273 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 268,931,465 $ 244,281,850 $ 296,393,238 $ 291,887,925 ================ ================ ================ ================ MIST JPMORGAN CORE BOND SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 4,214,903 $ 2,801,534 Net realized gains (losses).... (155,743) (395,625) Change in unrealized gains (losses) on investments...... (2,012,185) (6,145,255) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,046,975 (3,739,346) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 3,488,610 3,649,306 Net transfers (including fixed account)..................... 19,870,012 13,754,017 Contract charges............... (4,561,818) (4,484,730) Transfers for contract benefits and terminations............. (22,381,738) (23,734,420) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (3,584,934) (10,815,827) ---------------- ---------------- Net increase (decrease) in net assets.............. (1,537,959) (14,555,173) NET ASSETS: Beginning of year.............. 340,682,787 355,237,960 ---------------- ---------------- End of year.................... $ 339,144,828 $ 340,682,787 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 74
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST JPMORGAN GLOBAL ACTIVE ALLOCATION MIST JPMORGAN SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 7,722,055 $ 12,497,303 $ 27,357 $ (98,903) Net realized gains (losses).... 17,866,051 45,696,444 1,990,651 2,956,831 Change in unrealized gains (losses) on investments...... (9,890,380) (65,128,206) 4,123,036 (5,123,070) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 15,697,726 (6,934,459) 6,141,044 (2,265,142) ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 75,632,639 77,822,224 377,114 621,500 Net transfers (including fixed account)..................... 12,735,511 76,566,196 (1,284,706) (1,438,278) Contract charges............... (16,205,205) (13,964,421) (300,537) (305,249) Transfers for contract benefits and terminations............. (46,438,860) (38,679,798) (1,690,161) (1,411,453) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... 25,724,085 101,744,201 (2,898,290) (2,533,480) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets............. 41,421,811 94,809,742 3,242,754 (4,798,622) NET ASSETS: Beginning of year.............. 1,000,785,200 905,975,458 23,133,878 27,932,500 ---------------- ---------------- ----------------- ---------------- End of year.................... $ 1,042,207,011 $ 1,000,785,200 $ 26,376,632 $ 23,133,878 ================ ================ ================= ================ MIST MET/ABERDEEN MIST LOOMIS SAYLES GLOBAL MARKETS EMERGING MARKETS EQUITY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 182,134 $ 56,919 $ (2,095,800) $ 1,070,164 Net realized gains (losses).... 9,600,422 5,682,307 (3,800,343) (1,548,189) Change in unrealized gains (losses) on investments...... (5,021,627) (5,830,670) 42,924,968 (63,266,929) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 4,760,929 (91,444) 37,028,825 (63,744,954) ---------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,629,123 1,604,265 4,919,847 5,760,880 Net transfers (including fixed account)..................... (7,028,228) (3,286,915) (10,048,590) 27,512,370 Contract charges............... (1,788,348) (1,847,018) (4,895,870) (4,761,010) Transfers for contract benefits and terminations............. (10,360,270) (12,330,707) (21,935,749) (25,219,474) ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (17,547,723) (15,860,375) (31,960,362) 3,292,766 ---------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets............. (12,786,794) (15,951,819) 5,068,463 (60,452,188) NET ASSETS: Beginning of year.............. 161,399,211 177,351,030 365,167,198 425,619,386 ---------------- ----------------- ---------------- ---------------- End of year.................... $ 148,612,417 $ 161,399,211 $ 370,235,661 $ 365,167,198 ================ ================= ================ ================ MIST MIST MET/ARTISAN INTERNATIONAL MET/EATON VANCE FLOATING RATE SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 (a) 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (497) $ (369) $ 1,532,327 $ 1,437,029 Net realized gains (losses).... (407) (764) (526,227) (376,676) Change in unrealized gains (losses) on investments...... (17,443) (3,854) 3,593,742 (2,605,647) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... (18,347) (4,987) 4,599,842 (1,545,294) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 134,986 113,826 1,034,528 1,581,532 Net transfers (including fixed account)..................... 3,749 20,716 1,584,549 (1,657,616) Contract charges............... (34) -- (623,176) (665,463) Transfers for contract benefits and terminations............. (7,823) (8,396) (5,796,986) (7,593,451) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... 130,878 126,146 (3,801,085) (8,334,998) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. 112,531 121,159 798,757 (9,880,292) NET ASSETS: Beginning of year.............. 121,159 -- 64,028,918 73,909,210 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 233,690 $ 121,159 $ 64,827,675 $ 64,028,918 ================ ================ ================ ================ MIST MET/FRANKLIN LOW DURATION TOTAL RETURN SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 2,005,297 $ 2,577,678 Net realized gains (losses).... (1,131,686) (701,699) Change in unrealized gains (losses) on investments...... 1,355,961 (5,428,085) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 2,229,572 (3,552,106) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,614,780 5,599,233 Net transfers (including fixed account)..................... (2,839,999) 4,590 Contract charges............... (1,945,246) (2,052,441) Transfers for contract benefits and terminations............. (12,067,365) (15,141,099) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions..... (15,237,830) (11,589,717) ---------------- ---------------- Net increase (decrease) in net assets............. (13,008,258) (15,141,823) NET ASSETS: Beginning of year.............. 157,983,094 173,124,917 ---------------- ---------------- End of year.................... $ 144,974,836 $ 157,983,094 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 76
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The accompanying notes are an integral part of these financial statements. 77
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST MIST MET/WELLINGTON MET/TEMPLETON INTERNATIONAL BOND LARGE CAP RESEARCH SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (595,099) $ 3,038,946 $ 87,871 $ (152,730) Net realized gains (losses)..... (1,008,231) (460,924) 1,505,098 2,189,696 Change in unrealized gains (losses) on investments....... 1,285,705 (5,136,661) (634,599) (1,564,663) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ (317,625) (2,558,639) 958,370 472,303 ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 351,551 1,008,123 238,593 369,764 Net transfers (including fixed account)...................... (27,849) 43,895 (265,280) (990,704) Contract charges................ (574,332) (616,606) (205,310) (209,942) Transfers for contract benefits and terminations.............. (2,287,396) (2,711,377) (1,041,933) (1,284,833) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (2,538,026) (2,275,965) (1,273,930) (2,115,715) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (2,855,651) (4,834,604) (315,560) (1,643,412) NET ASSETS: Beginning of year............... 42,349,271 47,183,875 15,616,983 17,260,395 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 39,493,620 $ 42,349,271 $ 15,301,423 $ 15,616,983 ================ ================= ================ ================= MIST METLIFE ASSET ALLOCATION 100 MIST METLIFE BALANCED PLUS SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 3,646,362 $ (2,016,259) $ 99,157,622 $ 49,287,588 Net realized gains (losses)..... 77,714,514 61,106,802 83,546,261 446,515,766 Change in unrealized gains (losses) on investments....... (42,750,032) (79,692,789) 262,223,058 (884,673,039) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 38,610,844 (20,602,246) 444,926,941 (388,869,685) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 4,336,940 5,354,211 157,046,169 208,140,346 Net transfers (including fixed account)...................... (19,949,139) (6,689,447) 111,182,918 (4,605,195) Contract charges................ (4,987,628) (5,117,777) (107,705,162) (103,967,586) Transfers for contract benefits and terminations.............. (36,048,067) (38,701,487) (343,550,385) (315,728,010) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (56,647,894) (45,154,500) (183,026,460) (216,160,445) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (18,037,050) (65,756,746) 261,900,481 (605,030,130) NET ASSETS: Beginning of year............... 575,818,048 641,574,794 6,663,424,002 7,268,454,132 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 557,780,998 $ 575,818,048 $ 6,925,324,483 $ 6,663,424,002 ================ ================= ================ ================= MIST METLIFE MULTI-INDEX TARGETED RISK MIST METLIFE SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (371,686) $ (1,034,215) $ (1,309,213) $ (4,039,297) Net realized gains (losses)..... 284,022 14,297,878 5,062,414 102,531,369 Change in unrealized gains (losses) on investments....... 23,166,215 (32,052,767) 59,471,093 (116,797,548) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 23,078,551 (18,789,104) 63,224,294 (18,305,476) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 146,003,566 110,393,305 1,349,329 1,334,115 Net transfers (including fixed account)...................... 85,670,437 151,542,191 (11,765,305) (10,754,879) Contract charges................ (11,135,104) (7,735,258) (1,989,354) (2,014,570) Transfers for contract benefits and terminations.............. (29,873,770) (23,093,748) (20,501,444) (24,985,104) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... 190,665,129 231,106,490 (32,906,774) (36,420,438) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. 213,743,680 212,317,386 30,317,520 (54,725,914) NET ASSETS: Beginning of year............... 633,831,341 421,513,955 236,287,986 291,013,900 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 847,575,021 $ 633,831,341 $ 266,605,506 $ 236,287,986 ================ ================= ================ ================= MIST MFS RESEARCH INTERNATIONAL SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 1,087,152 $ 3,284,984 Net realized gains (losses)..... (1,908,775) 894,053 Change in unrealized gains (losses) on investments....... (5,640,472) (12,677,983) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (6,462,095) (8,498,946) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 2,345,413 4,293,533 Net transfers (including fixed account)...................... 1,343,494 12,947,453 Contract charges................ (2,432,236) (2,475,924) Transfers for contract benefits and terminations.............. (18,900,434) (22,193,367) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (17,643,763) (7,428,305) ---------------- ---------------- Net increase (decrease) in net assets.............. (24,105,858) (15,927,251) NET ASSETS: Beginning of year............... 271,985,758 287,913,009 ---------------- ---------------- End of year..................... $ 247,879,900 $ 271,985,758 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 78
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST MORGAN STANLEY MID CAP GROWTH MIST OPPENHEIMER GLOBAL EQUITY SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- --------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (2,927,589) $ (3,327,105) $ (294,846) $ (305,773) Net realized gains (losses).... 2,940,257 4,570,410 3,506,252 3,512,456 Change in unrealized gains (losses) on investments...... (20,657,747) (15,910,469) (4,061,196) (1,038,937) ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets resulting from operations............ (20,645,079) (14,667,164) (849,790) 2,167,746 ---------------- ---------------- ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 5,154,126 8,883,221 796,758 1,219,267 Net transfers (including fixed account)..................... 10,765,513 1,774,364 1,559,887 (2,158,048) Contract charges............... (2,683,209) (2,819,561) (535,014) (574,746) Transfers for contract benefits and terminations............. (11,898,645) (13,239,136) (6,477,083) (7,738,730) ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions...... 1,337,785 (5,401,112) (4,655,452) (9,252,257) ---------------- ---------------- ---------------- --------------- Net increase (decrease) in net assets.............. (19,307,294) (20,068,276) (5,505,242) (7,084,511) NET ASSETS: Beginning of year.............. 220,460,412 240,528,688 65,266,488 72,350,999 ---------------- ---------------- ---------------- --------------- End of year.................... $ 201,153,118 $ 220,460,412 $ 59,761,246 $ 65,266,488 ================ ================ ================ =============== MIST MIST PIMCO PANAGORA GLOBAL DIVERSIFIED RISK INFLATION PROTECTED BOND SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 978,295 $ (132,986) $ (9,898,158) $ 23,465,868 Net realized gains (losses).... 1,816,019 59,506 (10,740,646) (12,024,645) Change in unrealized gains (losses) on investments...... (2,298,273) (1,391,238) 40,944,062 (43,226,004) --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 496,041 (1,464,718) 20,305,258 (31,784,781) --------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 21,255,721 7,308,625 3,240,908 4,037,726 Net transfers (including fixed account)..................... 63,435,064 5,964,473 17,081,530 (8,720,486) Contract charges............... (700,033) (168,361) (7,965,099) (8,087,358) Transfers for contract benefits and terminations............. (2,852,672) (677,893) (44,800,654) (53,138,748) --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 81,138,080 12,426,844 (32,443,315) (65,908,866) --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 81,634,121 10,962,126 (12,138,057) (97,693,647) NET ASSETS: Beginning of year.............. 21,123,770 10,161,644 634,902,757 732,596,404 --------------- ---------------- ---------------- ---------------- End of year.................... $ 102,757,891 $ 21,123,770 $ 622,764,700 $ 634,902,757 =============== ================ ================ ================ MIST PIMCO TOTAL RETURN MIST PYRAMIS GOVERNMENT INCOME SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 15,567,461 $ 62,753,001 $ 5,121,802 $ 5,912,789 Net realized gains (losses).... (9,752,580) 12,734,375 484,438 (146,659) Change in unrealized gains (losses) on investments...... 11,149,277 (99,708,652) (5,834,587) (11,685,773) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 16,964,158 (24,221,276) (228,347) (5,919,643) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 10,347,774 11,483,909 15,864,750 10,291,987 Net transfers (including fixed account)..................... (15,057,846) (60,045,845) 44,787,356 21,792,687 Contract charges............... (18,905,496) (19,181,926) (12,288,781) (11,384,051) Transfers for contract benefits and terminations............. (108,958,935) (133,249,327) (50,418,725) (44,187,565) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (132,574,503) (200,993,189) (2,055,400) (23,486,942) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (115,610,345) (225,214,465) (2,283,747) (29,406,585) NET ASSETS: Beginning of year.............. 1,561,823,561 1,787,038,026 651,039,693 680,446,278 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 1,446,213,216 $ 1,561,823,561 $ 648,755,946 $ 651,039,693 ================ ================ ================ ================ MIST PYRAMIS MANAGED RISK SUB-ACCOUNT --------------------------------- 2016 2015 ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (2,665,946) $ (2,007,729) Net realized gains (losses).... 1,126,613 8,573,592 Change in unrealized gains (losses) on investments...... 14,310,453 (18,736,202) ---------------- --------------- Net increase (decrease) in net assets resulting from operations............ 12,771,120 (12,170,339) ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 37,420,704 41,633,612 Net transfers (including fixed account)..................... 41,259,942 178,575,410 Contract charges............... (5,650,668) (3,482,370) Transfers for contract benefits and terminations............. (21,503,630) (16,426,832) ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions...... 51,526,348 200,299,820 ---------------- --------------- Net increase (decrease) in net assets.............. 64,297,468 188,129,481 NET ASSETS: Beginning of year.............. 351,642,870 163,513,389 ---------------- --------------- End of year.................... $ 415,940,338 $ 351,642,870 ================ =============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 80
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The accompanying notes are an integral part of these financial statements. 81
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MIST SCHRODERS GLOBAL MULTI-ASSET MIST SSGA GROWTH AND INCOME ETF SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (41,848) $ (2,230,760) $ 11,412,496 $ 11,496,565 Net realized gains (losses).... 9,121,877 17,165,832 76,689,439 96,130,725 Change in unrealized gains (losses) on investments...... 14,289,470 (29,873,677) (34,109,060) (155,135,668) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 23,369,499 (14,938,605) 53,992,875 (47,508,378) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 26,804,004 35,201,400 22,979,145 21,766,022 Net transfers (including fixed account)..................... 1,726,932 81,935,629 (35,921,094) (22,073,877) Contract charges............... (9,116,567) (8,094,448) (17,584,989) (18,156,689) Transfers for contract benefits and terminations............. (28,231,649) (24,612,353) (82,883,163) (97,925,260) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (8,817,280) 84,430,228 (113,410,101) (116,389,804) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 14,552,219 69,491,623 (59,417,226) (163,898,182) NET ASSETS: Beginning of year.............. 562,872,602 493,380,979 1,349,807,450 1,513,705,632 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 577,424,821 $ 562,872,602 $ 1,290,390,224 $ 1,349,807,450 ================ ================ ================ ================ MIST SSGA GROWTH ETF MIST T. ROWE PRICE LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 2,695,036 $ 2,269,909 $ 9,316,005 $ 527,754 Net realized gains (losses).... 30,709,532 33,558,305 97,464,171 29,555,568 Change in unrealized gains (losses) on investments...... (11,006,299) (54,174,177) (12,601,645) (69,547,913) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 22,398,269 (18,345,963) 94,178,531 (39,464,591) ---------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,770,076 7,054,310 8,548,777 10,615,106 Net transfers (including fixed account)..................... (8,203,434) 9,763,304 (6,993,418) (11,574,647) Contract charges............... (5,726,100) (5,722,795) (4,671,865) (4,674,135) Transfers for contract benefits and terminations............. (23,760,861) (27,279,503) (59,133,973) (77,867,417) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (34,920,319) (16,184,684) (62,250,479) (83,501,093) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (12,522,050) (34,530,647) 31,928,052 (122,965,684) NET ASSETS: Beginning of year.............. 467,274,058 501,804,705 715,850,738 838,816,422 ---------------- ---------------- ---------------- ----------------- End of year.................... $ 454,752,008 $ 467,274,058 $ 747,778,790 $ 715,850,738 ================ ================ ================ ================= MIST T. ROWE PRICE MID CAP GROWTH MIST TCW CORE FIXED INCOME SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 (b) ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (7,333,776) $ (8,239,927) $ (1,112) $ (228) Net realized gains (losses).... 77,584,230 108,417,654 (86) (4) Change in unrealized gains (losses) on investments...... (49,804,269) (73,202,424) (1,515) (184) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 20,446,185 26,975,303 (2,713) (416) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 4,471,810 3,040,163 67,810 59,306 Net transfers (including fixed account)..................... (10,933,992) (34,784,143) 154,898 15,279 Contract charges............... (4,880,554) (5,053,956) (426) -- Transfers for contract benefits and terminations............. (31,973,648) (42,109,408) -- (1,000) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (43,316,384) (78,907,344) 222,282 73,585 ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (22,870,199) (51,932,041) 219,569 73,169 NET ASSETS: Beginning of year.............. 485,654,167 537,586,208 73,169 -- ---------------- ---------------- ---------------- ---------------- End of year.................... $ 462,783,968 $ 485,654,167 $ 292,738 $ 73,169 ================ ================ ================ ================ MSF BAILLIE GIFFORD INTERNATIONAL STOCK SUB-ACCOUNT ------------------------------------ 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (358,899) $ (271,859) Net realized gains (losses).... 1,625,583 3,508,939 Change in unrealized gains (losses) on investments...... 7,350,769 (10,663,827) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 8,617,453 (7,426,747) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,435,007 1,385,690 Net transfers (including fixed account)..................... (3,447,836) (10,590,297) Contract charges............... (2,978,189) (3,102,764) Transfers for contract benefits and terminations............. (15,218,207) (16,356,797) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (20,209,225) (28,664,168) ---------------- ---------------- Net increase (decrease) in net assets.............. (11,591,772) (36,090,915) NET ASSETS: Beginning of year.............. 233,411,516 269,502,431 ---------------- ---------------- End of year.................... $ 221,819,744 $ 233,411,516 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 82
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MSF BARCLAYS AGGREGATE BOND INDEX MSF BLACKROCK BOND INCOME SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 3,936,404 $ 2,774,012 $ 1,021,734 $ 1,289,428 Net realized gains (losses).... (40,488) (126,236) (7,093) 833,937 Change in unrealized gains (losses) on investments...... (2,592,464) (6,456,221) (212,769) (2,926,902) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,303,452 (3,808,445) 801,872 (803,537) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 30,163,105 21,367,597 4,112,157 4,381,285 Net transfers (including fixed account)..................... 60,238,116 35,972,097 7,482,169 8,341,934 Contract charges............... (4,030,668) (2,855,104) (846,113) (712,128) Transfers for contract benefits and terminations............. (24,282,675) (19,044,499) (6,120,099) (5,777,255) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 62,087,878 35,440,091 4,628,114 6,233,836 ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 63,391,330 31,631,646 5,429,986 5,430,299 NET ASSETS: Beginning of year.............. 245,107,645 213,475,999 69,045,344 63,615,045 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 308,498,975 $ 245,107,645 $ 74,475,330 $ 69,045,344 ================ ================ ================ ================ MSF BLACKROCK CAPITAL APPRECIATION MSF BLACKROCK LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (217,485) $ (237,170) $ 14,083 $ 21,337 Net realized gains (losses).... 1,398,745 3,380,193 184,701 294,376 Change in unrealized gains (losses) on investments...... (1,411,365) (2,490,455) 531,674 (639,612) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (230,105) 652,568 730,458 (323,899) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 698,086 702,398 517,735 590,441 Net transfers (including fixed account)..................... 400,373 113,015 122,400 157,108 Contract charges............... (122,760) (124,569) (1,953) (156) Transfers for contract benefits and terminations............. (947,754) (1,728,698) (492,830) (476,050) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 27,945 (1,037,854) 145,352 271,343 ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (202,160) (385,286) 875,810 (52,556) NET ASSETS: Beginning of year.............. 14,301,142 14,686,428 4,149,008 4,201,564 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 14,098,982 $ 14,301,142 $ 5,024,818 $ 4,149,008 ================ ================ ================ ================ MSF BLACKROCK ULTRA-SHORT TERM BOND MSF FRONTIER MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (5,946,317) $ (6,027,107) $ (1,111,280) $ (1,351,696) Net realized gains (losses).... 57,290 -- 8,350,119 14,193,562 Change in unrealized gains (losses) on investments...... 390,465 -- (4,923,796) (11,177,142) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (5,498,562) (6,027,107) 2,315,043 1,664,724 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 22,629,305 38,032,970 459,936 560,464 Net transfers (including fixed account)..................... 2,241,216 72,942,198 (1,795,582) (742,070) Contract charges............... (4,507,711) (4,210,469) (696,983) (814,235) Transfers for contract benefits and terminations............. (69,743,801) (98,033,180) (7,462,054) (8,311,622) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (49,380,991) 8,731,519 (9,494,683) (9,307,463) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (54,879,553) 2,704,412 (7,179,640) (7,642,739) NET ASSETS: Beginning of year.............. 398,590,779 395,886,367 73,654,799 81,297,538 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 343,711,226 $ 398,590,779 $ 66,475,159 $ 73,654,799 ================ ================ ================ ================ MSF JENNISON GROWTH SUB-ACCOUNT --------------------------------- 2016 2015 ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (7,224,509) $ (8,255,608) Net realized gains (losses).... 66,596,672 100,462,145 Change in unrealized gains (losses) on investments...... (68,013,517) (47,555,352) ---------------- --------------- Net increase (decrease) in net assets resulting from operations............ (8,641,354) 44,651,185 ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,534,813 3,569,781 Net transfers (including fixed account)..................... (5,166,821) (26,498,929) Contract charges............... (4,030,249) (4,176,518) Transfers for contract benefits and terminations............. (38,760,187) (45,499,489) ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions...... (45,422,444) (72,605,155) ---------------- --------------- Net increase (decrease) in net assets.............. (54,063,798) (27,953,970) NET ASSETS: Beginning of year.............. 501,066,353 529,020,323 ---------------- --------------- End of year.................... $ 447,002,555 $ 501,066,353 ================ =============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 84
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MSF MSF LOOMIS SAYLES SMALL CAP CORE LOOMIS SAYLES SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (213,402) $ (234,690) $ (3,388) $ (3,584) Net realized gains (losses)..... 1,253,265 1,994,940 24,565 47,572 Change in unrealized gains (losses) on investments....... 1,063,527 (2,197,811) (5,480) (43,867) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,103,390 (437,561) 15,697 121 ----------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 395,602 422,787 -- 17,612 Net transfers (including fixed account)...................... 133,951 (62,478) (2,393) 23,125 Contract charges................ (190,175) (186,706) (1,255) (1,118) Transfers for contract benefits and terminations.............. (792,777) (691,869) (48,133) (4,466) ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (453,399) (518,266) (51,781) 35,153 ----------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. 1,649,991 (955,827) (36,084) 35,274 NET ASSETS: Beginning of year............... 12,750,644 13,706,471 328,707 293,433 ----------------- ---------------- ----------------- ---------------- End of year..................... $ 14,400,635 $ 12,750,644 $ 292,623 $ 328,707 ================= ================ ================= ================ MSF MET/DIMENSIONAL MSF MET/ARTISAN MID CAP VALUE INTERNATIONAL SMALL COMPANY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (1,440,519) $ (1,466,298) $ 197,982 $ 48,982 Net realized gains (losses)..... 22,590,770 32,839,034 1,959,511 9,734,312 Change in unrealized gains (losses) on investments....... 17,360,148 (55,970,793) (120,230) (7,397,341) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 38,510,399 (24,598,057) 2,037,263 2,385,953 ----------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,644,637 1,435,147 541,256 899,458 Net transfers (including fixed account)...................... 1,133,610 (3,489,375) (3,621,425) 6,674,328 Contract charges................ (1,473,008) (1,479,616) (658,618) (620,871) Transfers for contract benefits and terminations.............. (17,651,427) (21,273,771) (3,537,341) (4,404,157) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (16,346,188) (24,807,615) (7,276,128) 2,548,758 ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 22,164,211 (49,405,672) (5,238,865) 4,934,711 NET ASSETS: Beginning of year............... 194,979,851 244,385,523 63,108,799 58,174,088 ----------------- ---------------- ---------------- ---------------- End of year..................... $ 217,144,062 $ 194,979,851 $ 57,869,934 $ 63,108,799 ================= ================ ================ ================ MSF MET/WELLINGTON CORE EQUITY OPPORTUNITIES MSF METLIFE ASSET ALLOCATION 20 SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 1,219,469 $ 287,887 $ 1,616,202 $ 193,571 Net realized gains (losses)..... 34,882,524 210,355,423 2,468,000 1,389,983 Change in unrealized gains (losses) on investments....... (1,075,951) (207,207,827) (1,234,614) (2,880,050) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 35,026,042 3,435,483 2,849,588 (1,296,496) ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 4,606,124 3,414,204 4,250,508 2,053,677 Net transfers (including fixed account)...................... 276,900,705 (35,779,438) 39,568,195 27,590,957 Contract charges................ (6,982,057) (4,607,450) (1,078,648) (543,349) Transfers for contract benefits and terminations.............. (49,347,852) (47,777,157) (9,572,655) (3,923,720) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 225,176,920 (84,749,841) 33,167,400 25,177,565 ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. 260,202,962 (81,314,358) 36,016,988 23,881,069 NET ASSETS: Beginning of year............... 527,700,755 609,015,113 65,568,612 41,687,543 ---------------- ---------------- ----------------- ---------------- End of year..................... $ 787,903,717 $ 527,700,755 $ 101,585,600 $ 65,568,612 ================ ================ ================= ================ MSF METLIFE ASSET ALLOCATION 40 SUB-ACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 81,100,363 $ (60,476,835) Net realized gains (losses)..... 235,969,851 270,937,811 Change in unrealized gains (losses) on investments....... (140,238,049) (322,220,355) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 176,832,165 (111,759,379) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 19,515,378 24,369,785 Net transfers (including fixed account)...................... (85,050,362) (213,524,358) Contract charges................ (47,232,692) (49,617,104) Transfers for contract benefits and terminations.............. (346,107,872) (392,793,086) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (458,875,548) (631,564,763) ----------------- ---------------- Net increase (decrease) in net assets.............. (282,043,383) (743,324,142) NET ASSETS: Beginning of year............... 4,248,132,666 4,991,456,808 ----------------- ---------------- End of year..................... $ 3,966,089,283 $ 4,248,132,666 ================= ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 86
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MSF METLIFE ASSET ALLOCATION 60 MSF METLIFE ASSET ALLOCATION 80 SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 101,922,722 $ (74,908,862) $ 74,843,650 $ (80,359,716) Net realized gains (losses).... 531,046,260 481,588,073 621,512,825 310,019,865 Change in unrealized gains (losses) on investments...... (294,350,528) (594,962,543) (352,024,646) (421,371,788) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 338,618,454 (188,283,332) 344,331,829 (191,711,639) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 44,053,111 51,082,227 25,414,383 38,874,727 Net transfers (including fixed account)..................... (75,462,340) (102,720,147) (115,627,973) (40,164,388) Contract charges............... (72,256,944) (74,049,982) (60,722,586) (61,430,326) Transfers for contract benefits and terminations............. (477,632,589) (546,730,912) (369,144,991) (439,432,331) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (581,298,762) (672,418,814) (520,081,167) (502,152,318) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (242,680,308) (860,702,146) (175,749,338) (693,863,957) NET ASSETS: Beginning of year.............. 6,667,289,010 7,527,991,156 5,814,030,390 6,507,894,347 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 6,424,608,702 $ 6,667,289,010 $ 5,638,281,052 $ 5,814,030,390 ================ ================ ================ ================ MSF METLIFE MID CAP STOCK INDEX MSF METLIFE STOCK INDEX SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (552,034) $ (669,052) $ 1,338,523 $ (347,601) Net realized gains (losses).... 11,662,760 11,113,039 44,048,436 54,311,839 Change in unrealized gains (losses) on investments...... 11,268,443 (15,667,437) 6,384,703 (57,710,605) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 22,379,169 (5,223,450) 51,771,662 (3,746,367) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 4,058,317 5,977,751 11,055,623 11,741,788 Net transfers (including fixed account)..................... 13,080,377 3,888,248 30,277,877 (7,225,683) Contract charges............... (1,110,917) (1,048,036) (4,394,187) (4,442,697) Transfers for contract benefits and terminations............. (8,266,622) (9,847,097) (47,239,994) (53,641,340) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 7,761,155 (1,029,134) (10,300,681) (53,567,932) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 30,140,324 (6,252,584) 41,470,981 (57,314,299) NET ASSETS: Beginning of year.............. 121,483,288 127,735,872 553,515,934 610,830,233 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 151,623,612 $ 121,483,288 $ 594,986,915 $ 553,515,934 ================ ================ ================ ================ MSF MFS TOTAL RETURN MSF MFS VALUE SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 513,233 $ 419,715 $ 1,355,107 $ 2,273,415 Net realized gains (losses).... 2,609,590 1,095,835 23,506,038 43,175,247 Change in unrealized gains (losses) on investments...... (168,660) (2,338,023) 5,602,006 (49,745,547) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,954,163 (822,473) 30,463,151 (4,296,885) ----------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 749,038 1,643,867 3,785,944 4,166,108 Net transfers (including fixed account)..................... 316,277 1,396,264 20,770,407 17,714,601 Contract charges............... (294,999) (284,691) (2,969,258) (2,641,500) Transfers for contract benefits and terminations............. (4,734,648) (5,431,228) (17,315,565) (20,453,721) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (3,964,332) (2,675,788) 4,271,528 (1,214,512) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (1,010,169) (3,498,261) 34,734,679 (5,511,397) NET ASSETS: Beginning of year.............. 42,319,194 45,817,455 249,890,569 255,401,966 ----------------- ---------------- ---------------- ---------------- End of year.................... $ 41,309,025 $ 42,319,194 $ 284,625,248 $ 249,890,569 ================= ================ ================ ================ MSF MSCI EAFE INDEX SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 940,243 $ 1,740,713 Net realized gains (losses).... (241,323) 673,901 Change in unrealized gains (losses) on investments...... (858,390) (5,975,929) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (159,470) (3,561,315) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,997,982 4,624,296 Net transfers (including fixed account)..................... 7,944,110 6,652,908 Contract charges............... (1,022,996) (1,032,788) Transfers for contract benefits and terminations............. (5,255,908) (8,003,438) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 4,663,188 2,240,978 ---------------- ---------------- Net increase (decrease) in net assets.............. 4,503,718 (1,320,337) NET ASSETS: Beginning of year.............. 99,902,951 101,223,288 ---------------- ---------------- End of year.................... $ 104,406,669 $ 99,902,951 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 88
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The accompanying notes are an integral part of these financial statements. 89
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] MSF NEUBERGER BERMAN GENESIS MSF RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (1,743,740) $ (2,005,253) $ (588,763) $ (772,570) Net realized gains (losses).... 4,670,391 5,492,282 10,623,295 14,703,805 Change in unrealized gains (losses) on investments...... 16,403,111 (4,849,556) 12,954,748 (21,801,085) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 19,329,762 (1,362,527) 22,989,280 (7,869,850) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,149,152 1,474,898 2,739,217 3,655,588 Net transfers (including fixed account)..................... (8,416,119) (3,545,710) (2,241,509) 1,761,396 Contract charges............... (1,202,775) (1,236,383) (1,250,753) (1,338,539) Transfers for contract benefits and terminations............. (9,696,351) (13,484,634) (8,064,211) (11,537,242) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (18,166,093) (16,791,829) (8,817,256) (7,458,797) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 1,163,669 (18,154,356) 14,172,024 (15,328,647) NET ASSETS: Beginning of year.............. 131,949,869 150,104,225 129,529,499 144,858,146 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 133,113,538 $ 131,949,869 $ 143,701,523 $ 129,529,499 ================ ================ ================ ================ MSF MSF T. ROWE PRICE LARGE CAP GROWTH T. ROWE PRICE SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (3,321,056) $ (2,957,599) $ (158,005) $ (160,395) Net realized gains (losses).... 24,174,828 34,270,652 1,737,507 1,535,562 Change in unrealized gains (losses) on investments...... (21,885,537) (16,807,403) (343,061) (1,319,353) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (1,031,765) 14,505,650 1,236,441 55,814 ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 5,465,210 4,861,358 1,135,684 1,208,773 Net transfers (including fixed account)..................... (15,563,299) 65,812,017 (424,023) 1,417,304 Contract charges............... (2,098,114) (1,679,181) (65,427) (67,963) Transfers for contract benefits and terminations............. (16,742,262) (17,010,364) (709,343) (775,788) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (28,938,465) 51,983,830 (63,109) 1,782,326 ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (29,970,230) 66,489,480 1,173,332 1,838,140 NET ASSETS: Beginning of year.............. 233,448,817 166,959,337 11,814,560 9,976,420 ---------------- ---------------- ----------------- ---------------- End of year.................... $ 203,478,587 $ 233,448,817 $ 12,987,892 $ 11,814,560 ================ ================ ================= ================ MSF MSF WESTERN ASSET MANAGEMENT VAN ECK GLOBAL NATURAL RESOURCES STRATEGIC BOND OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (817,168) $ (1,169,677) $ 6,258,190 $ 1,666 Net realized gains (losses).... (8,797,189) (1,908,883) 1,831,076 (74) Change in unrealized gains (losses) on investments...... 41,329,617 (29,752,057) 30,665,968 (7,019) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 31,715,260 (32,830,617) 38,755,234 (5,427) ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 540,665 905,618 6,741,904 98,520 Net transfers (including fixed account)..................... (12,765,187) 23,947,255 1,071,425,957 89,485 Contract charges............... (1,347,635) (1,200,210) (8,025,524) -- Transfers for contract benefits and terminations............. (4,973,728) (5,238,300) (59,024,383) (11) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (18,545,885) 18,414,363 1,011,117,954 187,994 ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. 13,169,375 (14,416,254) 1,049,873,188 182,567 NET ASSETS: Beginning of year.............. 74,871,874 89,288,128 195,310 12,743 ---------------- ---------------- ----------------- ---------------- End of year.................... $ 88,041,249 $ 74,871,874 $ 1,050,068,498 $ 195,310 ================ ================ ================= ================ MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT SUB-ACCOUNT ----------------------------------- 2016 2015 ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 2,541,592 $ 1,639,088 Net realized gains (losses).... (359,178) (87,820) Change in unrealized gains (losses) on investments...... (3,071,886) (4,546,618) ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ (889,472) (2,995,350) ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 4,839,053 4,788,989 Net transfers (including fixed account)..................... 3,483,398 14,987,445 Contract charges............... (3,417,794) (3,201,899) Transfers for contract benefits and terminations............. (21,968,669) (21,366,180) ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (17,064,012) (4,791,645) ---------------- ----------------- Net increase (decrease) in net assets.............. (17,953,484) (7,786,995) NET ASSETS: Beginning of year.............. 268,298,667 276,085,662 ---------------- ----------------- End of year.................... $ 250,345,183 $ 268,298,667 ================ ================= (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 90
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] NEUBERGER BERMAN GENESIS OPPENHEIMER VA CORE BOND SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (60) $ (75) $ 165 $ 216 Net realized gains (losses).... 1,095 1,363 (587) (275) Change in unrealized gains (losses) on investments...... 214 (1,296) 571 29 --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,249 (8) 149 (30) --------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- -- -- Net transfers (including fixed account)..................... -- -- -- -- Contract charges............... -- -- -- -- Transfers for contract benefits and terminations............. (1,907) (1,783) (1,907) (839) --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (1,907) (1,783) (1,907) (839) --------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (658) (1,791) (1,758) (869) NET ASSETS: Beginning of year.............. 7,222 9,013 7,477 8,346 --------------- ---------------- ---------------- ---------------- End of year.................... $ 6,564 $ 7,222 $ 5,719 $ 7,477 =============== ================ ================ ================ OPPENHEIMER VA OPPENHEIMER VA GOVERNMENT MONEY MAIN STREET SMALL CAP SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- --------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (48) $ (50) $ (1,193,648) $ (857,651) Net realized gains (losses).... -- -- 6,500,090 21,226,168 Change in unrealized gains (losses) on investments...... -- -- 11,237,743 (28,993,857) ---------------- --------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (48) (50) 16,544,185 (8,625,340) ---------------- --------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- 1,327,499 2,437,344 Net transfers (including fixed account)..................... -- -- (2,886,762) (2,506,338) Contract charges............... -- -- (1,283,015) (1,313,735) Transfers for contract benefits and terminations............. (148) (151) (7,757,953) (7,209,455) ---------------- --------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (148) (151) (10,600,231) (8,592,184) ---------------- --------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (196) (201) 5,943,954 (17,217,524) NET ASSETS: Beginning of year.............. 3,592 3,793 109,248,990 126,466,514 ---------------- --------------- ---------------- ---------------- End of year.................... $ 3,396 $ 3,592 $ 115,192,944 $ 109,248,990 ================ =============== ================ ================ PIMCO VIT OPPENHEIMER VA MAIN STREET COMMODITYREALRETURN STRATEGY SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- --------------------------------- 2016 2015 2016 2015 ---------------- ---------------- --------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ (264) $ (504) $ (1,454) $ 1,234 Net realized gains (losses).... 14,724 18,609 (4,882) (4,694) Change in unrealized gains (losses) on investments...... (4,604) (16,156) 50,041 (56,415) ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 9,856 1,949 43,705 (59,875) ---------------- ---------------- --------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- 82,723 279,525 Net transfers (including fixed account)..................... -- -- 102,751 38,967 Contract charges............... -- -- (55) (3) Transfers for contract benefits and terminations............. (12,174) (3,470) (14,359) (21,699) ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (12,174) (3,470) 171,060 296,790 ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets.............. (2,318) (1,521) 214,765 236,915 NET ASSETS: Beginning of year.............. 104,564 106,085 250,085 13,170 ---------------- ---------------- --------------- ---------------- End of year.................... $ 102,246 $ 104,564 $ 464,850 $ 250,085 ================ ================ =============== ================ PIMCO VIT EMERGING MARKETS BOND SUB-ACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)... $ 19,858 $ 8,655 Net realized gains (losses).... (739) 1,363 Change in unrealized gains (losses) on investments...... 34,366 (28,200) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 53,485 (18,182) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 221,405 401,043 Net transfers (including fixed account)..................... (13,170) 27,329 Contract charges............... (85) (2) Transfers for contract benefits and terminations............. (22,688) (18,594) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... 185,462 409,776 ---------------- ---------------- Net increase (decrease) in net assets.............. 238,947 391,594 NET ASSETS: Beginning of year.............. 406,796 15,202 ---------------- ---------------- End of year.................... $ 645,743 $ 406,796 ================ ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 92
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] PIMCO VIT UNCONSTRAINED BOND PIONEER VCT MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 290 $ 5,688 $ (573,188) $ (582,428) Net realized gains (losses)..... (3,758) (255) 4,194,006 9,032,785 Change in unrealized gains (losses) on investments....... 18,128 (13,479) 5,084,247 (13,899,812) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 14,660 (8,046) 8,705,065 (5,449,455) ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 195,066 236,532 1,113,121 2,033,056 Net transfers (including fixed account)...................... 97,472 61,782 (65,716) (692,772) Contract charges................ (74) (6) (672,822) (665,918) Transfers for contract benefits and terminations.............. (28,936) (13,158) (5,748,437) (6,137,579) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... 263,528 285,150 (5,373,854) (5,463,213) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. 278,188 277,104 3,331,211 (10,912,668) NET ASSETS: Beginning of year............... 281,863 4,759 63,990,328 74,902,996 ---------------- ----------------- ---------------- ----------------- End of year..................... $ 560,051 $ 281,863 $ 67,321,539 $ 63,990,328 ================ ================= ================ ================= PIONEER VCT REAL ESTATE SHARES T. ROWE PRICE GOVERNMENT MONEY SUB-ACCOUNT SUB-ACCOUNT ----------------------------------- ------------------------------------ 2016 2015 2016 2015 ----------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ 3,941 $ 1,096 $ (5,020) $ (4,409) Net realized gains (losses)..... 47,420 38,298 -- -- Change in unrealized gains (losses) on investments....... (40,983) (31,282) -- -- ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 10,378 8,112 (5,020) (4,409) ----------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 621 3,056 -- -- Net transfers (including fixed account)...................... 8,221 (13,623) 92,628 2,822 Contract charges................ (3,301) (2,978) (118) (131) Transfers for contract benefits and terminations.............. (4,793) (3,545) (51,844) (15,458) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... 748 (17,090) 40,666 (12,767) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets.............. 11,126 (8,978) 35,646 (17,176) NET ASSETS: Beginning of year............... 240,901 249,879 497,039 514,215 ----------------- ---------------- ----------------- ----------------- End of year..................... $ 252,027 $ 240,901 $ 532,685 $ 497,039 ================= ================ ================= ================= T. ROWE PRICE GROWTH STOCK T. ROWE PRICE INTERNATIONAL STOCK SUB-ACCOUNT SUB-ACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (52,576) $ (66,257) $ 1,032 $ (526) Net realized gains (losses)..... 412,844 1,195,637 8,094 33,135 Change in unrealized gains (losses) on investments....... (355,528) (416,328) (3,274) (36,641) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 4,740 713,052 5,852 (4,032) ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 193,684 221,245 10,989 14,912 Net transfers (including fixed account)...................... (301,323) (580,009) (11,589) (98,531) Contract charges................ (1,118) (1,330) (96) (109) Transfers for contract benefits and terminations.............. (562,309) (805,724) (39,735) (117,510) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions...... (671,066) (1,165,818) (40,431) (201,238) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (666,326) (452,766) (34,579) (205,270) NET ASSETS: Beginning of year............... 7,058,976 7,511,742 417,754 623,024 ---------------- ---------------- ----------------- ---------------- End of year..................... $ 6,392,650 $ 7,058,976 $ 383,175 $ 417,754 ================ ================ ================= ================ TAP 1919 VARIABLE SOCIALLY RESPONSIVE BALANCED SUB-ACCOUNT ------------------------------------ 2016 2015 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).... $ (1,057) $ (987) Net realized gains (losses)..... 8,317 27,006 Change in unrealized gains (losses) on investments....... (2,565) (33,756) ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 4,695 (7,737) ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 3,677 -- Net transfers (including fixed account)...................... (931) 2,550 Contract charges................ (117) (112) Transfers for contract benefits and terminations.............. (79,210) (32,709) ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions...... (76,581) (30,271) ----------------- ----------------- Net increase (decrease) in net assets.............. (71,886) (38,008) NET ASSETS: Beginning of year............... 215,832 253,840 ----------------- ----------------- End of year..................... $ 143,946 $ 215,832 ================= ================= (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 94
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 [Enlarge/Download Table] UIF GLOBAL INFRASTRUCTURE VANECK VIP LONG/SHORT EQUITY INDEX SUB-ACCOUNT SUB-ACCOUNT ------------------------------------ ----------------------------------- 2016 2015 2016 2015 ----------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).......................... $ 3,590 $ 201 $ (4,518) $ (1,955) Net realized gains (losses)........................... 25,538 14,300 (92) 302 Change in unrealized gains (losses) on investments............................. 25,505 (52,813) 11,722 (6,810) ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations.................................. 54,633 (38,312) 7,112 (8,463) ----------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners................................ 90,084 309,552 33,964 227,796 Net transfers (including fixed account)............................................ 43,465 88,579 184,712 27,028 Contract charges...................................... (144) (5) (78) (5) Transfers for contract benefits and terminations.................................... (29,784) (22,594) (25,761) (2,806) ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............................ 103,621 375,532 192,837 252,013 ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.................................... 158,254 337,220 199,949 243,550 NET ASSETS: Beginning of year..................................... 345,685 8,465 260,319 16,769 ----------------- ----------------- ---------------- ----------------- End of year........................................... $ 503,939 $ 345,685 $ 460,268 $ 260,319 ================= ================= ================ ================= (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 96
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION MetLife Investors USA Separate Account A (the "Separate Account"), a separate account of MetLife Insurance Company USA (the "Company"), was established by the Board of Directors of MetLife Investors USA Insurance Company ("MLI-USA") on May 29, 1980 to support operations of MLI-USA with respect to certain variable annuity contracts (the "Contracts"). On November 14, 2014, MLI-USA merged into the Company and the Separate Account became a Separate Account of the Company. The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the Delaware Department of Insurance. On January 12, 2016, MetLife, Inc. announced its plan to pursue the separation of a portion of its retail business, (the "Separation"). Additionally, on July 21, 2016, MetLife, Inc. announced that the following the Separation, the separated business will be rebranded as "Brighthouse Financial." On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"), which included a description of how MetLife, Inc. currently plans to effectuate the Separation. On December 6, 2016, Brighthouse filed amendments to its registration statement on Form 10 with the SEC. The information statement filed as an exhibit to the Form 10 disclosed that MetLife, Inc. intends to include the Company, New England Life Insurance Company, First MetLife Investors Insurance Company and MetLife Advisers, LLC ("MetLife Advisers"), among other companies, in the proposed separated business. The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. MetLife expects that the life and annuity business sold through Metropolitan Life Insurance Company will not be a part of Brighthouse Financial. The Separation remains subject to certain conditions, including, among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, and an SEC declaration of the effectiveness of the Form 10. The Separate Account is divided into Sub-Accounts, each of which is treated as an individual accounting entity for financial reporting purposes. Each Sub-Account invests in shares of the corresponding portfolio, series or fund (with the same name) of registered investment management companies (the "Trusts"), which are presented below: [Enlarge/Download Table] AIM Variable Insurance Funds (Invesco Variable Met Investors Series Trust ("MIST")* Insurance Funds) ("Invesco V.I.") Metropolitan Series Fund ("MSF")* American Funds Insurance Series ("American Funds") MFS Variable Insurance Trust ("MFS VIT") BlackRock Variable Series Funds, Inc ("BlackRock") Neuberger Berman Equity Funds ("Neuberger Berman") Deutsche Variable Series I ("Deutsche I") Oppenheimer Variable Account Funds Federated Insurance Series ("Federated") ("Oppenheimer VA") Fidelity Variable Insurance Products ("Fidelity VIP") PIMCO Variable Insurance Trust ("PIMCO VIT") Franklin Templeton Variable Insurance Products Trust Pioneer Variable Contracts Trust ("Pioneer VCT") ("FTVIPT") T. Rowe Price Government Money Fund, Inc. Ivy Variable Insurance Portfolios ("Ivy VIP") T. Rowe Price Growth Stock Fund, Inc. Janus Aspen Series ("Janus Aspen") T. Rowe Price International Funds, Inc. Legg Mason Partners Variable Equity Trust The Alger Portfolios ("Alger") ("LMPVET") Trust for Advised Portfolios ("TAP") Legg Mason Partners Variable Income Trust The Universal Institutional Funds, Inc. ("UIF") ("LMPVIT") VanEck VIP Trust ("VanEck VIP") * See Note 5 for a discussion of additional information on related party transactions. The assets of each of the Sub-Accounts of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Contracts is not chargeable with liabilities arising out of any other business the Company may conduct. 97
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF SUB-ACCOUNTS A. Purchase payments, less any applicable charges, applied to the Separate Account are invested in one or more Sub-Accounts in accordance with the selection made by the contract owner. The following Sub-Accounts had net assets as of December 31, 2016: [Enlarge/Download Table] Alger Small Cap Growth Sub-Account LMPVET EnTrust Permal Alternative Select VIT American Funds Bond Sub-Account (a) Sub-Account American Funds Global Growth Sub-Account (a) LMPVET QS Variable Conservative Growth American Funds Global Small Capitalization Sub-Account Sub-Account (a) LMPVET QS Variable Growth Sub-Account American Funds Growth Sub-Account LMPVET QS Variable Moderate Growth Sub-Account American Funds Growth-Income Sub-Account (a) LMPVIT Western Asset Variable Global High Yield BlackRock Global Allocation V.I. Sub-Account Bond Sub-Account (a) Deutsche I CROCI International Sub-Account MFS VIT Investors Trust Sub-Account Federated High Income Bond Sub-Account MFS VIT New Discovery Sub-Account Federated Kaufman Sub-Account MFS VIT Research Sub-Account Fidelity VIP Asset Manager Sub-Account MIST AB Global Dynamic Allocation Sub-Account Fidelity VIP Contrafund Sub-Account (a) MIST Allianz Global Investors Dynamic Multi-Asset Fidelity VIP Equity-Income Sub-Account Plus Sub-Account Fidelity VIP FundsManager 50% Sub-Account MIST American Funds Balanced Allocation Sub-Account Fidelity VIP FundsManager 60% Sub-Account MIST American Funds Growth Allocation Sub-Account Fidelity VIP Government Money Market MIST American Funds Growth Sub-Account Sub-Account (a) MIST American Funds Moderate Allocation Fidelity VIP Growth Sub-Account Sub-Account Fidelity VIP Index 500 Sub-Account MIST AQR Global Risk Balanced Sub-Account Fidelity VIP Mid Cap Sub-Account MIST BlackRock Global Tactical Strategies Fidelity VIP Overseas Sub-Account Sub-Account FTVIPT Franklin Income VIP Sub-Account MIST BlackRock High Yield Sub-Account (a) FTVIPT Franklin Mutual Shares VIP Sub-Account MIST Clarion Global Real Estate Sub-Account FTVIPT Franklin Small Cap Value VIP Sub-Account MIST ClearBridge Aggressive Growth Sub-Account (a) FTVIPT Templeton Foreign VIP Sub-Account MIST Goldman Sachs Mid Cap Value Sub-Account FTVIPT Templeton Global Bond VIP Sub-Account MIST Harris Oakmark International Sub-Account (a) Invesco V.I. American Franchise Sub-Account MIST Invesco Balanced-Risk Allocation Sub-Account Invesco V.I. Core Equity Sub-Account MIST Invesco Comstock Sub-Account Invesco V.I. Equity and Income Sub-Account (a) MIST Invesco Mid Cap Value Sub-Account Invesco V.I. Growth and Income Sub-Account MIST Invesco Small Cap Growth Sub-Account (a) Invesco V.I. International Growth Sub-Account (a) MIST JPMorgan Core Bond Sub-Account Ivy VIP Asset Strategy Sub-Account MIST JPMorgan Global Active Allocation LMPVET ClearBridge Variable Aggressive Growth Sub-Account Sub-Account (a) MIST JPMorgan Small Cap Value Sub-Account (a) LMPVET ClearBridge Variable Appreciation Sub- MIST Loomis Sayles Global Markets Sub-Account Account (a) MIST Met/Aberdeen Emerging Markets Equity LMPVET ClearBridge Variable Dividend Strategy Sub-Account Sub-Account (a) MIST Met/Artisan International Sub-Account LMPVET ClearBridge Variable Large Cap Growth MIST Met/Eaton Vance Floating Rate Sub-Account Sub-Account MIST Met/Franklin Low Duration Total Return LMPVET ClearBridge Variable Large Cap Value Sub- Sub-Account Account MIST Met/Templeton International Bond Sub-Account LMPVET ClearBridge Variable Small Cap Growth MIST Met/Wellington Large Cap Research Sub-Account (a) Sub-Account (a) 98
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF SUB-ACCOUNTS -- (CONCLUDED) [Enlarge/Download Table] MIST MetLife Asset Allocation 100 Sub-Account MSF MetLife Asset Allocation 60 Sub-Account MIST MetLife Balanced Plus Sub-Account MSF MetLife Asset Allocation 80 Sub-Account MIST MetLife Multi-Index Targeted Risk Sub-Account MSF MetLife Mid Cap Stock Index Sub-Account (a) MIST MetLife Small Cap Value Sub-Account (a) MSF MetLife Stock Index Sub-Account (a) MIST MFS Research International Sub-Account (a) MSF MFS Total Return Sub-Account (a) MIST Morgan Stanley Mid Cap Growth Sub-Account (a) MSF MFS Value Sub-Account (a) MIST Oppenheimer Global Equity Sub-Account MSF MSCI EAFE Index Sub-Account (a) MIST PanAgora Global Diversified Risk Sub-Account MSF Neuberger Berman Genesis Sub-Account (a) MIST PIMCO Inflation Protected Bond Sub-Account MSF Russell 2000 Index Sub-Account (a) MIST PIMCO Total Return Sub-Account (a) MSF T. Rowe Price Large Cap Growth Sub-Account (a) MIST Pyramis Government Income Sub-Account MSF T. Rowe Price Small Cap Growth Sub-Account (a) MIST Pyramis Managed Risk Sub-Account MSF Van Eck Global Natural Resources Sub-Account MIST Schroders Global Multi-Asset Sub-Account MSF Western Asset Management Strategic Bond MIST SSGA Growth and Income ETF Sub-Account Opportunities Sub-Account (a) MIST SSGA Growth ETF Sub-Account MSF Western Asset Management U.S. Government MIST T. Rowe Price Large Cap Value Sub-Account (a) Sub-Account (a) MIST T. Rowe Price Mid Cap Growth Sub-Account Neuberger Berman Genesis Sub-Account MIST TCW Core Fixed Income Sub-Account Oppenheimer VA Core Bond Sub-Account MSF Baillie Gifford International Stock Sub-Account (a) Oppenheimer VA Government Money Sub-Account MSF Barclays Aggregate Bond Index Sub-Account (a) Oppenheimer VA Main Street Small Cap Sub-Account (a) MSF BlackRock Bond Income Sub-Account (a) Oppenheimer VA Main Street Sub-Account MSF BlackRock Capital Appreciation Sub-Account (a) PIMCO VIT CommodityRealReturn Strategy MSF BlackRock Large Cap Value Sub-Account (a) Sub-Account MSF BlackRock Ultra-Short Term Bond Sub-Account (a) PIMCO VIT Emerging Markets Bond Sub-Account MSF Frontier Mid Cap Growth Sub-Account PIMCO VIT Unconstrained Bond Sub-Account MSF Jennison Growth Sub-Account (a) Pioneer VCT Mid Cap Value Sub-Account MSF Loomis Sayles Small Cap Core Sub-Account Pioneer VCT Real Estate Shares Sub-Account MSF Loomis Sayles Small Cap Growth Sub-Account T. Rowe Price Government Money Sub-Account MSF Met/Artisan Mid Cap Value Sub-Account (a) T. Rowe Price Growth Stock Sub-Account MSF Met/Dimensional International Small Company T. Rowe Price International Stock Sub-Account Sub-Account TAP 1919 Variable Socially Responsive Balanced MSF Met/Wellington Core Equity Opportunities Sub-Account Portfolio Sub-Account (a) UIF Global Infrastructure Sub-Account MSF MetLife Asset Allocation 20 Sub-Account VanEck VIP Long/Short Equity Index Sub-Account MSF MetLife Asset Allocation 40 Sub-Account (a) This Sub-Account invests in two or more share classes within the underlying portfolio, series or fund of the Trusts. B. The following Sub-Accounts had no net assets as of December 31, 2016: Janus Aspen Global Research Sub-Account Oppenheimer VA Global Strategic Income Sub-Account 99
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. PORTFOLIO CHANGES The following Sub-Accounts ceased operations during the year ended December 31, 2016: MIST Lord Abbett Bond Debenture Sub-Account MIST Pioneer Fund Sub-Account MIST Pioneer Strategic Income Sub-Account The operations of the Sub-Accounts were affected by the following changes that occurred during the year ended December 31, 2016: NAME CHANGES: [Enlarge/Download Table] Former Name New Name Ivy Funds VIP Asset Strategy Fund Ivy VIP Asset Strategy Fund Legg Mason Permal Alternative Select VIT Portfolio Legg Mason EnTrust Permal Alternative Select VIT Portfolio (MIST) MFS Emerging Markets Equity Portfolio (MIST) Met/Aberdeen Emerging Markets Equity Portfolio (MIST) WMC Large Cap Research Portfolio (MIST) Met/Wellington Large Cap Research Portfolio (MSF) BlackRock Money Market Portfolio (MSF) BlackRock Ultra-Short Term Bond Portfolio (MSF) WMC Core Equity Opportunities Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio Oppenheimer Money Fund/VA Oppenheimer Government Money Fund/VA QS Legg Mason Variable Conservative Growth QS Variable Conservative Growth QS Legg Mason Variable Growth QS Variable Growth QS Legg Mason Variable Moderate Growth QS Variable Moderate Growth T. Rowe Price Prime Reserve Fund T. Rowe Price Government Money Fund MERGERS: [Enlarge/Download Table] Former Portfolio New Portfolio (MIST) Lord Abbett Bond Debenture Portfolio (MSF) Western Asset Management Strategic Bond Opportunities Portfolio (MIST) Pioneer Fund Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio (MIST) Pioneer Strategic Income Portfolio (MSF) Western Asset Management Strategic Bond Opportunities Portfolio TRUST NAME CHANGES: [Download Table] Former Trust New Trust Ivy Funds Variable Insurance Portfolios Ivy Variable Insurance Portfolios Van Eck VIP Trust VanEck VIP Trust 4. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable for variable annuity separate accounts registered as unit investment trusts, which follow the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") ACCOUNTING STANDARDS CODIFICATION TOPIC 946. 100
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. SECURITY VALUATION A Sub-Account's investment in shares of a portfolio, series or fund of the Trusts is valued at fair value based on the closing net asset value ("NAV") or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Sub-Accounts. The Separate Account defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Each Sub-Account invests in shares of open-end mutual funds which calculate a daily NAV based on the fair value of the underlying securities in their portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily NAV as reported by the Trusts at the close of each business day. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Contracts. Accordingly, no charge is currently being made to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Contracts. ANNUITY PAYOUTS Net assets allocated to Contracts in the payout period are computed according to industry standard mortality tables. The assumed investment return is between 3.0 and 6.0 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Separate Account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. PURCHASE PAYMENTS Purchase payments received from contract owners by the Company are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus of the Contracts, and are reported as contract transactions on the statements of changes in net assets of the applicable Sub-Accounts. NET TRANSFERS Funds transferred by the contract owner into or out of Sub-Accounts within the Separate Account or into or out of the fixed account, which is part of the Company's general account, are recorded on a net basis as net transfers in the statements of changes in net assets of the applicable Sub-Accounts. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. 101
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONCLUDED) ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In March 2015, the FASB issued new guidance to improve fair value measurement guidance (ASU 2015-07, FAIR VALUE MEASUREMENT (TOPIC 820): DISCLOSURE FOR INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT)), effective for fiscal years beginning after December 15, 2015 and interim periods within those years. The objective of this update is to address the diversity in practice related to how certain investments measured at NAV with redemption dates in the future (including periodic redemption dates) are categorized within the fair value hierarchy. The amendments in the ASU remove the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the NAV per share practical expedient. Effective January 1, 2016, the Separate Account adopted this guidance. The adoption resulted in removal of the related disclosures in Note 4. 5. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charges paid to the Company are asset-based charges assessed through a daily reduction in unit values, which are recorded as expenses in the accompanying statements of operations of the applicable Sub-Accounts: Mortality and Expense Risk -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is the risk that expenses incurred in issuing and administering the Contracts will exceed the amounts realized from the administrative charges assessed against the Contracts. In addition, the charge compensates the Company for the risk that the investor may live longer than estimated and the Company would be obligated to pay more in income payments than anticipated. Administrative -- The Company has responsibility for the administration of the Contracts and the Separate Account. Generally, the administrative charge is related to the maintenance, including distribution, of each contract and the Separate Account. Optional Death Benefit Rider -- For an additional charge, the total death benefit payable may be increased based on increases in account value of the Contracts. Distribution Expense -- The risk that surrender charges will be insufficient to cover the actual costs of distribution which includes commissions, fees, registration costs, direct and indirect selling expenses. Guaranteed Minimum Accumulation Benefit -- For an additional charge, the Company will guarantee that the contract value will not be less than a guaranteed minimum amount at the end of a specified number of years. Guaranteed Withdrawal Benefit for Life -- For an additional charge that includes the Mortality and Expense Risk charge and a Guaranteed Withdrawal Benefit, the Company will guarantee the periodic return on the investment for life of a single annuitant or joint annuitants. Earnings Preservation Benefit -- For an additional charge, the Company will provide this additional death benefit. The table below represents the range of effective annual rates for each respective charge for the year ended December 31, 2016: [Enlarge/Download Table] ---------------------------------------------------------------------------------------------------------------------------- Mortality and Expense Risk 0.70% - 2.05% ---------------------------------------------------------------------------------------------------------------------------- Administrative 0.10% - 0.25% ---------------------------------------------------------------------------------------------------------------------------- Optional Death Benefit Rider 0.15% - 0.35% ---------------------------------------------------------------------------------------------------------------------------- Distribution Expense 0.10% ---------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Accumulation Benefit 1.50% ---------------------------------------------------------------------------------------------------------------------------- Guaranteed Withdrawal Benefit for Life 1.90% - 2.05% ---------------------------------------------------------------------------------------------------------------------------- Earnings Preservation Benefit 0.25% ---------------------------------------------------------------------------------------------------------------------------- 102
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. EXPENSES AND RELATED PARTY TRANSACTIONS -- (CONCLUDED) The above referenced charges may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular contract. The range of effective rates disclosed above excludes any waivers granted to certain Sub-Accounts. The following optional rider charges paid to the Company are charged at each contract anniversary date through the redemption of units and are recorded as contract charges in the accompanying statements of changes in net assets of the applicable Sub-Accounts: Guaranteed Minimum Accumulation Benefit -- For an additional charge, the Company will guarantee that the contract value will not be less than a guaranteed minimum amount at the end of a specified number of years. Lifetime Withdrawal Guarantee -- For an additional charge, the Company will guarantee minimum withdrawals for life regardless of market conditions. Guaranteed Withdrawal Benefit -- For an additional charge, the Company will guarantee minimum withdrawals regardless of market conditions. Guaranteed Minimum Income Benefit -- For an additional charge, the Company will guarantee a minimum payment regardless of market conditions. Enhanced Death Benefit -- For an additional charge, the Company will guarantee a death benefit equal to the greater of the account value or the higher of two death benefit bases. Enhanced Guaranteed Withdrawal Benefit -- For an additional charge, the Company will guarantee that at least the entire amount of purchase payments will be returned through a series of withdrawals without annuitizing. The table below represents the range of effective annual rates for each respective charge for the year ended December 31, 2016: [Enlarge/Download Table] ------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Accumulation Benefit 0.75% ------------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee 0.50% - 1.70% ------------------------------------------------------------------------------------------------------------------------- Guaranteed Withdrawal Benefit 0.25% - 1.80% ------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Income Benefit 0.50% - 1.15% ------------------------------------------------------------------------------------------------------------------------- Enhanced Death Benefit 0.60% - 1.35% ------------------------------------------------------------------------------------------------------------------------- Enhanced Guaranteed Withdrawal Benefit 0.50% - 1.00% ------------------------------------------------------------------------------------------------------------------------- The above referenced charges may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular contract. A contract maintenance fee ranging from $30 to $50 is assessed on an annual basis for Contracts with a value of less than $50,000 to $75,000. A transfer fee ranging from $0 to $25 may be deducted after twelve transfers are made in a contract year or, for certain contracts, 2% of the amount transferred from the contract value, if less. For certain Contracts, an administrative charge is also assessed which ranges from $12 to $29.50 for each Sub-Account in which the contract owner invests (waived if purchase payments equal or exceed $2,000 in the year, or if the account value is $10,000 or more at year end). For other Contracts, the administrative charge is $21.50 plus $2.50 for each Sub-Account selected, subject to the same waiver terms. In addition, the Contracts impose a surrender charge which ranges from 0% to 9% if the contract is partially or fully surrendered within the specified surrender charge period. For certain Contracts, a transaction charge of the lesser of $10 or 2% of the surrender is imposed on surrenders and a $10 charge is assessed for annuitizations. For those contract owners who choose optional living benefit riders or certain optional death benefit riders, these charges range from 0.25% to 1.80% of the benefit base and are charged at each contract anniversary date. These charges are paid to the Company and recorded as contract charges in the accompanying statements of changes in net assets of the applicable Sub-Accounts. The MIST and MSF Trusts currently offer shares of their portfolios only to separate accounts established by the Company and other affiliated life insurance companies, and are managed by MetLife Advisers, an affiliate of the Company. MetLife Advisers is also the investment adviser to the portfolios of the MIST and MSF Trusts. 103
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS [Enlarge/Download Table] FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ------------------------------- -------------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------- -------------- -------------- Alger Small Cap Growth Sub-Account.......................... 2,456,796 63,173,699 6,577,963 4,871,955 American Funds Bond Sub-Account............................. 12,438,642 133,136,363 6,804,434 22,077,355 American Funds Global Growth Sub-Account.................... 11,615,924 262,921,672 28,857,996 27,296,575 American Funds Global Small Capitalization Sub-Account...... 5,399,497 107,973,198 22,348,376 10,801,545 American Funds Growth Sub-Account........................... 10,832,254 619,686,935 70,559,887 94,097,146 American Funds Growth-Income Sub-Account.................... 8,272,690 320,752,805 49,242,887 38,099,244 BlackRock Global Allocation V.I. Sub-Account................ 193,129 2,635,899 1,072,291 115,232 Deutsche I CROCI International Sub-Account.................. 1,738,842 16,545,633 1,433,007 1,494,780 Federated High Income Bond Sub-Account...................... 4,032 28,020 1,641 1,112 Federated Kaufman Sub-Account............................... 2,850 40,850 3,202 1,989 Fidelity VIP Asset Manager Sub-Account...................... 4,626,593 71,228,345 4,838,784 8,208,259 Fidelity VIP Contrafund Sub-Account......................... 17,377,899 456,942,806 58,656,693 60,128,040 Fidelity VIP Equity-Income Sub-Account...................... 215,807 4,788,573 422,583 1,002,021 Fidelity VIP FundsManager 50% Sub-Account................... 373,684,972 4,395,666,480 261,620,359 253,283,024 Fidelity VIP FundsManager 60% Sub-Account................... 287,724,437 2,872,182,935 162,357,033 680,072,130 Fidelity VIP Government Money Market Sub-Account............ 18,955,238 18,955,238 51,494,589 82,193,377 Fidelity VIP Growth Sub-Account............................. 2,436,867 98,051,625 14,963,874 17,361,060 Fidelity VIP Index 500 Sub-Account.......................... 272,217 36,183,611 945,360 7,094,344 Fidelity VIP Mid Cap Sub-Account............................ 12,403,732 367,633,569 27,516,622 38,014,853 Fidelity VIP Overseas Sub-Account........................... 215,164 3,940,559 218,367 704,463 FTVIPT Franklin Income VIP Sub-Account...................... 16,916,465 254,420,748 15,381,514 29,116,738 FTVIPT Franklin Mutual Shares VIP Sub-Account............... 6,718,384 119,365,184 15,751,499 15,262,749 FTVIPT Franklin Small Cap Value VIP Sub-Account............. 6,625,570 111,808,329 20,623,812 16,071,233 FTVIPT Templeton Foreign VIP Sub-Account.................... 5,033,419 74,367,154 4,997,282 4,826,011 FTVIPT Templeton Global Bond VIP Sub-Account................ 13,159,407 240,672,163 3,518,168 17,976,356 Invesco V.I. American Franchise Sub-Account................. 233 12,941 1,104 2,661 Invesco V.I. Core Equity Sub-Account........................ 4,951 134,590 15,266 18,792 Invesco V.I. Equity and Income Sub-Account.................. 37,006,200 539,721,067 36,881,555 58,085,911 Invesco V.I. Growth and Income Sub-Account.................. 48 882 204 5,854 Invesco V.I. International Growth Sub-Account............... 7,516,905 206,137,475 7,528,602 15,449,019 Ivy VIP Asset Strategy Sub-Account.......................... 28,992 273,197 85,975 160,703 LMPVET ClearBridge Variable Aggressive Growth Sub-Account............................................... 11,706,369 230,261,767 27,776,002 21,432,482 LMPVET ClearBridge Variable Appreciation Sub-Account........ 11,059,432 290,010,740 19,387,803 36,439,467 LMPVET ClearBridge Variable Dividend Strategy Sub-Account............................................... 11,781,761 138,318,713 8,395,258 17,673,700 LMPVET ClearBridge Variable Large Cap Growth Sub-Account............................................... 152,863 2,816,377 309,162 956,231 LMPVET ClearBridge Variable Large Cap Value Sub-Account..... 441,049 7,633,059 1,610,617 1,214,094 LMPVET ClearBridge Variable Small Cap Growth Sub-Account............................................... 4,827,188 86,042,224 8,986,670 9,704,307 LMPVET EnTrust Permal Alternative Select VIT Sub-Account.... 1,419,672 13,900,602 3,910,128 888,987 LMPVET QS Variable Conservative Growth Sub-Account.......... 2,631,161 33,379,176 2,339,338 3,537,306 LMPVET QS Variable Growth Sub-Account....................... 5,761,050 71,928,286 5,588,402 7,844,693 LMPVET QS Variable Moderate Growth Sub-Account.............. 63,218 731,035 82,196 477,640 LMPVIT Western Asset Variable Global High Yield Bond Sub-Account............................................... 12,401,443 98,990,048 6,558,717 12,627,828 MFS VIT Investors Trust Sub-Account......................... 346 7,089 1,032 766 MFS VIT New Discovery Sub-Account........................... 2,548 39,303 1,788 1,564 MFS VIT Research Sub-Account................................ 831 15,733 2,272 6,075 MIST AB Global Dynamic Allocation Sub-Account............... 280,453,035 2,848,230,902 115,852,410 206,209,326 MIST Allianz Global Investors Dynamic Multi-Asset Plus Sub-Account............................................... 7,845,828 82,620,751 24,925,892 5,140,410 MIST American Funds Balanced Allocation Sub-Account......... 325,342,426 2,968,113,516 331,327,884 218,430,765 MIST American Funds Growth Allocation Sub-Account........... 190,709,393 1,628,589,301 218,187,604 164,327,573 MIST American Funds Growth Sub-Account...................... 66,617,368 598,329,860 181,819,491 64,059,085 104
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED) [Enlarge/Download Table] FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ------------------------------ -------------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------- -------------- -------------- MIST American Funds Moderate Allocation Sub-Account........ 164,303,088 1,529,574,235 158,471,894 109,383,755 MIST AQR Global Risk Balanced Sub-Account.................. 262,668,236 2,765,863,794 2,164,816 247,827,110 MIST BlackRock Global Tactical Strategies Sub-Account...... 512,743,473 5,046,756,822 494,520,779 354,448,753 MIST BlackRock High Yield Sub-Account...................... 30,515,245 244,357,248 45,012,414 38,266,498 MIST Clarion Global Real Estate Sub-Account................ 22,727,707 259,394,904 13,115,641 35,681,834 MIST ClearBridge Aggressive Growth Sub-Account............. 30,217,101 308,134,767 14,121,155 74,642,958 MIST Goldman Sachs Mid Cap Value Sub-Account............... 11,784,987 153,582,417 13,315,817 21,564,402 MIST Harris Oakmark International Sub-Account.............. 44,561,210 622,585,499 66,481,585 81,006,063 MIST Invesco Balanced-Risk Allocation Sub-Account.......... 91,855,309 945,784,258 109,305,221 34,298,485 MIST Invesco Comstock Sub-Account.......................... 50,919,996 603,184,711 83,413,478 82,898,354 MIST Invesco Mid Cap Value Sub-Account..................... 14,229,187 238,657,726 22,568,185 21,982,365 MIST Invesco Small Cap Growth Sub-Account.................. 22,903,644 319,645,202 63,846,091 37,659,196 MIST JPMorgan Core Bond Sub-Account........................ 33,249,505 348,065,952 31,632,610 31,002,671 MIST JPMorgan Global Active Allocation Sub-Account......... 95,091,895 1,036,542,448 110,306,678 59,105,280 MIST JPMorgan Small Cap Value Sub-Account.................. 1,457,792 20,665,955 2,753,028 4,043,412 MIST Loomis Sayles Global Markets Sub-Account.............. 9,980,695 120,925,093 12,483,848 24,940,821 MIST Met/Aberdeen Emerging Markets Equity Sub-Account...... 41,552,845 399,385,513 17,944,789 52,000,922 MIST Met/Artisan International Sub-Account................. 27,051 255,021 157,633 27,238 MIST Met/Eaton Vance Floating Rate Sub-Account............. 6,300,083 64,969,205 11,974,056 14,242,774 MIST Met/Franklin Low Duration Total Return Sub-Account.... 15,148,901 149,960,611 16,144,802 29,377,317 MIST Met/Templeton International Bond Sub-Account.......... 3,969,218 45,231,900 2,802,239 5,831,645 MIST Met/Wellington Large Cap Research Sub-Account......... 1,121,930 11,602,511 1,861,193 2,038,058 MIST MetLife Asset Allocation 100 Sub-Account.............. 48,209,256 513,855,028 87,908,590 69,298,638 MIST MetLife Balanced Plus Sub-Account..................... 643,617,526 6,612,811,145 376,103,285 384,879,272 MIST MetLife Multi-Index Targeted Risk Sub-Account......... 70,808,286 820,793,066 202,238,597 11,945,069 MIST MetLife Small Cap Value Sub-Account................... 16,880,775 237,467,921 12,243,095 39,954,957 MIST MFS Research International Sub-Account................ 24,633,181 266,411,114 9,075,051 25,631,608 MIST Morgan Stanley Mid Cap Growth Sub-Account............. 14,515,126 158,444,966 10,059,347 11,649,094 MIST Oppenheimer Global Equity Sub-Account................. 3,115,819 54,816,464 5,063,679 6,985,212 MIST PanAgora Global Diversified Risk Sub-Account.......... 9,957,177 106,600,781 87,119,950 3,162,552 MIST PIMCO Inflation Protected Bond Sub-Account............ 64,268,822 698,511,680 29,473,060 71,814,532 MIST PIMCO Total Return Sub-Account........................ 129,999,716 1,527,891,817 90,458,506 207,465,551 MIST Pyramis Government Income Sub-Account................. 61,727,511 662,971,826 124,647,847 121,581,438 MIST Pyramis Managed Risk Sub-Account...................... 37,170,729 409,151,110 68,213,077 18,348,064 MIST Schroders Global Multi-Asset Sub-Account.............. 49,863,988 548,494,125 34,990,186 36,019,650 MIST SSGA Growth and Income ETF Sub-Account................ 117,095,315 1,279,955,999 109,068,518 135,429,135 MIST SSGA Growth ETF Sub-Account........................... 41,228,656 434,178,776 49,298,276 52,674,436 MIST T. Rowe Price Large Cap Value Sub-Account............. 22,228,945 608,276,213 122,557,842 94,222,108 MIST T. Rowe Price Mid Cap Growth Sub-Account.............. 47,808,268 428,010,322 77,854,535 56,978,499 MIST TCW Core Fixed Income Sub-Account..................... 29,018 294,488 251,580 30,387 MSF Baillie Gifford International Stock Sub-Account........ 22,405,903 210,245,883 9,328,121 29,896,178 MSF Barclays Aggregate Bond Index Sub-Account.............. 29,061,735 316,592,048 133,499,165 67,474,824 MSF BlackRock Bond Income Sub-Account...................... 711,437 76,010,724 14,486,523 8,836,643 MSF BlackRock Capital Appreciation Sub-Account............. 425,229 12,720,185 3,122,060 2,102,165 MSF BlackRock Large Cap Value Sub-Account.................. 557,905 5,327,354 1,499,522 998,739 MSF BlackRock Ultra-Short Term Bond Sub-Account............ 3,432,973 343,320,994 111,962,097 167,282,118 MSF Frontier Mid Cap Growth Sub-Account.................... 2,323,497 69,312,099 10,470,119 12,292,045 MSF Jennison Growth Sub-Account............................ 34,218,505 417,661,860 68,768,026 60,374,364 MSF Loomis Sayles Small Cap Core Sub-Account............... 55,640 12,945,703 2,219,309 1,677,355 MSF Loomis Sayles Small Cap Growth Sub-Account............. 25,101 331,161 58,172 76,752 MSF Met/Artisan Mid Cap Value Sub-Account.................. 969,986 208,108,379 34,664,712 29,511,409 MSF Met/Dimensional International Small Company Sub-Account.............................................. 4,629,606 64,316,471 8,276,107 11,699,587 MSF Met/Wellington Core Equity Opportunities Sub-Account... 27,715,689 792,039,442 352,851,798 90,971,353 MSF MetLife Asset Allocation 20 Sub-Account................ 9,583,557 105,042,401 64,937,630 26,876,511 MSF MetLife Asset Allocation 40 Sub-Account................ 352,541,279 4,246,055,991 413,736,292 523,668,476 105
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONCLUDED) [Enlarge/Download Table] FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ------------------------------ ------------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------- -------------- -------------- MSF MetLife Asset Allocation 60 Sub-Account................ 549,581,592 6,980,035,677 801,265,071 693,802,078 MSF MetLife Asset Allocation 80 Sub-Account................ 440,490,712 6,086,147,894 834,684,145 611,810,683 MSF MetLife Mid Cap Stock Index Sub-Account................ 8,150,214 124,168,072 30,133,397 13,087,586 MSF MetLife Stock Index Sub-Account........................ 13,334,507 450,993,943 92,040,350 75,750,138 MSF MFS Total Return Sub-Account........................... 244,194 36,060,015 4,874,299 6,564,791 MSF MFS Value Sub-Account.................................. 18,754,823 277,713,381 65,869,833 36,332,133 MSF MSCI EAFE Index Sub-Account............................ 8,920,237 105,829,002 13,269,783 7,666,355 MSF Neuberger Berman Genesis Sub-Account................... 6,321,445 91,480,088 1,897,267 21,807,139 MSF Russell 2000 Index Sub-Account......................... 7,275,403 112,103,208 20,787,002 22,877,557 MSF T. Rowe Price Large Cap Growth Sub-Account............. 10,251,651 213,583,436 44,160,650 50,620,337 MSF T. Rowe Price Small Cap Growth Sub-Account............. 631,051 11,405,332 3,919,113 2,531,983 MSF Van Eck Global Natural Resources Sub-Account........... 8,159,529 100,937,138 10,419,896 29,782,968 MSF Western Asset Management Strategic Bond Opportunities Sub-Account.............................................. 78,622,647 1,019,409,839 1,118,674,941 101,298,513 MSF Western Asset Management U.S. Government Sub-Account.............................................. 21,428,850 257,312,695 22,564,201 37,086,534 Neuberger Berman Genesis Sub-Account....................... 110 4,519 478 1,975 Oppenheimer VA Core Bond Sub-Account....................... 746 7,461 270 2,017 Oppenheimer VA Government Money Sub-Account................ 3,398 3,398 4 207 Oppenheimer VA Main Street Small Cap Sub-Account........... 4,850,146 86,060,279 5,006,480 12,613,994 Oppenheimer VA Main Street Sub-Account..................... 3,599 82,745 13,678 13,614 PIMCO VIT CommodityRealReturn Strategy Sub-Account......... 59,373 473,006 223,492 53,872 PIMCO VIT Emerging Markets Bond Sub-Account................ 51,334 639,536 277,626 72,308 PIMCO VIT Unconstrained Bond Sub-Account................... 54,857 555,442 364,242 100,416 Pioneer VCT Mid Cap Value Sub-Account...................... 3,319,607 60,596,202 5,435,468 7,405,385 Pioneer VCT Real Estate Shares Sub-Account................. 15,371 249,677 76,996 28,969 T. Rowe Price Government Money Sub-Account................. 532,685 532,685 209,662 174,016 T. Rowe Price Growth Stock Sub-Account..................... 120,050 4,446,309 354,539 944,305 T. Rowe Price International Stock Sub-Account.............. 25,061 358,457 17,896 53,599 TAP 1919 Variable Socially Responsive Balanced Sub-Account. 5,553 145,357 15,520 84,171 UIF Global Infrastructure Sub-Account...................... 67,290 531,268 196,924 61,856 VanEck VIP Long/Short Equity Index Sub-Account............. 18,613 455,301 254,079 65,765 106
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] ALGER SMALL CAP GROWTH AMERICAN FUNDS BOND AMERICAN FUNDS GLOBAL GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- --------------- -------------- --------------- -------------- Units beginning of year.......... 3,508,832 3,970,857 8,159,989 8,333,829 7,480,782 8,193,931 Units issued and transferred from other funding options.... 80,179 111,356 772,477 957,597 522,007 545,519 Units redeemed and transferred to other funding options......... (388,533) (573,381) (1,639,113) (1,131,437) (1,022,066) (1,258,668) -------------- --------------- --------------- -------------- --------------- -------------- Units end of year................ 3,200,478 3,508,832 7,293,353 8,159,989 6,980,723 7,480,782 ============== =============== =============== ============== =============== ============== AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION AMERICAN FUNDS GROWTH SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 3,123,694 3,297,014 3,075,557 3,527,704 Units issued and transferred from other funding options.... 272,900 395,266 75,722 54,060 Units redeemed and transferred to other funding options......... (456,718) (568,586) (409,695) (506,207) --------------- -------------- --------------- --------------- Units end of year................ 2,939,876 3,123,694 2,741,584 3,075,557 =============== ============== =============== =============== AMERICAN FUNDS GROWTH-INCOME SUB-ACCOUNT ------------------------------- 2016 2015 -------------- --------------- Units beginning of year.......... 2,179,793 2,378,568 Units issued and transferred from other funding options.... 286,066 137,901 Units redeemed and transferred to other funding options......... (302,222) (336,676) -------------- --------------- Units end of year................ 2,163,637 2,179,793 ============== =============== [Enlarge/Download Table] BLACKROCK GLOBAL ALLOCATION V.I. DEUTSCHE I CROCI INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT --------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 77,369 402 1,563,760 1,732,959 Units issued and transferred from other funding options.... 60,040 92,990 71,496 95,371 Units redeemed and transferred to other funding options......... (13,474) (16,023) (218,351) (264,570) --------------- --------------- --------------- --------------- Units end of year................ 123,935 77,369 1,416,905 1,563,760 =============== =============== =============== =============== FEDERATED HIGH INCOME BOND FEDERATED KAUFMAN SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 2,503 2,534 5,491 5,676 Units issued and transferred from other funding options.... -- -- -- -- Units redeemed and transferred to other funding options......... (68) (31) (160) (185) --------------- --------------- --------------- --------------- Units end of year................ 2,435 2,503 5,331 5,491 =============== =============== =============== =============== FIDELITY VIP ASSET MANAGER FIDELITY VIP CONTRAFUND SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 4,920,853 5,426,360 21,653,047 20,382,633 Units issued and transferred from other funding options.... 136,470 153,576 2,319,348 3,996,402 Units redeemed and transferred to other funding options......... (563,948) (659,083) (2,712,917) (2,725,988) --------------- --------------- --------------- --------------- Units end of year................ 4,493,375 4,920,853 21,259,478 21,653,047 =============== =============== =============== =============== [Enlarge/Download Table] FIDELITY VIP EQUITY-INCOME FIDELITY VIP FUNDSMANAGER 50% SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 280,187 303,711 340,402,591 268,426,412 Units issued and transferred from other funding options.... 1,199 911 16,507,550 83,556,244 Units redeemed and transferred to other funding options......... (51,205) (24,435) (17,347,681) (11,580,065) --------------- --------------- --------------- --------------- Units end of year................ 230,181 280,187 339,562,460 340,402,591 =============== =============== =============== =============== FIDELITY VIP GOVERNMENT FIDELITY VIP FUNDSMANAGER 60% MONEY MARKET SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 299,646,067 319,425,019 5,764,747 5,894,288 Units issued and transferred from other funding options.... 391,758 457,348 17,447,762 107,299,143 Units redeemed and transferred to other funding options......... (49,048,117) (20,236,300) (20,453,584) (107,428,684) --------------- --------------- -------------- --------------- Units end of year................ 250,989,708 299,646,067 2,758,925 5,764,747 =============== =============== ============== =============== FIDELITY VIP GROWTH FIDELITY VIP INDEX 500 SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 6,842,558 7,538,876 2,464,560 2,778,454 Units issued and transferred from other funding options.... 160,970 221,157 19,180 11,728 Units redeemed and transferred to other funding options......... (824,248) (917,475) (261,640) (325,622) --------------- --------------- --------------- --------------- Units end of year................ 6,179,280 6,842,558 2,222,100 2,464,560 =============== =============== =============== =============== [Enlarge/Download Table] FIDELITY VIP MID CAP FIDELITY VIP OVERSEAS SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 6,898,177 7,445,624 376,022 411,275 Units issued and transferred from other funding options.... 397,383 425,914 17,936 16,903 Units redeemed and transferred to other funding options......... (913,445) (973,361) (60,807) (52,156) --------------- --------------- --------------- -------------- Units end of year................ 6,382,115 6,898,177 333,151 376,022 =============== =============== =============== ============== FTVIPT FRANKLIN FTVIPT FRANKLIN INCOME VIP MUTUAL SHARES VIP SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- --------------- Units beginning of year.......... 4,415,184 4,717,186 4,536,450 5,080,687 Units issued and transferred from other funding options.... 263,011 429,783 273,842 225,032 Units redeemed and transferred to other funding options......... (646,352) (731,785) (645,310) (769,269) -------------- --------------- --------------- --------------- Units end of year................ 4,031,843 4,415,184 4,164,982 4,536,450 ============== =============== =============== =============== FTVIPT FRANKLIN SMALL CAP VALUE VIP FTVIPT TEMPLETON FOREIGN VIP SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- --------------- Units beginning of year.......... 8,783,442 9,145,054 2,282,942 2,354,783 Units issued and transferred from other funding options.... 669,468 842,504 229,599 310,306 Units redeemed and transferred to other funding options......... (1,574,210) (1,204,116) (266,760) (382,147) -------------- --------------- --------------- --------------- Units end of year................ 7,878,700 8,783,442 2,245,781 2,282,942 ============== =============== =============== =============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 108
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] FTVIPT TEMPLETON GLOBAL BOND VIP INVESCO V.I. AMERICAN FRANCHISE SUB-ACCOUNT SUB-ACCOUNT --------------------------------- --------------------------------- 2016 2015 2016 2015 ---------------- --------------- ---------------- --------------- Units beginning of year.......... 11,945,145 12,667,617 1,825 1,911 Units issued and transferred from other funding options.... 1,038,847 1,072,638 -- 277 Units redeemed and transferred to other funding options......... (1,680,437) (1,795,110) (311) (363) ---------------- --------------- ---------------- --------------- Units end of year................ 11,303,555 11,945,145 1,514 1,825 ================ =============== ================ =============== INVESCO V.I. CORE EQUITY INVESCO V.I. EQUITY AND INCOME SUB-ACCOUNT SUB-ACCOUNT --------------------------------- --------------------------------- 2016 2015 2016 2015 --------------- ---------------- --------------- ---------------- Units beginning of year.......... 27,589 34,703 28,966,281 30,622,887 Units issued and transferred from other funding options.... 391 222 1,842,325 2,239,714 Units redeemed and transferred to other funding options......... (2,630) (7,336) (3,784,321) (3,896,320) --------------- ---------------- --------------- ---------------- Units end of year................ 25,350 27,589 27,024,285 28,966,281 =============== ================ =============== ================ INVESCO V.I. GROWTH AND INCOME INVESCO V.I. INTERNATIONAL GROWTH SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- ---------------- --------------- ---------------- Units beginning of year.......... 654 665 8,534,492 8,820,511 Units issued and transferred from other funding options.... 6 4,318 703,865 732,708 Units redeemed and transferred to other funding options......... (573) (4,329) (945,107) (1,018,727) --------------- ---------------- --------------- ---------------- Units end of year................ 87 654 8,293,250 8,534,492 =============== ================ =============== ================ [Enlarge/Download Table] LMPVET CLEARBRIDGE IVY VIP ASSET STRATEGY VARIABLE AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 20,900 2,575 11,091,987 11,333,726 Units issued and transferred from other funding options.... 5,793 18,664 1,508,549 1,598,334 Units redeemed and transferred to other funding options......... (10,870) (339) (1,668,238) (1,840,073) --------------- --------------- -------------- --------------- Units end of year................ 15,823 20,900 10,932,298 11,091,987 =============== =============== ============== =============== LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE VARIABLE APPRECIATION VARIABLE DIVIDEND STRATEGY SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 7,746,928 8,268,721 9,391,848 9,796,222 Units issued and transferred from other funding options.... 915,561 641,450 876,420 936,597 Units redeemed and transferred to other funding options......... (1,047,423) (1,163,243) (1,361,334) (1,340,971) --------------- --------------- --------------- --------------- Units end of year................ 7,615,066 7,746,928 8,906,934 9,391,848 =============== =============== =============== =============== LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE VARIABLE LARGE CAP GROWTH VARIABLE LARGE CAP VALUE SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 156,000 200,379 333,277 369,225 Units issued and transferred from other funding options.... 2,195 6,846 63,190 61,713 Units redeemed and transferred to other funding options......... (36,762) (51,225) (53,744) (97,661) --------------- -------------- --------------- --------------- Units end of year................ 121,433 156,000 342,723 333,277 =============== ============== =============== =============== [Enlarge/Download Table] LMPVET CLEARBRIDGE LMPVET ENTRUST PERMAL LMPVET QS VARIABLE SMALL CAP GROWTH ALTERNATIVE SELECT VIT VARIABLE CONSERVATIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 --------------- -------------- --------------- -------------- --------------- -------------- Units beginning of year.......... 3,817,761 4,105,606 1,078,857 64,025 1,731,301 1,866,299 Units issued and transferred from other funding options.... 552,112 409,903 547,861 1,126,041 99,760 197,334 Units redeemed and transferred to other funding options......... (599,641) (697,748) (198,029) (111,209) (173,182) (332,332) --------------- -------------- --------------- -------------- --------------- -------------- Units end of year................ 3,770,232 3,817,761 1,428,689 1,078,857 1,657,879 1,731,301 =============== ============== =============== ============== =============== ============== LMPVET QS LMPVET QS LMPVIT WESTERN ASSET VARIABLE VARIABLE GROWTH VARIABLE MODERATE GROWTH GLOBAL HIGH YIELD BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- -------------- Units beginning of year.......... 4,234,141 4,529,329 67,619 98,417 4,003,585 4,320,147 Units issued and transferred from other funding options.... 150,989 198,570 2,836 697 230,145 404,813 Units redeemed and transferred to other funding options......... (421,873) (493,758) (24,517) (31,495) (665,773) (721,375) -------------- --------------- -------------- --------------- -------------- -------------- Units end of year................ 3,963,257 4,234,141 45,938 67,619 3,567,957 4,003,585 ============== =============== ============== =============== ============== ============== [Enlarge/Download Table] MFS VIT INVESTORS TRUST MFS VIT NEW DISCOVERY SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- --------------- Units beginning of year.......... 1,112 1,191 3,178 3,178 Units issued and transferred from other funding options.... -- -- -- -- Units redeemed and transferred to other funding options......... (79) (79) (76) -- -------------- --------------- --------------- --------------- Units end of year................ 1,033 1,112 3,102 3,178 ============== =============== =============== =============== MIST AB GLOBAL MFS VIT RESEARCH DYNAMIC ALLOCATION SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 3,091 3,115 263,678,991 275,344,937 Units issued and transferred from other funding options.... -- -- 19,318,402 20,797,979 Units redeemed and transferred to other funding options......... (714) (24) (30,036,887) (32,463,925) --------------- --------------- --------------- -------------- Units end of year................ 2,377 3,091 252,960,506 263,678,991 =============== =============== =============== ============== MIST ALLIANZ GLOBAL INVESTORS MIST AMERICAN FUNDS DYNAMIC MULTI-ASSET PLUS BALANCED ALLOCATION SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- --------------- Units beginning of year.......... 59,800,997 18,219,524 246,263,553 264,143,945 Units issued and transferred from other funding options.... 33,904,838 46,238,996 15,335,939 12,343,569 Units redeemed and transferred to other funding options......... (14,269,519) (4,657,523) (27,228,489) (30,223,961) -------------- --------------- --------------- --------------- Units end of year................ 79,436,316 59,800,997 234,371,003 246,263,553 ============== =============== =============== =============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 110
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] MIST AMERICAN FUNDS GROWTH ALLOCATION MIST AMERICAN FUNDS GROWTH SUB-ACCOUNT SUB-ACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 137,469,623 142,940,560 77,730,599 71,860,704 Units issued and transferred from other funding options.... 8,565,324 10,181,343 12,677,891 19,365,787 Units redeemed and transferred to other funding options......... (17,517,477) (15,652,280) (12,979,518) (13,495,892) --------------- -------------- --------------- --------------- Units end of year................ 128,517,470 137,469,623 77,428,972 77,730,599 =============== ============== =============== =============== MIST AMERICAN FUNDS MIST AQR GLOBAL RISK MODERATE ALLOCATION BALANCED SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- -------------- Units beginning of year.......... 126,162,585 137,310,606 241,508,750 265,908,083 Units issued and transferred from other funding options.... 9,031,479 5,116,512 10,345,425 17,722,524 Units redeemed and transferred to other funding options......... (13,878,679) (16,264,533) (30,489,959) (42,121,857) -------------- --------------- --------------- -------------- Units end of year................ 121,315,385 126,162,585 221,364,216 241,508,750 ============== =============== =============== ============== MIST BLACKROCK GLOBAL TACTICAL STRATEGIES MIST BLACKROCK HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 445,213,023 463,962,556 9,031,674 9,596,910 Units issued and transferred from other funding options.... 23,672,589 30,759,555 2,059,900 2,244,487 Units redeemed and transferred to other funding options......... (47,711,278) (49,509,088) (2,231,500) (2,809,723) --------------- --------------- -------------- --------------- Units end of year................ 421,174,334 445,213,023 8,860,074 9,031,674 =============== =============== ============== =============== [Enlarge/Download Table] MIST CLEARBRIDGE MIST CLARION GLOBAL REAL ESTATE AGGRESSIVE GROWTH SUB-ACCOUNT SUB-ACCOUNT --------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 15,477,002 17,245,897 35,697,833 38,472,258 Units issued and transferred from other funding options.... 1,636,352 2,066,679 4,081,680 7,454,895 Units redeemed and transferred to other funding options......... (2,899,353) (3,835,574) (8,063,231) (10,229,320) --------------- --------------- --------------- -------------- Units end of year................ 14,214,001 15,477,002 31,716,282 35,697,833 =============== =============== =============== ============== MIST GOLDMAN SACHS MIST HARRIS OAKMARK MID CAP VALUE INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 6,513,771 7,477,599 25,339,005 26,551,192 Units issued and transferred from other funding options.... 550,368 909,368 3,176,397 3,949,293 Units redeemed and transferred to other funding options......... (1,348,683) (1,873,196) (5,507,833) (5,161,480) --------------- --------------- --------------- -------------- Units end of year................ 5,715,456 6,513,771 23,007,569 25,339,005 =============== =============== =============== ============== MIST INVESCO BALANCED-RISK ALLOCATION MIST INVESCO COMSTOCK SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 749,414,346 758,894,714 39,951,458 43,175,673 Units issued and transferred from other funding options.... 178,177,883 110,674,691 3,419,052 3,588,670 Units redeemed and transferred to other funding options......... (109,515,300) (120,155,059) (6,626,750) (6,812,885) --------------- --------------- --------------- -------------- Units end of year................ 818,076,929 749,414,346 36,743,760 39,951,458 =============== =============== =============== ============== [Enlarge/Download Table] MIST INVESCO MID CAP VALUE MIST INVESCO SMALL CAP GROWTH MIST JPMORGAN CORE BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- --------------- Units beginning of year.......... 7,308,379 6,927,870 11,537,860 11,824,275 31,401,600 32,404,332 Units issued and transferred from other funding options.... 1,000,977 1,471,034 1,540,952 2,126,130 5,804,842 5,583,982 Units redeemed and transferred to other funding options......... (1,241,132) (1,090,525) (2,409,263) (2,412,545) (6,142,083) (6,586,714) -------------- --------------- -------------- --------------- -------------- --------------- Units end of year................ 7,068,224 7,308,379 10,669,549 11,537,860 31,064,359 31,401,600 ============== =============== ============== =============== ============== =============== MIST JPMORGAN GLOBAL MIST LOOMIS SAYLES ACTIVE ALLOCATION MIST JPMORGAN SMALL CAP VALUE GLOBAL MARKETS SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- --------------- Units beginning of year.......... 828,919,735 747,266,184 1,287,553 1,417,944 9,530,128 10,444,732 Units issued and transferred from other funding options.... 155,414,383 183,798,458 78,756 82,373 976,077 1,293,487 Units redeemed and transferred to other funding options......... (136,235,268) (102,144,907) (225,007) (212,764) (2,000,250) (2,208,091) -------------- --------------- -------------- --------------- -------------- --------------- Units end of year................ 848,098,850 828,919,735 1,141,302 1,287,553 8,505,955 9,530,128 ============== =============== ============== =============== ============== =============== [Enlarge/Download Table] MIST MET/ABERDEEN EMERGING MARKETS EQUITY MIST MET/ARTISAN INTERNATIONAL SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 (a) --------------- --------------- --------------- -------------- Units beginning of year.......... 42,624,617 42,182,331 12,794 -- Units issued and transferred from other funding options.... 5,229,977 7,953,715 17,546 13,794 Units redeemed and transferred to other funding options......... (8,502,620) (7,511,429) (2,855) (1,000) --------------- --------------- --------------- -------------- Units end of year................ 39,351,974 42,624,617 27,485 12,794 =============== =============== =============== ============== MIST MET/EATON VANCE MIST MET/FRANKLIN FLOATING RATE LOW DURATION TOTAL RETURN SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 5,985,329 6,743,439 16,246,958 17,421,682 Units issued and transferred from other funding options.... 1,371,315 1,401,318 3,444,662 5,572,005 Units redeemed and transferred to other funding options......... (1,724,034) (2,159,428) (5,010,731) (6,746,729) --------------- --------------- --------------- -------------- Units end of year................ 5,632,610 5,985,329 14,680,889 16,246,958 =============== =============== =============== ============== MIST MET/TEMPLETON MIST MET/WELLINGTON INTERNATIONAL BOND LARGE CAP RESEARCH SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 3,361,116 3,537,497 1,013,512 1,151,671 Units issued and transferred from other funding options.... 486,091 523,212 43,104 57,769 Units redeemed and transferred to other funding options......... (693,904) (699,593) (125,479) (195,928) --------------- --------------- --------------- -------------- Units end of year................ 3,153,303 3,361,116 931,137 1,013,512 =============== =============== =============== ============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 112
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] MIST METLIFE ASSET ALLOCATION 100 MIST METLIFE BALANCED PLUS SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 37,143,227 39,915,870 552,214,291 569,859,186 Units issued and transferred from other funding options.... 1,378,487 1,828,840 46,998,673 52,530,370 Units redeemed and transferred to other funding options......... (4,983,406) (4,601,483) (62,306,567) (70,175,265) --------------- --------------- --------------- -------------- Units end of year................ 33,538,308 37,143,227 536,906,397 552,214,291 =============== =============== =============== ============== MIST METLIFE MULTI-INDEX TARGETED RISK MIST METLIFE SMALL CAP VALUE SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 435,062,012 281,516,918 10,725,811 12,299,087 Units issued and transferred from other funding options.... 213,057,814 195,537,842 854,348 696,285 Units redeemed and transferred to other funding options......... (64,211,078) (41,992,748) (2,217,697) (2,269,561) --------------- --------------- --------------- -------------- Units end of year................ 583,908,748 435,062,012 9,362,462 10,725,811 =============== =============== =============== ============== MIST MFS MIST MORGAN STANLEY RESEARCH INTERNATIONAL MID CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 18,156,340 18,585,662 12,648,258 12,928,550 Units issued and transferred from other funding options.... 1,542,675 2,420,616 1,794,662 1,292,590 Units redeemed and transferred to other funding options......... (2,742,573) (2,849,938) (1,672,384) (1,572,882) --------------- --------------- --------------- -------------- Units end of year................ 16,956,442 18,156,340 12,770,536 12,648,258 =============== =============== =============== ============== [Enlarge/Download Table] MIST OPPENHEIMER MIST PANAGORA MIST PIMCO GLOBAL EQUITY GLOBAL DIVERSIFIED RISK INFLATION PROTECTED BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 --------------- -------------- --------------- -------------- -------------- --------------- Units beginning of year.......... 2,520,098 2,866,078 21,772,279 9,788,108 46,098,333 50,751,209 Units issued and transferred from other funding options.... 236,785 127,425 90,776,007 15,578,995 5,877,834 5,226,296 Units redeemed and transferred to other funding options......... (423,676) (473,405) (16,761,139) (3,594,824) (8,227,044) (9,879,172) --------------- -------------- --------------- -------------- -------------- --------------- Units end of year................ 2,333,207 2,520,098 95,787,147 21,772,279 43,749,123 46,098,333 =============== ============== =============== ============== ============== =============== MIST PYRAMIS MIST PIMCO TOTAL RETURN GOVERNMENT INCOME MIST PYRAMIS MANAGED RISK SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- -------------- --------------- -------------- --------------- -------------- Units beginning of year.......... 91,772,688 103,504,587 60,149,269 62,286,953 31,417,980 14,204,266 Units issued and transferred from other funding options.... 10,440,405 11,840,703 18,530,743 17,467,934 10,679,496 21,363,188 Units redeemed and transferred to other funding options......... (18,167,160) (23,572,602) (18,704,998) (19,605,618) (5,933,225) (4,149,474) -------------- -------------- --------------- -------------- --------------- -------------- Units end of year................ 84,045,933 91,772,688 59,975,014 60,149,269 36,164,251 31,417,980 ============== ============== =============== ============== =============== ============== [Enlarge/Download Table] MIST SCHRODERS MIST SSGA GLOBAL MULTI-ASSET GROWTH AND INCOME ETF MIST SSGA GROWTH ETF SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- -------------- Units beginning of year.......... 467,251,015 400,460,215 93,774,991 101,616,119 32,991,663 34,092,389 Units issued and transferred from other funding options.... 58,310,305 125,494,383 3,654,848 4,020,856 2,024,267 3,610,428 Units redeemed and transferred to other funding options......... (66,560,148) (58,703,583) (11,480,095) (11,861,984) (4,503,224) (4,711,154) -------------- --------------- -------------- --------------- -------------- -------------- Units end of year................ 459,001,172 467,251,015 85,949,744 93,774,991 30,512,706 32,991,663 ============== =============== ============== =============== ============== ============== MIST T. ROWE PRICE MIST T. ROWE PRICE MIST TCW CORE LARGE CAP VALUE MID CAP GROWTH FIXED INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 (b) --------------- -------------- --------------- -------------- --------------- -------------- Units beginning of year.......... 12,150,155 13,521,347 27,786,712 32,310,271 7,421 -- Units issued and transferred from other funding options.... 1,028,927 1,142,766 2,545,274 3,078,951 25,027 7,607 Units redeemed and transferred to other funding options......... (2,097,012) (2,513,958) (5,011,943) (7,602,510) (3,018) (186) --------------- -------------- --------------- -------------- --------------- -------------- Units end of year................ 11,082,070 12,150,155 25,320,043 27,786,712 29,430 7,421 =============== ============== =============== ============== =============== ============== [Enlarge/Download Table] MSF BAILLIE GIFFORD MSF BARCLAYS INTERNATIONAL STOCK AGGREGATE BOND INDEX SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 24,846,295 27,573,117 18,032,558 16,099,701 Units issued and transferred from other funding options.... 2,167,017 2,341,820 11,999,341 6,472,916 Units redeemed and transferred to other funding options......... (4,208,496) (5,068,642) (8,425,458) (4,540,059) --------------- --------------- --------------- -------------- Units end of year................ 22,804,816 24,846,295 21,606,441 18,032,558 =============== =============== =============== ============== MSF BLACKROCK MSF BLACKROCK BOND INCOME CAPITAL APPRECIATION SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------ 2016 2015 2016 2015 --------------- --------------- -------------- -------------- Units beginning of year.......... 1,196,294 1,105,752 579,182 639,908 Units issued and transferred from other funding options.... 289,844 302,840 93,393 70,075 Units redeemed and transferred to other funding options......... (216,789) (212,298) (87,808) (130,801) --------------- --------------- -------------- -------------- Units end of year................ 1,269,349 1,196,294 584,767 579,182 =============== =============== ============== ============== MSF BLACKROCK MSF BLACKROCK LARGE CAP VALUE ULTRA-SHORT TERM BOND SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 245,613 229,967 39,040,662 39,068,482 Units issued and transferred from other funding options.... 77,920 67,694 22,705,149 27,939,873 Units redeemed and transferred to other funding options......... (68,703) (52,048) (27,830,740) (27,967,693) --------------- --------------- --------------- -------------- Units end of year................ 254,830 245,613 33,915,071 39,040,662 =============== =============== =============== ============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 114
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] MSF LOOMIS SAYLES MSF FRONTIER MID CAP GROWTH MSF JENNISON GROWTH SMALL CAP CORE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- --------------- Units beginning of year.......... 3,809,398 4,248,372 23,988,437 27,528,387 250,951 261,060 Units issued and transferred from other funding options.... 314,123 926,646 2,192,365 2,170,102 29,461 23,649 Units redeemed and transferred to other funding options......... (805,895) (1,365,620) (4,424,040) (5,710,052) (38,665) (33,758) -------------- --------------- -------------- --------------- -------------- --------------- Units end of year................ 3,317,626 3,809,398 21,756,762 23,988,437 241,747 250,951 ============== =============== ============== =============== ============== =============== MSF LOOMIS SAYLES MSF MET/ARTISAN MSF MET/DIMENSIONAL SMALL CAP GROWTH MID CAP VALUE INTERNATIONAL SMALL COMPANY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- --------------- Units beginning of year.......... 18,203 16,302 10,052,598 11,205,267 3,198,853 3,070,324 Units issued and transferred from other funding options.... 1,246 2,801 1,328,066 798,484 449,612 831,227 Units redeemed and transferred to other funding options......... (4,021) (900) (2,104,725) (1,951,153) (833,482) (702,698) -------------- --------------- -------------- --------------- -------------- --------------- Units end of year................ 15,428 18,203 9,275,939 10,052,598 2,814,983 3,198,853 ============== =============== ============== =============== ============== =============== [Enlarge/Download Table] MSF MET/WELLINGTON MSF METLIFE CORE EQUITY OPPORTUNITIES ASSET ALLOCATION 20 SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 26,356,637 30,718,018 4,782,874 2,973,577 Units issued and transferred from other funding options.... 8,235,123 1,037,897 5,207,792 3,666,154 Units redeemed and transferred to other funding options......... (4,926,115) (5,399,278) (2,798,512) (1,856,857) --------------- --------------- --------------- --------------- Units end of year................ 29,665,645 26,356,637 7,192,154 4,782,874 =============== =============== =============== =============== MSF METLIFE MSF METLIFE ASSET ALLOCATION 40 ASSET ALLOCATION 60 SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 297,958,878 341,017,115 446,107,386 489,838,225 Units issued and transferred from other funding options.... 6,249,604 6,819,800 12,125,390 15,596,548 Units redeemed and transferred to other funding options......... (37,857,212) (49,878,037) (50,681,240) (59,327,387) --------------- --------------- --------------- --------------- Units end of year................ 266,351,270 297,958,878 407,551,536 446,107,386 =============== =============== =============== =============== MSF METLIFE MSF METLIFE ASSET ALLOCATION 80 MID CAP STOCK INDEX SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 388,323,652 420,572,925 5,111,469 5,178,461 Units issued and transferred from other funding options.... 7,664,067 11,840,482 1,293,546 988,386 Units redeemed and transferred to other funding options......... (42,177,168) (44,089,755) (1,066,476) (1,055,378) --------------- --------------- --------------- --------------- Units end of year................ 353,810,551 388,323,652 5,338,539 5,111,469 =============== =============== =============== =============== [Enlarge/Download Table] MSF METLIFE STOCK INDEX MSF MFS TOTAL RETURN MSF MFS VALUE SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------ ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- -------------- -------------- -------------- -------------- -------------- Units beginning of year............ 25,649,785 28,264,874 710,775 756,067 10,866,190 10,916,908 Units issued and transferred from other funding options...... 5,242,838 4,504,075 45,755 82,475 2,869,961 2,504,720 Units redeemed and transferred to other funding options........... (5,673,804) (7,119,164) (111,137) (127,767) (2,720,554) (2,555,438) -------------- -------------- -------------- -------------- -------------- -------------- Units end of year.................. 25,218,819 25,649,785 645,393 710,775 11,015,597 10,866,190 ============== ============== ============== ============== ============== ============== MSF MSCI EAFE INDEX MSF NEUBERGER BERMAN GENESIS MSF RUSSELL 2000 INDEX SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------ ------------------------------ 2016 2015 2016 2015 2016 2015 --------------- -------------- -------------- -------------- -------------- -------------- Units beginning of year............ 8,770,551 8,697,532 6,339,117 7,109,782 5,516,806 5,807,014 Units issued and transferred from other funding options...... 1,618,760 2,367,341 394,983 596,532 1,136,668 1,423,551 Units redeemed and transferred to other funding options........... (1,204,121) (2,294,322) (1,263,301) (1,367,197) (1,521,548) (1,713,759) --------------- -------------- -------------- -------------- -------------- -------------- Units end of year.................. 9,185,190 8,770,551 5,470,799 6,339,117 5,131,926 5,516,806 =============== ============== ============== ============== ============== ============== [Enlarge/Download Table] MSF T. ROWE PRICE MSF T. ROWE PRICE LARGE CAP GROWTH SMALL CAP GROWTH SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 19,853,858 15,015,374 373,434 321,073 Units issued and transferred from other funding options.... 4,964,805 10,061,304 86,909 125,375 Units redeemed and transferred to other funding options......... (7,815,594) (5,222,820) (86,424) (73,014) --------------- --------------- -------------- --------------- Units end of year................ 17,003,069 19,853,858 373,919 373,434 =============== =============== ============== =============== MSF VAN ECK MSF WESTERN ASSET MANAGEMENT GLOBAL NATURAL RESOURCES STRATEGIC BOND OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 8,336,502 6,586,665 6,545 398 Units issued and transferred from other funding options.... 1,877,875 3,338,775 37,011,107 6,964 Units redeemed and transferred to other funding options......... (3,289,485) (1,588,938) (4,165,558) (817) --------------- --------------- -------------- --------------- Units end of year................ 6,924,892 8,336,502 32,852,094 6,545 =============== =============== ============== =============== MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT NEUBERGER BERMAN GENESIS SUB-ACCOUNT SUB-ACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- -------------- --------------- Units beginning of year.......... 15,069,560 15,346,536 317 393 Units issued and transferred from other funding options.... 2,544,781 2,489,463 -- 75 Units redeemed and transferred to other funding options......... (3,487,731) (2,766,439) (71) (151) --------------- -------------- -------------- --------------- Units end of year................ 14,126,610 15,069,560 246 317 =============== ============== ============== =============== (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 116
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015: [Enlarge/Download Table] OPPENHEIMER VA OPPENHEIMER VA OPPENHEIMER VA CORE BOND GOVERNMENT MONEY MAIN STREET SMALL CAP SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------- ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- -------------- --------------- -------------- -------------- -------------- Units beginning of year............ 1,226 1,362 668 696 4,053,883 4,346,502 Units issued and transferred from other funding options...... -- -- -- -- 221,945 290,602 Units redeemed and transferred to other funding options........... (305) (136) (28) (28) (591,746) (583,221) -------------- -------------- --------------- -------------- -------------- -------------- Units end of year.................. 921 1,226 640 668 3,684,082 4,053,883 ============== ============== =============== ============== ============== ============== PIMCO VIT COMMODITYREALRETURN PIMCO VIT OPPENHEIMER VA MAIN STREET STRATEGY EMERGING MARKETS BOND SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------ ------------------------------- ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- -------------- --------------- -------------- -------------- -------------- Units beginning of year............ 12,936 13,372 39,333 1,515 44,282 1,592 Units issued and transferred from other funding options...... -- 575 34,303 42,876 31,172 46,798 Units redeemed and transferred to other funding options........... (1,444) (1,011) (8,999) (5,058) (12,465) (4,108) -------------- -------------- --------------- -------------- -------------- -------------- Units end of year.................. 11,492 12,936 64,637 39,333 62,989 44,282 ============== ============== =============== ============== ============== ============== [Enlarge/Download Table] PIMCO VIT UNCONSTRAINED BOND PIONEER VCT MID CAP VALUE SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- -------------- --------------- Units beginning of year.......... 29,245 478 1,461,366 1,581,277 Units issued and transferred from other funding options.... 38,838 30,612 102,546 123,362 Units redeemed and transferred to other funding options......... (11,660) (1,845) (221,594) (243,273) --------------- -------------- -------------- --------------- Units end of year................ 56,423 29,245 1,342,318 1,461,366 =============== ============== ============== =============== PIONEER VCT REAL ESTATE SHARES T. ROWE PRICE GOVERNMENT MONEY SUB-ACCOUNT SUB-ACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 8,230 8,772 28,754 29,487 Units issued and transferred from other funding options.... 922 881 12,932 26,424 Units redeemed and transferred to other funding options......... (884) (1,423) (10,600) (27,157) --------------- --------------- --------------- --------------- Units end of year................ 8,268 8,230 31,086 28,754 =============== =============== =============== =============== T. ROWE PRICE GROWTH STOCK T. ROWE PRICE INTERNATIONAL STOCK SUB-ACCOUNT SUB-ACCOUNT -------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 44,692 52,254 27,270 39,998 Units issued and transferred from other funding options.... 2,085 5,247 898 8,179 Units redeemed and transferred to other funding options......... (6,510) (12,809) (3,498) (20,907) --------------- --------------- --------------- --------------- Units end of year................ 40,267 44,692 24,670 27,270 =============== =============== =============== =============== [Enlarge/Download Table] TAP 1919 VARIABLE SOCIALLY RESPONSIVE BALANCED UIF GLOBAL INFRASTRUCTURE SUB-ACCOUNT SUB-ACCOUNT -------------------------------- --------------------------------- 2016 2015 2016 2015 --------------- --------------- ---------------- --------------- Units beginning of year.......... 5,634 6,406 32,371 664 Units issued and transferred from other funding options.... 152 657 15,667 33,687 Units redeemed and transferred to other funding options......... (2,220) (1,429) (6,364) (1,980) --------------- --------------- ---------------- --------------- Units end of year................ 3,566 5,634 41,674 32,371 =============== =============== ================ =============== VANECK VIP LONG/SHORT EQUITY INDEX SUB-ACCOUNT --------------------------------- 2016 2015 --------------- ---------------- Units beginning of year.......... 26,997 1,662 Units issued and transferred from other funding options.... 28,392 27,896 Units redeemed and transferred to other funding options......... (8,246) (2,561) --------------- ---------------- Units end of year................ 47,143 26,997 =============== ================ (a) Commenced November 19, 2014 and began transactions in 2015. (b) For the period May 1, 2015 to December 31, 2015. 118
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS The Company sells a number of variable annuity products which have unique combinations of features and fees, some of which directly affect the unit values of the Sub-Accounts. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The following table is a summary of unit values and units outstanding for the Contracts, net investment income ratios, and expense ratios, excluding expenses for the underlying portfolio, series or fund, for the respective stated periods in the five years ended December 31, 2016: [Enlarge/Download Table] AS OF DECEMBER 31 ---------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ---------------- -------------- Alger Small Cap Growth 2016 3,200,478 14.26 - 14.61 46,089,499 Sub-Account 2015 3,508,832 13.61 - 13.92 48,208,209 2014 3,970,857 14.28 - 14.58 57,195,868 2013 4,387,118 14.41 - 14.70 63,772,199 2012 4,795,545 10.89 - 11.09 52,626,085 American Funds Bond 2016 7,293,353 9.80 - 19.73 132,721,070 Sub-Account 2015 8,159,989 16.20 - 19.35 146,511,985 2014 8,333,829 16.47 - 19.48 151,245,946 2013 8,361,945 15.94 - 18.68 146,158,351 2012 7,687,811 16.60 - 19.27 139,213,016 American Funds Global 2016 6,980,723 13.31 - 44.38 277,038,594 Growth Sub-Account 2015 7,480,782 34.27 - 44.51 300,649,358 2014 8,193,931 32.79 - 42.00 312,209,187 2013 8,333,553 32.79 - 41.42 314,826,203 2012 8,485,913 25.98 - 32.35 251,295,328 American Funds Global Small 2016 2,939,876 12.70 - 40.30 106,488,578 Capitalization Sub-Account 2015 3,123,694 12.77 - 39.82 113,155,266 2014 3,297,014 13.05 - 40.07 122,112,070 2013 3,375,743 33.79 - 39.59 124,184,003 2012 3,385,796 26.85 - 31.14 98,386,346 American Funds Growth 2016 2,741,584 200.05 - 318.18 724,894,313 Sub-Account 2015 3,075,557 186.96 - 293.21 754,095,254 2014 3,527,704 179.03 - 276.84 821,201,132 2013 3,937,244 168.83 - 257.41 856,560,204 2012 4,113,319 132.79 - 199.62 696,665,988 American Funds 2016 2,163,637 15.56 - 219.23 363,982,389 Growth-Income Sub-Account 2015 2,179,793 126.48 - 198.34 358,450,579 2014 2,378,568 127.56 - 197.24 390,905,716 2013 2,581,885 117.99 - 179.88 388,319,990 2012 2,745,842 90.43 - 135.94 312,823,451 BlackRock Global Allocation 2016 123,935 20.06 - 21.99 2,582,039 V.I. Sub-Account 2015 77,369 19.63 - 21.37 1,566,871 (Commenced 11/19/2014) 2014 402 21.30 8,557 Deutsche I CROCI 2016 1,416,905 6.42 - 7.94 11,250,311 International Sub-Account 2015 1,563,760 7.92 - 7.99 12,496,599 2014 1,732,959 8.50 - 8.57 14,851,303 2013 1,888,612 9.76 - 9.85 18,592,794 2012 2,040,232 8.24 - 8.30 16,933,216 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Alger Small Cap Growth 2016 -- 1.25 - 1.40 4.76 - 4.92 Sub-Account 2015 -- 1.25 - 1.40 (4.66) - (4.52) 2014 -- 1.25 - 1.40 (0.96) - (0.81) 2013 -- 1.25 - 1.40 32.40 - 32.59 2012 -- 1.25 - 1.40 10.93 - 11.09 American Funds Bond 2016 1.64 0.95 - 1.90 (1.68) - 1.97 Sub-Account 2015 1.68 0.95 - 1.90 (1.61) - (0.67) 2014 1.94 0.95 - 1.90 3.30 - 4.28 2013 1.84 0.95 - 1.90 (4.00) - (3.08) 2012 2.64 0.95 - 1.90 3.38 - 4.37 American Funds Global 2016 0.91 0.90 - 2.30 (1.67) - 2.43 Growth Sub-Account 2015 0.99 0.90 - 2.30 4.51 - 5.98 2014 1.16 0.90 - 2.30 (0.01) - 1.40 2013 1.26 0.90 - 2.30 26.24 - 28.02 2012 0.94 0.90 - 2.30 7.06 - 21.40 American Funds Global Small 2016 0.25 0.89 - 1.90 0.18 - 2.23 Capitalization Sub-Account 2015 -- 0.89 - 1.90 (6.47) - (0.62) 2014 0.12 0.89 - 1.90 0.20 - 1.67 2013 0.87 0.89 - 1.90 25.87 - 27.14 2012 1.35 0.89 - 1.90 2.91 - 17.13 American Funds Growth 2016 0.76 0.89 - 2.30 7.00 - 8.52 Sub-Account 2015 0.58 0.89 - 2.30 4.43 - 5.91 2014 0.77 0.89 - 2.30 6.04 - 7.55 2013 0.93 0.89 - 2.30 27.15 - 28.95 2012 0.81 0.89 - 2.30 1.85 - 16.84 American Funds 2016 1.47 0.89 - 2.30 6.81 - 10.53 Growth-Income Sub-Account 2015 1.28 0.89 - 2.30 (0.85) - 0.56 2014 1.27 0.89 - 2.30 8.12 - 9.65 2013 1.35 0.89 - 2.30 30.47 - 32.32 2012 1.64 0.89 - 2.30 14.80 - 16.44 BlackRock Global Allocation 2016 1.55 0.90 - 1.60 2.16 - 2.87 V.I. Sub-Account 2015 2.16 0.90 - 1.60 (5.15) - (0.44) (Commenced 11/19/2014) 2014 2.13 1.10 (0.45) Deutsche I CROCI 2016 10.65 0.89 - 1.40 (0.66) - (0.15) International Sub-Account 2015 4.14 1.35 - 1.40 (6.80) - (6.75) 2014 1.76 1.35 - 1.40 (12.99) - (12.95) 2013 5.30 1.35 - 1.40 18.56 - 18.62 2012 2.19 1.35 - 1.40 18.96 - 19.02 120
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ --------------- ------------- ------------- ---------------- ---------------- Federated High Income Bond 2016 2,435 11.32 27,574 6.17 1.40 13.22 Sub-Account 2015 2,503 10.00 25,030 5.62 1.40 (3.93) 2014 2,534 10.41 26,376 5.88 1.40 1.26 2013 2,545 10.28 26,166 6.76 1.40 5.50 2012 2,556 9.74 24,908 8.87 1.40 13.09 Federated Kaufman 2016 5,331 8.93 47,589 -- 1.40 2.22 Sub-Account 2015 5,491 8.73 47,958 -- 1.40 4.90 2014 5,676 8.33 47,253 -- 1.40 8.19 2013 5,836 7.70 44,907 -- 1.40 38.18 2012 6,002 5.57 33,424 -- 1.40 15.65 Fidelity VIP Asset Manager 2016 4,493,375 15.61 - 16.70 70,694,332 1.45 0.89 - 1.40 1.64 - 2.16 Sub-Account 2015 4,920,853 15.35 - 16.34 76,132,122 1.53 0.89 - 1.40 (1.25) - (0.75) 2014 5,426,360 15.54 - 16.47 84,977,763 1.47 0.89 - 1.40 4.36 - 4.90 2013 5,885,530 14.88 - 15.70 88,274,483 1.55 0.89 - 1.40 14.10 - 14.68 2012 6,517,939 13.04 - 13.69 85,640,352 1.49 0.89 - 1.40 10.91 - 11.48 Fidelity VIP Contrafund 2016 21,259,478 6.55 - 75.90 573,685,439 0.74 0.89 - 2.25 5.15 - 7.05 Sub-Account 2015 21,653,047 6.17 - 71.00 581,923,231 0.94 0.89 - 2.25 (1.68) - (0.22) 2014 20,382,633 6.24 - 71.28 631,948,733 0.89 0.89 - 2.25 9.33 - 10.95 2013 17,717,451 5.67 - 64.36 611,972,926 1.04 0.89 - 2.25 10.23 - 30.12 2012 15,604,750 12.42 - 49.54 471,113,726 1.36 0.89 - 2.25 13.71 - 15.38 Fidelity VIP Equity-Income 2016 230,181 20.60 4,741,279 2.16 1.40 16.38 Sub-Account 2015 280,187 17.70 4,959,137 3.11 1.40 (5.30) 2014 303,711 18.69 5,676,328 2.75 1.40 7.21 2013 341,560 17.43 5,954,600 2.41 1.40 26.37 2012 400,352 13.80 5,523,241 2.96 1.40 15.67 Fidelity VIP FundsManager 2016 339,562,460 13.13 - 13.34 4,491,693,357 1.24 1.90 - 2.05 2.11 - 2.26 50% Sub-Account 2015 340,402,591 12.86 - 13.05 4,406,702,675 1.25 1.90 - 2.05 (1.89) - (1.75) (Commenced 7/23/2012) 2014 268,426,412 13.11 - 13.28 3,538,458,593 1.45 1.90 - 2.05 2.96 - 3.12 2013 158,954,030 12.73 - 12.88 2,033,793,788 1.55 1.90 - 2.05 12.57 - 12.74 2012 39,080,828 11.31 - 11.42 443,823,085 2.69 1.90 - 2.05 1.76 - 4.11 Fidelity VIP FundsManager 2016 250,989,708 12.56 - 12.74 3,173,600,531 1.14 1.90 - 2.05 2.66 - 2.82 60% Sub-Account 2015 299,646,067 12.24 - 12.39 3,688,709,449 1.05 1.90 - 2.05 (1.63) - (1.48) 2014 319,425,019 12.44 - 12.58 3,994,437,491 1.24 1.90 - 2.05 3.27 - 3.42 2013 333,151,686 12.05 - 12.16 4,031,523,824 1.16 1.90 - 2.05 16.21 - 16.38 2012 345,636,001 10.37 - 10.45 3,596,633,088 1.53 1.90 - 2.05 9.33 - 9.49 Fidelity VIP Government 2016 2,758,925 6.77 - 10.16 18,955,221 0.18 0.89 - 2.05 (1.85) - (0.68) Money Market Sub-Account 2015 5,764,747 6.85 - 10.34 49,654,013 0.02 0.89 - 2.05 (2.02) - (0.86) 2014 5,894,288 6.95 - 10.53 50,947,648 0.01 0.89 - 2.05 (2.02) - (0.88) 2013 8,307,410 7.04 - 10.73 76,155,346 0.02 0.89 - 2.05 (2.01) - (0.86) 2012 8,041,430 7.14 - 10.94 73,659,399 0.12 0.89 - 2.05 (1.93) - (0.76) Fidelity VIP Growth 2016 6,179,280 23.17 - 24.67 144,530,563 0.04 0.89 - 1.40 (0.60) - (0.09) Sub-Account 2015 6,842,558 23.31 - 24.69 160,925,919 0.25 0.89 - 1.40 5.68 - 6.23 2014 7,538,876 22.06 - 23.24 167,673,930 0.18 0.89 - 1.40 9.75 - 10.31 2013 8,194,380 20.10 - 21.07 165,968,439 0.29 0.89 - 1.40 34.44 - 35.13 2012 9,085,626 14.95 - 15.59 136,799,312 0.59 0.89 - 1.40 13.09 - 13.67 121
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Download Table] AS OF DECEMBER 31 ---------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ---------------- -------------- Fidelity VIP Index 500 2016 2,222,100 27.86 - 29.74 61,915,726 Sub-Account 2015 2,464,560 25.24 - 26.83 62,224,177 2014 2,778,454 25.25 - 26.71 70,165,982 2013 3,091,556 22.53 - 23.73 69,677,247 2012 3,530,426 17.27 - 18.10 60,984,620 Fidelity VIP Mid Cap 2016 6,382,115 58.33 - 69.23 409,695,192 Sub-Account 2015 6,898,177 53.12 - 62.44 401,284,587 2014 7,445,624 55.03 - 64.08 446,277,693 2013 7,792,671 52.90 - 61.01 446,581,942 2012 7,598,912 39.68 - 45.33 324,832,892 Fidelity VIP Overseas 2016 333,151 10.84 - 12.36 3,832,068 Sub-Account 2015 376,022 11.55 - 13.19 4,615,792 2014 411,275 11.28 - 12.89 4,942,746 2013 447,143 12.41 - 14.19 5,925,521 2012 509,517 9.62 - 11.02 5,241,037 FTVIPT Franklin Income VIP 2016 4,031,843 50.36 - 72.41 260,175,136 Sub-Account 2015 4,415,184 45.17 - 64.11 253,302,116 2014 4,717,186 49.71 - 69.63 294,909,928 2013 4,919,666 48.59 - 67.20 297,821,470 2012 4,708,870 43.62 - 59.54 253,164,341 FTVIPT Franklin Mutual 2016 4,164,982 29.15 - 35.30 134,905,092 Shares VIP Sub-Account 2015 4,536,450 25.60 - 30.71 128,211,487 2014 5,080,687 27.45 - 32.61 153,109,223 2013 5,477,366 26.11 - 30.73 156,078,571 2012 5,768,385 20.75 - 24.19 129,780,562 FTVIPT Franklin Small Cap 2016 7,878,700 1.69 - 39.24 128,270,987 Value VIP Sub-Account 2015 8,783,442 1.31 - 13.07 110,998,636 2014 9,145,054 1.42 - 14.25 126,502,556 2013 9,184,423 13.56 - 14.30 128,048,983 2012 8,321,925 10.13 - 10.60 86,296,073 FTVIPT Templeton Foreign 2016 2,245,781 13.71 - 32.34 68,504,762 VIP Sub-Account 2015 2,282,942 13.03 - 30.69 66,002,305 2014 2,354,783 14.19 - 33.39 73,607,780 2013 2,457,017 16.25 - 38.21 87,721,293 2012 2,730,167 13.46 - 31.61 80,788,377 FTVIPT Templeton Global 2016 11,303,555 17.42 - 20.30 213,840,331 Bond VIP Sub-Account 2015 11,945,145 17.38 - 19.91 222,633,715 2014 12,667,617 18.48 - 21.01 250,150,012 2013 12,950,902 18.47 - 20.82 254,683,414 2012 11,067,808 18.50 - 20.69 217,063,429 Invesco V.I. American 2016 1,514 8.25 12,495 Franchise Sub-Account 2015 1,825 8.19 14,936 2014 1,911 7.90 15,107 2013 22,147 7.39 163,713 2012 28,015 5.35 149,862 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Fidelity VIP Index 500 2016 1.44 0.89 - 1.35 10.36 - 10.87 Sub-Account 2015 1.93 0.89 - 1.35 (0.02) - 0.44 2014 1.59 0.89 - 1.35 12.05 - 12.56 2013 1.84 0.89 - 1.35 30.47 - 31.07 2012 2.03 0.89 - 1.35 14.35 - 14.88 Fidelity VIP Mid Cap 2016 0.31 0.95 - 1.90 6.93 - 10.87 Sub-Account 2015 0.25 0.95 - 1.90 (3.48) - (2.56) 2014 0.02 0.95 - 1.90 4.04 - 5.03 2013 0.28 0.95 - 1.90 33.31 - 34.59 2012 0.43 0.95 - 1.90 12.40 - 13.47 Fidelity VIP Overseas 2016 1.38 1.15 - 1.40 (6.38) - (6.15) Sub-Account 2015 1.31 1.15 - 1.40 2.18 - 2.44 2014 1.29 1.15 - 1.40 (9.36) - (9.13) 2013 1.34 1.15 - 1.40 28.62 - 28.95 2012 1.97 1.15 - 1.40 19.05 - 19.35 FTVIPT Franklin Income VIP 2016 4.98 0.95 - 2.25 8.00 - 12.95 Sub-Account 2015 4.62 0.95 - 2.25 (9.12) - (7.93) 2014 4.98 0.95 - 2.25 2.29 - 3.63 2013 6.33 0.95 - 2.25 11.41 - 12.86 2012 6.44 0.95 - 2.25 10.13 - 11.58 FTVIPT Franklin Mutual 2016 1.98 0.95 - 1.90 10.51 - 14.96 Shares VIP Sub-Account 2015 3.00 0.95 - 1.90 (6.73) - (5.84) 2014 2.00 0.95 - 1.90 5.11 - 6.11 2013 2.10 0.95 - 1.90 25.85 - 27.05 2012 2.06 0.95 - 1.90 12.08 - 13.16 FTVIPT Franklin Small Cap 2016 0.82 0.95 - 1.80 19.18 - 28.96 Value VIP Sub-Account 2015 0.63 0.95 - 1.75 (8.99) - (8.26) 2014 0.61 0.95 - 1.75 (1.17) - (0.38) 2013 1.31 0.95 - 1.75 33.88 - 34.95 2012 0.78 0.95 - 1.75 16.32 - 17.26 FTVIPT Templeton Foreign 2016 1.95 1.55 - 2.30 4.74 - 5.53 VIP Sub-Account 2015 3.23 1.55 - 2.30 (8.62) - (7.93) 2014 1.86 1.55 - 2.30 (13.15) - (12.50) 2013 2.38 1.55 - 2.30 20.18 - 21.08 2012 3.02 1.55 - 2.30 15.53 - 16.41 FTVIPT Templeton Global 2016 -- 0.95 - 1.80 1.15 - 2.04 Bond VIP Sub-Account 2015 7.91 0.95 - 1.75 (5.97) - (5.21) 2014 5.11 0.95 - 1.75 0.07 - 0.87 2013 4.75 0.95 - 1.75 (0.13) - 0.67 2012 6.42 0.95 - 1.75 13.06 - 13.97 Invesco V.I. American 2016 -- 1.40 0.85 Franchise Sub-Account 2015 -- 1.40 3.55 2014 -- 1.40 6.93 2013 0.42 1.40 38.19 2012 -- 1.40 12.14 122
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- Invesco V.I. Core Equity 2016 25,350 6.75 171,207 Sub-Account 2015 27,589 6.21 171,366 2014 34,703 6.68 231,978 2013 39,835 6.27 249,696 2012 49,005 4.92 241,009 Invesco V.I. Equity and 2016 27,024,285 7.16 - 25.65 654,269,917 Income Sub-Account 2015 28,966,281 6.30 - 22.55 619,311,840 2014 30,622,887 6.54 - 23.37 681,211,301 2013 31,328,255 6.09 - 21.69 649,322,698 2012 29,563,858 4.93 - 17.54 496,945,594 Invesco V.I. Growth and 2016 87 11.74 1,017 Income Sub-Account 2015 654 9.95 6,509 2014 665 10.41 6,927 2013 13,799,854 9.57 - 36.41 365,970,613 2012 13,407,203 7.24 - 27.48 268,230,013 Invesco V.I. International 2016 8,293,250 8.57 - 32.43 243,849,630 Growth Sub-Account 2015 8,534,492 8.74 - 32.97 256,390,780 2014 8,820,511 9.07 - 34.18 275,880,972 2013 8,901,354 9.17 - 34.47 281,999,206 2012 8,127,475 7.81 - 29.32 219,783,700 Ivy VIP Asset Strategy 2016 15,823 13.72 - 15.29 233,181 Sub-Account 2015 20,900 14.31 - 15.87 317,700 (Commenced 11/19/2014) 2014 2,575 16.67 - 17.51 45,023 LMPVET ClearBridge Variable 2016 10,932,298 16.82 - 30.24 293,536,621 Aggressive Growth 2015 11,091,987 16.99 - 30.16 300,878,534 Sub-Account 2014 11,333,726 17.67 - 30.99 316,448,933 2013 11,979,001 15.00 - 25.98 280,745,200 2012 11,687,754 10.38 - 17.75 186,988,862 LMPVET ClearBridge Variable 2016 7,615,066 10.51 - 62.23 405,981,554 Appreciation Sub-Account 2015 7,746,928 41.76 - 57.24 400,323,007 2014 8,268,721 42.06 - 56.87 426,519,441 2013 8,604,407 38.78 - 51.73 405,286,221 2012 7,908,912 30.52 - 40.17 290,191,379 LMPVET ClearBridge Variable 2016 8,906,934 14.51 - 24.31 200,725,348 Dividend Strategy 2015 9,391,848 12.92 - 21.38 186,422,315 Sub-Account 2014 9,796,222 13.81 - 22.59 205,573,482 2013 10,244,154 12.44 - 20.09 191,169,653 2012 9,055,914 10.11 - 16.14 134,931,130 LMPVET ClearBridge Variable 2016 121,433 23.83 - 27.67 3,173,371 Large Cap Growth 2015 156,000 22.70 - 26.15 3,887,858 Sub-Account 2014 200,379 21.16 - 24.18 4,631,601 2013 242,954 18.99 - 21.53 5,012,390 2012 283,429 14.10 - 15.86 4,312,254 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- Invesco V.I. Core Equity 2016 0.76 1.40 8.73 Sub-Account 2015 1.05 1.40 (7.08) 2014 0.87 1.40 6.64 2013 1.36 1.40 27.45 2012 0.91 1.40 12.29 Invesco V.I. Equity and 2016 1.64 0.95 - 1.90 10.31 - 13.75 Income Sub-Account 2015 2.30 0.95 - 1.90 (4.42) - (3.51) 2014 1.58 0.95 - 1.90 6.72 - 7.74 2013 1.54 0.95 - 1.90 22.54 - 23.71 2012 1.85 0.95 - 1.90 10.26 - 11.32 Invesco V.I. Growth and 2016 0.58 1.40 18.03 Income Sub-Account 2015 2.94 1.40 (4.41) 2014 -- 1.40 8.75 2013 1.31 0.95 - 1.90 31.25 - 32.50 2012 1.36 0.95 - 1.90 12.18 - 13.26 Invesco V.I. International 2016 1.17 0.95 - 1.80 (4.75) - (1.64) Growth Sub-Account 2015 1.28 0.95 - 1.75 (4.31) - (3.54) 2014 1.38 0.95 - 1.75 (1.65) - (0.86) 2013 1.10 0.95 - 1.75 16.66 - 17.60 2012 1.38 0.95 - 1.75 13.25 - 14.16 Ivy VIP Asset Strategy 2016 0.56 1.10 - 1.60 (4.11) - (3.63) Sub-Account 2015 0.36 1.10 - 1.60 (9.80) - (9.35) (Commenced 11/19/2014) 2014 -- 1.10 - 1.35 (2.27) - (2.24) LMPVET ClearBridge Variable 2016 0.65 0.95 - 2.30 (1.10) - 4.06 Aggressive Growth 2015 0.35 0.95 - 2.30 (3.97) - (2.66) Sub-Account 2014 0.17 0.95 - 2.30 17.66 - 19.26 2013 0.28 0.95 - 2.30 44.42 - 46.38 2012 0.43 0.95 - 2.30 16.01 - 17.60 LMPVET ClearBridge Variable 2016 1.32 0.95 - 2.30 4.49 - 8.73 Appreciation Sub-Account 2015 1.17 0.95 - 2.30 (0.71) - 0.64 2014 1.17 0.95 - 2.30 8.47 - 9.94 2013 1.29 0.95 - 2.30 27.05 - 28.77 2012 1.75 0.95 - 2.30 13.30 - 14.85 LMPVET ClearBridge Variable 2016 1.44 0.95 - 2.30 6.86 - 13.69 Dividend Strategy 2015 1.65 0.95 - 2.30 (6.48) - (5.34) Sub-Account 2014 2.05 0.95 - 2.30 11.03 - 12.41 2013 1.65 0.95 - 2.30 23.08 - 24.49 2012 3.04 0.95 - 2.30 11.60 - 12.99 LMPVET ClearBridge Variable 2016 0.48 1.50 - 2.30 4.95 - 5.79 Large Cap Growth 2015 0.43 1.50 - 2.30 7.30 - 8.16 Sub-Account 2014 0.48 1.50 - 2.30 11.40 - 12.29 2013 0.51 1.50 - 2.30 34.72 - 35.80 2012 0.66 1.50 - 2.30 17.60 - 18.55 123
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- LMPVET ClearBridge Variable 2016 342,723 22.62 - 26.31 8,591,571 Large Cap Value Sub-Account 2015 333,277 20.49 - 23.64 7,518,321 2014 369,225 21.58 - 24.70 8,744,177 2013 319,601 19.77 - 22.45 6,892,954 2012 286,427 15.28 - 17.21 4,743,489 LMPVET ClearBridge Variable 2016 3,770,232 13.20 - 32.37 102,811,126 Small Cap Growth 2015 3,817,761 21.51 - 30.88 101,595,917 Sub-Account 2014 4,105,606 23.02 - 32.61 115,942,801 2013 4,102,827 22.63 - 31.63 112,499,020 2012 3,457,289 15.75 - 21.71 64,881,494 LMPVET EnTrust Permal 2016 1,428,689 9.02 - 9.16 12,975,771 Alternative Select VIT 2015 1,078,857 9.42 - 9.49 10,193,761 Sub-Account 2014 64,025 10.01 - 10.02 641,034 (Commenced 11/19/2014) LMPVET QS Variable 2016 1,657,879 21.04 - 25.43 38,835,887 Conservative Growth 2015 1,731,301 19.96 - 23.89 38,239,774 Sub-Account 2014 1,866,299 20.59 - 24.41 42,335,472 2013 2,011,433 20.00 - 23.49 44,101,401 2012 1,699,443 17.68 - 20.56 32,620,028 LMPVET QS Variable Growth 2016 3,963,257 19.02 - 22.99 83,823,213 Sub-Account 2015 4,234,141 17.87 - 21.39 83,641,315 2014 4,529,329 18.63 - 22.09 92,760,220 2013 4,790,185 18.14 - 21.30 95,074,284 2012 5,015,187 14.61 - 17.00 79,817,339 LMPVET QS Variable Moderate 2016 45,938 19.03 - 20.61 921,078 Growth Sub-Account 2015 67,619 17.96 - 19.37 1,277,408 2014 98,417 18.64 - 20.02 1,923,838 2013 121,395 18.11 - 19.37 2,304,999 2012 162,342 15.15 - 16.14 2,573,509 LMPVIT Western Asset 2016 3,567,957 16.56 - 26.90 87,930,944 Variable Global High Yield 2015 4,003,585 18.50 - 23.49 86,641,483 Bond Sub-Account 2014 4,320,147 20.11 - 25.19 100,641,688 2013 4,386,878 20.82 - 25.72 104,740,451 2012 4,039,328 20.05 - 24.44 91,771,912 MFS VIT Investors Trust 2016 1,033 8.55 8,827 Sub-Account 2015 1,112 7.98 8,875 2014 1,191 8.08 9,619 2013 3,517 7.38 25,951 2012 3,616 5.67 20,488 MFS VIT New Discovery 2016 3,102 13.29 41,234 Sub-Account 2015 3,178 12.36 39,288 2014 3,178 12.78 40,607 2013 3,294 13.97 46,020 2012 4,161 10.01 41,661 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- LMPVET ClearBridge Variable 2016 1.62 1.50 - 2.30 10.43 - 11.32 Large Cap Value Sub-Account 2015 1.41 1.50 - 2.30 (5.08) - (4.31) 2014 1.96 1.50 - 2.30 9.17 - 10.05 2013 1.77 1.50 - 2.30 29.36 - 30.40 2012 2.37 1.50 - 2.30 13.84 - 14.76 LMPVET ClearBridge Variable 2016 -- 0.95 - 2.30 3.40 - 9.41 Small Cap Growth 2015 -- 0.95 - 2.30 (6.55) - (5.28) Sub-Account 2014 -- 0.95 - 2.30 1.71 - 3.09 2013 0.05 0.95 - 2.30 43.71 - 45.66 2012 0.42 0.95 - 2.30 16.70 - 18.29 LMPVET EnTrust Permal 2016 0.04 0.95 - 1.60 (4.17) - (3.54) Alternative Select VIT 2015 1.46 0.95 - 1.60 (5.89) - (4.25) Sub-Account 2014 0.57 1.10 - 1.60 (0.55) - (0.49) (Commenced 11/19/2014) LMPVET QS Variable 2016 2.42 0.95 - 1.90 5.41 - 6.42 Conservative Growth 2015 1.95 0.95 - 1.90 (3.05) - (2.12) Sub-Account 2014 2.46 0.95 - 1.90 2.93 - 3.92 2013 2.21 0.95 - 1.90 13.16 - 14.24 2012 2.95 0.95 - 1.90 10.96 - 12.02 LMPVET QS Variable Growth 2016 1.45 0.95 - 1.90 6.46 - 7.47 Sub-Account 2015 1.33 0.95 - 1.90 (4.07) - (3.16) 2014 1.77 0.95 - 1.90 2.72 - 3.70 2013 1.66 0.95 - 1.90 24.12 - 25.30 2012 1.84 0.95 - 1.90 13.70 - 14.79 LMPVET QS Variable Moderate 2016 1.85 1.50 - 1.90 5.96 - 6.39 Growth Sub-Account 2015 1.47 1.50 - 1.90 (3.64) - (3.25) 2014 1.74 1.50 - 1.90 2.93 - 3.34 2013 1.41 1.50 - 1.90 19.53 - 20.01 2012 2.16 1.50 - 1.90 12.43 - 12.88 LMPVIT Western Asset 2016 6.08 0.95 - 2.30 8.61 - 14.51 Variable Global High Yield 2015 5.96 0.95 - 2.30 (7.98) - (6.73) Bond Sub-Account 2014 7.11 0.95 - 2.30 (3.40) - (2.09) 2013 6.19 0.95 - 2.30 3.85 - 5.27 2012 7.84 0.95 - 2.30 15.62 - 17.20 MFS VIT Investors Trust 2016 0.86 1.40 7.08 Sub-Account 2015 0.92 1.40 (1.18) 2014 0.61 1.40 9.46 2013 1.10 1.40 30.22 2012 0.67 1.40 17.52 MFS VIT New Discovery 2016 -- 1.40 7.54 Sub-Account 2015 -- 1.40 (3.25) 2014 -- 1.40 (8.55) 2013 -- 1.40 39.55 2012 -- 1.40 19.53 124
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- MFS VIT Research Sub-Account 2016 2,377 9.09 21,608 2015 3,091 8.48 26,211 2014 3,115 8.53 26,571 2013 8,132 7.85 63,835 2012 8,335 6.02 50,155 MIST AB Global Dynamic 2016 252,960,506 11.77 - 12.78 3,143,878,353 Allocation Sub-Account 2015 263,678,991 11.63 - 12.45 3,205,371,897 2014 275,344,937 11.84 - 12.49 3,373,491,338 2013 286,256,086 11.32 - 11.74 3,313,674,192 2012 267,334,005 10.40 - 10.66 2,823,843,417 MIST Allianz Global 2016 79,436,316 1.00 - 10.44 82,224,138 Investors Dynamic 2015 59,800,997 1.00 - 10.35 60,867,062 Multi-Asset Plus 2014 18,219,524 1.04 - 10.55 18,986,456 Sub-Account (Commenced 4/28/2014) MIST American Funds 2016 234,371,003 12.52 - 14.20 3,152,567,972 Balanced Allocation 2015 246,263,553 11.89 - 13.29 3,117,922,583 Sub-Account 2014 264,143,945 12.26 - 13.41 3,417,834,574 2013 276,830,535 11.83 - 12.78 3,430,387,038 2012 292,605,761 10.22 - 10.89 3,106,060,329 MIST American Funds Growth 2016 128,517,470 12.68 - 14.39 1,744,990,829 Allocation Sub-Account 2015 137,469,623 11.92 - 13.12 1,740,439,216 2014 142,940,560 12.29 - 13.37 1,852,260,667 2013 147,794,512 11.83 - 12.67 1,828,322,375 2012 149,020,463 9.68 - 10.24 1,496,665,592 MIST American Funds Growth 2016 77,428,972 1.55 - 16.08 654,182,440 Sub-Account 2015 77,730,599 1.44 - 14.88 640,713,098 2014 71,860,704 1.37 - 13.78 648,671,484 2013 59,593,818 1.29 - 12.90 632,386,636 2012 54,812,434 9.59 - 10.07 545,665,799 MIST American Funds 2016 121,315,385 12.19 - 13.83 1,590,453,756 Moderate Allocation 2015 126,162,585 11.66 - 13.04 1,567,578,863 Sub-Account 2014 137,310,606 12.03 - 13.16 1,744,157,123 2013 147,773,215 11.61 - 12.53 1,796,366,977 2012 159,499,085 10.47 - 11.15 1,734,325,945 MIST AQR Global Risk 2016 221,364,216 9.79 - 11.01 2,395,534,199 Balanced Sub-Account 2015 241,508,750 9.10 - 10.21 2,431,541,679 2014 265,908,083 10.20 - 11.40 3,001,302,195 2013 295,108,196 9.93 - 11.09 3,248,475,977 2012 324,843,850 10.42 - 11.61 3,753,309,463 MIST BlackRock Global 2016 421,174,334 11.24 - 12.21 4,999,248,698 Tactical Strategies 2015 445,213,023 11.02 - 11.80 5,128,182,508 Sub-Account 2014 463,962,556 11.30 - 11.92 5,423,637,032 2013 487,574,727 10.92 - 11.35 5,457,878,761 2012 471,913,542 10.13 - 10.38 4,856,824,935 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MFS VIT Research Sub-Account 2016 0.78 1.40 7.22 2015 0.73 1.40 (0.60) 2014 0.79 1.40 8.67 2013 0.33 1.40 30.45 2012 0.79 1.40 15.63 MIST AB Global Dynamic 2016 1.58 0.90 - 2.35 (0.62) - 2.67 Allocation Sub-Account 2015 3.28 0.90 - 2.35 (1.76) - (0.32) 2014 1.94 0.90 - 2.35 0.77 - 6.39 2013 1.28 0.90 - 2.35 8.56 - 10.15 2012 0.10 0.90 - 2.35 3.45 - 8.82 MIST Allianz Global 2016 0.05 0.90 - 2.15 (0.69) - 1.08 Investors Dynamic 2015 1.61 1.10 - 2.15 (3.09) - (2.07) Multi-Asset Plus 2014 0.92 1.15 - 2.00 0.71 - 4.55 Sub-Account (Commenced 4/28/2014) MIST American Funds 2016 1.62 0.90 - 2.35 2.90 - 6.84 Balanced Allocation 2015 1.40 0.90 - 2.35 (4.60) - (0.37) Sub-Account 2014 1.27 1.00 - 2.35 (0.35) - 4.99 2013 1.37 1.00 - 2.35 15.78 - 17.35 2012 1.69 1.00 - 2.35 10.88 - 12.39 MIST American Funds Growth 2016 1.30 0.90 - 2.35 6.43 - 7.98 Allocation Sub-Account 2015 1.31 1.10 - 2.35 (5.94) - (0.25) 2014 1.03 1.10 - 2.35 (0.52) - 5.17 2013 1.00 1.15 - 2.35 22.20 - 23.68 2012 1.21 1.15 - 2.35 13.45 - 14.82 MIST American Funds Growth 2016 0.29 0.95 - 2.35 6.57 - 8.32 Sub-Account 2015 0.87 0.95 - 2.35 1.76 - 5.48 2014 0.55 0.95 - 2.35 0.56 - 7.16 2013 0.44 0.95 - 2.35 11.27 - 28.11 2012 0.33 1.30 - 2.35 14.67 - 15.89 MIST American Funds 2016 1.91 0.90 - 2.35 2.00 - 6.05 Moderate Allocation 2015 1.49 0.90 - 2.35 (3.52) - (0.45) Sub-Account 2014 1.46 1.00 - 2.35 (0.26) - 5.04 2013 1.65 1.00 - 2.35 10.88 - 12.39 2012 2.04 1.00 - 2.35 8.25 - 9.73 MIST AQR Global Risk 2016 -- 0.90 - 2.35 2.44 - 7.98 Balanced Sub-Account 2015 5.51 0.90 - 2.35 (11.67) - (10.38) 2014 -- 0.90 - 2.35 (3.48) - 3.07 2013 2.09 0.90 - 2.35 (5.64) - (4.26) 2012 0.44 0.90 - 2.35 3.72 - 9.29 MIST BlackRock Global 2016 1.45 0.90 - 2.35 0.63 - 3.50 Tactical Strategies 2015 1.55 0.90 - 2.35 (2.43) - 0.11 Sub-Account 2014 1.12 0.90 - 2.35 (0.16) - 4.97 2013 1.36 0.90 - 2.35 7.75 - 9.32 2012 -- 0.90 - 2.35 3.27 - 7.89 125
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 -------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- ------------- MIST BlackRock High Yield 2016 8,860,074 16.19 - 31.14 231,879,405 Sub-Account 2015 9,031,674 14.40 - 27.56 210,920,401 2014 9,596,910 15.21 - 28.99 238,215,887 2013 10,783,682 14.92 - 28.32 265,149,806 2012 11,949,833 13.83 - 26.13 276,977,302 MIST Clarion Global Real 2016 14,214,001 16.13 - 70.52 263,186,597 Estate Sub-Account 2015 15,477,002 16.37 - 70.58 288,549,595 2014 17,245,897 17.00 - 72.26 330,178,643 2013 11,099,591 15.36 - 17.68 182,673,922 2012 10,967,900 15.19 - 17.23 177,317,957 MIST ClearBridge Aggressive 2016 31,716,282 12.20 - 205.91 461,921,010 Growth Sub-Account 2015 35,697,833 12.04 - 203.07 513,586,109 2014 38,472,258 12.71 - 214.41 586,572,505 2013 36,299,683 10.84 - 13.77 451,710,565 2012 33,802,849 7.55 - 9.54 292,871,764 MIST Goldman Sachs Mid Cap 2016 5,715,456 21.64 - 26.00 136,116,482 Value Sub-Account 2015 6,513,771 19.57 - 23.18 139,196,313 2014 7,477,599 22.05 - 25.19 178,512,669 2013 7,939,384 19.93 - 22.07 170,038,386 2012 8,486,283 15.38 - 16.85 139,211,779 MIST Harris Oakmark 2016 23,007,569 21.43 - 27.85 576,095,441 International Sub-Account 2015 25,339,005 20.23 - 25.80 595,542,818 2014 26,551,192 21.63 - 27.28 663,509,252 2013 25,769,452 23.43 - 29.23 693,983,244 2012 25,722,293 18.33 - 22.61 538,939,254 MIST Invesco Balanced-Risk 2016 818,076,929 1.09 - 11.62 940,598,161 Allocation Sub-Account 2015 749,414,346 1.00 - 10.52 777,069,714 (Commenced 4/30/2012) 2014 758,894,714 1.07 - 11.10 832,374,445 2013 800,860,953 1.04 - 1.06 843,160,697 2012 631,214,101 1.04 - 1.05 661,422,417 MIST Invesco Comstock 2016 36,743,760 16.14 - 26.27 742,413,375 Sub-Account 2015 39,951,458 14.08 - 22.61 699,284,637 2014 43,175,673 15.33 - 24.28 813,000,076 2013 26,889,264 14.36 - 22.42 443,561,923 2012 26,662,653 10.86 - 16.72 329,458,802 MIST Invesco Mid Cap Value 2016 7,068,224 1.84 - 43.07 268,931,465 Sub-Account 2015 7,308,379 1.61 - 37.62 244,281,850 2014 6,927,870 17.85 - 41.71 258,407,609 2013 4,619,902 30.27 - 38.39 158,040,375 2012 5,175,603 23.78 - 29.73 138,149,492 MIST Invesco Small Cap 2016 10,669,549 24.88 - 31.68 296,393,238 Growth Sub-Account 2015 11,537,860 22.84 - 28.61 291,887,925 2014 11,824,275 23.77 - 29.28 308,642,273 2013 13,003,134 22.53 - 27.31 319,189,345 2012 13,528,657 16.44 - 19.61 240,468,780 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MIST BlackRock High Yield 2016 6.73 0.90 - 2.35 7.19 - 12.96 Sub-Account 2015 8.07 0.90 - 2.35 (6.28) - (4.91) 2014 6.09 0.90 - 2.35 (1.88) - 2.37 2013 7.02 0.90 - 2.35 6.79 - 8.35 2012 7.05 0.90 - 2.35 7.68 - 15.15 MIST Clarion Global Real 2016 2.07 0.90 - 2.35 (4.89) - (0.03) Estate Sub-Account 2015 3.81 0.90 - 2.35 (3.69) - 3.43 2014 1.03 0.90 - 2.35 1.03 - 12.25 2013 6.85 0.90 - 2.35 1.14 - 2.62 2012 2.03 0.90 - 2.35 9.18 - 24.35 MIST ClearBridge Aggressive 2016 0.40 0.90 - 2.35 0.30 - 1.76 Growth Sub-Account 2015 0.23 0.90 - 2.35 (6.27) - (4.69) 2014 0.11 0.90 - 2.35 1.60 - 17.83 2013 0.22 0.90 - 2.35 42.22 - 44.30 2012 0.02 0.90 - 2.35 3.28 - 17.38 MIST Goldman Sachs Mid Cap 2016 0.83 0.90 - 2.35 10.55 - 12.17 Value Sub-Account 2015 0.64 0.90 - 2.35 (11.23) - (4.37) 2014 0.54 1.10 - 2.35 2.29 - 11.77 2013 0.89 1.30 - 2.35 29.57 - 30.94 2012 0.59 1.30 - 2.35 15.36 - 16.58 MIST Harris Oakmark 2016 2.14 0.90 - 2.35 5.67 - 7.21 International Sub-Account 2015 3.01 0.95 - 2.35 (6.74) - (3.92) 2014 2.41 0.95 - 2.35 (7.98) - 0.25 2013 2.44 0.95 - 2.35 27.46 - 29.26 2012 1.63 0.95 - 2.35 15.61 - 27.58 MIST Invesco Balanced-Risk 2016 0.15 0.90 - 2.35 4.88 - 10.72 Allocation Sub-Account 2015 2.83 0.90 - 2.35 (6.43) - (0.67) (Commenced 4/30/2012) 2014 -- 0.90 - 2.35 0.40 - 4.63 2013 -- 0.90 - 2.35 (0.50) - 0.95 2012 0.55 0.90 - 2.35 3.03 - 4.04 MIST Invesco Comstock 2016 2.53 0.90 - 2.35 12.17 - 16.25 Sub-Account 2015 2.88 0.90 - 2.35 (8.16) - (6.81) 2014 0.60 0.90 - 2.35 0.28 - 8.33 2013 1.07 0.90 - 2.35 32.25 - 34.18 2012 1.22 0.90 - 2.35 5.55 - 17.40 MIST Invesco Mid Cap Value 2016 0.63 0.90 - 2.35 9.67 - 14.47 Sub-Account 2015 0.45 0.90 - 2.35 (11.10) - (6.76) 2014 0.33 0.90 - 2.35 1.20 - 8.70 2013 0.74 0.90 - 2.35 27.28 - 29.14 2012 0.40 0.90 - 2.35 2.26 - 13.21 MIST Invesco Small Cap 2016 -- 0.89 - 2.35 8.71 - 10.73 Growth Sub-Account 2015 0.01 0.89 - 2.35 (3.99) - (2.29) 2014 -- 0.89 - 2.35 1.89 - 7.22 2013 0.23 0.89 - 2.35 36.92 - 39.29 2012 -- 0.89 - 2.35 15.47 - 17.45 126
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- MIST JPMorgan Core Bond 2016 31,064,359 9.84 - 11.16 339,144,828 Sub-Account 2015 31,401,600 9.78 - 11.06 340,682,787 2014 32,404,332 9.89 - 11.15 355,237,960 2013 29,439,490 10.12 - 10.75 311,869,932 2012 31,242,391 10.69 - 11.23 346,492,447 MIST JPMorgan Global Active 2016 848,098,850 1.17 - 12.50 1,042,207,011 Allocation Sub-Account 2015 828,919,735 1.16 - 12.26 1,000,785,200 (Commenced 4/30/2012) 2014 747,266,184 1.18 - 12.14 905,975,458 2013 649,853,969 1.13 - 1.16 746,849,717 2012 269,034,003 1.04 - 1.05 282,572,135 MIST JPMorgan Small Cap 2016 1,141,302 21.67 - 24.82 26,376,632 Value Sub-Account 2015 1,287,553 16.94 - 19.19 23,133,878 2014 1,417,944 18.69 - 20.92 27,932,500 2013 1,455,583 18.28 - 20.23 27,866,566 2012 1,643,159 14.04 - 15.36 24,014,976 MIST Loomis Sayles Global 2016 8,505,955 16.04 - 18.73 148,612,417 Markets Sub-Account 2015 9,530,128 15.68 - 17.95 161,399,211 2014 10,444,732 15.85 - 17.90 177,351,030 2013 10,842,823 15.69 - 17.47 180,595,781 2012 12,318,466 13.71 - 14.91 177,780,410 MIST Met/Aberdeen Emerging 2016 39,351,974 8.62 - 10.44 370,235,661 Markets Equity Sub-Account 2015 42,624,617 7.91 - 9.58 365,167,198 2014 42,182,331 9.40 - 11.38 425,619,386 2013 41,623,177 10.29 - 12.45 456,076,892 2012 38,352,212 11.09 - 13.41 448,693,258 MIST Met/Artisan 2016 27,485 8.41 - 8.57 233,690 International Sub-Account 2015 12,794 9.42 - 9.54 121,159 (Commenced 11/19/2014 and began transactions in 2015) MIST Met/Eaton Vance 2016 5,632,610 10.95 - 12.06 64,827,675 Floating Rate Sub-Account 2015 5,985,329 10.26 - 11.01 64,028,918 2014 6,743,439 10.59 - 11.23 73,909,210 2013 7,519,969 10.76 - 11.18 83,115,837 2012 5,007,151 10.61 - 10.91 54,197,004 MIST Met/Franklin Low 2016 14,680,889 9.44 - 10.25 144,974,836 Duration Total Return 2015 16,246,958 9.37 - 10.03 157,983,094 Sub-Account 2014 17,421,682 9.65 - 10.18 173,124,917 2013 14,050,793 9.78 - 10.16 140,307,146 2012 4,349,231 9.92 - 10.14 43,609,944 MIST Met/Templeton 2016 3,153,303 11.87 - 13.07 39,493,620 International Bond 2015 3,361,116 12.07 - 13.08 42,349,271 Sub-Account 2014 3,537,497 12.87 - 13.66 47,183,875 2013 3,905,329 13.00 - 13.53 52,286,139 2012 4,238,395 13.19 - 13.56 57,001,253 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST JPMorgan Core Bond 2016 2.78 0.90 - 2.20 0.01 - 1.31 Sub-Account 2015 2.33 0.90 - 2.20 (1.70) - (0.01) 2014 1.42 1.10 - 2.20 0.48 - 3.73 2013 0.28 1.30 - 2.35 (5.04) - (4.05) 2012 2.57 1.30 - 2.35 2.47 - 3.55 MIST JPMorgan Global Active 2016 2.12 0.90 - 2.35 0.12 - 1.98 Allocation Sub-Account 2015 2.71 0.90 - 2.35 (1.45) - 0.82 (Commenced 4/30/2012) 2014 1.13 0.90 - 2.35 0.35 - 6.02 2013 0.08 0.90 - 2.35 8.41 - 9.99 2012 0.73 0.90 - 2.35 3.02 - 4.03 MIST JPMorgan Small Cap 2016 1.84 0.90 - 2.30 27.88 - 29.34 Value Sub-Account 2015 1.35 0.90 - 2.30 (9.36) - (1.13) 2014 1.07 0.90 - 2.30 2.28 - 3.89 2013 0.69 0.90 - 2.30 30.22 - 31.71 2012 0.84 0.90 - 2.30 2.73 - 13.98 MIST Loomis Sayles Global 2016 1.67 0.90 - 2.35 1.78 - 3.84 Markets Sub-Account 2015 1.59 0.95 - 2.35 (1.12) - 0.27 2014 2.08 0.95 - 2.35 (0.82) - 2.49 2013 2.41 0.95 - 2.35 14.41 - 16.02 2012 2.32 1.10 - 2.35 2.75 - 15.41 MIST Met/Aberdeen Emerging 2016 0.97 0.90 - 2.35 (0.57) - 10.50 Markets Equity Sub-Account 2015 1.79 0.90 - 2.35 (15.82) - (2.68) 2014 0.84 0.90 - 2.35 (8.69) - (4.92) 2013 1.07 0.90 - 2.35 (7.19) - (5.83) 2012 0.75 0.90 - 2.35 3.96 - 17.77 MIST Met/Artisan 2016 0.99 0.90 - 1.60 (10.71) - (10.09) International Sub-Account 2015 0.60 0.90 - 1.60 (9.11) - (4.55) (Commenced 11/19/2014 and began transactions in 2015) MIST Met/Eaton Vance 2016 4.01 0.90 - 2.35 6.73 - 8.29 Floating Rate Sub-Account 2015 3.64 1.10 - 2.35 (3.14) - (1.92) 2014 3.65 1.10 - 2.35 (1.60) - (0.57) 2013 3.38 1.30 - 2.35 1.42 - 2.50 2012 3.39 1.30 - 2.35 4.83 - 5.94 MIST Met/Franklin Low 2016 2.90 0.90 - 2.35 0.74 - 2.21 Duration Total Return 2015 3.12 0.90 - 2.35 (2.93) - (1.51) Sub-Account 2014 2.15 0.90 - 2.35 (1.29) - 0.15 2013 1.07 0.90 - 2.35 (1.19) - 0.25 2012 1.91 0.90 - 2.20 1.17 - 3.15 MIST Met/Templeton 2016 -- 0.95 - 2.20 (1.32) - (0.08) International Bond 2015 8.17 0.95 - 2.15 (6.20) - 0.75 Sub-Account 2014 4.63 1.10 - 2.15 (2.28) - (0.17) 2013 2.02 1.30 - 2.15 (1.11) - (0.27) 2012 10.26 1.30 - 2.05 11.96 - 12.80 127
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- MIST Met/Wellington Large 2016 931,137 14.70 - 18.51 15,301,423 Cap Research Sub-Account 2015 1,013,512 13.89 - 17.26 15,616,983 2014 1,151,671 13.60 - 16.68 17,260,395 2013 1,260,254 12.25 - 14.84 16,869,650 2012 1,423,242 9.34 - 11.16 14,439,147 MIST MetLife Asset 2016 33,538,308 15.19 - 18.13 557,780,998 Allocation 100 Sub-Account 2015 37,143,227 14.27 - 16.78 575,818,048 2014 39,915,870 14.91 - 17.28 641,574,794 2013 42,451,280 14.53 - 16.59 659,971,504 2012 44,655,767 11.48 - 12.93 545,044,070 MIST MetLife Balanced Plus 2016 536,906,397 12.22 - 13.27 6,925,324,483 Sub-Account 2015 552,214,291 11.54 - 12.35 6,663,424,002 2014 569,859,186 12.32 - 13.00 7,268,454,132 2013 547,096,627 11.51 - 11.96 6,454,726,976 2012 438,994,467 10.30 - 10.55 4,593,209,415 MIST MetLife Multi-Index 2016 583,908,748 1.18 - 12.35 847,575,021 Targeted Risk Sub-Account 2015 435,062,012 1.15 - 11.96 633,831,341 (Commenced 11/12/2012) 2014 281,516,918 1.19 - 12.18 421,513,955 2013 153,950,143 1.12 - 11.26 209,957,052 2012 11,094,386 1.01 11,247,979 MIST MetLife Small Cap 2016 9,362,462 25.74 - 32.69 266,605,506 Value Sub-Account 2015 10,725,811 20.08 - 25.07 236,287,986 2014 12,299,087 21.73 - 26.68 291,013,900 2013 13,992,716 21.87 - 26.40 330,701,962 2012 15,859,523 16.91 - 20.06 287,540,317 MIST MFS Research 2016 16,956,442 13.02 - 17.53 247,879,900 International Sub-Account 2015 18,156,340 13.44 - 17.81 271,985,758 2014 18,585,662 14.00 - 18.24 287,913,009 2013 19,616,483 15.39 - 18.44 331,488,461 2012 21,667,563 13.21 - 15.60 311,615,422 MIST Morgan Stanley Mid Cap 2016 12,770,536 2.37 - 21.48 201,153,118 Growth Sub-Account 2015 12,648,258 2.62 - 23.62 220,460,412 2014 12,928,550 2.79 - 25.03 240,528,688 2013 13,099,903 2.79 - 24.94 244,579,234 2012 12,225,316 2.03 - 18.06 166,100,095 MIST Oppenheimer Global 2016 2,333,207 21.57 - 28.48 59,761,246 Equity Sub-Account 2015 2,520,098 22.02 - 28.67 65,266,488 2014 2,866,078 21.68 - 27.83 72,350,999 2013 3,127,720 21.72 - 27.49 78,398,573 2012 500,711 18.48 - 21.83 9,983,469 MIST PanAgora Global 2016 95,787,147 1.04 - 10.75 102,757,891 Diversified Risk Sub-Account 2015 21,772,279 0.95 - 9.78 21,123,770 (Commenced 4/28/2014) 2014 9,788,108 1.03 - 10.44 10,161,644 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MIST Met/Wellington Large 2016 2.26 0.90 - 2.30 5.83 - 7.22 Cap Research Sub-Account 2015 0.78 0.90 - 2.30 2.08 - 3.48 2014 0.80 0.90 - 2.30 1.80 - 12.40 2013 1.28 0.90 - 2.30 31.12 - 32.97 2012 1.07 0.90 - 2.30 (0.27) - 11.75 MIST MetLife Asset 2016 2.26 0.90 - 2.35 5.06 - 8.00 Allocation 100 Sub-Account 2015 1.29 0.90 - 2.35 (4.28) - (1.06) 2014 0.71 0.90 - 2.35 0.05 - 4.15 2013 0.75 0.90 - 2.35 26.50 - 28.35 2012 0.64 0.90 - 2.35 2.91 - 15.40 MIST MetLife Balanced Plus 2016 2.86 0.90 - 2.35 2.21 - 7.39 Sub-Account 2015 2.10 0.90 - 2.35 (6.32) - (4.95) 2014 1.75 0.90 - 2.35 0.70 - 8.67 2013 1.19 0.90 - 2.35 11.71 - 13.34 2012 -- 0.90 - 2.35 4.67 - 11.81 MIST MetLife Multi-Index 2016 1.29 0.90 - 2.25 0.17 - 3.43 Targeted Risk Sub-Account 2015 1.20 0.90 - 2.25 (3.41) - (2.10) (Commenced 11/12/2012) 2014 -- 1.15 - 2.25 0.83 - 8.01 2013 0.55 1.15 - 2.25 4.04 - 11.65 2012 -- 1.15 - 2.00 2.56 - 2.68 MIST MetLife Small Cap 2016 1.06 0.89 - 2.35 28.21 - 30.39 Value Sub-Account 2015 0.10 0.89 - 2.35 (7.61) - (6.05) 2014 0.04 0.89 - 2.35 (0.65) - 1.06 2013 0.99 0.89 - 2.35 29.37 - 31.64 2012 -- 0.89 - 2.35 15.23 - 17.22 MIST MFS Research 2016 2.00 0.89 - 2.35 (3.18) - (1.55) International Sub-Account 2015 2.71 0.89 - 2.35 (4.06) - (2.37) 2014 2.24 0.89 - 2.35 (9.11) - (3.46) 2013 2.58 0.90 - 2.35 16.49 - 18.19 2012 1.89 0.90 - 2.35 6.35 - 15.60 MIST Morgan Stanley Mid Cap 2016 -- 0.89 - 2.30 (10.54) - (2.08) Growth Sub-Account 2015 -- 0.89 - 2.30 (7.18) - (5.63) 2014 -- 0.89 - 2.30 (1.40) - 0.39 2013 0.60 0.89 - 2.30 35.86 - 38.07 2012 -- 0.89 - 2.30 (4.93) - 8.58 MIST Oppenheimer Global 2016 0.92 0.90 - 2.30 (2.05) - (0.67) Equity Sub-Account 2015 0.94 0.90 - 2.30 (1.50) - 3.00 2014 0.82 0.90 - 2.30 (0.31) - 1.23 2013 0.35 0.90 - 2.30 24.22 - 25.97 2012 1.40 0.90 - 1.95 8.80 - 19.84 MIST PanAgora Global 2016 3.34 0.90 - 2.20 2.13 - 10.13 Diversified Risk Sub-Account 2015 0.55 1.10 - 2.20 (7.53) - (6.51) (Commenced 4/28/2014) 2014 0.46 1.15 - 2.00 (0.35) - 3.75 128
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 -------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- --------------- -------------- MIST PIMCO Inflation 2016 43,749,123 12.81 - 15.62 622,764,700 Protected Bond Sub-Account 2015 46,098,333 12.49 - 15.01 634,902,757 2014 50,751,209 13.20 - 15.63 732,596,404 2013 57,648,505 13.13 - 15.33 821,456,089 2012 64,013,091 14.82 - 17.05 1,021,039,296 MIST PIMCO Total Return 2016 84,045,933 12.44 - 20.10 1,446,213,216 Sub-Account 2015 91,772,688 12.26 - 19.72 1,561,823,561 2014 103,504,587 12.40 - 19.84 1,787,038,026 2013 118,419,838 12.03 - 19.16 1,993,786,948 2012 128,302,689 12.42 - 19.67 2,234,370,461 MIST Pyramis Government 2016 59,975,014 10.24 - 11.12 648,755,946 Income Sub-Account 2015 60,149,269 10.35 - 11.07 651,039,693 2014 62,286,953 10.55 - 11.13 680,446,278 2013 69,488,361 10.04 - 10.44 715,739,557 2012 88,599,553 10.77 - 11.03 968,887,238 MIST Pyramis Managed Risk 2016 36,164,251 1.18 - 11.76 415,940,338 Sub-Account 2015 31,417,980 1.14 - 11.35 351,642,870 (Commenced 4/29/2013) 2014 14,204,266 11.35 - 11.58 163,513,389 2013 7,294,047 10.69 - 10.77 78,417,229 MIST Schroders Global 2016 459,001,172 1.20 - 12.75 577,424,821 Multi-Asset Sub-Account 2015 467,251,015 1.16 - 12.20 562,872,602 (Commenced 4/30/2012) 2014 400,460,215 1.20 - 12.36 493,380,979 2013 375,261,358 1.14 - 1.17 435,205,689 2012 179,641,654 1.06 - 1.07 191,885,161 MIST SSGA Growth and Income 2016 85,949,744 13.64 - 16.06 1,290,390,224 ETF Sub-Account 2015 93,774,991 13.20 - 15.32 1,349,807,450 2014 101,616,119 13.79 - 15.77 1,513,705,632 2013 110,435,377 13.34 - 15.03 1,578,178,677 2012 118,446,237 12.09 - 13.24 1,521,502,479 MIST SSGA Growth ETF 2016 30,512,706 13.61 - 16.02 454,752,008 Sub-Account 2015 32,991,663 13.03 - 15.12 467,274,058 2014 34,092,389 13.66 - 15.62 501,804,705 2013 35,919,224 13.27 - 14.96 509,607,858 2012 36,733,044 11.51 - 12.55 448,167,959 MIST T. Rowe Price Large 2016 11,082,070 43.41 - 159.87 747,778,790 Cap Value Sub-Account 2015 12,150,155 38.27 - 138.81 715,850,738 2014 13,521,347 40.58 - 144.85 838,816,422 2013 11,320,980 38.18 - 128.69 657,944,319 2012 12,231,249 28.88 - 96.83 536,790,380 MIST T. Rowe Price Mid Cap 2016 25,320,043 16.30 - 19.10 462,783,968 Growth Sub-Account 2015 27,786,712 15.70 - 18.22 485,654,167 2014 32,310,271 15.06 - 17.30 537,586,208 2013 37,965,912 13.67 - 15.54 568,882,747 2012 41,941,697 10.24 - 11.53 467,536,275 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST PIMCO Inflation 2016 -- 0.90 - 2.35 2.55 - 4.04 Protected Bond Sub-Account 2015 4.95 0.90 - 2.35 (5.36) - (3.98) 2014 1.54 0.90 - 2.35 (1.54) - 1.97 2013 2.20 0.90 - 2.35 (11.38) - (10.09) 2012 3.02 0.90 - 2.35 4.22 - 7.82 MIST PIMCO Total Return 2016 2.59 0.89 - 2.35 0.23 - 1.94 Sub-Account 2015 5.26 0.89 - 2.35 (2.32) - (0.45) 2014 2.34 0.89 - 2.35 0.40 - 3.56 2013 4.27 0.89 - 2.35 (4.19) - (2.59) 2012 3.13 0.89 - 2.35 4.10 - 8.58 MIST Pyramis Government 2016 2.11 0.90 - 2.35 (2.68) - 0.41 Income Sub-Account 2015 2.27 0.90 - 2.35 (1.90) - (0.47) 2014 2.60 0.90 - 2.35 0.96 - 6.59 2013 1.55 0.90 - 2.35 (6.74) - (5.37) 2012 0.02 0.90 - 2.35 0.74 - 1.96 MIST Pyramis Managed Risk 2016 0.75 0.90 - 2.25 0.87 - 3.63 Sub-Account 2015 0.66 0.90 - 2.25 (3.45) - (0.73) (Commenced 4/29/2013) 2014 -- 1.10 - 2.25 0.98 - 7.40 2013 1.65 1.15 - 2.25 4.66 - 5.43 MIST Schroders Global 2016 1.40 0.90 - 2.35 0.71 - 4.71 Multi-Asset Sub-Account 2015 1.00 0.90 - 2.35 (3.18) - (1.77) (Commenced 4/30/2012) 2014 1.32 0.90 - 2.35 0.43 - 6.77 2013 0.01 0.90 - 2.35 7.55 - 9.12 2012 1.49 0.90 - 2.35 5.01 - 6.03 MIST SSGA Growth and Income 2016 2.37 0.90 - 2.35 1.90 - 4.84 ETF Sub-Account 2015 2.30 0.90 - 2.35 (4.24) - (2.84) 2014 2.24 0.90 - 2.35 (0.03) - 4.86 2013 2.51 0.90 - 2.35 10.31 - 11.92 2012 2.40 1.10 - 2.35 4.01 - 11.55 MIST SSGA Growth ETF 2016 2.14 0.90 - 2.35 4.40 - 5.92 Sub-Account 2015 2.00 0.90 - 2.35 (4.58) - (3.19) 2014 1.88 0.90 - 2.35 (0.05) - 4.43 2013 2.10 0.90 - 2.35 15.33 - 17.01 2012 1.96 1.15 - 2.35 4.38 - 13.71 MIST T. Rowe Price Large 2016 2.83 0.89 - 2.35 8.67 - 15.17 Cap Value Sub-Account 2015 1.58 0.89 - 2.35 (5.83) - 3.48 2014 1.18 0.89 - 2.35 1.20 - 12.56 2013 1.58 0.89 - 2.35 30.67 - 32.90 2012 1.50 0.89 - 2.35 6.92 - 17.22 MIST T. Rowe Price Mid Cap 2016 -- 1.30 - 2.35 3.75 - 4.84 Growth Sub-Account 2015 -- 1.30 - 2.35 4.20 - 5.30 2014 -- 1.30 - 2.35 10.16 - 11.32 2013 0.21 1.30 - 2.35 33.41 - 34.82 2012 -- 1.30 - 2.35 11.03 - 12.21 129
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- MIST TCW Core Fixed Income 2016 29,430 9.90 - 10.02 292,738 Sub-Account 2015 7,421 9.84 - 9.87 73,169 (Commenced 5/1/2015) MSF Baillie Gifford 2016 22,804,816 4.33 - 14.68 221,819,744 International Stock 2015 24,846,295 4.17 - 14.13 233,411,516 Sub-Account 2014 27,573,117 4.31 - 14.37 269,502,431 2013 29,549,817 4.51 - 15.12 303,453,047 2012 219,106 3.96 - 13.35 2,585,607 MSF Barclays Aggregate Bond 2016 21,606,441 1.79 - 19.26 308,498,975 Index Sub-Account 2015 18,032,558 1.77 - 18.98 245,107,645 2014 16,099,701 1.79 - 19.11 213,475,999 2013 13,536,937 1.71 - 18.22 162,571,849 2012 10,756,748 1.78 - 18.82 151,553,766 MSF BlackRock Bond Income 2016 1,269,349 46.30 - 77.89 74,475,330 Sub-Account 2015 1,196,294 46.01 - 76.20 69,045,344 2014 1,105,752 46.87 - 76.43 63,615,045 2013 1,054,348 44.86 - 72.01 57,251,907 2012 1,045,629 46.32 - 73.22 57,888,933 MSF BlackRock Capital 2016 584,767 17.21 - 54.82 14,098,982 Appreciation Sub-Account 2015 579,182 17.56 - 55.26 14,301,142 2014 639,908 16.88 - 52.46 14,686,428 2013 721,215 15.83 - 48.60 15,272,342 2012 745,728 12.04 - 36.54 11,831,610 MSF BlackRock Large Cap 2016 254,830 18.36 - 21.14 5,024,818 Value Sub-Account 2015 245,613 15.79 - 17.99 4,149,008 2014 229,967 17.66 - 19.31 4,201,564 2013 225,190 16.80 - 17.73 3,792,926 2012 230,438 12.89 - 13.54 2,977,532 MSF BlackRock Ultra-Short 2016 33,915,071 2.28 - 25.22 343,711,226 Term Bond Sub-Account 2015 39,040,662 2.31 - 25.42 398,590,779 2014 39,068,482 2.33 - 25.65 395,886,367 2013 44,329,198 2.36 - 25.88 461,342,890 2012 53,484,009 9.33 - 25.53 569,109,901 MSF Frontier Mid Cap Growth 2016 3,317,626 18.21 - 20.80 66,475,159 Sub-Account 2015 3,809,398 17.73 - 20.04 73,654,799 (Commenced 4/29/2013) 2014 4,248,372 17.69 - 19.79 81,297,538 2013 4,767,721 16.33 - 18.08 83,651,163 MSF Jennison Growth 2016 21,756,762 4.56 - 23.16 447,002,555 Sub-Account 2015 23,988,437 4.61 - 23.40 501,066,353 2014 27,528,387 4.22 - 21.36 529,020,323 2013 32,574,197 3.93 - 19.82 585,624,219 2012 35,125,323 2.91 - 14.55 468,764,846 MSF Loomis Sayles Small Cap 2016 241,747 52.28 - 68.64 14,400,635 Core Sub-Account 2015 250,951 44.97 - 58.33 12,750,644 2014 261,060 46.83 - 58.80 13,706,471 2013 283,327 46.30 - 57.49 14,610,773 2012 330,015 33.68 - 41.36 12,332,225 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MIST TCW Core Fixed Income 2016 0.71 0.90 - 1.60 0.59 - 1.29 Sub-Account 2015 -- 1.10 - 1.60 (1.56) - (0.10) (Commenced 5/1/2015) MSF Baillie Gifford 2016 1.38 1.10 - 2.25 2.71 - 3.91 International Stock 2015 1.43 1.10 - 2.25 (4.35) - (0.24) Sub-Account 2014 1.26 1.30 - 2.25 (5.49) - (1.36) 2013 0.02 1.30 - 2.25 9.68 - 13.94 2012 1.14 1.40 - 1.90 17.11 - 17.85 MSF Barclays Aggregate Bond 2016 2.73 0.89 - 2.35 (2.09) - 1.44 Index Sub-Account 2015 2.67 0.89 - 2.35 (2.38) - (0.46) 2014 2.62 0.89 - 2.35 0.54 - 4.87 2013 3.23 0.89 - 2.25 (4.74) - (3.19) 2012 3.45 0.89 - 2.25 1.27 - 2.98 MSF BlackRock Bond Income 2016 2.96 0.89 - 2.30 (1.22) - 2.21 Sub-Account 2015 3.55 0.89 - 2.30 (1.84) - (0.30) 2014 3.22 0.89 - 2.30 0.85 - 6.14 2013 3.83 0.89 - 2.30 (3.17) - (1.65) 2012 2.54 0.89 - 2.30 3.74 - 6.59 MSF BlackRock Capital 2016 -- 0.89 - 2.30 (2.19) - (0.80) Appreciation Sub-Account 2015 -- 0.89 - 2.30 0.83 - 5.34 2014 0.06 0.89 - 2.30 0.94 - 7.93 2013 0.79 0.89 - 2.30 31.17 - 33.03 2012 0.32 0.89 - 2.30 (0.88) - 13.35 MSF BlackRock Large Cap 2016 1.63 0.89 - 1.60 16.22 - 17.46 Value Sub-Account 2015 1.82 0.89 - 1.60 (10.29) - (6.82) 2014 1.26 0.89 - 1.35 1.39 - 8.95 2013 1.38 0.89 - 1.35 30.28 - 30.88 2012 1.61 0.89 - 1.35 12.74 - 13.27 MSF BlackRock Ultra-Short 2016 -- 0.90 - 2.35 (2.21) - (0.75) Term Bond Sub-Account 2015 -- 0.90 - 2.35 (2.32) - (0.27) 2014 -- 0.90 - 2.35 (2.32) - (0.13) 2013 -- 0.90 - 2.35 (2.32) - (0.37) 2012 -- 0.95 - 2.35 (2.34) - (0.74) MSF Frontier Mid Cap Growth 2016 -- 1.30 - 2.35 2.72 - 3.80 Sub-Account 2015 -- 1.30 - 2.35 0.22 - 1.28 (Commenced 4/29/2013) 2014 -- 1.30 - 2.35 8.30 - 9.44 2013 -- 1.30 - 2.35 19.21 - 20.07 MSF Jennison Growth 2016 0.03 0.90 - 2.35 (2.45) - (0.98) Sub-Account 2015 0.02 0.90 - 2.35 3.00 - 9.55 2014 0.04 0.90 - 2.35 (0.16) - 7.81 2013 0.20 0.90 - 2.35 33.56 - 35.51 2012 0.01 0.95 - 2.35 (4.12) - 14.17 MSF Loomis Sayles Small Cap 2016 0.07 1.10 - 2.30 16.27 - 17.67 Core Sub-Account 2015 -- 1.10 - 2.30 (3.98) - (2.67) 2014 -- 1.20 - 2.30 1.15 - 2.27 2013 0.23 1.20 - 2.30 37.49 - 39.01 2012 -- 1.20 - 2.30 11.66 - 12.90 130
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 -------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- ------------- MSF Loomis Sayles Small Cap 2016 15,428 17.80 - 19.55 292,623 Growth Sub-Account 2015 18,203 17.03 - 18.60 328,707 (Commenced 4/30/2012) 2014 16,302 17.05 - 18.51 293,433 2013 12,506 17.15 - 18.50 226,802 2012 3,306 11.73 - 12.58 40,927 MSF Met/Artisan Mid Cap 2016 9,275,939 20.44 - 60.81 217,144,062 Value Sub-Account 2015 10,052,598 17.04 - 49.89 194,979,851 2014 11,205,267 19.30 - 55.59 244,385,523 2013 13,125,790 19.41 - 55.03 285,771,010 2012 13,419,571 14.54 - 40.57 217,257,576 MSF Met/Dimensional 2016 2,814,983 19.38 - 21.73 57,869,934 International Small Company 2015 3,198,853 18.74 - 20.72 63,108,799 Sub-Account 2014 3,070,324 18.13 - 19.77 58,174,088 2013 3,208,551 19.88 - 21.38 66,162,419 2012 3,203,412 15.91 - 16.90 52,618,293 MSF Met/Wellington Core 2016 29,665,645 5.82 - 62.22 787,903,717 Equity Opportunities 2015 26,356,637 17.28 - 58.48 527,700,755 Sub-Account 2014 30,718,018 17.28 - 57.62 609,015,113 2013 36,209,587 16.00 - 52.55 658,561,438 2012 41,401,029 12.26 - 39.65 572,327,325 MSF MetLife Asset 2016 7,192,154 13.15 - 15.31 101,585,600 Allocation 20 Sub-Account 2015 4,782,874 12.86 - 14.78 65,568,612 2014 2,973,577 13.22 - 15.00 41,687,543 2013 557,035 12.93 - 13.63 7,497,408 2012 735,694 12.67 - 13.27 9,655,026 MSF MetLife Asset 2016 266,351,270 13.44 - 16.21 3,966,089,283 Allocation 40 Sub-Account 2015 297,958,878 12.97 - 15.25 4,248,132,666 2014 341,017,115 13.43 - 15.56 4,991,456,808 2013 550,896 13.60 - 14.27 7,732,376 2012 588,986 12.52 - 13.07 7,576,787 MSF MetLife Asset 2016 407,551,536 14.43 - 20.37 6,424,608,702 Allocation 60 Sub-Account 2015 446,107,386 13.78 - 19.25 6,667,289,010 2014 489,838,225 14.27 - 19.73 7,527,991,156 2013 3,073,122 13.90 - 14.77 44,655,421 2012 3,326,548 12.05 - 12.71 41,689,448 MSF MetLife Asset 2016 353,810,551 14.56 - 21.32 5,638,281,052 Allocation 80 Sub-Account 2015 388,323,652 13.77 - 19.96 5,814,030,390 2014 420,572,925 14.33 - 20.54 6,507,894,347 2013 3,927,901 14.05 - 14.80 57,260,787 2012 4,335,356 11.55 - 12.09 51,720,857 MSF MetLife Mid Cap Stock 2016 5,338,539 3.27 - 35.35 151,623,612 Index Sub-Account 2015 5,111,469 2.75 - 29.62 121,483,288 2014 5,178,461 2.86 - 30.60 127,735,872 2013 5,501,359 2.64 - 28.20 125,884,078 2012 4,914,049 2.01 - 21.37 88,989,701 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ------------------ MSF Loomis Sayles Small Cap 2016 -- 0.90 - 1.50 4.47 - 5.10 Growth Sub-Account 2015 -- 0.90 - 1.50 (0.08) - 0.52 (Commenced 4/30/2012) 2014 -- 0.90 - 1.50 (0.57) - 0.03 2013 -- 0.90 - 1.50 46.17 - 47.05 2012 -- 0.90 - 1.50 (1.28) - (0.88) MSF Met/Artisan Mid Cap 2016 0.88 0.89 - 2.35 19.80 - 21.88 Value Sub-Account 2015 0.94 0.89 - 2.35 (11.76) - (10.24) 2014 0.55 0.89 - 2.35 (0.69) - 1.02 2013 0.77 0.89 - 2.35 33.34 - 35.64 2012 0.80 0.89 - 2.35 8.98 - 10.87 MSF Met/Dimensional 2016 1.92 0.90 - 2.30 3.42 - 4.88 International Small Company 2015 1.67 0.90 - 2.30 0.83 - 4.81 Sub-Account 2014 2.02 0.90 - 2.30 (8.82) - (0.83) 2013 1.72 0.90 - 2.30 24.70 - 26.46 2012 2.19 0.90 - 2.35 3.91 - 16.37 MSF Met/Wellington Core 2016 1.71 0.89 - 2.35 0.63 - 6.39 Equity Opportunities 2015 1.65 0.89 - 2.35 (0.11) - 4.18 Sub-Account 2014 0.59 0.89 - 2.35 1.34 - 9.65 2013 1.27 0.89 - 2.35 30.43 - 32.52 2012 0.72 0.89 - 2.35 1.16 - 11.86 MSF MetLife Asset 2016 3.21 0.90 - 2.20 0.66 - 3.59 Allocation 20 Sub-Account 2015 1.92 0.90 - 2.20 (2.75) - (0.55) 2014 1.17 0.90 - 2.20 0.07 - 3.02 2013 3.04 1.55 - 2.15 2.07 - 2.68 2012 3.27 1.55 - 2.15 6.85 - 7.49 MSF MetLife Asset 2016 3.55 0.90 - 2.35 1.95 - 5.14 Allocation 40 Sub-Account 2015 0.28 0.90 - 2.35 (3.37) - (0.68) 2014 0.01 0.90 - 2.35 0.04 - 3.47 2013 2.53 1.55 - 2.10 8.62 - 9.22 2012 2.95 1.55 - 2.10 9.13 - 9.74 MSF MetLife Asset 2016 3.15 0.90 - 2.35 3.07 - 6.15 Allocation 60 Sub-Account 2015 0.54 0.90 - 2.35 (3.56) - (0.67) 2014 0.02 0.90 - 2.35 0.03 - 3.93 2013 2.00 1.55 - 2.25 15.36 - 16.17 2012 2.39 1.55 - 2.25 10.71 - 11.49 MSF MetLife Asset 2016 2.95 0.90 - 2.35 4.56 - 7.17 Allocation 80 Sub-Account 2015 0.33 0.90 - 2.35 (3.98) - (0.84) 2014 0.02 0.90 - 2.35 (0.03) - 4.53 2013 1.46 1.55 - 2.15 21.67 - 22.40 2012 1.91 1.55 - 2.15 12.92 - 13.60 MSF MetLife Mid Cap Stock 2016 1.06 0.89 - 2.35 17.29 - 19.37 Index Sub-Account 2015 0.97 0.89 - 2.35 (7.24) - (2.52) 2014 0.85 0.89 - 2.35 1.60 - 8.52 2013 1.00 0.89 - 2.35 29.67 - 31.97 2012 0.82 0.89 - 2.35 14.53 - 16.55 131
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 ---------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ---------------- -------------- MSF MetLife Stock Index 2016 25,218,819 7.75 - 86.45 594,986,915 Sub-Account 2015 25,649,785 7.03 - 78.11 553,515,934 2014 28,264,874 7.03 - 77.90 610,830,233 2013 28,624,388 6.28 - 69.33 561,274,487 2012 29,109,224 4.82 - 52.98 446,759,028 MSF MFS Total Return 2016 645,393 50.82 - 81.96 41,309,025 Sub-Account 2015 710,775 47.72 - 75.73 42,319,194 2014 756,067 49.00 - 76.52 45,817,455 2013 814,124 46.24 - 71.07 46,044,412 2012 730,405 41.41 - 60.26 35,344,618 MSF MFS Value Sub-Account 2016 11,015,597 14.16 - 29.18 284,625,248 2015 10,866,190 12.69 - 25.81 249,890,569 2014 10,916,908 13.03 - 26.14 255,401,966 2013 12,139,878 12.05 - 23.85 260,473,964 2012 3,025,966 14.12 - 17.78 48,275,261 MSF MSCI EAFE Index 2016 9,185,190 1.46 - 15.96 104,406,669 Sub-Account 2015 8,770,551 1.46 - 15.89 99,902,951 2014 8,697,532 1.49 - 16.21 101,223,288 2013 8,809,646 1.61 - 17.40 112,197,169 2012 7,172,234 1.34 - 14.41 81,404,548 MSF Neuberger Berman 2016 5,470,799 20.57 - 32.20 133,113,538 Genesis Sub-Account 2015 6,339,117 17.77 - 27.37 131,949,869 2014 7,109,782 18.11 - 27.46 150,104,225 2013 8,020,175 18.58 - 27.70 172,247,460 2012 626,194 16.44 - 20.18 11,798,908 MSF Russell 2000 Index 2016 5,131,926 3.22 - 35.60 143,701,523 Sub-Account 2015 5,516,806 2.69 - 29.61 129,529,499 2014 5,807,014 2.84 - 31.21 144,858,146 2013 5,835,501 2.74 - 29.98 141,070,458 2012 5,078,788 2.01 - 21.83 91,750,975 MSF T. Rowe Price Large Cap 2016 17,003,069 8.79 - 62.34 203,478,587 Growth Sub-Account 2015 19,853,858 8.76 - 62.33 233,448,817 2014 15,015,374 8.02 - 57.25 166,959,337 2013 14,688,080 8.03 - 53.41 151,930,071 2012 39,346 35.99 - 39.07 1,501,612 MSF T. Rowe Price Small Cap 2016 373,919 29.67 - 42.70 12,987,892 Growth Sub-Account 2015 373,434 27.19 - 38.55 11,814,560 2014 321,073 27.11 - 37.87 9,976,420 2013 356,919 25.98 - 35.74 10,522,813 2012 380,162 18.41 - 24.95 7,808,995 MSF Van Eck Global Natural 2016 6,924,892 12.08 - 13.17 88,041,249 Resources Sub-Account 2015 8,336,502 8.59 - 9.26 74,871,874 2014 6,586,665 13.05 - 13.93 89,288,128 2013 6,278,667 16.43 - 17.17 106,449,499 2012 7,200,491 15.15 - 15.70 111,896,983 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MSF MetLife Stock Index 2016 1.84 0.89 - 2.90 8.35 - 10.68 Sub-Account 2015 1.57 0.89 - 2.90 (3.80) - 2.90 2014 1.51 0.89 - 2.90 0.87 - 12.36 2013 1.68 0.89 - 2.90 28.14 - 30.85 2012 1.55 0.89 - 2.90 12.30 - 14.73 MSF MFS Total Return 2016 2.77 0.89 - 2.30 6.50 - 8.23 Sub-Account 2015 2.49 0.89 - 2.30 (2.62) - (1.04) 2014 2.25 0.89 - 2.30 5.95 - 7.68 2013 2.31 0.89 - 2.30 16.06 - 17.94 2012 2.78 0.89 - 2.15 2.75 - 10.59 MSF MFS Value Sub-Account 2016 2.08 0.89 - 2.35 11.45 - 13.38 2015 2.49 0.89 - 2.35 (2.68) - 2.26 2014 1.57 0.89 - 2.35 1.99 - 9.83 2013 0.55 0.89 - 2.35 17.10 - 34.53 2012 1.94 0.89 - 2.30 3.00 - 15.61 MSF MSCI EAFE Index 2016 2.41 0.89 - 2.25 (1.28) - 0.44 Sub-Account 2015 3.14 0.89 - 2.25 (9.98) - (1.36) 2014 2.43 0.89 - 2.25 (8.42) - (2.81) 2013 2.89 0.89 - 2.25 18.74 - 20.78 2012 2.89 0.89 - 2.15 15.42 - 17.27 MSF Neuberger Berman 2016 0.23 0.89 - 2.35 15.64 - 17.63 Genesis Sub-Account 2015 0.18 0.89 - 2.35 (1.95) - (0.31) 2014 0.22 0.89 - 2.35 (2.62) - 0.40 2013 0.10 0.89 - 2.35 24.94 - 37.30 2012 0.34 0.89 - 2.30 7.25 - 9.05 MSF Russell 2000 Index 2016 1.07 0.89 - 2.35 18.12 - 20.21 Sub-Account 2015 1.00 0.89 - 2.35 (9.86) - (3.68) 2014 0.96 0.89 - 2.35 2.30 - 4.11 2013 1.29 0.89 - 2.35 34.91 - 37.33 2012 0.88 0.89 - 2.35 13.24 - 15.31 MSF T. Rowe Price Large Cap 2016 -- 0.89 - 2.35 (0.83) - 0.86 Growth Sub-Account 2015 -- 0.89 - 2.35 (3.16) - 9.80 2014 -- 0.89 - 2.35 (0.04) - 13.92 2013 -- 0.89 - 2.35 26.10 - 37.93 2012 -- 1.50 - 1.90 16.43 - 16.90 MSF T. Rowe Price Small Cap 2016 0.15 0.89 - 2.15 9.11 - 10.75 Growth Sub-Account 2015 0.08 0.89 - 2.15 (8.44) - 1.80 2014 0.01 0.89 - 2.15 2.47 - 5.96 2013 0.22 0.89 - 2.15 41.11 - 43.27 2012 -- 0.89 - 2.15 13.43 - 15.14 MSF Van Eck Global Natural 2016 0.59 1.10 - 2.15 40.68 - 42.17 Resources Sub-Account 2015 0.21 1.10 - 2.15 (34.19) - (33.49) 2014 0.27 1.10 - 2.15 (20.55) - (11.40) 2013 0.66 1.30 - 2.15 8.40 - 9.32 2012 -- 1.30 - 2.15 0.38 - 1.25 132
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 -------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- --------------- -------------- MSF Western Asset 2016 32,852,094 25.20 - 36.70 1,050,068,498 Management Strategic Bond 2015 6,545 27.92 - 31.04 195,310 Opportunities Sub-Account 2014 398 32.02 12,743 (Commenced 11/19/2014) MSF Western Asset 2016 14,126,610 14.46 - 19.94 250,345,183 Management U.S. Government 2015 15,069,560 14.65 - 19.92 268,298,667 Sub-Account 2014 15,346,536 14.95 - 19.83 276,085,662 2013 16,417,493 14.93 - 19.52 291,870,388 2012 17,244,875 15.42 - 19.89 313,310,285 Neuberger Berman Genesis 2016 246 26.63 6,564 Sub-Account 2015 317 22.76 7,222 2014 393 22.93 9,013 2013 474 23.21 10,991 2012 474 17.11 8,101 Oppenheimer VA Core Bond 2016 921 6.21 5,719 Sub-Account 2015 1,226 6.10 7,477 2014 1,362 6.13 8,346 2013 1,493 5.79 8,646 2012 1,541 5.88 9,058 Oppenheimer VA Government 2016 640 5.30 3,396 Money Sub-Account 2015 668 5.38 3,592 2014 696 5.45 3,793 2013 723 5.53 4,000 2012 20,150 5.61 112,965 Oppenheimer VA Main Street 2016 3,684,082 19.26 - 33.36 115,192,944 Small Cap Sub-Account 2015 4,053,883 16.54 - 28.62 109,248,990 2014 4,346,502 17.83 - 30.77 126,466,514 2013 4,655,290 16.15 - 27.82 123,045,407 2012 5,041,901 11.62 - 19.97 96,092,155 Oppenheimer VA Main Street 2016 11,492 8.90 102,246 Sub-Account 2015 12,936 8.08 104,564 2014 13,372 7.93 106,085 2013 14,316 7.27 104,039 2012 14,959 5.59 83,663 PIMCO VIT 2016 64,637 7.15 - 7.22 464,850 CommodityRealReturn 2015 39,333 6.34 - 6.37 250,085 Strategy Sub-Account 2014 1,515 8.69 - 8.70 13,170 (Commenced 11/19/2014) PIMCO VIT Emerging Markets 2016 62,989 10.18 - 10.29 645,743 Bond Sub-Account 2015 44,282 9.16 - 9.21 406,796 (Commenced 11/19/2014) 2014 1,592 9.55 15,202 PIMCO VIT Unconstrained 2016 56,423 9.87 - 9.98 560,051 Bond Sub-Account 2015 29,245 9.61 - 9.66 281,863 (Commenced 11/19/2014) 2014 478 9.96 4,759 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MSF Western Asset 2016 2.28 0.89 - 2.35 3.36 - 7.33 Management Strategic Bond 2015 3.26 1.10 - 1.60 (3.56) - (2.23) Opportunities Sub-Account 2014 -- 1.10 (0.65) (Commenced 11/19/2014) MSF Western Asset 2016 2.39 0.90 - 2.35 (1.94) - 0.12 Management U.S. Government 2015 2.04 0.90 - 2.35 (2.02) - (0.40) Sub-Account 2014 1.68 0.95 - 2.35 0.17 - 1.58 2013 1.95 0.95 - 2.35 (3.21) - (1.84) 2012 1.85 0.95 - 2.35 0.64 - 2.07 Neuberger Berman Genesis 2016 0.06 0.89 17.01 Sub-Account 2015 0.05 0.89 (0.74) 2014 0.05 0.89 (1.19) 2013 0.32 0.89 35.68 2012 0.21 0.89 8.84 Oppenheimer VA Core Bond 2016 3.73 1.40 1.83 Sub-Account 2015 4.05 1.40 (0.44) 2014 5.29 1.40 5.77 2013 5.14 1.40 (1.49) 2012 4.67 1.40 8.75 Oppenheimer VA Government 2016 -- 1.40 (1.38) Money Sub-Account 2015 -- 1.40 (1.38) 2014 -- 1.40 (1.38) 2013 0.01 1.40 (1.38) 2012 0.01 1.40 (1.39) Oppenheimer VA Main Street 2016 0.25 0.95 - 1.80 12.92 - 16.56 Small Cap Sub-Account 2015 0.64 0.95 - 1.75 (7.72) - (6.98) 2014 0.63 0.95 - 1.75 9.72 - 10.60 2013 0.70 0.95 - 1.75 38.19 - 39.29 2012 0.33 0.95 - 1.75 15.62 - 16.55 Oppenheimer VA Main Street 2016 1.14 1.40 10.07 Sub-Account 2015 0.92 1.40 1.89 2014 0.84 1.40 9.16 2013 1.10 1.40 29.94 2012 0.86 1.40 15.24 PIMCO VIT 2016 0.90 1.10 - 1.60 12.80 - 13.37 CommodityRealReturn 2015 2.13 1.10 - 1.60 (27.09) - (26.72) Strategy Sub-Account 2014 0.20 1.10 - 1.35 (13.36) - (13.33) (Commenced 11/19/2014) PIMCO VIT Emerging Markets 2016 4.97 0.95 - 1.60 11.18 - 11.91 Bond Sub-Account 2015 5.03 1.10 - 1.60 (4.08) - (3.60) (Commenced 11/19/2014) 2014 0.32 1.10 - 1.60 (3.46) - (3.40) PIMCO VIT Unconstrained 2016 1.42 1.10 - 1.60 2.77 - 3.28 Bond Sub-Account 2015 4.52 1.10 - 1.60 (3.52) - (3.04) (Commenced 11/19/2014) 2014 0.04 1.35 (0.10) 133
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED) [Enlarge/Download Table] AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ --------------- -------------- Pioneer VCT Mid Cap Value 2016 1,342,318 44.36 - 55.19 67,321,539 Sub-Account 2015 1,461,366 38.92 - 47.94 63,990,328 2014 1,581,277 42.37 - 51.68 74,902,996 2013 1,719,853 37.64 - 45.45 71,900,042 2012 1,769,793 28.91 - 34.56 56,444,927 Pioneer VCT Real Estate 2016 8,268 28.88 - 32.67 252,027 Shares Sub-Account 2015 8,230 27.82 - 31.25 240,901 2014 8,772 27.15 - 30.26 249,879 2013 11,399 21.20 - 23.46 252,653 2012 10,700 21.29 - 23.38 237,514 T. Rowe Price Government 2016 31,086 17.14 532,685 Money Sub-Account 2015 28,754 17.29 497,039 2014 29,487 17.44 514,215 2013 31,743 17.59 558,449 2012 40,746 17.75 723,146 T. Rowe Price Growth Stock 2016 40,267 158.76 6,392,650 Sub-Account 2015 44,692 157.95 7,058,976 2014 52,254 143.75 7,511,742 2013 62,571 133.27 8,339,192 2012 66,302 96.60 6,404,585 T. Rowe Price International 2016 24,670 15.53 383,175 Stock Sub-Account 2015 27,270 15.32 417,754 2014 39,998 15.58 623,024 2013 41,360 15.85 655,401 2012 45,736 13.99 639,881 TAP 1919 Variable Socially 2016 3,566 37.21 - 41.07 143,946 Responsive Balanced 2015 5,634 35.70 - 39.24 215,832 Sub-Account 2014 6,406 37.02 - 40.53 253,840 2013 7,932 34.52 - 37.64 292,286 2012 9,185 29.64 - 32.19 289,329 UIF Global Infrastructure 2016 41,674 11.55 - 12.97 503,939 Sub-Account 2015 32,371 10.20 - 11.38 345,685 (Commenced 11/19/2014) 2014 664 12.49 - 12.95 8,465 VanEck VIP Long/Short 2016 47,143 9.70 - 9.81 460,268 Equity Index Sub-Account 2015 26,997 9.61 - 9.67 260,319 (Commenced 11/19/2014) 2014 1,662 10.08 - 10.09 16,769 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Pioneer VCT Mid Cap Value 2016 0.47 0.95 - 1.95 10.51 - 15.13 Sub-Account 2015 0.55 0.95 - 1.95 (8.16) - (7.24) 2014 0.65 0.95 - 1.95 12.58 - 13.71 2013 0.74 0.95 - 1.95 30.19 - 31.50 2012 0.84 0.95 - 1.95 8.67 - 9.77 Pioneer VCT Real Estate 2016 3.27 1.20 - 1.95 3.78 - 4.56 Shares Sub-Account 2015 2.06 1.20 - 1.95 2.50 - 3.27 2014 2.29 1.20 - 1.95 28.04 - 29.00 2013 2.16 1.20 - 1.95 (0.42) - 0.33 2012 2.11 1.20 - 1.95 13.84 - 14.70 T. Rowe Price Government 2016 0.02 0.89 (0.87) Money Sub-Account 2015 0.01 0.89 (0.88) 2014 0.01 0.89 (0.88) 2013 0.01 0.89 (0.87) 2012 0.01 0.89 (0.88) T. Rowe Price Growth Stock 2016 0.07 0.89 0.51 Sub-Account 2015 -- 0.89 9.87 2014 -- 0.89 7.86 2013 0.04 0.89 37.97 2012 0.18 0.89 17.86 T. Rowe Price International 2016 1.14 0.89 1.39 Stock Sub-Account 2015 0.80 0.89 (1.65) 2014 1.13 0.89 (1.70) 2013 0.97 0.89 13.26 2012 1.21 0.89 17.66 TAP 1919 Variable Socially 2016 0.88 1.50 - 1.90 4.24 - 4.65 Responsive Balanced 2015 1.19 1.50 - 1.90 (3.56) - (3.18) Sub-Account 2014 0.87 1.50 - 1.90 7.25 - 7.68 2013 0.83 1.50 - 1.90 16.47 - 16.94 2012 1.06 1.50 - 1.90 8.62 - 9.06 UIF Global Infrastructure 2016 2.10 0.90 - 1.60 13.14 - 13.94 Sub-Account 2015 1.43 0.90 - 1.60 (15.25) - (12.01) (Commenced 11/19/2014) 2014 -- 1.10 - 1.35 0.27 - 0.30 VanEck VIP Long/Short 2016 0.14 1.10 - 1.60 0.99 - 1.50 Equity Index Sub-Account 2015 0.06 1.10 - 1.60 (4.67) - (4.20) (Commenced 11/19/2014) 2014 -- 1.10 - 1.35 0.67 - 0.70 1 These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the underlying portfolio, series or fund, net of management fees assessed by the fund manager, divided by the average net assets, regardless of share class, if any. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The investment income ratio is calculated for each period indicated or from the effective date through the end of the reporting period. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the underlying portfolio, series or fund in which the Sub-Account invests. The investment income ratio is calculated as a weighted average ratio since the Sub-Account may invest in two or more share classes, within the underlying portfolio, series or fund of the Trusts which may have unique investment income ratios. 134
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONCLUDED) 2 These amounts represent annualized contract expenses of each of the applicable Sub-Accounts, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying portfolio, series or fund have been excluded. 3 These amounts represent the total return for the period indicated, including changes in the value of the underlying portfolio, series or fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on the minimum and maximum returns within each product grouping of the applicable Sub-Account. 135
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METLIFE INVESTORS USA SEPARATE ACCOUNT A OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONCLUDED) 9. SUBSEQUENT EVENTS The operations of the Sub-Accounts were affected by the following changes that occurred on March 6, 2017: PORTFOLIO NAME CHANGES: [Enlarge/Download Table] Former Name New Name (MIST) Met/Aberdeen Emerging Markets Equity (BHFTI) Brighthouse/Aberdeen Emerging Markets Portfolio Equity Portfolio (MIST) Met/Artisan International Portfolio (BHFTI) Brighthouse/Artisan International Portfolio (MIST) Met/Eaton Vance Floating Rate Portfolio (BHFTI) Brighthouse/Eaton Vance Floating Rate Portfolio (MIST) Met/Franklin Low Duration Total Return (BHFTI) Brighthouse/Franklin Low Duration Total Portfolio Return Portfolio (MIST) Met/Templeton International Bond Portfolio (BHFTI) Brighthouse/Templeton International Bond Portfolio (MIST) Met/Wellington Large Cap Research Portfolio (BHFTI) Brighthouse/Wellington Large Cap Research Portfolio (MIST) MetLife Asset Allocation 100 Portfolio (BHFTI) Brighthouse Asset Allocation 100 Portfolio (MIST) MetLife Balanced Plus Portfolio (BHFTI) Brighthouse Balanced Plus Portfolio (MIST) MetLife Small Cap Value Portfolio (BHFTI) Brighthouse Small Cap Value Portfolio (MSF) Barclays Aggregate Bond Index Portfolio (BHFTII) MetLife Aggregate Bond Index Portfolio (MSF) Met/Artisan Mid Cap Value Portfolio (BHFTII) Brighthouse/Artisan Mid Cap Value Portfolio (MSF) Met/Dimensional International Small Company (BHFTII) Brighthouse/Dimensional International Portfolio Small Company Portfolio (MSF) Met/Wellington Core Equity Opportunities (BHFTII) Brighthouse/Wellington Core Equity Portfolio Opportunities Portfolio (MSF) MetLife Asset Allocation 20 Portfolio (BHFTII) Brighthouse Asset Allocation 20 Portfolio (MSF) MetLife Asset Allocation 40 Portfolio (BHFTII) Brighthouse Asset Allocation 40 Portfolio (MSF) MetLife Asset Allocation 60 Portfolio (BHFTII) Brighthouse Asset Allocation 60 Portfolio (MSF) MetLife Asset Allocation 80 Portfolio (BHFTII) Brighthouse Asset Allocation 80 Portfolio (MSF) MSCI EAFE Index Portfolio (BHFTII) MetLife MSCI EAFE Index Portfolio (MSF) Russell 2000 Index Portfolio (BHFTII) MetLife Russell 2000 Index Portfolio TRUST NAME CHANGES: [Download Table] Former Trust New Trust Met Investors Series Trust (MIST) Brighthouse Funds Trust I (BHFTI) Metropolitan Series Fund (MSF) Brighthouse Funds Trust II (BHFTII) ADVISER NAME CHANGE: [Download Table] Former Adviser New Adviser MetLife Advisers, LLC Brighthouse Investment Advisers, LLC SEPARATE ACCOUNT NAME CHANGE: [Download Table] Former Name New Name MetLife Investors USA Separate Account A Brighthouse Separate Account A 136
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements, Notes and Schedules [Enlarge/Download Table] Page --------- Report of Independent Registered Public Accounting Firm.............................................. 2 Financial Statements at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Consolidated Balance Sheets......................................................................... 3 Consolidated Statements of Operations............................................................... 4 Consolidated Statements of Comprehensive Income (Loss).............................................. 5 Consolidated Statements of Stockholder's Equity..................................................... 6 Consolidated Statements of Cash Flows............................................................... 7 Notes to the Consolidated Financial Statements...................................................... 9 Note 1 -- Business, Basis of Presentation and Summary of Significant Accounting Policies........ 9 Note 2 -- Segment Information................................................................... 25 Note 3 -- Mergers............................................................................... 30 Note 4 -- Disposition........................................................................... 30 Note 5 -- Insurance............................................................................. 31 Note 6 -- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles... 37 Note 7 -- Reinsurance........................................................................... 40 Note 8 -- Investments........................................................................... 46 Note 9 -- Derivatives........................................................................... 66 Note 10 -- Fair Value........................................................................... 78 Note 11 -- Goodwill............................................................................. 95 Note 12 -- Debt................................................................................. 97 Note 13 -- Equity............................................................................... 97 Note 14 -- Other Expenses....................................................................... 101 Note 15 -- Income Tax........................................................................... 102 Note 16 -- Contingencies, Commitments and Guarantees............................................ 105 Note 17 -- Related Party Transactions........................................................... 109 Note 18 -- Subsequent Events.................................................................... 111 Financial Statement Schedules at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Schedule I -- Consolidated Summary of Investments -- Other Than Investments in Related Parties...... 112 Schedule III -- Consolidated Supplementary Insurance Information.................................... 113 Schedule IV -- Consolidated Reinsurance............................................................. 115 1
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Brighthouse Life Insurance Company: We have audited the accompanying consolidated balance sheets of Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules. These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Brighthouse Life Insurance Company and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ DELOITTE & TOUCHE LLP New York, New York March 28, 2017 2
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2016 and 2015 (In millions, except share and per share data) [Enlarge/Download Table] 2016 2015 ------------ ------------- Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $49,312 and $50,154, respectively)...................................................... $ 51,785 $ 52,409 Equity securities available-for-sale, at estimated fair value (cost: $280 and $384, respectively)........................................................................... 300 409 Mortgage loans (net of valuation allowances of $38 and $36, respectively; includes $136 and $172, respectively, at estimated fair value, relating to variable interest entities) 8,884 7,262 Policy loans............................................................................. 1,093 1,266 Real estate and real estate joint ventures (includes $0 and $5, respectively, of real estate held-for-sale)................................................................... 215 628 Other limited partnership interests...................................................... 1,639 1,846 Short-term investments, principally at estimated fair value.............................. 926 1,737 Other invested assets, principally at estimated fair value............................... 3,887 4,942 ------------ ------------- Total investments....................................................................... 68,729 70,499 Cash and cash equivalents, principally at estimated fair value............................ 1,888 1,383 Accrued investment income (includes $1 and $1, respectively, relating to variable interest entities)....................................................................... 591 505 Premiums, reinsurance and other receivables............................................... 20,101 22,251 Deferred policy acquisition costs and value of business acquired.......................... 5,274 4,809 Current income tax recoverable............................................................ 454 -- Deferred income tax receivable............................................................ 1,018 -- Goodwill.................................................................................. -- 381 Other assets.............................................................................. 630 799 Separate account assets................................................................... 100,588 101,735 ------------ ------------- Total assets.......................................................................... $ 199,273 $ 202,362 ============ ============= Liabilities and Stockholder's Equity Liabilities Future policy benefits.................................................................... $ 31,684 $ 29,894 Policyholder account balances............................................................. 35,587 35,661 Other policy-related balances............................................................. 3,384 3,549 Payables for collateral under securities loaned and other transactions.................... 7,362 10,619 Long-term debt (includes $23 and $48, respectively, at estimated fair value, relating to variable interest entities).............................................................. 804 836 Current income tax payable................................................................ -- 20 Deferred income tax liability............................................................. -- 803 Other liabilities (includes $1 and $1, respectively, relating to variable interest entities)................................................................................ 10,147 7,682 Separate account liabilities.............................................................. 100,588 101,735 ------------ ------------- Total liabilities..................................................................... 189,556 190,799 ------------ ------------- Contingencies, Commitments and Guarantees (Note 16) Stockholder's Equity Common stock, par value $25,000 per share; 4,000 shares authorized; 3,000 shares issued and outstanding.......................................................................... 75 75 Additional paid-in capital................................................................ 12,449 10,871 Retained earnings (deficit)............................................................... (4,209) (1,011) Accumulated other comprehensive income (loss)............................................. 1,402 1,628 ------------ ------------- Total stockholder's equity............................................................ 9,717 11,563 ------------ ------------- Total liabilities and stockholder's equity............................................ $ 199,273 $ 202,362 ============ ============= See accompanying notes to the consolidated financial statements. 3
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Operations For the Years Ended December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] 2016 2015 2014 --------- ----------- ----------- Revenues Premiums...................................................................... $ 921 $ 1,433 $ 1,152 Universal life and investment-type product policy fees........................ 2,696 2,940 3,193 Net investment income......................................................... 2,712 2,615 2,669 Other revenues................................................................ 761 504 539 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities................ (16) (16) (6) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss).......................................... (3) (9) (6) Other net investment gains (losses).......................................... (13) 61 (457) --------- ----------- ----------- Total net investment gains (losses)........................................ (32) 36 (469) Net derivative gains (losses)................................................ (5,878) (424) (181) --------- ----------- ----------- Total revenues........................................................... 1,180 7,104 6,903 --------- ----------- ----------- Expenses Policyholder benefits and claims.............................................. 2,984 2,696 2,764 Interest credited to policyholder account balances............................ 957 1,037 1,062 Goodwill impairment........................................................... 381 -- 33 Amortization of deferred policy acquisition costs and value of business acquired.................................................................... (172) 595 990 Other expenses................................................................ 1,738 1,722 1,764 --------- ----------- ----------- Total expenses........................................................... 5,888 6,050 6,613 --------- ----------- ----------- Income (loss) before provision for income tax................................. (4,708) 1,054 290 Provision for income tax expense (benefit).................................... (1,771) 215 (5) --------- ----------- ----------- Net income (loss)............................................................. $ (2,937) $ 839 $ 295 ========= =========== =========== See accompanying notes to the consolidated financial statements. 4
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] 2016 2015 2014 ------------- ------------- ------------- Net income (loss)........................................................... $ (2,937) $ 839 $ 295 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets.............. (349) (1,324) 1,953 Unrealized gains (losses) on derivatives.................................. 25 86 244 Foreign currency translation adjustments.................................. (3) (28) (50) ------------- ------------- ------------- Other comprehensive income (loss), before income tax........................ (327) (1,266) 2,147 Income tax (expense) benefit related to items of other comprehensive income (loss)..................................................................... 101 468 (701) ------------- ------------- ------------- Other comprehensive income (loss), net of income tax........................ (226) (798) 1,446 ------------- ------------- ------------- Comprehensive income (loss)................................................. $ (3,163) $ 41 $ 1,741 ============= ============= ============= See accompanying notes to the consolidated financial statements. 5
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Stockholder's Equity For the Years Ended December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] Accumulated Additional Retained Other Total Common Paid-in Earnings Comprehensive Stockholder's Stock Capital (Deficit) Income (Loss) Equity --------- ------------- ---------- ------------- ------------- Balance at December 31, 2013......................... $ 86 $ 11,506 $ (1,006) $ 980 $ 11,566 Redemption of common stock........................... (11) (895) (484) (1,390) Capital contributions from MetLife, Inc.............. 244 244 Dividends paid to MetLife, Inc....................... (155) (155) Net income (loss).................................... 295 295 Other comprehensive income (loss), net of income tax. 1,446 1,446 --------- ------------- ---------- ------------- ------------- Balance at December 31, 2014......................... 75 10,855 (1,350) 2,426 12,006 Capital contributions from MetLife, Inc.............. 16 16 Dividends paid to MetLife, Inc....................... (500) (500) Net income (loss).................................... 839 839 Other comprehensive income (loss), net of income tax. (798) (798) --------- ------------- ---------- ------------- ------------- Balance at December 31, 2015......................... 75 10,871 (1,011) 1,628 11,563 Capital contributions from MetLife, Inc.............. 1,578 1,578 Dividends paid to MetLife, Inc....................... (261) (261) Net income (loss).................................... (2,937) (2,937) Other comprehensive income (loss), net of income tax. (226) (226) --------- ------------- ---------- ------------- ------------- Balance at December 31, 2016......................... $ 75 $ 12,449 $ (4,209) $ 1,402 $ 9,717 ========= ============= ========== ============= ============= See accompanying notes to the consolidated financial statements. 6
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows For the Years Ended December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] 2016 2015 2014 ------------- ------------- ------------- Cash flows from operating activities Net income (loss)........................................... $ (2,937) $ 839 $ 295 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:............... Depreciation and amortization expenses..................... 52 23 30 Amortization of premiums and accretion of discounts associated with investments, net.......................... (197) (204) (166) (Gains) losses on investments and from sales of businesses, net........................................... 32 (36) 469 (Gains) losses on derivatives, net......................... 7,082 1,225 1,443 (Income) loss from equity method investments, net of dividends or distributions................................ 26 108 (11) Interest credited to policyholder account balances......... 957 1,037 1,062 Universal life and investment-type product policy fees..... (2,696) (2,940) (3,193) Goodwill impairment........................................ 381 -- 33 Change in accrued investment income........................ (44) 9 124 Change in premiums, reinsurance and other receivables...... (1,157) (586) (1,479) Change in deferred policy acquisition costs and value of business acquired, net.................................... (455) 270 711 Change in income tax....................................... (2,195) 491 245 Change in other assets..................................... 2,060 2,127 2,258 Change in future policy benefits and other policy-related balances.................................................. 2,197 2,104 1,398 Change in other liabilities................................ 389 (267) 1,390 Other, net................................................. (206) 5 (67) ------------- ------------- ------------- Net cash provided by (used in) operating activities......... 3,289 4,205 4,542 ------------- ------------- ------------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities.................................. 39,080 35,704 20,249 Equity securities.......................................... 175 308 98 Mortgage loans............................................. 1,518 1,059 2,428 Real estate and real estate joint ventures................. 446 512 28 Other limited partnership interests........................ 417 425 255 Purchases of: Fixed maturity securities.................................. (34,906) (39,298) (24,520) Equity securities.......................................... (58) (273) (41) Mortgage loans............................................. (2,803) (2,515) (343) Real estate and real estate joint ventures................. (75) (109) (209) Other limited partnership interests........................ (203) (233) (345) Cash received in connection with freestanding derivatives... 707 223 788 Cash paid in connection with freestanding derivatives....... (2,764) (868) (1,991) Cash received under repurchase agreements................... -- 199 -- Cash paid under repurchase agreements....................... -- (199) -- Cash received under reverse repurchase agreements........... -- 199 -- Cash paid under reverse repurchase agreements............... -- (199) -- Sale of business, net of cash and cash equivalents disposed of $0, $0 and $251, respectively........................... -- -- 451 Sales of loans to affiliates................................ -- -- 520 Net change in policy loans.................................. 109 (72) 52 Net change in short-term investments........................ 882 (495) 3,581 Net change in other invested assets......................... 7 (55) (305) ------------- ------------- ------------- Net cash provided by (used in) investing activities......... $ 2,532 $ (5,687) $ 696 ------------- ------------- ------------- See accompanying notes to the consolidated financial statements. 7
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows -- (continued) For the Years Ended December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] 2016 2015 2014 ------------- -------------- -------------- Cash flows from financing activities Policyholder account balances: Deposits................................................... $ 9,672 $ 19,970 $ 18,581 Withdrawals................................................ (12,001) (20,797) (21,564) Net change in payables for collateral under securities loaned and other transactions.............................. (3,257) 3,118 703 Long-term debt issued....................................... -- 175 -- Long-term debt repaid....................................... (26) (235) (1,379) Financing element on certain derivative instruments, net.... (1,011) (81) (414) Redemption of common stock.................................. -- -- (906) Common stock redemption premium............................. -- -- (484) Dividends paid to MetLife, Inc.............................. (261) (500) (155) Capital contributions....................................... 1,568 11 231 ------------- -------------- -------------- Net cash provided by (used in) financing activities......... (5,316) 1,661 (5,387) ------------- -------------- -------------- Effect of change in foreign currency exchange rates on cash and cash equivalents balances.............................. -- (2) (45) ------------- -------------- -------------- Change in cash and cash equivalents......................... 505 177 (194) Cash and cash equivalents, beginning of year................ 1,383 1,206 1,400 ------------- -------------- -------------- Cash and cash equivalents, end of year...................... $ 1,888 $ 1,383 $ 1,206 ============= ============== ============== Supplemental disclosures of cash flow information Net cash paid (received) for: Interest................................................... $ 70 $ 77 $ 116 ============= ============== ============== Income tax................................................. $ 431 $ (263) $ (221) ============= ============== ============== Non-cash transactions: Capital contributions...................................... $ 10 $ 5 $ 13 ============= ============== ============== Transfer of fixed maturity securities from affiliates...... $ 3,565 $ -- $ -- ============= ============== ============== Transfer of mortgage loans from affiliates................. $ 395 $ -- $ -- ============= ============== ============== Transfer of short-term investments from affiliates......... $ 94 $ -- $ -- ============= ============== ============== Transfer of fixed maturity securities to affiliates........ $ 346 $ -- $ 804 ============= ============== ============== Reduction of other invested assets in connection with reinsurance transactions.................................. $ 676 $ -- $ -- ============= ============== ============== See accompanying notes to the consolidated financial statements. 8
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business "Brighthouse Insurance" and the "Company" refer to Brighthouse Life Insurance Company (formerly, MetLife Insurance Company USA, "MetLife USA"), a Delaware corporation originally incorporated in Connecticut in 1863, and its subsidiaries. Brighthouse Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, "MetLife"). The Company offers a range of individual annuities and individual life insurance products. In anticipation of MetLife's plan to separate a substantial portion of its former Retail segment, as well as certain portions of its former Corporate Benefit Funding segment and Corporate & Other (the "Separation"), in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities, Life and Run-off. See Note 2 for further information on the reorganization of the Company's segments in the third quarter of 2016, which was applied retrospectively. On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. Additionally, on July 21, 2016, MetLife, Inc. announced that following the planned Separation, the separated business will be rebranded as Brighthouse Financial. On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"). The information statement filed as an exhibit to the Form 10 disclosed that MetLife intends to include Brighthouse Insurance and certain affiliates in the proposed separated business and distribute at least 80.1% of the shares of Brighthouse's common stock on a pro rata basis to the holders of MetLife, Inc. common stock. Effective March 6, 2017, and in connection with the planned Separation, the Company changed its name from MetLife Insurance Company USA to Brighthouse Life Insurance Company. The ultimate form and timing of the planned Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. The planned Separation remains subject to certain conditions, including among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service ("IRS") and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, insurance and other regulatory approvals, and an SEC declaration of the effectiveness of the Form 10. In November 2014, MetLife Insurance Company of Connecticut re-domesticated from Connecticut to Delaware, changed its name to MetLife Insurance Company USA and merged with its subsidiary, MetLife Investors USA Insurance Company ("MLI-USA"), and its affiliates, MetLife Investors Insurance Company ("MLIIC") and Exeter Reassurance Company, Ltd. ("Exeter"). See Note 3 for further information on the merger transactions and the prior periods' adjustments. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's business and operations. Actual results could differ from these estimates. Consolidation The accompanying consolidated financial statements include the accounts of Brighthouse Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities ("VIEs") for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. 9
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Discontinued Operations The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in discontinued operations if certain criteria are met. Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations for disposals or classifications as held-for-sale that have not been previously reported on the consolidated financial statements. A disposal of a component is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results. See "-- Adoption of New Accounting Pronouncements." Separate Accounts Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts cannot be used to settle the liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: . such separate accounts are legally recognized; . assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; . investments are directed by the contractholder; and . all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets at their fair value, which is based on the estimated fair values of the underlying assets comprising the individual separate account portfolios. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line on the statements of operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Such fees are included in universal life and investment-type product policy fees on the statements of operations. Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. Summary of Significant Accounting Policies The following are the Company's significant accounting policies with references to notes providing additional information on such policies and critical accounting estimates relating to such policies. [Enlarge/Download Table] ----------------------------------------------------------------------------------------- Accounting Policy Note ----------------------------------------------------------------------------------------- Insurance 5 ----------------------------------------------------------------------------------------- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles 6 ----------------------------------------------------------------------------------------- Reinsurance 7 ----------------------------------------------------------------------------------------- Investments 8 ----------------------------------------------------------------------------------------- Derivatives 9 ----------------------------------------------------------------------------------------- Fair Value 10 ----------------------------------------------------------------------------------------- Income Tax 15 ----------------------------------------------------------------------------------------- Litigation Contingencies 16 ----------------------------------------------------------------------------------------- 10
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Insurance Future Policy Benefit Liabilities and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid, reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying assumptions that are in accordance with GAAP and applicable actuarial standards. The principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policy lapse, policy renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. These assumptions are established at the time the policy is issued and locked in and are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. For long duration insurance contracts, assumptions such as mortality, morbidity and interest rates are locked in upon the issuance of new business. However, significant adverse changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then current assumptions and do not include a provision for adverse deviation. To assess whether or not a premium deficiency exists, the Company groups insurance contracts based on the manner acquired, serviced, and the measurement of profitability. In applying the profitability criteria, groupings are limited by segment. Liabilities for universal and variable life secondary guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the contract period based on total expected assessments. The assumptions used in estimating the secondary guarantee liabilities are consistent with those used for amortizing deferred policy acquisition costs ("DAC"), and are therefore subject to the same variability and risk as further discussed herein. The assumptions of investment performance and volatility for variable products are consistent with historical experience of the appropriate underlying equity indices, such as the Standard & Poor's Global Ratings ("S&P") 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company regularly reviews its assumptions supporting its estimates of actuarial liabilities for future policy benefits. For universal life and annuity product guarantees, assumptions are updated periodically, whereas for traditional life products, such as term life and non-participating whole life insurance, assumptions are established and locked in at inception but reviewed periodically to determine whether a premium deficiency exists that would trigger an unlocking of assumptions. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the period in which the changes occur. Policyholder account balances relate to contracts or contract features where the Company has no significant insurance risk. See "-- "Variable Annuity Guarantees" for additional information on the Company's variable annuity guarantee features that are accounted for as insurance liabilities and recorded in future policy benefits, as well as the guarantee features that are accounted for at fair value as embedded derivatives and recorded in policyholder account balances. Other Policy-Related Balances Other policy-related balances primarily include assumed affiliated reinsurance payables, affiliated deferred experience refunds, policy and contract claims and unearned revenue liabilities. The assumed affiliated reinsurance payable relates primarily to reinsurance for certain universal life business assumed from an affiliate, net of other reinsurance. The affiliated deferred experience refunds relate to the repayment of acquisition costs under an affiliated reinsurance agreement and represent part of the net cost of reinsurance for the business reinsured. The deferred experience refund is being amortized consistent with the DAC methodology on the underlying contracts. 11
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The liability for policy and contract claims generally relates to incurred but not reported death, disability and long-term care claims, as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits, similar to DAC as discussed further herein. Such amortization is recorded in universal life and investment-type product policy fees. Recognition of Insurance Revenues and Deposits Premiums related to traditional life and annuity contracts with life contingencies are recognized as revenues when due from policyholders. When premiums are due over a significantly shorter period than the period over which policyholder benefits are incurred, any excess profit is deferred and recognized into earnings in proportion to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which policyholder benefits and expenses are incurred. Amounts that are charged to earnings include interest credited and benefit claims incurred in excess of related policyholder account balances. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include: . incremental direct costs of contract acquisition, such as commissions; . the portion of an employee's total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; . other essential direct costs that would not have been incurred had a policy not been acquired or renewed; and . the costs of direct-response advertising, the primary purpose of which is to elicit sales to customers who could be shown to have responded specifically to the advertising and that results in probable future benefits. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Value of business acquired ("VOBA") is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. 12
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) DAC and VOBA are amortized as follows: [Enlarge/Download Table] ------------------------------------------------------------------------------------------------------------------------------ Products: In proportion to the following over estimated lives of the contracts: ------------------------------------------------------------------------------------------------------------------------------ Nonparticipating and non-dividend-paying traditional contracts (primarily term insurance) Actual and expected future gross premiums. ------------------------------------------------------------------------------------------------------------------------------ Participating, dividend-paying traditional contracts Actual and expected future gross margins. ------------------------------------------------------------------------------------------------------------------------------ Fixed and variable universal life contracts Actual and expected future gross profits. Fixed and variable deferred annuity contracts ------------------------------------------------------------------------------------------------------------------------------ See Note 6 for additional information on DAC and VOBA amortization. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated on the financial statements for reporting purposes. The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements ("DSI") to determine the recoverability of the asset. Value of distribution agreements acquired ("VODA") is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over useful lives ranging from 10 to 40 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired. Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC when there is a gain at inception on the ceding entity and to other liabilities when there is a loss at inception. The net cost of reinsurance is recognized as a component of other expenses when there is a gain at inception and as policyholder benefits and claims when there is a loss and is subsequently amortized on a basis consistent with the methodology used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established. Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. 13
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With respect to guaranteed minimum income benefits ("GMIBs"), a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net derivative gains (losses). If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Certain assumed non-life contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"), guaranteed minimum accumulation benefits ("GMABs") and GMIBs are also accounted for as embedded derivatives with changes in estimated fair value reported in net derivative gains (losses). Variable Annuity Guarantees The Company issues directly and assumes from an affiliate through reinsurance certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value step-ups. Certain of the Company's variable annuity guarantee features are accounted for as insurance liabilities and recorded in future policy benefits while others are accounted for at fair value as embedded derivatives and recorded in policyholder account balances. Generally speaking, a guarantee is accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable event, or (ii) annuitization. Alternatively, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize, that is, the policyholder can receive the guarantee on a net basis. In certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is split and accounted for under both models. Further, changes in assumptions, principally involving behavior, can result in a change of expected future cash outflows of a guarantee between portions accounted for as insurance liabilities and portions accounted for as embedded derivatives. Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death benefits ("GMDBs"), the life contingent portion of the GMWBs and the portion of the GMIBs that require annuitization, as well as the life contingent portion of the expected annuitization when the policyholder is forced into an annuitization upon depletion of their account value. These insurance liabilities are accrued over the accumulation phase of the contract in proportion to actual and future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future benefits exceed those previously projected or when current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the current estimates of future benefits are lower than those previously projected or when current estimates of future assessments exceed those previously projected. At each reporting period, we update the actual amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current period charge or increase to earnings. See Note 5 for additional details of guarantees accounted for as insurance liabilities. 14
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Guarantees accounted for as embedded derivatives in policyholder account balances include the non-life contingent portion of GMWBs, GMABs, and for GMIBs the non-life contingent portion of the expected annuitization when the policyholder is forced into an annuitization upon depletion of their account value, as well as the Guaranteed Principal Option. The estimated fair values of guarantees accounted for as embedded derivatives are determined based on the present value of projected future benefits minus the present value of projected future fees. At policy inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. In valuing the embedded derivative, the percentage of fees included in the fair value measurement is locked-in at inception. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital market scenarios to determine an economic liability. The reported estimated fair value is then determined by taking the present value of these risk-free generated cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin. For more information on the determination of estimated fair value, see Note 10 Fair Value. Investments Net Investment Income and Net Investment Gains (Losses) Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, impairment losses and changes in valuation allowances are reported within net investment gains (losses), unless otherwise stated herein. Fixed Maturity and Equity Securities The Company's fixed maturity and equity securities are classified as available-for-sale ("AFS") and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) ("OCI"), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales are determined on a specific identification basis. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities ("ABS") considers the estimated timing and amount of prepayments of the underlying loans. See Note 8 "Investments -- Fixed Maturity and Equity Securities AFS -- Methodology for Amortization of Premium and Accretion of Discount on Structured Securities". The amortization of premium and accretion of discount of fixed maturity securities also takes into consideration call and maturity dates. Dividends on equity securities are recognized when declared. The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value, as well as an analysis of the gross unrealized losses by severity and/or age as described in Note 8 "-- Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities." For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the OTTI recognized in earnings is the entire difference between the security's amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as an OTTI in earnings ("credit loss"). If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors ("noncredit loss") is recorded in OCI. 15
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the security's cost and its estimated fair value. Mortgage Loans The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 8. Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts. Also included in mortgage loans are commercial mortgage loans held by consolidated securitization entities ("CSEs") for which the fair value option ("FVO") was elected, which are stated at estimated fair value. Changes in estimated fair value are recognized in net investment gains (losses) for commercial mortgage loans held by CSEs. Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Real Estate Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, which is generally computed using the present value of expected future cash flows discounted at a rate commensurate with the underlying risks. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition for a reasonable price in comparison to its estimated fair value is classified as held-for-sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated. Real Estate Joint Ventures and Other Limited Partnership Interests The Company uses the equity method of accounting for investments ("investees") when it has more than a minor ownership interest or more than a minor influence over the investee's operations, while the cost method is used when the Company has virtually no influence over the investee's operations. The Company generally recognizes its share of the equity method investee's earnings on a three-month lag in instances where the investee's financial information is not sufficiently timely or when the investee's reporting period differs from the Company's reporting period; while distributions on cost method investments are recognized as earned or received. The Company routinely evaluates such investments for impairment. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for impairment when the carrying value of such investments exceeds the net asset value ("NAV"). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is impaired. 16
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Short-term Investments Short-term investments include securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value. Short-term investments also include investments in affiliated money market pools. Other Invested Assets Other invested assets consist principally of the following: . Freestanding derivatives with positive estimated fair values which are described in "-- Derivatives" below. . Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method. . Leveraged leases which are recorded net of non-recourse debt. Income is recognized by applying the leveraged lease's estimated rate of return to the net investment in the lease. The Company regularly reviews residual values for impairment. . Investments in an operating joint venture that engages in insurance underwriting activities which are accounted for under the equity method. . Funds withheld which represent a receivable for amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying investments. Securities Lending Program Securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection with securities lending transactions may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the Company's financial statements. The Company monitors the estimated fair value of the securities loaned on a daily basis and additional collateral is obtained as necessary throughout the duration of the loan. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, within net investment income. Derivatives Freestanding Derivatives Freestanding derivatives are carried on the Company's balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivatives carrying value in other invested assets or other liabilities. 17
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows: [Enlarge/Download Table] ------------------------------------------------------------------------------------------------------------- Statement of Operations Presentation: Derivative: ------------------------------------------------------------------------------------------------------------- Policyholder benefits and claims . Economic hedges of variable annuity guarantees included in future policy benefits ------------------------------------------------------------------------------------------------------------- Net investment income . Economic hedges of equity method investments in joint ventures ------------------------------------------------------------------------------------------------------------- Hedge Accounting To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows: . Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in estimated fair value of the hedged item attributable to the designated risk being hedged. . Cash flow hedge (a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses). The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item. In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net derivative gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses). 18
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Embedded Derivatives The Company sells variable annuities and issues certain insurance products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if: . the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings; . the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and . a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. See "Variable Annuity Guarantees" for additional information on the accounting policy for embedded derivatives bifurcated from variable annuity host contracts. Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses), except for those in policyholder benefits and claims related to ceded reinsurance of GMIB. If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition. Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring management judgment are used to determine the estimated fair value of assets and liabilities. Income Tax Brighthouse Life Insurance Company and its includable subsidiaries join with MetLife, Inc. and its includable subsidiaries in filing a consolidated U.S. life and non-life federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Current taxes (and the benefits of tax attributes such as losses) are allocated to Brighthouse Life Insurance Company and its subsidiaries under the consolidated tax return regulations and a tax sharing agreement. Under the consolidated tax return regulations, MetLife, Inc. has elected the "percentage method" (and 100% under such method) of reimbursing companies for tax attributes e.g. net operating losses. As a result, 100% of tax attributes are reimbursed by MetLife, Inc. to the extent that consolidated federal income tax of the consolidated federal tax return group is reduced in a year by tax attributes. On an annual basis, each of the profitable subsidiaries pays to MetLife, Inc. the federal income tax which it would have paid based upon that year's taxable income. If Brighthouse Life Insurance Company or its includable subsidiaries has current or prior deductions and credits (including but not limited to losses) which reduce the consolidated tax liability of the consolidated federal tax return group, the deductions and credits are characterized as realized (or realizable) by Brighthouse Life Insurance Company and its includable subsidiaries when those tax attributes are realized (or realizable) by the consolidated federal tax return group, even if Brighthouse Life Insurance Company or its includable subsidiaries would not have realized the attributes on a stand-alone basis under a "wait and see" method. 19
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established against deferred tax assets when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. When making such determination the Company considers many factors, including: . the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; . the jurisdiction in which the deferred tax asset was generated; . the length of time that carryforward can be utilized in the various taxing jurisdiction; . future taxable income exclusive of reversing temporary differences and carryforwards; . future reversals of existing taxable temporary differences; . taxable income in prior carryback years; and . tax planning strategies. The Company may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, the effect of changes in tax laws, tax regulations, or interpretations of such laws or regulations, is recognized in net income tax expense (benefit) in the period of change. The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded on the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax expense. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Legal costs are recognized as incurred. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected on the Company's financial statements. Other Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value. 20
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, as appropriate. Estimated lives generally range from five to 10 years for leasehold improvements, and from three to seven years for all other property and equipment. The net book value of the property, equipment and leasehold improvements was insignificant at both December 31, 2016 and 2015. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $236 million and $254 million at December 31, 2016 and 2015, respectively. Accumulated amortization of capitalized software was $136 million and $107 million at December 31, 2016 and 2015, respectively. Related amortization expense was $37 million, less than $1 million and $2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Other Revenues Other revenues primarily include, in addition to items described elsewhere herein, fee income on financial reinsurance agreements and broker-dealer fees. Employee Benefit Plans Through December 31, 2016, Metropolitan Life Insurance Company ("MLIC") provided and the Company contributed to defined benefit pension and postemployment plans for its employees and retirees. MLIC also provides and the Company contributes to a postretirement medical and life insurance benefit plan for certain retired employees. The Company accounts for these plans as multiemployer benefit plans and as a result the assets, obligations and other comprehensive gains and losses of these benefit plans are not included on the consolidated balance sheet. Within its consolidated statement of operations, the Company has included expense associated with its participants in these plans. These plans also include participants from other affiliates of MLIC. The Company's participation in these plans ceased December 31, 2016. Defined Contribution Plans Through December 31, 2016, MLIC provides and the Company contributes to a defined contribution plan sponsored by MLIC for substantially all employees under which a portion of employee contributions are matched. The Company's participation in this plan ceased on December 31, 2016. Foreign Currency Assets, liabilities and operations of a foreign affiliate (owned in 2014) are recorded based on functional currency. The determination of the functional currency is made based on the appropriate economic and management indicators. The local currencies of foreign operations are the functional currencies. Assets and liabilities of this foreign affiliate are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end and revenues and expenses are translated at the average exchange rates during the year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur. Goodwill Goodwill represents the future economic benefits arising from net assets acquired in a business combination that are not individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless there is a significant identified impairment event. 21
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The impairment test is performed at the reporting unit level, which is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there may be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income. On an ongoing basis, the Company evaluates potential triggering events that may affect the estimated fair value of the Company's reporting units to assess whether any goodwill impairment exists. Adoption of New Accounting Pronouncements Effective January 1, 2016, the Company adopted guidance relating to short-duration contracts. Upon adopting the new guidance, the Company updated the disclosure for the rollforward of the liability of the unpaid policy and contract claims to include incurred and paid long-duration life claims that are settled within one year. The Company's liability for unpaid policy and contract claims includes incurred but not reported claims, as well as claims which have been reported but not yet settled. The net incurred and paid claims within the Company's tabular rollforward are principally comprised of death benefits on long-duration life contracts. The adoption did not have an impact on the consolidated financial statements and given the Company's minimal extent of short-duration insurance contracts did not require any other expanded disclosures. Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and maximum exposure to loss as of December 31, 2016, disclosed in Note 8, reflect the application of the new guidance. Effective November 18, 2014, the Company adopted new guidance on when, if ever, the cost of acquiring an entity should be used to establish a new accounting basis ("pushdown") in the acquired entity's separate financial statements. The guidance provides an acquired entity and its subsidiaries with an irrevocable option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. If a reporting entity elects to apply pushdown accounting, its stand-alone financial statements would reflect the acquirer's new basis in the acquired entity's assets and liabilities. The election to apply pushdown accounting should be determined by an acquired entity for each individual change-in-control event in which an acquirer obtains control of the acquired entity; however, an entity that does not elect to apply pushdown accounting in the period of a change-in-control can later elect to retrospectively apply pushdown accounting to the most recent change-in-control transaction as a change in accounting principle. The new guidance did not have a material impact on the consolidated financial statements upon adoption. Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations and disclosures of disposals of components of an entity. The guidance increases the threshold for a disposal to qualify as a discontinued operation, expands the disclosures for discontinued operations and requires new disclosures for certain disposals that do not meet the definition of a discontinued operation. Disposals must now represent a strategic shift that has or will have a major effect on the entity's operations and financial results to qualify as discontinued operations. As discussed in Note 4, the Company sold its wholly-owned subsidiary, MetLife Assurance Limited ("MAL"). As a result of the adoption of this new guidance, the results of operations of MAL and the loss on sale have been included in income from continuing operations. 22
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Future Adoption of New Accounting Pronouncements In February 2017, the Financial Accounting Standards Board ("FASB") issued new guidance on derecognition of nonfinancial assets (Accounting Standards Update ("ASU") 2017- 05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance clarifies the scope and accounting of a financial asset that meets the definition of an "in-substance nonfinancial asset" and defines the term, "in-substance nonfinancial asset." The ASU also adds guidance for partial sales of nonfinancial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued new guidance on business combinations (ASU 2017- 01, Business Combinations (Topic 805): Clarifying the Definition of a Business). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted as specified in the guidance. The new guidance clarifies the definition of a business and requires that an entity apply certain criteria in order to determine when a set of assets and activities qualifies as a business. The adoption of this standard will result in fewer acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that do not qualify as businesses will be capitalized rather than expensed. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2016, the FASB issued new guidance on restricted cash (ASU 2016-18, Statement of Cash Flows (Topic 230): a consensus of the FASB Emerging Issues Task Force). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, the new guidance requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance does not provide a definition of restricted cash or restricted cash equivalents. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In October 2016, the FASB issued new guidance on consolidation evaluation for entities under common control (ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control). The new guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance does not change the characteristics of a primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held through related parties that are under common control with the reporting entity. The adoption of this new guidance will not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis. Early adoption is permitted in the first interim or annual reporting period. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all periods presented. Early adoption is permitted in any interim or annual period. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified on the statement of cash flows. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 23
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13, Financial Instruments--Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that an OTTI on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses. The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance. The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company is continuing to evaluate the overall impact of the new guidance on its consolidated financial statements. In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the FVO that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. Additionally, there will no longer be a requirement to assess equity securities for impairment since such securities will be measured at fair value through net income. The Company has assessed the population of financial instruments that are subject to the new guidance and has determined that the most significant impact will be the requirement to report changes in fair value in net income each reporting period for all equity securities currently classified as AFS and to a lesser extent, other limited partnership interests and real estate joint ventures that are currently accounted for under the cost method. The population of these investments accounted for under the cost method is not material. The Company is continuing to evaluate the overall impact of this guidance on its consolidated financial statements. In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)), effective for fiscal years beginning after December 15, 2017 and interim periods within those years. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of Financial Services insurance (Topic 944), leases, financial instruments and guarantees. For those contracts that are impacted, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. Given the scope of the new revenue recognition guidance, the Company does not expect the adoption to have a material impact on its consolidated revenues or statements of operations, with the Company's implementation efforts primarily focused on other revenues on the consolidated statements of operations. Other Effective January 3, 2017, the Chicago Mercantile Exchange ("CME") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments will impact the accounting treatment of the Company's centrally cleared derivatives, for which the CME serves as the central clearing party. The application of the amended rulebook is expected to reduce the gross derivative assets and liabilities, as well as the related collateral, recorded on the consolidated balance sheet for trades cleared through the CME. The Company is currently evaluating the impact of these amendments on its consolidated financial statements. This change is not expected to impact the tax treatment of such derivatives, although the IRS is being asked to issue definitive guidance. 24
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information In anticipation of the planned Separation, in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities, Life and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other. Also, in the fourth quarter of 2016, the Company moved the universal life policies with secondary guarantees ("ULSG") business from the Life segment to the Run-off segment. These and certain other presentation changes were applied retrospectively and did not have an impact on total consolidated net income (loss) or operating earnings in the prior periods. Annuities The Annuities segment offers a variety of variable, fixed, index-linked and income annuities designed to address contractholders' needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. Life The Life segment offers insurance products and services, including term, whole, universal and variable life products designed to address policyholders' needs for financial security and protected wealth transfer, which may be provided on a tax-advantaged basis. Run-off The Run-off segment consists of products no longer actively sold and which are separately managed, including structured settlements, certain company-owned life insurance policies, bank-owned life insurance policies, funding agreements and ULSG. Corporate & Other Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the majority of the Company's outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Additionally, Corporate & Other includes assumed reinsurance of certain variable annuity products from a former affiliated operating joint venture in Japan. Under this in-force reinsurance agreement, the Company reinsured living and death benefit guarantees issued in connection with variable annuity products. Also, Corporate & Other includes a reinsurance agreement to assume certain blocks of indemnity reinsurance from an affiliate. These reinsurance agreements were recaptured effective November 1, 2014. Corporate & Other also includes the elimination of intersegment amounts and a portion of MetLife's U.S. insurance business sold direct to consumers. Financial Measures and Segment Accounting Policies Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is also the Company's GAAP measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings allows analysis of the Company's performance and facilitates comparisons to industry results. Operating earnings is defined as operating revenues less operating expenses, both net of income tax. 25
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) The following are excluded from total revenues in calculating operating revenues: . Net investment gains (losses); . Net derivative gains (losses) except: (i) earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment and (ii) earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment; . Amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees ("GMIB Fees"); . Certain amounts related to securitization entities that are VIEs consolidated under GAAP; and . Results of discontinued operations and other businesses that have been or will be sold or exited by the Company ("Divested Businesses"). The following are excluded from total expenses in calculating operating expenses: . Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, benefits and hedging costs related to GMIBs ("GMIB Costs") and market value adjustments associated with surrenders or terminations of contracts; . Amounts related to: (i) net investment gains (losses) and net derivative gains (losses) and (ii) GMIB Fees and GMIB Costs included in amortization of deferred policy acquisition costs and value of business acquired; . Recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance; . Results of discontinued operations and Divested Businesses; . Amounts related to securitization entities that are VIEs consolidated under GAAP; . Goodwill impairment; and . Costs related to: (i) implementation of new insurance regulatory requirements and (ii) acquisition and integration costs. The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company's effective tax rate. Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2016, 2015 and 2014 and at December 31, 2016 and 2015. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below. The internal capital model is a MetLife developed risk capital model that reflects management's judgment and view of required capital to represent the measurement of the risk profile of the business, to meet the Company's long term promises to clients, to service long-term obligations and to support the credit ratings of the Company. It accounts for the unique and specific nature of the risks inherent in the Company's business. Management is responsible for the ongoing production and enhancement of the internal capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. As such, the internal capital allocation methodology in the future may differ from MetLife's historical model. The Company allocates equity to the segments based on the internal capital model, coupled with considerations of local capital requirements, and aligns with emerging standards and consistent risk principles. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income or net income (loss). 26
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Net investment income is based upon the actual results of each segment's specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee time incurred by each segment; and (iii) cost estimates included in the Company's product pricing. [Enlarge/Download Table] Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2016 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,399 $ (138) $ (63) $ (64) $ 1,134 Provision for income tax expense (benefit). 411 (50) (25) (40) 296 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 988 $ (88) $ (38) $ (24) 838 =========== ========= ========= ========= Adjustments for:........................... Net investment gains (losses).............. (32) Net derivative gains (losses).............. (5,878) Other adjustments to net income............ 68 Provision for income tax (expense) benefit. 2,067 ----------- Net income (loss).......................... $ (2,937) =========== Inter-segment revenues..................... $ 722 $ (867) $ (127) $ (40) Interest revenue........................... $ 1,412 $ 295 $ 1,235 $ 62 Interest expense........................... $ -- $ -- $ -- $ 67 [Download Table] Corporate At December 31, 2016 Annuities Life Run-off & Other Total ----------------------------- ---------- --------- --------- --------- ---------- (In millions) Total assets................. $ 141,111 $ 12,674 $ 39,261 $ 6,227 $ 199,273 Separate account assets...... $ 95,450 $ 1,671 $ 3,467 $ -- $ 100,588 Separate account liabilities. $ 95,450 $ 1,671 $ 3,467 $ -- $ 100,588 27
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) [Enlarge/Download Table] Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2015 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,318 $ (54) $ 590 $ (207) $ 1,647 Provision for income tax expense (benefit). 329 (21) 204 (89) 423 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 989 $ (33) $ 386 $ (118) 1,224 =========== ========= ========= ========= Adjustments for: Net investment gains (losses).............. 36 Net derivative gains (losses).............. (424) Other adjustments to net income............ (205) Provision for income tax (expense) benefit. 208 ----------- Net income (loss).......................... $ 839 =========== Inter-segment revenues..................... $ 590 $ (740) $ (72) $ 137 Interest revenue........................... $ 1,245 $ 296 $ 1,360 $ (60) Interest expense........................... $ -- $ -- $ -- $ 68 [Enlarge/Download Table] Corporate & At December 31, 2015 Annuities Life Run-off Other Total ----------------------------- ----------- ---------- ---------- ----------- ----------- (In millions) Total assets................. $ 136,230 $ 12,805 $ 43,142 $ 10,185 $ 202,362 Separate account assets...... $ 96,922 $ 1,580 $ 3,233 $ -- $ 101,735 Separate account liabilities. $ 96,922 $ 1,580 $ 3,233 $ -- $ 101,735 [Enlarge/Download Table] Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2014 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,221 $ (152) $ 664 $ (109) $ 1,624 Provision for income tax expense (benefit). 295 (56) 227 (46) 420 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 926 $ (96) $ 437 $ (63) 1,204 =========== ========= ========= ========= Adjustments for: Net investment gains (losses).............. (469) Net derivative gains (losses).............. (181) Other adjustments to net income............ (684) Provision for income tax (expense) benefit. 425 ----------- Net income (loss).......................... $ 295 =========== Inter-segment revenues..................... $ 729 $ (703) $ (275) $ 66 Interest revenue........................... $ 1,177 $ 295 $ 1,384 $ (109) Interest expense........................... $ -- $ 5 $ -- $ 68 28
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Reconciliation of Company operating revenues to total revenues: [Download Table] Years Ended December 31, ------------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Annuities..................... $ 4,295 $ 4,528 $ 4,677 Life.......................... 725 738 568 Run-off....................... 1,919 1,998 1,935 ------------- ------------- ------------- Total segment............... 6,939 7,264 7,180 ------------- ------------- ------------- Corporate & Other............. 176 188 134 Net investment gains (losses). (32) 36 (469) Net derivative gains (losses). (5,878) (424) (181) Other adjustments............. (25) 40 239 ------------- ------------- ------------- Total....................... $ 1,180 $ 7,104 $ 6,903 ============= ============= ============= The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company's segments, as well as Corporate & Other: [Download Table] Years Ended December 31, ----------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Annuity products........ $ 3,300 $ 3,568 $ 3,926 Life insurance products. 1,055 1,176 953 Other products.......... 23 133 5 ------------- ------------- ------------- Total................. $ 4,378 $ 4,877 $ 4,884 ============= ============= ============= Substantially all of the Company's consolidated premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. Revenues derived from any customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2016, 2015 and 2014. 29
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 3. Mergers In November 2014, MetLife Insurance Company of Connecticut, a wholly-owned subsidiary of MetLife, Inc., re-domesticated from Connecticut to Delaware, changed its name to MetLife Insurance Company USA and merged with its subsidiary, MLI-USA, and its affiliate, MLIIC, each a U.S. insurance company that issued variable annuity products in addition to other products, and Exeter, a former offshore, captive reinsurance subsidiary of MetLife, Inc. and affiliate of MetLife Insurance Company of Connecticut that mainly reinsured guarantees associated with variable annuity products (the "Mergers"). The surviving entity of the Mergers was MetLife USA. Exeter, formerly a Cayman Islands company, was re-domesticated to Delaware in October 2013. Prior to the Mergers, 40,000,000 authorized shares of common stock, of which 30,000,000 shares were issued and outstanding, were converted to 4,000 authorized shares of common stock, of which 3,000 shares were issued and outstanding. Prior to the Mergers, effective January 1, 2014, following receipt of New York State Department of Financial Services approval, MetLife Insurance Company of Connecticut withdrew its license to issue insurance policies and annuity contracts in New York. Also effective January 1, 2014, MetLife Insurance Company of Connecticut reinsured with MLIC, an affiliate, all existing New York insurance policies and annuity contracts that include a separate account feature and deposited investments with an estimated fair market value of $6.3 billion into a custodial account to secure MetLife Insurance Company of Connecticut's remaining New York policyholder liabilities not covered by such reinsurance. Also prior to the Mergers, certain risks ceded to Exeter were recaptured. See Notes 8, 9 and 13 for information regarding additional transactions in connection with the Mergers. The Mergers represent a transaction among entities under common control and have been accounted for in a manner similar to the pooling-of-interests method, which requires that the merged entities be combined at their historical cost. The Company's consolidated financial statements and related footnotes are presented as if the transaction occurred at the beginning of the earliest date presented and the prior periods have been retrospectively adjusted. 4. Disposition In May 2014, the Company completed the sale of its wholly-owned subsidiary, MAL, for $702 million ((Pounds)418 million) in net cash consideration. As a result of the sale, a loss of $608 million ($436 million, net of income tax), was recorded for the year ended December 31, 2014, which includes a reduction to goodwill of $112 million ($94 million, net of income tax). The loss is reflected within net investment gains (losses) on the consolidated statements of operations and comprehensive income (loss). Compared to the expected loss at the time of the sales agreement, the actual loss on the sale was increased by net income from MAL of $77 million for the year ended December 31, 2014. MAL's results of operations are included in continuing operations. They were historically included in the Run-off segment. 30
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance Insurance Liabilities Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at: [Download Table] December 31, ----------------------------- 2016 2015 -------------- -------------- (In millions) Annuities $ 31,516 $ 27,370 Life 6,687 7,105 Run-off 25,027 27,463 Corporate & Other 7,425 7,166 -------------- -------------- Total $ 70,655 $ 69,104 ============== ============== See Note 7 for discussion of affiliated reinsurance liabilities included in the table above. Future policy benefits are measured as follows: [Enlarge/Download Table] Product Type: Measurement Assumptions: ----------------------------------------------------------------------------------------------------------------------------- Participating life Aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate of 4%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends. ----------------------------------------------------------------------------------------------------------------------------- Nonparticipating life Aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 3% to 8%. ----------------------------------------------------------------------------------------------------------------------------- Individual and group Present value of expected future payments. Interest rate assumptions used in establishing traditional fixed annuities after such liabilities range from 3% to 8%. annuitization ----------------------------------------------------------------------------------------------------------------------------- Non-medical health The net level premium method and assumptions as to future morbidity, withdrawals and insurance interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. ----------------------------------------------------------------------------------------------------------------------------- Disabled lives Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 3% to 7%. Participating business represented 4% and 3% of the Company's life insurance in-force at December 31, 2016 and 2015, respectively. Participating policies represented 45%, 43% and 39% of gross traditional life insurance premiums for the years ended December 31, 2016, 2015 and 2014, respectively. Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross premium payments; (ii) credited interest, ranging from less than 1% to 8%, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments relating to business combinations. 31
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Guarantees The Company issues variable annuity products with guaranteed minimum benefits. GMABs, the non-life contingent portion of GMWBs and the portion of certain GMIBs that do not require annuitization are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include: [Enlarge/Download Table] Guarantee: Measurement Assumptions: ---------------------------------------------------------------------------------------------------------------------- GMDBs A return of purchase payment upon death Present value of expected death benefits in excess of the even if the account value is reduced projected account balance recognizing the excess ratably to zero. over the accumulation period based on the present value of total expected assessments. An enhanced death benefit may be Assumptions are consistent with those used for amortizing available for an additional fee. DAC, and are thus subject to the same variability and risk. Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index. Benefit assumptions are based on the average benefits payable over a range of scenarios. ---------------------------------------------------------------------------------------------------------------------- GMIBs After a specified period of time Present value of expected income benefits in excess of the determined at the time of issuance of projected account balance at any future date of the variable annuity contract, a annuitization and recognizing the excess ratably over the minimum accumulation of purchase accumulation period based on present value of total payments, even if the account value is expected assessments. reduced to zero, that can be annuitized to receive a monthly income stream that is not less than a specified amount. Certain contracts also provide for a Assumptions are consistent with those used for estimating guaranteed lump sum return of purchase GMDB liabilities. premium in lieu of the annuitization benefit. Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. ---------------------------------------------------------------------------------------------------------------------- GMWBs A return of purchase payment via Expected value of the life contingent payments and partial withdrawals, even if the expected assessments using assumptions consistent with account value is reduced to zero, those used for estimating the GMDB liabilities. provided that cumulative withdrawals in a contract year do not exceed a certain limit. Certain contracts include guaranteed withdrawals that are life contingent. 32
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows: [Download Table] Universal and Variable Annuity Contracts Life Contracts ---------------- ---------------------- Secondary GMDBs GMIBs Guarantees Total ------ ------ ---------------------- ------ (In millions) Direct Balance at January 1, 2014....... $ 404 $1,155 $1,784 $3,343 Incurred guaranteed benefits (1). 231 285 590 1,106 Paid guaranteed benefits......... (24) -- -- (24) ------ ------ ---------------------- ------ Balance at December 31, 2014..... 611 1,440 2,374 4,425 Incurred guaranteed benefits..... 248 317 413 978 Paid guaranteed benefits......... (36) -- -- (36) ------ ------ ---------------------- ------ Balance at December 31, 2015..... 823 1,757 2,787 5,367 Incurred guaranteed benefits..... 331 300 752 1,383 Paid guaranteed benefits......... (58) -- -- (58) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $1,096 $2,057 $3,539 $6,692 ====== ====== ====================== ====== Net Ceded/(Assumed) Balance at January 1, 2014....... $ (205) $ (155) $1,312 $ 952 Incurred guaranteed benefits (1). 175 98 477 750 Paid guaranteed benefits......... 1 -- -- 1 ------ ------ ---------------------- ------ Balance at December 31, 2014..... (29) (57) 1,789 1,703 Incurred guaranteed benefits..... 19 (9) 362 372 Paid guaranteed benefits......... (33) -- -- (33) ------ ------ ---------------------- ------ Balance at December 31, 2015..... (43) (66) 2,151 2,042 Incurred guaranteed benefits..... 41 (3) 594 632 Paid guaranteed benefits......... (54) (1) -- (55) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $ (56) $ (70) $2,745 $2,619 ====== ====== ====================== ====== Net Balance at January 1, 2014....... $ 609 $1,310 $ 472 $2,391 Incurred guaranteed benefits (1). 56 187 113 356 Paid guaranteed benefits......... (25) -- -- (25) ------ ------ ---------------------- ------ Balance at December 31, 2014..... 640 1,497 585 2,722 Incurred guaranteed benefits..... 229 326 51 606 Paid guaranteed benefits......... (3) -- -- (3) ------ ------ ---------------------- ------ Balance at December 31, 2015..... 866 1,823 636 3,325 Incurred guaranteed benefits..... 290 303 158 751 Paid guaranteed benefits......... (4) 1 -- (3) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $1,152 $2,127 $ 794 $4,073 ====== ====== ====================== ====== --------- (1) See Note 7. 33
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Information regarding the Company's guarantee exposure was as follows at: [Enlarge/Download Table] December 31, ----------------------------------------------------------- 2016 2015 --------------------------- --------------------------- In the At In the At Event of Death Annuitization Event of Death Annuitization -------------- ------------- -------------- ------------- (Dollars in millions) Annuity Contracts (1), (2) Variable Annuity Guarantees Total account value (3)................. $ 101,827 $ 57,370 $ 103,830 $ 58,615 Separate account value.................. $ 97,237 $ 56,048 $ 98,897 $ 57,284 Net amount at risk...................... $ 6,726 (4) $ 2,906 (5) $ 8,168 (4) $ 2,088 (5) Average attained age of contractholders. 67 years 67 years 66 years 66 years [Download Table] December 31, --------------------- 2016 2015 --------- --------- Secondary Guarantees --------------------- (Dollars in millions) Universal and Variable Life Contracts Total account value (3)............... $ 7,176 $ 6,919 Net amount at risk (6)................ $ 90,973 $ 90,940 Average attained age of policyholders. 60 years 59 years --------- (1) The Company's annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) Includes direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the NARs presented reflect the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 7 for a discussion of GMxBs which have been reinsured. (3) Includes the contractholder's investments in the general account and separate account, if applicable. (4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved. (6) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. 34
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Account balances of contracts with guarantees were invested in separate account asset classes as follows at: [Download Table] December 31, --------------- 2016 2015 ------- ------- (In millions) Fund Groupings: Balanced...... $49,224 $49,870 Equity........ 39,749 41,269 Bond.......... 5,726 4,802 Money Market.. 654 768 ------- ------- Total....... $95,353 $96,709 ======= ======= Obligations Under Funding Agreements The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. During the years ended December 31, 2016, 2015 and 2014, the Company issued $1.4 billion, $13.0 billion and $12.2 billion, respectively, and repaid $3.4 billion, $14.4 billion and $13.9 billion, respectively, of such funding agreements. As of December 31, 2016 and 2015, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $127 million and $2.2 billion, respectively. The Company is a member of the Federal Home Loan Bank ("FHLB") of Pittsburgh and holds common stock in certain regional banks in the FHLB system ("FHLBanks"). Holdings of common stock of FHLBanks, included in equity securities, were as follows as of: [Download Table] December 31, ------------ 2016 2015 ---- ---- (In millions) FHLB of Pittsburgh. $44 $85 FHLB of Boston..... $27 $36 FHLB of Des Moines. $ 4 $ 4 The Company has also entered into funding agreements with FHLBanks. The liability for such funding agreements is included in policyholder account balances. Information related to such funding agreements was as follows as of: [Download Table] Liability Collateral ----------- ----------------------------------- December 31, ----------------------------------------------- 2016 2015 2016 2015 ---- ------ ----------------- - (In millions) FHLB of Pittsburgh (1). $500 $1,570 $ 3,765 (2) $ 1,789 (2) FHLB of Boston (1)..... $ 50 $ 250 $ 144 (2) $ 311 (2) FHLB of Des Moines (1). $ 95 $ 95 $ 266 (2) $ 147 (2) --------- (1) Represents funding agreements issued to the applicable FHLBank in exchange for cash and for which such FHLBank has been granted a lien on certain assets, some of which are in the custody of such FHLBank, including residential mortgage-backed securities ("RMBS"), to collateralize obligations under advances evidenced by funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of such FHLBank as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, such FHLBank's recovery on the collateral is limited to the amount of the Company's liability to such FHLBank. 35
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) (2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value. Liabilities for Unpaid Claims and Claim Expenses Information regarding the liabilities for unpaid claims and claim expense was as follows: [Download Table] Years Ended December 31, ------------------------- 2016 2015 2014 ------- ------- ------- (In millions) Balance at December 31 of prior period..... $1,693 $1,483 $1,325 Less: Reinsurance recoverables........... 1,545 1,400 1,235 ------- ------- ------- Net balance at December 31 of prior period. 148 83 90 Cumulative adjustment (1).................. 67 -- -- ------- ------- ------- Net balance at January 1,.................. 215 83 90 Incurred related to: Current year............................. 638 105 3 Prior years (2).......................... (22) -- 2 ------- ------- ------- Total incurred......................... 616 105 5 ------- ------- ------- Paid related to: Current year............................. (613) (30) -- Prior years.............................. (60) (10) (12) ------- ------- ------- Total paid............................. (673) (40) (12) ------- ------- ------- Net balance at December 31,................ 158 148 83 Add: Reinsurance recoverables............ 1,808 1,545 1,400 ------- ------- ------- Balance at December 31,.................... $1,966 $1,693 $1,483 ======= ======= ======= --------- (1) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the new guidance related to short-duration contracts. Prior periods have not been restated. See Note 1. (2) During 2016, 2015 and 2014, claims and claims adjustment expenses associated with prior years changed due to differences between the actual benefits paid and the expected benefits owed during those periods. 36
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $100.6 billion and $101.5 billion at December 31, 2016 and 2015, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $33 million and $189 million at December 31, 2016 and 2015, respectively. The latter category consisted of bank owned life insurance contracts. The average interest rate credited on these contracts was 2.63% and 2.56% at December 31, 2016 and 2015, respectively. For each of the years ended December 31, 2016, 2015 and 2014, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles See Note 1 for a description of capitalized acquisition costs. Nonparticipating and Non-Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts (primarily term insurance) over the appropriate premium paying period in proportion to the actual and expected future gross premiums that were set at contract issue. The expected premiums are based upon the premium requirement of each policy and assumptions for mortality, persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include provisions for adverse deviation, and are consistent with the assumptions used to calculate future policy benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. Participating, Dividend-Paying Traditional Contracts The Company amortizes DAC related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales, are reasonably likely to significantly impact the rate of DAC amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC balances. 37
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, benefit elections and withdrawals, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, persistency and benefit elections and withdrawals are reasonably likely to significantly impact the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. Factors Impacting Amortization Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, benefit elections and withdrawals and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will generally decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. 38
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding DAC and VOBA was as follows: [Enlarge/Download Table] Years Ended December 31, ----------------------- 2016 2015 2014 ------- ------ ------ (In millions) DAC Balance at January 1,............................................. $ 4,131 $4,162 $4,795 Capitalizations................................................... 282 325 279 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 1,348 188 (152) Other expenses.................................................. (1,107) (639) (699) ------- ------ ------ Total amortization............................................ 241 (451) (851) ------- ------ ------ Unrealized investment gains (losses).............................. (20) 95 (61) ------- ------ ------ Balance at December 31,........................................... 4,634 4,131 4,162 ------- ------ ------ VOBA Balance at January 1,............................................. 678 728 896 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 2 (19) (1) Other expenses.................................................. (71) (125) (138) ------- ------ ------ Total amortization............................................ (69) (144) (139) ------- ------ ------ Unrealized investment gains (losses).............................. 31 94 (29) ------- ------ ------ Balance at December 31,........................................... 640 678 728 ------- ------ ------ Total DAC and VOBA Balance at December 31,........................................... $ 5,274 $4,809 $4,890 ======= ====== ====== Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at: [Download Table] December 31, ------------- 2016 2015 ------ ------ (In millions) Annuities......... $4,521 $3,510 Life.............. 504 680 Run-off........... 112 510 Corporate & Other. 137 109 ------ ------ Total........... $5,274 $4,809 ====== ====== 39
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding other intangibles was as follows: [Download Table] Years Ended December 31, ----------------------- 2016 2015 2014 ---- ---- ---- (In millions) DSI Balance at January 1,................ $478 $522 $619 Capitalization....................... 2 3 4 Amortization......................... (88) (64) (73) Unrealized investment gains (losses). (1) 17 (28) ---- ---- ---- Balance at December 31,.............. $391 $478 $522 ==== ==== ==== VODA and VOCRA Balance at January 1,................ $125 $142 $159 Amortization......................... (15) (17) (17) ---- ---- ---- Balance at December 31,.............. $110 $125 $142 ==== ==== ==== Accumulated amortization............. $130 $115 $ 98 ==== ==== ==== The estimated future amortization expense to be reported in other expenses for the next five years is as follows: [Download Table] VOBA VODA and VOCRA -------------- -------------- (In millions) 2017. $ 108 $ 14 2018. $ 92 $ 13 2019. $ 78 $ 12 2020. $ 58 $ 11 2021. $ 50 $ 9 7. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed in Note 8. 40
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Annuities and Life For annuities, the Company reinsures portions of the living and death benefit guarantees issued in connection with certain variable annuities to unaffiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on fees associated with the guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations. The value of embedded derivatives on the ceded risk is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The Company reinsures 100% of certain variable annuity risks to an affiliate. The Company also assumes 100% of the living and death benefit guarantees issued in connection with certain variable annuities issued by certain affiliates. For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount the Company retains. The Company also reinsures portions of the risk associated with certain whole life policies to an affiliate and assumes certain term life policies and universal life policies with secondary death benefit guarantees issued by an affiliate. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. Corporate & Other The Company reinsures, through 100% quota share reinsurance agreements certain run-off long-term care and workers' compensation business written by the Company. Catastrophe Coverage The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. Reinsurance Recoverables The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at both December 31, 2016 and 2015, were not significant. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts and funds withheld accounts. The Company had $2.6 billion and $2.4 billion of unsecured unaffiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had $9.1 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $7.8 billion, or 86%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.5 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2015, the Company had $8.5 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $7.4 billion, or 87%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.5 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. 41
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows: [Enlarge/Download Table] Years Ended December 31, ------------------------- 2016 2015 2014 ------- ------- ------- (In millions) Premiums Direct premiums................................................................ $ 2,117 $ 2,281 $ 2,226 Reinsurance assumed............................................................ 79 297 94 Reinsurance ceded.............................................................. (1,275) (1,145) (1,168) ------- ------- ------- Net premiums................................................................. $ 921 $ 1,433 $ 1,152 ======= ======= ======= Universal life and investment-type product policy fees Direct universal life and investment-type product policy fees.................. $ 3,476 $ 3,607 $ 3,610 Reinsurance assumed............................................................ 129 142 398 Reinsurance ceded.............................................................. (909) (809) (815) ------- ------- ------- Net universal life and investment-type product policy fees................... $ 2,696 $ 2,940 $ 3,193 ======= ======= ======= Other revenues Direct other revenues.......................................................... $ 259 $ 258 $ 259 Reinsurance assumed............................................................ 87 -- 28 Reinsurance ceded.............................................................. 415 246 252 ------- ------- ------- Net other revenues........................................................... $ 761 $ 504 $ 539 ======= ======= ======= Policyholder benefits and claims Direct policyholder benefits and claims........................................ $ 5,909 $ 4,807 $ 4,797 Reinsurance assumed............................................................ 128 305 263 Reinsurance ceded.............................................................. (3,053) (2,416) (2,296) ------- ------- ------- Net policyholder benefits and claims......................................... $ 2,984 $ 2,696 $ 2,764 ======= ======= ======= Interest credited to policyholder account balances Direct interest credited to policyholder account balances...................... $ 1,027 $ 1,104 $ 1,125 Reinsurance assumed............................................................ 75 78 76 Reinsurance ceded.............................................................. (145) (145) (139) ------- ------- ------- Net interest credited to policyholder account balances....................... $ 957 $ 1,037 $ 1,062 ======= ======= ======= Amortization of deferred policy acquisition costs and value of business acquired Direct amortization of deferred policy acquisition costs and value of business acquired...................................................................... $ (114) $ 630 $ 958 Reinsurance assumed............................................................ 148 8 100 Reinsurance ceded.............................................................. (206) (43) (68) ------- ------- ------- Net amortization of deferred policy acquisition costs and value of business acquired.................................................................... $ (172) $ 595 $ 990 ======= ======= ======= Other expenses Direct other expenses.......................................................... $ 1,482 $ 1,512 $ 1,566 Reinsurance assumed............................................................ 35 47 6 Reinsurance ceded.............................................................. 221 163 192 ------- ------- ------- Net other expenses........................................................... $ 1,738 $ 1,722 $ 1,764 ======= ======= ======= 42
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at: [Enlarge/Download Table] December 31, ------------------------------------------------------------------------------- 2016 2015 --------------------------------------------- --------------------------------- Total Balance Direct Assumed Ceded Sheet Direct Assumed Ceded ----------- ---------- --------- ----------- ----------- ---------- --------- (In millions) Assets Premiums, reinsurance and other receivables................................... $ 1,143 $ 23 $ 18,935 $ 20,101 $ 630 $ 162 $ 21,459 Deferred policy acquisition costs and value of business acquired............................. 6,020 71 (817) 5,274 5,467 219 (877) ----------- ---------- --------- ----------- ----------- ---------- --------- Total assets................................. $ 7,163 $ 94 $ 18,118 $ 25,375 $ 6,097 $ 381 $ 20,582 =========== ========== ========= =========== =========== ========== ========= Liabilities Future policy benefits......................... $ 31,567 $ 234 $ (117) $ 31,684 $ 28,670 $ 1,294 $ (70) Policyholder account balances.................. 34,635 952 -- 35,587 34,764 897 -- Other policy-related balances.................. 1,027 1,677 680 3,384 990 1,804 755 Other liabilities.............................. 4,466 12 5,669 10,147 2,566 86 5,030 ----------- ---------- --------- ----------- ----------- ---------- --------- Total liabilities............................ $ 71,695 $ 2,875 $ 6,232 $ 80,802 $ 66,990 $ 4,081 $ 5,715 =========== ========== ========= =========== =========== ========== ========= [Download Table] ------------ ------------ Total Balance Sheet ----------- Assets Premiums, reinsurance and other receivables................................... $ 22,251 Deferred policy acquisition costs and value of business acquired............................. 4,809 ----------- Total assets................................. $ 27,060 =========== Liabilities Future policy benefits......................... $ 29,894 Policyholder account balances.................. 35,661 Other policy-related balances.................. 3,549 Other liabilities.............................. 7,682 ----------- Total liabilities............................ $ 76,786 =========== Effective December 1, 2016, the Company terminated two agreements with an unaffiliated reinsurer which covered 90% of the liabilities on certain participating whole life insurance policies issued between April 1, 2000 and December 31, 2001 by MLIC. This termination resulted in a decrease in other invested assets of $713 million, a decrease in deferred policy acquisition costs and value of business acquired of $95 million, a decrease in future policy benefits of $654 million, and a decrease in other liabilities of $43 million. The Company recognized a loss of approximately $72 million, net of income tax, as a result of this transaction. Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $2.0 billion and $6.0 billion at December 31, 2016 and 2015, respectively. The deposit liabilities on reinsurance was $1 million at both December 31, 2016 and 2015. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MLIC, MetLife Reinsurance Company of South Carolina, Brighthouse Life Insurance Company of NY ("Brighthouse NY"), General American Life Insurance Company ("GALIC"), MetLife Europe d.a.c., MetLife Reinsurance Company of Vermont ("MRV"), New England Life Insurance Company ("NELICO"), MetLife Reinsurance Company of Delaware ("MRD"), Delaware American Life Insurance Company ("DELAM") and American Life Insurance Company ("ALICO"), all of which are related parties. 43
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated statements of operations was as follows: [Enlarge/Download Table] Years Ended December 31, --------------------- 2016 2015 2014 ------- ----- ----- (In millions) Premiums Reinsurance assumed........................................................... $ 34 $ 227 $ 55 Reinsurance ceded............................................................. (928) (783) (830) ------- ----- ----- Net premiums................................................................ $ (894) $(556) $(775) ======= ===== ===== Universal life and investment-type product policy fees Reinsurance assumed........................................................... $ 129 $ 142 $ 291 Reinsurance ceded............................................................. (359) (299) (361) ------- ----- ----- Net universal life and investment-type product policy fees.................. $ (230) $(157) $ (70) ======= ===== ===== Other revenues Reinsurance assumed........................................................... $ 56 $ -- $ 28 Reinsurance ceded............................................................. 414 246 252 ------- ----- ----- Net other revenues.......................................................... $ 470 $ 246 $ 280 ======= ===== ===== Policyholder benefits and claims Reinsurance assumed........................................................... $ 91 $ 255 $ 229 Reinsurance ceded............................................................. (1,304) (925) (942) ------- ----- ----- Net policyholder benefits and claims........................................ $(1,213) $(670) $(713) ======= ===== ===== Interest credited to policyholder account balances Reinsurance assumed........................................................... $ 75 $ 78 $ 76 Reinsurance ceded............................................................. (145) (145) (139) ------- ----- ----- Net interest credited to policyholder account balances...................... $ (70) $ (67) $ (63) ======= ===== ===== Amortization of deferred policy acquisition costs and value of business acquired Reinsurance assumed........................................................... $ 49 $ 24 $ 90 Reinsurance ceded............................................................. (189) (40) (63) ------- ----- ----- Net amortization of deferred policy acquisition costs and value of business. $ (140) $ (16) $ 27 ======= ===== ===== Other expenses Reinsurance assumed........................................................... $ 19 $ 41 $ 2 Reinsurance ceded............................................................. 242 186 219 ------- ----- ----- Net other expenses.......................................................... $ 261 $ 227 $ 221 ======= ===== ===== 44
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated balance sheets was as follows at: [Enlarge/Download Table] December 31, ------------------------------- 2016 2015 -------------- --------------- Assumed Ceded Assumed Ceded ------- ------ ------- ------- (In millions) Assets Premiums, reinsurance and other receivables...................... $ 23 $9,661 $ 129 $12,746 Deferred policy acquisition costs and value of business acquired. 71 (803) 120 (861) ------- ------ ------- ------- Total assets................................................... $ 94 $8,858 $ 249 $11,885 ======= ====== ======= ======= Liabilities Future policy benefits........................................... $ 213 $ (117) $ 630 $ (70) Policyholder account balances.................................... 952 -- 897 -- Other policy-related balances.................................... 1,677 680 1,785 755 Other liabilities................................................ 10 5,344 27 4,691 ------- ------ ------- ------- Total liabilities.............................................. $2,852 $5,907 $3,339 $ 5,376 ======= ====== ======= ======= The Company assumes risks from affiliates related to guaranteed minimum benefit guarantees written directly by the affiliates. These assumed reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within policyholder account balances and were $952 million and $897 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were ($45) million, ($59) million and ($541) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company ceded two blocks of business to two affiliates on a 90% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and increased the funds withheld balance by $285 million and $244 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($41) million, $137 million and ($348) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. This ceded reinsurance agreement contains embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with this cession is included within premiums, reinsurance and other receivables and were $3 million and $4 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were less than ($1) million, less than $1 million, and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively. In April 2016, the Company recaptured risks related to certain single premium deferred annuity contracts previously reinsured to MLIC. As a result of this recapture, the significant effects to the Company were an increase in investments and cash and cash equivalents of $4.3 billion and an increase in DAC of $87 million, offset by a decrease in premiums, reinsurance and other receivables of $4.0 billion. The Company recognized a gain of $246 million, net of income tax, as a result of this recapture. In December 2015, the Company entered into a reinsurance agreement to cede one block of business to MRD on a 90% coinsurance with funds withheld basis. This agreement covers certain term life policies issued in 2015 by the Company. This agreement transfers risk to MRD and, therefore, is accounted for as reinsurance. As a result of the agreement, affiliated reinsurance recoverables, included in premiums, reinsurance and other receivables, were $83 million and $126 million at December 31, 2016 and 2015, respectively. The Company also recorded a funds withheld liability and other reinsurance payables, included in other liabilities, which were $34 million and $79 million at December 31, 2016 and 2015, respectively. The Company's consolidated statement of operations and comprehensive income (loss) includes a loss for this agreement of $27 million and no income for the years ended December 31, 2016 and 2015, respectively. 45
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) In December 2014, the Company entered into a reinsurance agreement to cede two blocks of business to MRD on a 90% coinsurance with funds withheld basis. This agreement covers certain term and certain universal life policies issued in 2014 by the Company. This agreement transfers risk to MRD and, therefore, is accounted for as reinsurance. As a result of the agreement, affiliated reinsurance recoverables, included in premiums, reinsurance and other receivables, were $136 million and $81 million at December 31, 2016 and 2015, respectively. The Company also recorded a funds withheld liability and other reinsurance payables, included in other liabilities, which were $83 million and $23 million at December 31, 2016 and 2015, respectively. The Company's consolidated statement of operations and comprehensive income (loss) includes a gain for this agreement of $3 million, a loss of $17 million and a loss of less than $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $2.4 billion and $6.3 billion of unsecured affiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. Affiliated reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on affiliated reinsurance were $1.8 billion and $5.8 billion at December 31, 2016 and 2015, respectively. There were no deposit liabilities on affiliated reinsurance at both December 31, 2016 and 2015. 8. Investments See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies. Investment Risks and Uncertainties Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented on the consolidated financial statements. The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, ABS and certain structured investment transactions) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. 46
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Fixed Maturity and Equity Securities AFS Fixed Maturity and Equity Securities AFS by Sector The following table presents the fixed maturity and equity securities AFS by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including RMBS, commercial mortgage-backed securities ("CMBS") and ABS (collectively, "Structured Securities"). [Enlarge/Download Table] December 31, 2016 December 31, 2015 ------------------------------------------------ ---------------------------------------- Gross Unrealized Gross Unrealized Cost or ------------------------- Estimated Cost or ---------------------------- Amortized Temporary OTTI Fair Amortized Temporary OTTI Cost Gains Losses Losses Value Cost Gains Losses Losses ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- (In millions) Fixed maturity securities: U.S. corporate.................. $17,583 $1,158 $235 $ -- $18,506 $16,160 $ 979 $393 $-- U.S. government and agency...... 10,517 1,221 188 -- 11,550 12,562 1,297 53 -- RMBS............................ 6,722 194 101 -- 6,815 8,391 201 95 19 Foreign corporate............... 5,512 201 158 -- 5,555 4,995 153 194 -- State and political subdivision. 2,633 305 24 -- 2,914 2,398 321 13 1 CMBS (1)........................ 2,837 26 26 (1) 2,838 2,303 20 23 (1) ABS............................. 2,562 11 12 -- 2,561 2,694 14 34 -- Foreign government.............. 946 111 11 -- 1,046 651 104 10 -- ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- Total fixed maturity securities................... $49,312 $3,227 $755 $ (1) $51,785 $50,154 $ 3,089 $815 $19 ========== ======= ========== ====== ========== ========== ========= ========== ======= Equity securities: Non-redeemable preferred stock.. $ 180 $ 6 $ 9 $ -- $ 177 $ 217 $ 16 $ 9 $-- Common stock.................... 100 23 -- -- 123 167 23 5 -- ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- Total equity securities....... $ 280 $ 29 $ 9 $ -- $ 300 $ 384 $ 39 $ 14 $-- ========== ======= ========== ====== ========== ========== ========= ========== ======= [Download Table] ----------- Estimated Fair Value ---------- Fixed maturity securities: U.S. corporate.................. $16,746 U.S. government and agency...... 13,806 RMBS............................ 8,478 Foreign corporate............... 4,954 State and political subdivision. 2,705 CMBS (1)........................ 2,301 ABS............................. 2,674 Foreign government.............. 745 ---------- Total fixed maturity securities................... $52,409 ========== Equity securities: Non-redeemable preferred stock.. $ 224 Common stock.................... 185 ---------- Total equity securities....... $ 409 ========== --------- (1) The noncredit loss component of OTTI losses for CMBS was in an unrealized gain position of $1 million at both December 31, 2016 and 2015, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also "-- Net Unrealized Investment Gains (Losses)." The Company held non-income producing fixed maturity securities with an estimated fair value of $5 million and $11 million with unrealized gains (losses) of less than $1 million and $1 million at December 31, 2016 and 2015, respectively. Methodology for Amortization of Premium and Accretion of Discount on Structured Securities Amortization of premium and accretion of discount on Structured Securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for Structured Securities are estimated using inputs obtained from third-party specialists and based on management's knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis. 47
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2016: [Enlarge/Download Table] Due After Five Due After One Years Total Fixed Due in One Year Through Through Ten Due After Ten Structured Maturity Year or Less Five Years Years Years Securities Securities ------------- -------------- --------------- -------------- ----------- ------------ (In millions) Amortized cost...... $1,801 $8,096 $8,570 $18,724 $12,121 $49,312 Estimated fair value $1,805 $8,460 $8,684 $20,622 $12,214 $51,785 Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at: [Enlarge/Download Table] December 31, 2016 December 31, 2015 ----------------------------------------------- ---------------------------------------------------- Equal to or Greater than Equal to or Greater than 12 Less than 12 Months 12 Months Less than 12 Months Months ----------------------- ----------------------- ------------------------ --------------------------- Estimated Gross Estimated Gross Estimated Gross Estimated Gross Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Value Losses ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ (Dollars in millions) Fixed maturity securities: U.S. corporate...... $ 3,525 $ 145 $ 625 $ 90 $ 4,569 $ 278 $ 571 $ 115 U.S. government and agency............. 3,548 188 -- -- 4,037 53 -- -- RMBS................ 2,642 69 811 32 4,305 73 495 41 Foreign corporate... 1,231 60 532 98 1,650 96 605 98 State and political subdivision........ 548 21 29 3 373 12 19 2 CMBS................ 1,307 22 164 3 1,346 21 44 1 ABS................. 433 4 461 8 1,818 28 194 6 Foreign government.. 228 10 4 1 130 9 6 1 ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ Total fixed maturity securities....... $ 13,462 $ 519 $ 2,626 $ 235 $ 18,228 $ 570 $ 1,934 $ 264 =========== =========== =========== =========== ============ =========== =========== ============ Equity securities: Non-redeemable preferred stock.... $ 57 $ 2 $ 40 $ 7 $ 25 $ 1 $ 40 $ 8 Common stock........ -- -- -- -- 6 5 1 -- ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ Total equity securities....... $ 57 $ 2 $ 40 $ 7 $ 31 $ 6 $ 41 $ 8 =========== =========== =========== =========== ============ =========== =========== ============ Total number of securities in an unrealized loss position........... 1,388 468 1,850 394 =========== =========== ============ =========== 48
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities Evaluation and Measurement Methodologies Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments 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 where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to Structured Securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed maturity securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating agencies. The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows: . The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment. . When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management's best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies. . Additional considerations are made when assessing the unique features that apply to certain Structured Securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security. . When determining the amount of the credit loss for U.S. and foreign corporate securities, state and political subdivision securities and foreign government securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described above, as well as any private and public sector programs to restructure such securities. With respect to securities that have attributes of debt and equity ("perpetual hybrid securities"), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security's cost and its estimated fair value with a corresponding charge to earnings. The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value. 49
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows. Current Period Evaluation Based on the Company's current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company's current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at December 31, 2016. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities decreased $80 million during the year ended December 31, 2016 to $754 million. The decrease in gross unrealized losses for the year ended December 31, 2016, was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates and, to a lesser extent, the impact of weakening foreign currencies on non-functional currency denominated fixed maturity securities. At December 31, 2016, $57 million of the total $754 million of gross unrealized losses were from 15 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. The change in gross unrealized losses on equity securities was not significant during the year ended December 31, 2016. Investment Grade Fixed Maturity Securities Of the $57 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $53 million, or 93%, were related to gross unrealized losses on six investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $57 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $4 million, or 7%, were related to gross unrealized losses on nine below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily industrial securities) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over lower oil prices in the energy sector. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers. 50
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at: [Enlarge/Download Table] December 31, ----------------------------------------------------- 2016 2015 ------------------------- -------------------------- Carrying % of Carrying % of Value Total Value Total ------------- ---------- ------------- ----------- (Dollars in millions) Mortgage loans Commercial.................................... $ 6,211 69.9% $ 5,331 73.4% Agricultural.................................. 1,708 19.2 1,460 20.1 Residential................................... 867 9.8 335 4.6 ------------- ---------- ------------- ----------- Subtotal.................................... 8,786 98.9 7,126 98.1 Valuation allowances.......................... (38) (0.4) (36) (0.5) ------------- ---------- ------------- ----------- Subtotal mortgage loans, net................ 8,748 98.5 7,090 97.6 Commercial mortgage loans held by CSEs -- FVO. 136 1.5 172 2.4 ------------- ---------- ------------- ----------- Total mortgage loans, net................ $ 8,884 100.0% $ 7,262 100.0% ============= ========== ============= =========== The Company purchases unaffiliated mortgage loans under a master participation agreement, from an affiliate, simultaneously with the affiliate's origination or acquisition of mortgage loans. The aggregate amount of unaffiliated mortgage loan participation interests purchased by the Company from an affiliate during the years ended December 31, 2016, 2015 and 2014 were $2.3 billion, $2.0 billion and $360 million, respectively. In connection with the mortgage loan participations, the affiliate collected mortgage loan principal and interest payments on the Company's behalf and the affiliate remitted such payments to the Company in the amount of $1.6 billion, $973 million and $1.0 billion during the years ended December 31, 2016, 2015 and 2014, respectively. Purchases of mortgage loans from third parties were $619 million and $346 million for the years ended December 31, 2016 and 2015, respectively, and were primarily comprised of residential mortgage loans. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of related party mortgage loans. Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on commercial mortgage loans held by CSEs - FVO is presented in Note 10. The Company elects the FVO for certain commercial mortgage loans and related long-term debt that are managed on a total return basis. 51
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended: [Enlarge/Download Table] Evaluated Collectively for Evaluated Individually for Credit Losses Credit Losses Impaired Loans --------------------------------------------------------- -------------------------- --------------------- Impaired Loans with a Valuation Impaired Loans without Allowance a Valuation Allowance ---------------------------------- ---------------------- Unpaid Unpaid Average Principal Recorded Valuation Principal Recorded Recorded Valuation Carrying Recorded Balance Investment Allowances Balance Investment Investment Allowances Value Investment ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- (In millions) December 31, 2016 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 6,211 $ 30 $ -- $ -- Agricultural...... 4 3 -- -- -- 1,705 5 3 3 Residential....... -- -- -- 1 1 866 3 1 -- ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- Total............. $ 4 $ 3 $ -- $ 1 $ 1 $ 8,782 $ 38 $ 4 $ 3 ========== =========== =========== ========== =========== =========== =========== ========= =========== December 31, 2015 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 5,331 $ 28 $ -- $ -- Agricultural...... 4 3 -- -- -- 1,457 5 3 3 Residential....... -- -- -- -- -- 335 3 -- -- ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- Total............. $ 4 $ 3 $ -- $ -- $ -- $ 7,123 $ 36 $ 3 $ 3 ========== =========== =========== ========== =========== =========== =========== ========= =========== The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $43 million, $3 million and $0, respectively, for the year ended December 31, 2014. Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows: [Download Table] Commercial Agricultural Residential Total ------------ -------------- ------------- --------- (In millions) Balance at January 1, 2014... $ 31 $ 4 $-- $ 35 Provision (release).......... (10) -- -- (10) ------------ -------------- ------------- --------- Balance at December 31, 2014. 21 4 -- 25 Provision (release).......... 7 1 3 11 ------------ -------------- ------------- --------- Balance at December 31, 2015. 28 5 3 36 Provision (release).......... 2 -- -- 2 ------------ -------------- ------------- --------- Balance at December 31, 2016. $ 30 $ 5 $ 3 $ 38 ============ ============== ============= ========= 52
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Valuation Allowance Methodology Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company's experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available. Commercial and Agricultural Mortgage Loan Portfolio Segments The Company typically uses several years of historical experience in establishing non-specific valuation allowances which captures multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for commercial and agricultural mortgage loans. All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio. For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company's ongoing review of its commercial mortgage loan portfolio. For agricultural mortgage loans, the Company's primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated. 53
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Residential Mortgage Loan Portfolio Segment The Company's residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments. For residential mortgage loans, the Company's primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss. Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at: [Enlarge/Download Table] Recorded Investment ------------------------------------------------------- Debt Service Coverage Ratios Estimated ------------------------------------ % of Fair % of > 1.20x 1.00x - 1.20x < 1.00x Total Total Value Total ---------- --------------- --------- -------- --------- ----------- -------- (Dollars in millions) December 31, 2016 Loan-to-value ratios Less than 65%........ $5,459 $214 $166 $ 5,839 94.0% $5,922 94.2% 65% to 75%........... 281 -- 19 300 4.8 294 4.7 76% to 80%........... 34 -- -- 34 0.6 33 0.5 Greater than 80%..... 24 14 -- 38 0.6 37 0.6 ---------- --------------- --------- -------- --------- ----------- -------- Total.............. $5,798 $228 $185 $ 6,211 100.0% $6,286 100.0% ========== =============== ========= ======== ========= =========== ======== December 31, 2015 Loan-to-value ratios Less than 65%........ $4,659 $151 $100 $ 4,910 92.1% $5,124 92.6% 65% to 75%........... 330 -- 8 338 6.3 330 6.0 76% to 80%........... -- -- -- -- -- -- -- Greater than 80%..... 44 25 14 83 1.6 80 1.4 ---------- --------------- --------- -------- --------- ----------- -------- Total.............. $5,033 $176 $122 $ 5,331 100.0% $5,534 100.0% ========== =============== ========= ======== ========= =========== ======== 54
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at: [Download Table] December 31, -------------------------------------------- 2016 2015 ---------------------- -------------------- Recorded % of Recorded % of Investment Total Investment Total ------------ --------- ---------- --------- (Dollars in millions) Loan-to-value ratios Less than 65%........ $1,669 97.7% $1,366 93.6% 65% to 75%........... 39 2.3 94 6.4 ------------ --------- ---------- --------- Total.............. $1,708 100.0% $1,460 100.0% ============ ========= ========== ========= The estimated fair value of agricultural mortgage loans was $1.7 billion and $1.5 billion at December 31, 2016 and 2015, respectively. Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at: [Enlarge/Download Table] December 31, ---------------------------------------------------------------- 2016 2015 ------------------------------- ------------------------------- Recorded Investment % of Total Recorded Investment % of Total -------------------- ---------- -------------------- ---------- (Dollars in millions) Performance indicators: Performing.............. $856 98.7% $331 98.8% Nonperforming........... 11 1.3 4 1.2 -------------------- ---------- -------------------- ---------- Total................... $867 100.0% $335 100.0% ==================== ========== ==================== ========== The estimated fair value of residential mortgage loans was $867 million and $345 million at December 31, 2016 and 2015, respectively. Past Due and Nonaccrual Mortgage Loans The Company has a high quality, well performing, mortgage loan portfolio, with over 99% of all mortgage loans classified as performing as of both December 31, 2016 and 2015. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans -- 60 days and agricultural mortgage loans -- 90 days. The Company had no commercial or agricultural mortgage loans past due and no commercial or agricultural mortgage loans in nonaccrual status at either December 31, 2016, or 2015. The recorded investment of residential mortgage loans past due and in nonaccrual status was $11 million and $4 million at December 31, 2016 and 2015, respectively. Mortgage Loans Modified in a Troubled Debt Restructuring The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concessions granted are considered in determining any impairment or changes in the specific valuation allowance. During the year ended December 31, 2016, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring. There were no mortgage loans modified in a troubled debt restructuring during the year ended December 31, 2015. 55
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Other Invested Assets Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), operating joint venture, tax credit and renewable energy partnerships, leveraged leases and funds withheld. Tax Credit Partnerships The carrying value of tax credit partnerships was $41 million and $42 million at December 31, 2016 and 2015, respectively. Net investment income (loss) from tax credit partnerships were ($1) million for both of the years ended December 31, 2016 and 2015. Net investment income (loss) was $3 million for the year ended December 31, 2014. Leveraged Leases Investment in leveraged leases consisted of the following at: [Enlarge/Download Table] December 31, -------------------- 2016 2015 --------- --------- (In millions) Rental receivables, net........................................ $ 87 $ 90 Estimated residual values...................................... 14 14 --------- --------- Subtotal..................................................... 101 104 Unearned income................................................ (32) (33) --------- --------- Investment in leveraged leases, net of non-recourse debt... $ 69 $ 71 ========= ========= Rental receivables are generally due in periodic installments. The payment periods for leveraged leases range from one to 16 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At December 31, 2016 and 2015, all rental receivables were performing. The deferred income tax liability related to leveraged leases was $74 million and $76 million at December 31, 2016 and 2015, respectively. Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $1.6 billion and $1.1 billion at December 31, 2016 and 2015, respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI and future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in accumulated other comprehensive income (loss) ("AOCI"). 56
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The components of net unrealized investment gains (losses), included in AOCI, were as follows: [Enlarge/Download Table] Years Ended December 31, -------------------------- 2016 2015 2014 ------- ------- -------- (In millions) Fixed maturity securities......................................................... $2,464 $2,265 $ 4,311 Fixed maturity securities with noncredit OTTI losses included in AOCI............. 1 (19) (34) ------- ------- -------- Total fixed maturity securities................................................. 2,465 2,246 4,277 Equity securities................................................................. 32 54 69 Derivatives....................................................................... 393 368 282 Short-term investments............................................................ (42) -- -- Other............................................................................. 58 78 9 ------- ------- -------- Subtotal........................................................................ 2,906 2,746 4,637 ------- ------- -------- Amounts allocated from: Future policy benefits............................................................ (550) (56) (503) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.................. (1) (1) (2) DAC, VOBA and DSI................................................................. (188) (198) (403) ------- ------- -------- Subtotal........................................................................ (739) (255) (908) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI.......................................................................... -- 7 12 Deferred income tax benefit (expense)............................................. (736) (844) (1,308) ------- ------- -------- Net unrealized investment gains (losses)...................................... $1,431 $1,654 $ 2,433 ======= ======= ======== The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows: [Download Table] Years Ended December 31, ----------------------- 2016 2015 ----- ----- (In millions) Balance at January 1,................................... $(19) $(34) Noncredit OTTI losses and subsequent changes recognized. 3 9 Securities sold with previous noncredit OTTI loss....... 14 17 Subsequent changes in estimated fair value.............. 3 (11) ----- ----- Balance at December 31,................................. $ 1 $(19) ===== ===== 57
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The changes in net unrealized investment gains (losses) were as follows: [Enlarge/Download Table] Years Ended December 31, -------------------------- 2016 2015 2014 ------- -------- ------- (In millions) Balance at January 1,....................................................................... $1,654 $ 2,433 $ 941 Fixed maturity securities on which noncredit OTTI losses have been recognized............... 20 15 11 Unrealized investment gains (losses) during the year........................................ 140 (1,906) 2,807 Unrealized investment gains (losses) relating to: Future policy benefits.................................................................... (494) 447 (503) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.......................... -- 1 (2) DAC, VOBA and DSI......................................................................... 10 205 (116) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI. (7) (5) (3) Deferred income tax benefit (expense)..................................................... 108 464 (702) ------- -------- ------- Balance at December 31,..................................................................... $1,431 $ 1,654 $2,433 ======= ======== ======= Change in net unrealized investment gains (losses)...................................... $ (223) $ (779) $1,492 ======= ======== ======= Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company's stockholder's equity, other than the U.S. government and its agencies, at both December 31, 2016 and 2015. Securities Lending Elements of the securities lending program are presented below at: [Download Table] December 31, --------------- 2016 2015 ------- ------- (In millions) Securities on loan: (1) Amortized cost....................................... $5,895 $8,047 Estimated fair value................................. $6,555 $8,830 Cash collateral on deposit from counterparties (2)..... $6,642 $8,981 Security collateral on deposit from counterparties (3). $ 27 $ 23 Reinvestment portfolio -- estimated fair value......... $6,571 $8,938 --------- (1)Included within fixed maturity securities and short-term investments. (2)Included within payables for collateral under securities loaned and other transactions. (3)Security collateral on deposit from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. 58
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at: [Enlarge/Download Table] December 31, 2016 December 31, 2015 ------------------------------------- ------------------------------------- Remaining Tenor of Securities Remaining Tenor of Securities Lending Agreements Lending Agreements ----------------------------- ----------------------------- 1 Month 1 to 6 1 Month 1 to 6 Open (1) or Less Months Total Open (1) or Less Months Total --------- -------- ------- ------- --------- -------- ------- ------- (In millions) Cash collateral liability by loaned security type: U.S. government and agency......................... $2,129 $1,906 $1,743 $5,778 $2,631 $3,140 $1,338 $7,109 U.S. corporate..................................... -- 480 -- 480 9 302 -- 311 Agency RMBS........................................ -- -- 274 274 -- 939 579 1,518 Foreign corporate.................................. -- 58 -- 58 -- -- -- -- Foreign government................................. -- 52 -- 52 1 42 -- 43 --------- -------- ------- ------- --------- -------- ------- ------- Total............................................ $2,129 $2,496 $2,017 $6,642 $2,641 $4,423 $1,917 $8,981 ========= ======== ======= ======= ========= ======== ======= ======= --------- (1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2016 was $2.1 billion, all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, ABS, non-agency RMBS, U.S. corporate securities and U.S. government and agency) with 48% invested in agency RMBS, short-term investments, U.S. government and agency, cash equivalents or held in cash at December 31, 2016. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit, Held in Trust and Pledged as Collateral Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes at: [Enlarge/Download Table] December 31, ----------------- 2016 2015 -------- -------- (In millions) Invested assets on deposit (regulatory deposits)............................. $ 7,642 $ 7,245 Invested assets held in trust (reinsurance agreements) (1)................... 721 952 Invested assets pledged as collateral (2).................................... 3,548 2,801 -------- -------- Total invested assets on deposit, held in trust, and pledged as collateral. $11,911 $10,998 ======== ======== --------- (1) The Company has held in trust certain investments, primarily fixed maturity securities, in connection with certain reinsurance transactions. (2) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 5) and derivative transactions (see Note 9). See "-- Securities Lending" for information regarding securities on loan. 59
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Purchased Credit Impaired Investments Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired ("PCI") investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI. The Company's PCI fixed maturity securities were as follows at: [Download Table] December 31, ------------------- 2016 2015 --------- --------- (In millions) Outstanding principal and interest balance (1). $1,423 $1,224 Carrying value (2)............................. $1,087 $ 911 --------- (1) Represents the contractually required payments, which is the sum of contractual principal, whether or not currently due, and accrued interest. (2) Estimated fair value plus accrued interest. The following table presents information about PCI fixed maturity securities acquired during the periods indicated: [Download Table] Years Ended December 31, ------------------------ 2016 2015 --------- --------- (In millions) Contractually required payments (including interest). $525 $785 Cash flows expected to be collected (1).............. $457 $698 Fair value of investments acquired................... $322 $512 --------- (1) Represents undiscounted principal and interest cash flow expectations, at the date of acquisition. The following table presents activity for the accretable yield on PCI fixed maturity securities for: [Download Table] Years Ended December 31, ------------------------ 2016 2015 ----------- ----------- (In millions) Accretable yield, January 1,........................ $ 400 $ 251 Investments purchased............................... 135 186 Accretion recognized in earnings.................... (66) (48) Disposals........................................... (11) (8) Reclassification (to) from nonaccretable difference. (50) 19 ----------- ----------- Accretable yield, December 31,...................... $ 408 $ 400 =========== =========== 60
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Collectively Significant Equity Method Investments The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $1.9 billion at December 31, 2016. The Company's maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $1.1 billion at December 31, 2016. Except for certain real estate joint ventures, the Company's investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities. As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company's consolidated pre-tax income (loss) for the two of the most recent annual periods: 2015 and 2014. This aggregated summarized financial data does not represent the Company's proportionate share of the assets, liabilities, or earnings of such entities. The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2016, 2015 and 2014. Aggregate total assets of these entities totaled $285.1 billion and $294.3 billion at December 31, 2016 and 2015, respectively. Aggregate total liabilities of these entities totaled $26.3 billion and $46.3 billion at December 31, 2016 and 2015, respectively. Aggregate net income (loss) of these entities totaled $21.3 billion, $13.7 billion and $25.1 billion for the years ended December 31, 2016, 2015 and 2014, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses). Variable Interest Entities The Company has invested in certain entities (including CSEs) that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE's primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party's relationship with or involvement in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. Consolidated VIEs Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company's obligation to the VIEs is limited to the amount of its committed investment. The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at December 31, 2016 and 2015. [Download Table] December 31, ----------------------- 2016 2015 ----------- ----------- (In millions) CSEs: (1) Assets: Mortgage loans (commercial mortgage loans). $ 136 $ 172 Accrued investment income.................. 1 1 ----------- ----------- Total assets............................. $ 137 $ 173 =========== =========== Liabilities: Long-term debt............................. $ 23 $ 48 Other liabilities.......................... 1 1 ----------- ----------- Total liabilities........................ $ 24 $ 49 =========== =========== -------- 61
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (1) The Company consolidates entities that are structured as CMBS. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company's exposure was limited to that of its remaining investment in these entities of $95 million and $105 million at estimated fair value at December 31, 2016 and 2015, respectively. Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at: [Enlarge/Download Table] December 31, --------------------------------------------------- 2016 2015 ------------------------- ------------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) ------------ ------------ ------------ ------------ (In millions) Fixed maturity securities AFS: Structured Securities (2)......... $ 10,789 $ 10,789 $ 13,453 $ 13,453 U.S. and foreign corporate........ 505 505 461 461 Other limited partnership interests. 1,491 2,287 1,367 1,647 Real estate joint ventures.......... 17 22 35 38 Other investments (3)............... 61 66 57 62 ------------ ------------ ------------ ------------ Total........................... $ 12,863 $ 13,669 $ 15,373 $ 15,661 ============ ============ ============ ============ -------- (1)The maximum exposure to loss relating to fixed maturity and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company's return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties. There were no income tax credits and less than $1 million at December 31, 2016 and 2015, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2)For these variable interests, the Company's involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. (3)Other investments is comprised of other invested assets and non-redeemable preferred stock. As described in Note 16, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended December 31, 2016, 2015 and 2014. 62
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Income The components of net investment income were as follows: [Enlarge/Download Table] Years Ended December 31, ----------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Investment income: Fixed maturity securities................................ $ 2,167 $ 2,010 $ 1,954 Equity securities........................................ 18 18 17 Mortgage loans........................................... 384 360 337 Policy loans............................................. 54 54 59 Real estate and real estate joint ventures............... 32 108 80 Other limited partnership interests...................... 163 134 266 Cash, cash equivalents and short-term investments........ 18 8 5 Operating joint venture.................................. 11 11 2 Other.................................................... 13 11 3 ------------- ------------- ------------- Subtotal............................................... 2,860 2,714 2,723 Less: Investment expenses................................ 160 115 103 ------------- ------------- ------------- Subtotal, net.......................................... 2,700 2,599 2,620 FVO CSEs -- interest income -- commercial mortgage loans. 12 16 49 ------------- ------------- ------------- Net investment income................................. $ 2,712 $ 2,615 $ 2,669 ============= ============= ============= See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. 63
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows: [Enlarge/Download Table] Years Ended December 31, ---------------------------------- 2016 2015 2014 ---------- ----------- --------- (In millions) Total gains (losses) on fixed maturity securities: Total OTTI losses recognized -- by sector and industry: U.S. and foreign corporate securities -- by industry: Industrial............................................................. $ (13) $ (3) $ -- Consumer............................................................... -- (8) (2) Transportation......................................................... -- -- (2) ---------- ----------- --------- Total U.S. and foreign corporate securities.......................... (13) (11) (4) RMBS.................................................................... (6) (14) (8) ---------- ----------- --------- OTTI losses on fixed maturity securities recognized in earnings...... (19) (25) (12) Fixed maturity securities -- net gains (losses) on sales and disposals.... 2 (34) 26 ---------- ----------- --------- Total gains (losses) on fixed maturity securities....................... (17) (59) 14 ---------- ----------- --------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by sector: Common stock............................................................ (1) (3) (7) Non-redeemable preferred stock.......................................... (1) -- (8) ---------- ----------- --------- OTTI losses on equity securities recognized in earnings.............. (2) (3) (15) Equity securities -- net gains (losses) on sales and disposals............ 10 18 14 ---------- ----------- --------- Total gains (losses) on equity securities............................... 8 15 (1) ---------- ----------- --------- Mortgage loans............................................................ 7 (11) 17 Real estate and real estate joint ventures................................ (34) 98 (4) Other limited partnership interests....................................... (7) (1) (9) Other..................................................................... 11 (2) 43 ---------- ----------- --------- Subtotal............................................................... (32) 40 60 ---------- ----------- --------- FVO CSEs: Commercial mortgage loans............................................... (2) (7) (13) Long-term debt -- related to commercial mortgage loans.................. 1 4 19 Non-investment portfolio gains (losses) (1)................................. 1 (1) (535) ---------- ----------- --------- Subtotal............................................................... -- (4) (529) ---------- ----------- --------- Total net investment gains (losses).................................. $ (32) $ 36 $ (469) ========== =========== ========= -------- (1)Non-investment portfolio gains (losses) for the year ended December 31, 2014 includes a loss of $608 million related to the disposition of MAL as more fully described in Note 4. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. Gains (losses) from foreign currency transactions included within net investment gains (losses) were $8 million, ($6) million and $66 million for the years ended December 31, 2016, 2015 and 2014, respectively. 64
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Sales or Disposals and Impairments of Fixed Maturity and Equity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown in the table below. [Enlarge/Download Table] Years Ended December 31, -------------------------------------------------------------------- 2016 2015 2014 2016 2015 2014 ------------ ---------- ------------ -------- -------- -------- Fixed Maturity Securities Equity Securities -------------------------------------- ---------------------------- (In millions) Proceeds........................ $ 33,339 $ 29,937 $ 14,649 $ 48 $ 80 $ 57 ============ ========== ============ ======== ======== ======== Gross investment gains.......... $ 211 $ 165 $ 84 $ 10 $ 25 $ 15 Gross investment losses......... (209) (199) (58) -- (7) (1) OTTI losses..................... (19) (25) (12) (2) (3) (15) ------------ ---------- ------------ -------- -------- -------- Net investment gains (losses). $ (17) $ (59) $ 14 $ 8 $ 15 $ (1) ============ ========== ============ ======== ======== ======== Credit Loss Rollforward The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI: [Enlarge/Download Table] Years Ended December 31, ---------------------- 2016 2015 ---------- ---------- (In millions) Balance at January 1,................................................................................ $ 52 $ 57 Additions: Initial impairments -- credit loss OTTI on securities not previously impaired...................... -- 1 Additional impairments -- credit loss OTTI on securities previously impaired....................... 5 11 Reductions: Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI. (28) (14) Increase in cash flows -- accretion of previous credit loss OTTI................................... (1) (3) ---------- ---------- Balance at December 31,.............................................................................. $ 28 $ 52 ========== ========== Related Party Investment Transactions The Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Invested assets transferred to and from affiliates were as follows: [Enlarge/Download Table] Years Ended December 31, ------------------------------------ 2016 2015 2014 ------------ ---------- ------------ (In millions) Estimated fair value of invested assets transferred to affiliates... $ 1,465 $ 185 $ 1,441 Amortized cost of invested assets transferred to affiliates......... $ 1,370 $ 169 $ 1,362 Net investment gains (losses) recognized on transfers............... $ 27 $ 16 $ 79 Change in additional paid-in-capital recognized on transfers........ $ 68 $ -- $ -- Estimated fair value of invested assets transferred from affiliates. $ 5,428 $ 928 $ 132 In April 2016, the Company received a transfer of investments and cash and cash equivalents totaling $4.3 billion for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to MLIC, an affiliate, which are included in the table above. See Note 7 for additional information related to these transfers. 65
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) In July 2014, prior to the Mergers, the Company sold affiliated loans to other affiliates, which were included in other invested assets and in the table above, at an estimated fair value totaling $520 million and a $45 million gain was recognized in net investment gains (losses). Net investment income from these affiliated loans was $13 million for the year ended December 31, 2014. The Company had affiliated loans outstanding to wholly-owned real estate subsidiaries of MLIC, which were included in mortgage loans, with a carrying value of $242 million at December 31, 2014. In August 2015 and November 2014, one affiliated loan with a carrying value of $132 million and two affiliated loans with a total carrying value of $120 million were repaid in cash prior to maturity. The remaining loan with a carrying value of $110 million was repaid in cash upon maturity in December 31, 2015. These affiliated loans were secured by interests in the real estate subsidiaries, which owned operating real estate with an estimated fair value in excess of the affiliated loans. Net investment income from these affiliated loans was $8 million and $34 million for the years ended December 31, 2015 and 2014, respectively. In addition, mortgage loan prepayment income earned from the three repayments prior to maturity described above was $31 million and $16 million for the years ended December 31, 2015 and 2014, respectively. The Company receives investment administrative services from an affiliate. The related investment administrative service charges were $85 million, $68 million, and $62 million for the years ended December 31, 2016, 2015 and 2014, respectively. See "-- Mortgage Loans -- Mortgage Loans by Portfolio Segment" for discussion of mortgage loan participation agreements with an affiliate. 9. Derivatives Accounting for Derivatives See Note 1 for a description of the Company's accounting policies for derivatives and Note 10 for information about the fair value hierarchy for derivatives. Derivative Strategies The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter ("OTC") market. Certain of the Company's OTC derivatives are cleared and settled through central clearing counterparties ("OTC-cleared"), while others are bilateral contracts between two counterparties ("OTC-bilateral"). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets. Interest Rate Derivatives The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, caps, floors, swaptions, futures and forwards. Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships. Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Interbank Offered Rate ("LIBOR"), calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships. 66
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships. In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options. The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow hedging relationships. Foreign Currency Exchange Rate Derivatives The Company uses foreign currency swaps to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in cash flow and nonqualifying hedging relationships. To a lesser extent, the Company uses foreign currency forwards in nonqualifying hedging relationships. Credit Derivatives The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations, repudiation, moratorium, involuntary restructuring or governmental intervention. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. ("ISDA") deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships. The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency securities or other fixed maturity securities. These credit default swaps are not designated as hedging instruments. Equity Derivatives The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps. 67
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships. In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships. In an equity total return swap are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the LIBOR, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships. 68
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Primary Risks Managed by Derivatives The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the Company's derivatives, excluding embedded derivatives, held at: [Enlarge/Download Table] December 31, ------------------------------------------------------------------- 2016 2015 --------------------------------- --------------------------------- Estimated Fair Value Estimated Fair Value --------------------- --------------------- Gross Gross Notional Notional Primary Underlying Risk Exposure Amount Assets Liabilities Amount Assets Liabilities ---------------------------------- ----------- --------- ----------- ----------- --------- ----------- (In millions) Derivatives Designated as Hedging Instruments Fair value hedges: Interest rate swaps..... Interest rate................... $ 310 $ 41 $ -- $ 420 $ 38 $ 1 ----------- --------- --------- ----------- --------- --------- Cash flow hedges: Interest rate swaps..... Interest rate................... 45 7 -- 230 60 -- Interest rate forwards.. Interest rate................... -- -- -- 35 8 -- Foreign currency swaps.. Foreign currency exchange rate 1,386 181 10 937 126 3 ----------- --------- --------- ----------- --------- --------- Subtotal.............................................. 1,431 188 10 1,202 194 3 ----------- --------- --------- ----------- --------- --------- Total qualifying hedges............................. 1,741 229 10 1,622 232 4 ----------- --------- --------- ----------- --------- --------- Derivatives Not Designated or Not Qualifying as Hedging Instruments Interest rate swaps...... Interest rate................... 28,175 1,928 1,688 23,086 1,802 638 Interest rate floors..... Interest rate................... 2,100 5 2 7,036 33 24 Interest rate caps....... Interest rate................... 12,042 25 -- 13,792 38 -- Interest rate futures.... Interest rate................... 1,288 9 -- 630 2 -- Interest rate options.... Interest rate................... 15,520 136 -- 18,620 472 5 Interest rate total return swaps............ Interest rate................... 3,876 -- 611 48 2 -- Foreign currency swaps... Foreign currency exchange rate................... 1,236 149 4 659 75 -- Foreign currency forwards Foreign currency exchange rate................... 158 9 -- 185 4 1 Credit default swaps -- purchased............... Credit.......................... 34 -- -- 21 -- -- Credit default swaps -- written................. Credit.......................... 1,891 28 -- 2,093 13 1 Equity futures........... Equity market................... 8,037 38 -- 3,669 37 -- Equity index options..... Equity market................... 37,501 897 934 44,035 1,032 626 Equity variance swaps.... Equity market................... 14,894 140 517 14,866 120 434 Equity total return swaps Equity market................... 2,855 1 117 2,814 31 49 ----------- --------- --------- ----------- --------- --------- Total non-designated or nonqualifying derivatives........................................ 129,607 3,365 3,873 131,554 3,661 1,778 ----------- --------- --------- ----------- --------- --------- Total......................................... $ 131,348 $ 3,594 $ 3,883 $ 133,176 $ 3,893 $ 1,782 =========== ========= ========= =========== ========= ========= Based on gross notional amounts, a substantial portion of the Company's derivatives was not designated or did not qualify as part of a hedging relationship at both December 31, 2016 and 2015. The Company's use of derivatives includes (i) derivatives that serve as macro hedges of the Company's exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship; (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income; and (iv) written credit default swaps that are used to synthetically create credit investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged. 69
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Net Derivative Gains (Losses) The components of net derivative gains (losses) were as follows: [Download Table] Years Ended December 31, -------------------------- 2016 2015 2014 -------- ------ -------- (In millions) Freestanding derivatives and hedging gains (losses) (1). $(4,030) $(154) $ 868 Embedded derivatives gains (losses)..................... (1,848) (270) (1,049) -------- ------ -------- Total net derivative gains (losses).................... $(5,878) $(424) $ (181) ======== ====== ======== --------- (1) Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships, which are not presented elsewhere in this note. The following table presents earned income on derivatives: [Enlarge/Download Table] Years Ended December 31, ------------------------------------ 2016 2015 2014 ----------- ----------- ----------- (In millions) Qualifying hedges: Net investment income.............................. $ 18 $ 11 $ 4 Interest credited to policyholder account balances. -- (2) (1) Nonqualifying hedges: Net derivative gains (losses)...................... 460 360 273 Policyholder benefits and claims................... 16 14 32 ----------- ----------- ----------- Total............................................ $ 494 $ 383 $ 308 =========== =========== =========== 70
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Nonqualifying Derivatives and Derivatives for Purposes Other Than Hedging The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or qualifying as hedging instruments: [Enlarge/Download Table] Net Net Policyholder Derivative Investment Benefits and Gains (Losses) Income (1) Claims (2) -------------- ------------- ------------- (In millions) Year Ended December 31, 2016 Interest rate derivatives.................. $ (2,873) $ -- $ (4) Foreign currency exchange rate derivatives. 74 -- -- Credit derivatives -- purchased............ -- -- -- Credit derivatives -- written.............. 10 -- -- Equity derivatives......................... (1,724) (6) (320) -------------- ------------- ------------- Total.................................... $ (4,513) $ (6) $ (324) ============== ============= ============= Year Ended December 31, 2015 Interest rate derivatives.................. $ (67) $ -- $ 5 Foreign currency exchange rate derivatives. 42 -- -- Credit derivatives -- purchased............ -- -- -- Credit derivatives -- written.............. (14) -- -- Equity derivatives......................... (476) (4) (25) -------------- ------------- ------------- Total.................................... $ (515) $ (4) $ (20) ============== ============= ============= Year Ended December 31, 2014 Interest rate derivatives.................. $ 1,174 $ -- $ 43 Foreign currency exchange rate derivatives. 4 -- -- Credit derivatives -- purchased............ (22) -- -- Credit derivatives -- written.............. 18 -- -- Equity derivatives......................... (591) (8) (279) -------------- ------------- ------------- Total.................................... $ 583 $ (8) $ (236) ============== ============= ============= --------- (1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures. (2) Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits. Fair Value Hedges The Company designates and accounts for interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities as fair value hedges when they have met the requirements of fair value hedging. 71
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses): [Enlarge/Download Table] Net Derivative Net Derivative Ineffectiveness Gains (Losses) Gains (Losses) Recognized in Derivatives in Fair Value Hedged Items in Fair Value Recognized Recognized for Net Derivative Hedging Relationships Hedging Relationships for Derivatives Hedged Items Gains (Losses) ----------------------------- --------------------------------- --------------- -------------- --------------- (In millions) Year Ended December 31, 2016 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ (1) $ -- Policyholder liabilities (1)..... -- -- -- Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 1 $ (1) $ -- =============== ============== =============== Year Ended December 31, 2015 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ 1 $ 2 Policyholder liabilities (1)..... 2 (2) -- Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 3 $ (1) $ 2 =============== ============== =============== Year Ended December 31, 2014 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ (1) $ -- Policyholder liabilities (1)..... 32 (31) 1 Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 33 $ (32) $ 1 =============== ============== =============== --------- (1) Fixed rate liabilities reported in policyholder account balances or future policy benefits. (2) Fixed rate or floating rate liabilities. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. Cash Flow Hedges The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $1 million and $3 million for the years ended December 31, 2016 and 2015, respectively. These amounts were not significant for the year ended December 31, 2014. At December 31, 2016 and 2015, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed three years and four years, respectively. At December 31, 2016 and 2015, the balance in AOCI associated with cash flow hedges was $393 million and $368 million, respectively. 72
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and comprehensive income (loss) and the consolidated statements of stockholder's equity: [Enlarge/Download Table] Amount and Location Amount and Location Amount of Gains of Gains (Losses) of Gains (Losses) Derivatives in Cash Flow (Losses) Deferred in Reclassified from Recognized in Income Hedging Relationships AOCI on Derivatives AOCI into Income (Loss) (Loss) on Derivatives ----------------------------- -------------------- -------------------------------- --------------------- (Effective Portion) (Effective Portion) (Ineffective Portion) -------------------- -------------------------------- --------------------- Net Derivative Net Investment Net Derivative Gains (Losses) Income Gains (Losses) --------------- --------------- --------------------- (In millions) Year Ended December 31, 2016 Interest rate swaps.......... $ 24 $ 33 $ 3 $ -- Interest rate forwards....... 4 2 2 -- Foreign currency swaps....... 40 3 -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 68 $ 38 $ 5 $ -- ==================== =============== =============== ===================== Year Ended December 31, 2015 Interest rate swaps.......... $ 15 $ 1 $ 1 $ 1 Interest rate forwards....... 1 2 2 -- Foreign currency swaps....... 76 -- -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 92 $ 3 $ 3 $ 1 ==================== =============== =============== ===================== Year Ended December 31, 2014 Interest rate swaps.......... $ -- $ 131 $ 1 $ 1 Interest rate forwards....... 55 1 1 -- Foreign currency swaps....... 56 (6) -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 242 $ (4) $ 2 $ -- ==================== =============== =============== ===================== All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2016, the Company expects to reclassify $39 million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $1.9 billion and $2.1 billion at December 31, 2016 and 2015, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At December 31, 2016 and 2015, the Company would have received $28 million and $12 million, respectively, to terminate all of these contracts. 73
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at: [Enlarge/Download Table] December 31, --------------------------------------------------------------------------------- 2016 2015 ---------------------------------------- ---------------------------------------- Maximum Maximum Estimated Amount Estimated Amount Fair Value of Future Weighted Fair Value of Future Weighted of Credit Payments under Average of Credit Payments under Average Rating Agency Designation of Default Credit Default Years to Default Credit Default Years to Referenced Credit Obligations (1) Swaps Swaps Maturity (2) Swaps Swaps Maturity (2) ------------------------------------- ---------- --------------- ------------- ---------- --------------- ------------- (Dollars in millions) Aaa/Aa/A............................. Single name credit default swaps (3). $ 1 $ 45 2.2 $ 1 $ 207 1.5 Credit default swaps referencing indices............................. 8 433 3.7 1 219 4.0 ---------- --------------- ---------- --------------- Subtotal........................... 9 478 3.6 2 426 2.8 ---------- --------------- ---------- --------------- Baa.................................. Single name credit default swaps (3). 1 180 1.6 2 409 1.6 Credit default swaps referencing indices............................. 18 1,213 4.8 8 1,222 4.8 ---------- --------------- ---------- --------------- Subtotal........................... 19 1,393 4.4 10 1,631 4.0 ---------- --------------- ---------- --------------- Ba................................... Single name credit default swaps (3). -- 20 2.7 -- -- -- Credit default swaps referencing indices............................. -- -- -- -- -- -- ---------- --------------- ---------- --------------- Subtotal........................... -- 20 2.7 -- -- -- ---------- --------------- ---------- --------------- B.................................... Single name credit default swaps (3). -- -- -- -- -- -- Credit default swaps referencing indices............................. -- -- -- -- 36 5.0 ---------- --------------- ---------- --------------- Subtotal........................... -- -- -- -- 36 5.0 ---------- --------------- ---------- --------------- Total............................ $ 28 $ 1,891 4.2 $ 12 $ 2,093 3.8 ========== =============== ========== =============== --------- (1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's Investors Service ("Moody's"), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used. (2) The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. (3) Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions. Credit Risk on Freestanding Derivatives The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company's derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements. 74
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company's OTC-bilateral derivative transactions are generally governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. Substantially all of the Company's ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives. The Company's OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives. See Note 10 for a description of the impact of credit risk on the valuation of derivatives. The estimated fair values of the Company's net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at: [Enlarge/Download Table] December 31, -------------------------------------------- 2016 2015 --------------------- --------------------- Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement Assets Liabilities Assets Liabilities --------------------------------------------------------------------- --------- ----------- --------- ----------- (In millions) Gross estimated fair value of derivatives: OTC-bilateral (1).................................................... $ 3,384 $ 2,929 $ 3,870 $ 1,725 OTC-cleared (1)...................................................... 267 905 78 78 Exchange-traded...................................................... 47 -- 39 -- --------- ----------- --------- ----------- Total gross estimated fair value of derivatives (1)................ 3,698 3,834 3,987 1,803 Amounts offset on the consolidated balance sheets..................... -- -- -- -- --------- ----------- --------- ----------- Estimated fair value of derivatives presented on the consolidated balance sheets (1)................................................... 3,698 3,834 3,987 1,803 Gross amounts not offset on the consolidated balance sheets: Gross estimated fair value of derivatives: (2) OTC-bilateral........................................................ (2,231) (2,231) (1,577) (1,577) OTC-cleared.......................................................... (165) (165) (70) (70) Exchange-traded...................................................... -- -- -- -- Cash collateral: (3), (4) OTC-bilateral........................................................ (625) -- (1,605) -- OTC-cleared.......................................................... (92) (740) (8) (8) Exchange-traded...................................................... -- -- -- -- Securities collateral: (5) OTC-bilateral........................................................ (429) (698) (552) (148) OTC-cleared.......................................................... -- -- -- -- Exchange-traded...................................................... -- -- -- -- --------- ----------- --------- ----------- Net amount after application of master netting agreements and collateral........................................................... $ 156 $ -- $ 175 $ -- ========= =========== ========= =========== --------- (1) At December 31, 2016 and 2015, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $104 million and $94 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($49) million and $21 million, respectively. 75
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) (2) Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals. (3) Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. (4) The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At December 31, 2016 and 2015, the Company received excess cash collateral of $3 million and $1 million, respectively, and provided excess cash collateral of $25 million and $62 million, respectively, which is not included in the table above due to the foregoing limitation. (5) Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at December 31, 2016 none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31, 2016 and 2015, the Company received excess securities collateral with an estimated fair value of $135 million and $0, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2016 and 2015, the Company provided excess securities collateral with an estimated fair value of $108 million and $36 million, respectively, for its OTC-bilateral derivatives, $630 million and $34 million, respectively, for its OTC-cleared derivatives, and $453 million and $156 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. The Company's collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. A small number of these arrangements also include credit-contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of Brighthouse Life Insurance Company, and/or the counterparty. In addition, substantially all of the Company's netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody's and S&P. If a party's credit or financial strength ratings, as applicable, were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party's reasonable valuation of the derivatives. 76
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value of the Company's OTC-bilateral derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The Company's collateral agreements require both parties to be fully collateralized, as such, Brighthouse Life Insurance Company would not be required to post additional collateral as a result of a downgrade in financial strength rating. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table. [Enlarge/Download Table] December 31, ----------------------------- 2016 2015 -------------- -------------- (In millions) Estimated fair value of derivatives in a net liability position (1)....................... $ 698 $ 148 Estimated Fair Value of Collateral Provided Fixed maturity securities................................................................ $ 777 $ 179 Cash..................................................................................... $ -- $ -- Fair Value of Incremental Collateral Provided Upon One-notch downgrade in financial strength rating......................................... $ -- $ -- Downgrade in financial strength rating to a level that triggers full overnight collateralization or termination of the derivative position............................ $ -- $ -- --------- (1) After taking into consideration the existence of netting agreements. Embedded Derivatives The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and certain GMIBs; affiliated ceded reinsurance of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; affiliated assumed reinsurance of guaranteed minimum benefits related to GMWBs and certain GMIBs; funds withheld on assumed and ceded reinsurance; fixed annuities with equity indexed returns; and certain debt and equity securities. The following table presents the estimated fair value and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at: [Enlarge/Download Table] December 31, ------------------------ Balance Sheet Location 2016 2015 -------------------------------------------- ----------- ----------- (In millions) Embedded derivatives within asset host contracts: Ceded guaranteed minimum benefits................... Premiums, reinsurance and other receivables. $ 241 $ 242 Funds withheld on assumed reinsurance............... Other invested assets....................... -- 35 Options embedded in debt or equity securities....... Investments................................. (49) (63) ----------- ----------- Embedded derivatives within asset host contracts........................................... $ 192 $ 214 =========== =========== Embedded derivatives within liability host contracts: Direct guaranteed minimum benefits.................. Policyholder account balances............... $ 2,261 $ 177 Assumed guaranteed minimum benefits................. Policyholder account balances............... 952 897 Funds withheld on ceded reinsurance................. Other liabilities........................... 285 244 Fixed annuities with equity indexed returns......... Policyholder account balances............... 192 6 ----------- ----------- Embedded derivatives within liability host contracts....................................... $ 3,690 $ 1,324 =========== =========== 77
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents changes in estimated fair value related to embedded derivatives: [Download Table] Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Net derivative gains (losses) (1), (2). $ (1,848) $ (270) $ (1,049) Policyholder benefits and claims....... $ (4) $ 21 $ 87 --------- (1) The valuation of direct and assumed guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $253 million, $25 million and $73 million for the years ended December 31, 2016, 2015 and 2014, respectively. (2) See Note 7 for discussion of affiliated net derivative gains (losses). Related Party Freestanding Derivative Transactions In November 2014, as part of the settlement of related party reinsurance transactions, the Company transferred derivatives to affiliates. The estimated fair value of freestanding derivative assets and liabilities transferred was $1.8 billion and $1.2 billion, respectively. 10. Fair Value When developing estimated fair values, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs, giving priority to observable inputs. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. 78
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at: [Enlarge/Download Table] December 31, 2016 -------------------------------------------------------- Fair Value Hierarchy ---------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ------------ ------------- ------------- --------------- (In millions) Assets Fixed maturity securities: U.S. corporate......................................... $ -- $ 17,107 $ 1,399 $ 18,506 U.S. government and agency............................. 5,279 6,271 -- 11,550 RMBS................................................... -- 5,524 1,291 6,815 Foreign corporate...................................... -- 4,727 828 5,555 State and political subdivision........................ -- 2,897 17 2,914 CMBS................................................... -- 2,676 162 2,838 ABS.................................................... -- 2,350 211 2,561 Foreign government..................................... -- 1,046 -- 1,046 ------------ ------------- ------------- --------------- Total fixed maturity securities....................... 5,279 42,598 3,908 51,785 ------------ ------------- ------------- --------------- Equity securities........................................ 39 124 137 300 Short-term investments................................... 459 465 2 926 Commercial mortgage loans held by CSEs -- FVO............ -- 136 -- 136 Derivative assets: (1) Interest rate.......................................... 9 2,142 -- 2,151 Foreign currency exchange rate......................... -- 339 -- 339 Credit................................................. -- 20 8 28 Equity market.......................................... 38 859 179 1,076 ------------ ------------- ------------- --------------- Total derivative assets............................... 47 3,360 187 3,594 ------------ ------------- ------------- --------------- Embedded derivatives within asset host contracts (2)..... -- -- 241 241 Separate account assets (3).............................. 720 99,858 10 100,588 ------------ ------------- ------------- --------------- Total assets....................................... $ 6,544 $ 146,541 $ 4,485 $ 157,570 ============ ============= ============= =============== Liabilities Derivative liabilities: (1) Interest rate.......................................... $ -- $ 1,690 $ 611 $ 2,301 Foreign currency exchange rate......................... -- 14 -- 14 Equity market.......................................... -- 1,038 530 1,568 ------------ ------------- ------------- --------------- Total derivative liabilities.......................... -- 2,742 1,141 3,883 ------------ ------------- ------------- --------------- Embedded derivatives within liability host contracts (2). -- -- 3,690 3,690 Long-term debt of CSEs -- FVO............................ -- 23 -- 23 ------------ ------------- ------------- --------------- Total liabilities.................................. $ -- $ 2,765 $ 4,831 $ 7,596 ============ ============= ============= =============== 79
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) [Enlarge/Download Table] December 31, 2015 -------------------------------------------------------- Fair Value Hierarchy ---------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ------------ ------------- ------------- --------------- (In millions) Assets Fixed maturity securities: U.S. corporate......................................... $ -- $ 15,295 $ 1,451 $ 16,746 U.S. government and agency............................. 7,998 5,808 -- 13,806 RMBS................................................... -- 7,138 1,340 8,478 Foreign corporate...................................... -- 4,263 691 4,954 State and political subdivision........................ -- 2,692 13 2,705 CMBS................................................... -- 2,120 181 2,301 ABS.................................................... -- 2,357 317 2,674 Foreign government..................................... -- 719 26 745 ------------ ------------- ------------- --------------- Total fixed maturity securities....................... 7,998 40,392 4,019 52,409 ------------ ------------- ------------- --------------- Equity securities........................................ 44 268 97 409 Short-term investments (4)............................... 59 1,623 47 1,729 Commercial mortgage loans held by CSEs -- FVO............ -- 172 -- 172 Derivative assets: (1) Interest rate.......................................... 2 2,445 8 2,455 Foreign currency exchange rate......................... -- 205 -- 205 Credit................................................. -- 12 1 13 Equity market.......................................... 37 968 215 1,220 ------------ ------------- ------------- --------------- Total derivative assets............................... 39 3,630 224 3,893 ------------ ------------- ------------- --------------- Embedded derivatives within asset host contracts (2)..... -- -- 277 277 Separate account assets (3).............................. 624 100,965 146 101,735 ------------ ------------- ------------- --------------- Total assets....................................... $ 8,764 $ 147,050 $ 4,810 $ 160,624 ============ ============= ============= =============== Liabilities Derivative liabilities: (1) Interest rate.......................................... $ -- $ 668 $ -- $ 668 Foreign currency exchange rate......................... -- 4 -- 4 Credit................................................. -- 1 -- 1 Equity market.......................................... -- 653 456 1,109 ------------ ------------- ------------- --------------- Total derivative liabilities.......................... -- 1,326 456 1,782 ------------ ------------- ------------- --------------- Embedded derivatives within liability host contracts (2). -- -- 1,324 1,324 Long-term debt of CSEs -- FVO............................ -- 48 -- 48 ------------ ------------- ------------- --------------- Total liabilities................................. $ -- $ 1,374 $ 1,780 $ 3,154 ============ ============= ============= =============== --------- (1) Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets, but are presented net for purposes of the roll-forward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables. (2) Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and other invested assets on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the consolidated balance sheets. At December 31, 2016 and 2015, debt and equity securities also included embedded derivatives of ($49) million and ($63) million, respectively. 80
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (3) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. (4) Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis. The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy. Investments Valuation Controls and Procedures On behalf of the Company and MetLife, Inc.'s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee that is independent of the trading and investing functions and comprised of senior management, provides oversight of control systems and valuation policies for securities, mortgage loans and derivatives. On a quarterly basis, this committee reviews and approves new transaction types and markets, ensures that observable market prices and market-based parameters are used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. This committee also provides oversight of the selection of independent third-party pricing providers and the controls and procedures to evaluate third party pricing. Periodically, the Chief Accounting Officer reports to the Audit Committee of Brighthouse Life Insurance Company's Board of Directors regarding compliance with fair value accounting standards. The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management's knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices received from independent brokers, also referred to herein as "consensus pricing," represent a reasonable estimate of fair value by considering such pricing relative to the Company's knowledge of the current market dynamics and current pricing for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker quotations represent less than 1% of the total estimated fair value of fixed maturity securities and 5% of the total estimated fair value of Level 3 fixed maturity securities at December 31, 2016. The Company also applies a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management's best estimate is used. Securities, Short-term Investments and Long-term Debt of CSEs -- FVO When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management's judgment. 81
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management's judgment or estimation and cannot be supported by reference to market activity. Even though these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances. The estimated fair value of long-term debt of CSEs -- FVO is determined on a basis consistent with the methodologies described herein for securities. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs. [Enlarge/Download Table] Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs --------------------------------------------------------------------------------------------- Fixed Maturity Securities --------------------------------------------------------------------------------------------- U.S. corporate and Foreign corporate securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market and income approaches. market approach. Key Inputs: Key Inputs: . quoted prices in markets that are not . illiquidity premium active . delta spread adjustments to reflect . benchmark yields; spreads off specific credit-related issues benchmark yields; new issuances; . credit spreads issuer rating . quoted prices in markets that are not . trades of identical or comparable active for identical or similar securities; duration securities that are less liquid . Privately-placed securities are and based on lower levels of trading valued using the additional key activity than securities inputs: classified in Level 2 . market yield curve; call provisions . independent non-binding broker . observable prices and spreads for quotations similar public or private securities that incorporate the credit quality and industry sector of the issuer . delta spread adjustments to reflect specific credit-related issues --------------------------------------------------------------------------------------------- U.S. government and agency, State and political subdivision and Foreign government securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market approach. Valuation Techniques: Principally the Key Inputs: market approach. . quoted prices in markets that are not Key Inputs: active . independent non-binding broker . benchmark U.S. Treasury yield or quotations other yields . quoted prices in markets that are not . the spread off the U.S. Treasury active for identical or similar yield curve for the identical security securities that are less liquid . issuer ratings and issuer spreads; and based on lower levels of trading broker-dealer quotes activity than securities . comparable securities that are classified in Level 2 actively traded . credit spreads --------------------------------------------------------------------------------------------- Structured Securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market and income approaches. market and income approaches. Key Inputs: Key Inputs: . quoted prices in markets that are not . credit spreads active . quoted prices in markets that are not . spreads for actively traded active for identical or similar securities; spreads off benchmark securities that are less liquid yields and based on lower levels of trading . expected prepayment speeds and volumes activity than securities . current and forecasted loss severity; classified in Level 2 ratings; geographic region . independent non-binding broker . weighted average coupon and weighted quotations average maturity . average delinquency rates; debt-service coverage ratios . issuance-specific information, including, but not limited to: . collateral type; structure of the security; vintage of the loans . payment terms of the underlying assets . payment priority within the tranche; deal performance --------------------------------------------------------------------------------------------- 82
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) [Enlarge/Download Table] Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs ---------------------------------------------------------------------------------------------- Equity Securities ---------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market approach. market and income approaches. Key Input: Key Inputs: . quoted prices in markets that are not . credit ratings; issuance structures considered active . quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2 . independent non-binding broker quotations ---------------------------------------------------------------------------------------------- Short-term investments ---------------------------------------------------------------------------------------------- . Short-term investments are of a . Short-term investments are of a similar nature and class to the fixed similar nature and class to the fixed maturity and equity securities maturity and equity securities described above; accordingly, the described above; accordingly, the valuation techniques and observable valuation techniques and inputs used in their valuation are unobservable inputs used in their also similar to those described valuation are also similar to those above. described above. ---------------------------------------------------------------------------------------------- Commercial mortgage loans held by CSEs -- FVO ---------------------------------------------------------------------------------------------- Valuation Techniques: Principally the . N/A market approach. Key Input: . quoted securitization market price of the obligations of the CSEs determined principally by independent pricing services using observable inputs ---------------------------------------------------------------------------------------------- Separate Account Assets (1) ---------------------------------------------------------------------------------------------- Mutual funds without readily determinable fair values as prices are not published publicly ---------------------------------------------------------------------------------------------- Key Input: . N/A . quoted prices or reported net asset value ("NAV") provided by the fund managers ---------------------------------------------------------------------------------------------- Other limited partnership interests ---------------------------------------------------------------------------------------------- . N/A Valuation Techniques: Valued giving consideration to the underlying holdings of the partnerships and by applying a premium or discount, if appropriate. Key Inputs: . liquidity; bid/ask spreads; performance record of the fund manager . other relevant variables that may impact the exit value of the particular partnership interest ---------------------------------------------------------------------------------------------- --------- (1) Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under "-- Securities, Short-term Investments and Long-term Debt of CSEs -- FVO" and "-- Derivatives -- Freestanding Derivatives." Derivatives The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. The valuation controls and procedures for derivatives are described in "-- Investments -- Valuation Controls and Procedures." The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. 83
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Freestanding Derivatives Level 2 Valuation Techniques and Key Inputs: This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3. Level 3 Valuation Techniques and Key Inputs: These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows: Instrument Interest Rate Foreign Credit Equity Market Currency Exchange Rate ------------------------------------------------------------------------------- Inputs common . swap yield . swap yield . swap yield . swap yield to Level 2 curves curves curves curves and Level 3 . basis curves . basis curves . credit curves . spot equity by instrument . interest . currency . recovery index levels type rate spot rates rates . dividend volatility . cross yield curves (1) currency . equity basis volatility curves (1) ------------------------------------------------------------------------------- Level 3 . swap yield . N/A . swap yield . dividend curves (2) curves (2) yield curves . basis curves . credit (2) (2) curves (2) . equity . repurchase . credit volatility rates spreads (1), (2) . repurchase . correlation rates between . independent model non-binding inputs (1) broker quotations ------------------------------------------------------------------------------- --------- (1) Option-based only. (2) Extrapolation beyond the observable limits of the curve(s). 84
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Embedded Derivatives Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, equity or bond indexed crediting rates within certain annuity contracts, and those related to funds withheld on ceded reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The Company's actuarial department calculates the fair value of these embedded derivatives, which are estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates. Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.'s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income. The Company assumed from an affiliated insurance company the risk associated with certain GMIBs. These embedded derivatives are included in policyholder account balances on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these assumed risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company. The Company ceded to an affiliate the risk associated with certain of the GMIBs, GMABs and GMWBs described above that are also accounted for as embedded derivatives. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also cedes, to an affiliated company, certain directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives), but where the reinsurance agreement contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. 85
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as previously described in "-- Investments -- Securities, Short-term Investments and Long-term Debt of CSEs -- FVO." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity indices. These equity indexed features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior, is calculated by the Company's actuarial department. The calculation is based on in-force business and uses standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk. Embedded Derivatives Within Asset and Liability Host Contracts Level 3 Valuation Techniques and Key Inputs: Direct and assumed guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin. Reinsurance ceded on certain guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in "-- Direct and assumed guaranteed minimum benefits" and also include counterparty credit spreads. Transfers between Levels Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the period. Transfers between Levels 1 and 2: For assets and liabilities measured at estimated fair value and still held at December 31, 2016 and 2015, transfers between Levels 1 and 2 were not significant. 86
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Transfers into or out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at: [Enlarge/Download Table] December 31, 2016 December 31, 2015 --------------------------- --------------------------- Significant Weighted Weighted Valuation Techniques Unobservable Inputs Range Average (1) Range Average (1) --------------------- ---------------------- ------------- ------------ ------------- ------------ Fixed maturity securities (3) U.S. corporate . and foreign Matrix pricing . Delta spread corporate..... adjustments (4) (65) - 240 49 . Offered quotes (5) 18 - 138 104 96 - 96 96 . Market . pricing Quoted prices (5) 13 - 700 99 13 - 780 314 . Consensus . pricing Offered quotes (5) 68 - 109 86 68 - 95 80 ----------------------------------------------------------------------------------------------------------- RMBS........... . . Quoted Market pricing prices (5) 38 - 111 91 29 - 292 93 ----------------------------------------------------------------------------------------------------------- ABS............ . . Market pricing Quoted prices (5) 94 - 106 100 97 - 103 100 . Consensus . Offered pricing quotes (5) 98 - 100 99 66 - 105 99 ----------------------------------------------------------------------------------------------------------- Derivatives Interest rate.. . Present . Swap yield value (7) techniques -- - -- 317 - 317 . Repurchase rates (9) (44) - 18 ----------------------------------------------------------------------------------------------------------- Credit......... . Present value . techniques Credit spreads (10) 97 - 98 -- - -- . Consensus . pricing Offered quotes (11) ----------------------------------------------------------------------------------------------------------- Equity market.. . Present . Volatility 14% - 32% 17% - 36% value (12) techniques or option pricing models . Correlation (13) 40% - 40% 70% - 70% ----------------------------------------------------------------------------------------------------------- [Download Table] Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------- ---------------------- ------------------ Fixed maturity securities (3) U.S. corporate . and foreign Matrix pricing . Delta spread corporate..... adjustments (4) Decrease . Offered quotes (5) Increase . Market . pricing Quoted prices (5) Increase . Consensus . pricing Offered quotes (5) Increase ----------------------------------------------------------------- RMBS........... . . Quoted Market pricing prices (5) Increase (6) ----------------------------------------------------------------- ABS............ . . Market pricing Quoted prices (5) Increase (6) . Consensus . Offered pricing quotes (5) Increase (6) ----------------------------------------------------------------- Derivatives Interest rate.. . Present . Swap yield value (7) techniques Increase (8) . Repurchase rates (9) Decrease (8) ----------------------------------------------------------------- Credit......... . Present value . techniques Credit spreads (10) Decrease (10) . Consensus . pricing Offered quotes (11) ----------------------------------------------------------------- Equity market.. . Present . Volatility Increase (8) value (12) techniques or option pricing models . Correlation (13) ----------------------------------------------------------------- [Enlarge/Download Table] December 31, 2016 December 31, 2015 --------------------------- --------------------------- Significant Weighted Weighted Valuation Techniques Unobservable Inputs Range Average (1) Range Average (1) --------------------- ---------------------- ------------- ------------ ------------- ------------ Embedded derivatives Direct, . assumed and Mortality rates: ceded guaranteed . Option minimum pricing benefits...... techniques Ages 0 - 40 0% - 0.09% 0% - 0.09% Ages 41 - 60 0.04% - 0.65% 0.04% - 0.65% Ages 61 - 115 0.26% - 100% 0.26% - 100% . Lapse rates: Durations 1 - 10 0.25% - 100% 0.25% - 100% Durations 11 - 20 2% - 100% 3% - 100% Durations 21 - 116 2% - 100% 3% - 100% . Utilization rates 0% - 25% 0% - 25% . Withdrawal rates 0.25% - 10% 0.25% - 10% . Long-term equity volatilities 17.40% - 25% 17.40% - 25% . Nonperformance risk spread 0.04% - 0.57% 0.04% - 0.52% [Download Table] Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------- ---------------------- ------------------ Embedded derivatives Direct, . assumed and Mortality rates: ceded guaranteed . Option minimum pricing benefits...... techniques Ages 0 - 40 Decrease (14) Ages 41 - 60 Decrease (14) Ages 61 - 115 Decrease (14) . Lapse rates: Durations 1 - 10 Decrease (15) Durations 11 - 20 Decrease (15) Durations 21 - 116 Decrease (15) . Utilization rates Increase (16) . Withdrawal rates (17) . Long-term equity volatilities Increase (18) . Nonperformance risk spread Decrease (19) --------- (1) The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities. 87
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) The impact of a decrease in input would have the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions. (3) Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations. (4) Range and weighted average are presented in basis points. (5) Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par. (6) Changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates. (7) Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (8) Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions. (9) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points. (10)Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps. (11)As of December 31, 2016 and 2015, independent non-binding broker quotations were used in the determination of 3% and less than 1% of the total net derivative estimated fair value, respectively. (12)Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (13)Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations. (14)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (15)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (16)The utilization rate assumption estimates the percentage of contractholders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract's withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. 88
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (17)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (18)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (19)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value measurement of assets and liabilities classified within Level 3 that are not included in the preceding table. Generally, all other classes of securities classified within Level 3, including those within separate account assets and embedded derivatives within funds withheld related to certain ceded and assumed reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. This includes matrix pricing and discounted cash flow methodologies, inputs such as quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, as well as independent non-binding broker quotations. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in "-- Nonrecurring Fair Value Measurements." 89
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3): [Download Table] - -------------- - -------------- Corporate (1) - ------------- Balance, January 1, 2015............... $ 2,065 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 16 Total realized/unrealized gains (losses) included in AOCI... (113) Purchases (7)....... 285 Sales (7)........... (118) Issuances (7)....... -- Settlements (7)..... -- Transfers into Level 3 (8)........ 202 Transfers out of Level 3 (8)........ (195) ------------- Balance, December 31, 2015.. $ 2,142 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 1 Total realized/unrealized gains (losses) included in AOCI... (32) Purchases (7)....... 557 Sales (7)........... (244) Issuances (7)....... -- Settlements (7)..... -- Transfers into Level 3 (8)........ 118 Transfers out of Level 3 (8)........ (315) ------------- Balance, December 31, 2016.. $ 2,227 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014 (9)................ $ 3 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015(9)............ $ 11 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016 (9)................ $ 2 ============= Gains (Losses) Data for the year ended December 31, 2014.. Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... $ 3 Total realized/unrealized gains (losses) included in AOCI... $ 74 [Enlarge/Download Table] Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - ----------------------------------------------------------------------------------------------------------- Fixed Maturity Securities - -------------------------------------- State and Separate Structured Political Foreign Equity Short-term Net Net Embedded Account Securities Subdivision Government Securities Investments Derivatives (2) Derivatives (3) Assets (4) - ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- (In millions) Balance, January 1, 2015............... $ 1,045 $ -- $ -- $ 100 $ 71 $ (196) $ (347) $ 158 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 21 -- -- 11 -- (74) (228) (6) Total realized/unrealized gains (losses) included in AOCI... (11) -- (3) (10) -- 2 -- -- Purchases (7)....... 1,255 13 29 -- 47 22 -- 3 Sales (7)........... (360) -- -- (16) -- -- -- (5) Issuances (7)....... -- -- -- -- -- -- -- -- Settlements (7)..... -- -- -- -- -- 14 (472) -- Transfers into Level 3 (8)........ 22 -- -- 19 -- -- -- -- Transfers out of Level 3 (8)........ (134) -- -- (7) (71) -- -- (4) ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- Balance, December 31, 2015.. $ 1,838 $ 13 $ 26 $ 97 $ 47 $ (232) $ (1,047) $ 146 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 30 -- -- -- -- (703) (1,866) -- Total realized/unrealized gains (losses) included in AOCI... 20 -- -- (11) -- 4 -- -- Purchases (7)....... 576 -- -- -- 3 10 -- 2 Sales (7)........... (530) -- -- (26) (1) -- -- (134) Issuances (7)....... -- -- -- -- -- -- -- -- Settlements (7)..... -- -- -- -- -- (33) (536) -- Transfers into Level 3 (8)........ 12 9 -- 131 -- -- -- -- Transfers out of Level 3 (8)........ (282) (5) (26) (54) (47) -- -- (4) ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- Balance, December 31, 2016.. $ 1,664 $ 17 $ -- $ 137 $ 2 $ (954) $ (3,449) $ 10 ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014 (9)................ $ 6 $ -- $ -- $ (1) $ -- $ (7) $ (982) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015(9)............ $ 21 $ -- $ -- $ -- $ -- $ (64) $ (241) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016 (9)................ $ 28 $ -- $ -- $ -- $ -- $ (687) $ (1,839) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Gains (Losses) Data for the year ended December 31, 2014.. Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... $ 10 $ -- $ -- $ (2) $ -- $ (4) $ (957) $ (1) Total realized/unrealized gains (losses) included in AOCI... $ 12 $ -- $ -- $ 7 $ -- $ 57 $ 107 $ -- --------- (1) Comprised of U.S. and foreign corporate securities. 90
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (3) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (4) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). (5) Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and embedded derivatives are reported in net derivatives gains (losses). (6) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (7) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (8) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (9) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and embedded derivatives are reported in net derivative gains (losses). Fair Value Option The following table presents information for certain assets and liabilities of CSEs, which are accounted for under the FVO. These assets and liabilities were initially measured at fair value. [Enlarge/Download Table] December 31, --------------------------- 2016 2015 ------------- ------------- (In millions) Assets (1) Unpaid principal balance.................................................. $ 88 $ 121 Difference between estimated fair value and unpaid principal balance...... 48 51 ------------- ------------- Carrying value at estimated fair value.................................. $ 136 $ 172 ============= ============= Liabilities (1) Contractual principal balance............................................. $ 22 $ 46 Difference between estimated fair value and contractual principal balance. 1 2 ------------- ------------- Carrying value at estimated fair value.................................. $ 23 $ 48 ============= ============= --------- (1) These assets and liabilities are comprised of commercial mortgage loans and long-term debt. Changes in estimated fair value on these assets and liabilities and gains or losses on sales of these assets are recognized in net investment gains (losses). Interest income on commercial mortgage loans held by CSEs -- FVO is recognized in net investment income. Interest expense from long-term debt of CSEs -- FVO is recognized in other expenses. 91
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Nonrecurring Fair Value Measurements The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment). The estimated fair values for these assets were determined using significant unobservable inputs (Level 3). [Enlarge/Download Table] At December 31, Years Ended December 31, ------------------------------ -------------------------------- 2016 2015 2014 2016 2015 2014 ---------- --------- --------- ---------- --------- --------- Carrying Value After Measurement Gains (Losses) ------------------------------ -------------------------------- (In millions) Mortgage loans (1)...................... $ 3 $ 3 $ 3 $ -- $ -- $ -- Other limited partnership interests (2). $ 3 $ 2 $ 38 $ (2) $ (1) $ (6) Other assets (3)........................ $ -- $ -- $ -- $ (11) $ -- $ -- Goodwill (4)............................ $ -- $ -- $ -- $ (381) $ -- $ (33) -------- (1) Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral or the present value of the expected future cash flows. (2) For these cost method investments, estimated fair value is determined from information provided on the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2016 and 2015 were not significant. (3) During the year ended December 31, 2016, the Company recognized an impairment of computer software in connection with the sale to Massachusetts Mutual Life Insurance Company ("MassMutual") of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MetLife's affiliated broker-dealer, MetLife Securities, Inc. ("MSI"), a wholly-owned subsidiary of MetLife, Inc. See Note 17. (4) As discussed in Note 11, for the year ended December 31, 2016, the Company recorded an impairment of goodwill associated with the Run-off reporting unit. Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the "-- Recurring Fair Value Measurements" section. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. 92
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at: [Enlarge/Download Table] December 31, 2016 ---------------------------------------------------------------------- Fair Value Hierarchy ------------------------------------------ Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------- ------------ --------------- ------------- ------------- (In millions) Assets Mortgage loans...................... $ 8,748 $ -- $ -- $ 8,893 $ 8,893 Policy loans........................ $ 1,093 $ -- $ 746 $ 431 $ 1,177 Real estate joint ventures.......... $ 12 $ -- $ -- $ 44 $ 44 Other limited partnership interests. $ 44 $ -- $ -- $ 42 $ 42 Premiums, reinsurance and other receivables........................ $ 2,831 $ -- $ 832 $ 2,843 $ 3,675 Liabilities Policyholder account balances....... $ 14,829 $ -- $ -- $ 15,975 $ 15,975 Long-term debt...................... $ 781 $ -- $ 1,060 $ -- $ 1,060 Other liabilities................... $ 194 $ -- $ 27 $ 167 $ 194 Separate account liabilities........ $ 1,110 $ -- $ 1,110 $ -- $ 1,110 [Enlarge/Download Table] December 31, 2015 ---------------------------------------------------------------------- Fair Value Hierarchy ------------------------------------------ Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------- ------------ --------------- ------------- ------------- (In millions) Assets Mortgage loans...................... $ 7,090 $ -- $ -- $ 7,386 $ 7,386 Policy loans........................ $ 1,266 $ -- $ 917 $ 430 $ 1,347 Real estate joint ventures.......... $ 23 $ -- $ -- $ 65 $ 65 Other limited partnership interests. $ 52 $ -- $ -- $ 57 $ 57 Premiums, reinsurance and other receivables........................ $ 6,074 $ -- $ 80 $ 7,163 $ 7,243 Liabilities Policyholder account balances....... $ 18,968 $ -- $ -- $ 20,339 $ 20,339 Long-term debt...................... $ 788 $ -- $ 1,070 $ -- $ 1,070 Other liabilities................... $ 217 $ -- $ 43 $ 174 $ 217 Separate account liabilities........ $ 1,275 $ -- $ 1,275 $ -- $ 1,275 The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Mortgage Loans The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk, or is determined from pricing for similar loans. 93
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Policy Loans Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk, as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. Policy loans with variable interest rates are classified within Level 2 and the estimated fair value approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. Real Estate Joint Ventures and Other Limited Partnership Interests The estimated fair values of these cost method investments are generally based on the Company's share of the NAV as provided on the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Premiums, Reinsurance and Other Receivables Premiums, reinsurance and other receivables are principally comprised of certain amounts recoverable under reinsurance agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and amounts receivable for securities sold but not yet settled. Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using interest rates determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements, classified within Level 2, essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. Policyholder Account Balances These policyholder account balances include investment contracts which primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance risk in the liability. Long-term Debt The estimated fair value of long-term debt is principally determined using market standard valuation methodologies. Valuations of instruments are based primarily on quoted prices in markets that are not active or using matrix pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable inputs including market yield curve, duration, observable prices and spreads for similar publicly traded or privately traded issues. Other Liabilities Other liabilities consist primarily of interest payable, amounts due for securities purchased but not yet settled and funds withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance agreements. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which are not materially different from the carrying values. 94
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Separate Account Liabilities Separate account liabilities represent those balances due to policyholders under contracts that are classified as investment contracts. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described in the section "-- Recurring Fair Value Measurements," the value of those assets approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate account liabilities are similar to those described for separate account assets. 11. Goodwill The Company tests goodwill for impairment during the third quarter of each year at the reporting unit level based upon best available data as of June 30 of that year. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. In anticipation of the planned Separation, in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities; Life; and Run-off. As a result, the Company reallocated goodwill. In connection with the reorganization and the 2016 annual goodwill impairment test, the Company performed Step 1 of the goodwill impairment process, which requires a comparison of the estimated fair value of a reporting unit to its carrying value. To determine the estimated fair value for the Run-off reporting unit, an actuarial based approach, embedded value, was utilized to estimate the net worth of the reporting unit and the value of existing business. This actuarial based approach requires judgments and assumptions about the projected cash flows, the level of internal capital required to support the mix of business, the account value of in-force business, projections of renewal business and margins on such business, interest rates, credit spreads, equity market levels, and the discount rate that the Company believes is appropriate for this reporting unit. Based on a quantitative analysis performed for the Run-off reporting unit, the Company concluded that the carrying value exceeded the estimated fair value, indicating a potential for goodwill impairment. Accordingly, the Company performed Step 2 of the goodwill impairment process for the reporting unit, which compares the implied estimated fair value of the reporting unit's goodwill with its carrying value. This analysis indicated that the goodwill associated with this reporting unit was not recoverable. As a result, the Company recorded a non-cash charge of $381 million ($305 million, net of income tax) for the impairment of the entire goodwill balance, which is reported in goodwill impairment on the consolidated statements of operations for the year ended December 31, 2016. 95
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Goodwill (continued) Information regarding goodwill by segment was as follows: [Enlarge/Download Table] Annuities Life Run-off Total ------------ ------------ ------------ ------------ (In millions) Balance at January 1, 2014 Goodwill..................... $ 427 $ 66 $ 493 $ 986 Accumulated impairment....... (394) (66) -- (460) ------------ ------------ ------------ ------------ Total goodwill, net........ 33 -- 493 526 Dispositions (1)............. -- -- (112) (112) Impairments.................. (33) -- -- (33) Balance at December 31, 2014. Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) -- (493) ------------ ------------ ------------ ------------ Total goodwill, net........ -- -- 381 381 Balance at December 31, 2015 Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) -- (493) ------------ ------------ ------------ ------------ Total goodwill, net........ -- -- 381 381 Impairments.................. -- -- (381) (381) Balance at December 31, 2016 Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) (381) (874) ------------ ------------ ------------ ------------ Total goodwill, net........ $ -- $ -- $ -- $ -- ============ ============ ============ ============ --------- (1) In connection with the sale of MAL, goodwill in the Run-off reporting unit was reduced by $112 million during the year ended December 31, 2014. See Note 4. This goodwill was allocated to MAL based on the relative fair values of MAL and the remaining portion of the Run-off reporting unit. 96
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Debt Long-term debt outstanding was as follows: [Download Table] December 31, ----------------------- Interest Rate Maturity 2016 2015 ------------- -------- ----------- ----------- (In millions) Surplus note -- affiliated (1), (2). 8.60% 2038 $ 744 $ 750 Long-term debt -- unaffiliated (3).. 7.03% 2030 37 38 ----------- ----------- Total long-term debt (4).......... $ 781 $ 788 =========== =========== -------- (1) Payments of interest and principal on the affiliated surplus note, which is subordinate to all other obligations and may be made only with the prior approval of the Delaware Commissioner of Insurance (the "Delaware Commissioner"). (2) Includes $6 million of debt issuance costs at both December 31, 2016 and 2015. Debt issuance costs were reported in other assets at December 31, 2015. (3) Principal and interest is paid quarterly. (4) Excludes $23 million and $48 million of long-term debt relating to CSEs at December 31, 2016 and 2015, respectively. See Note 8. In December 2014, Brighthouse Insurance repaid in cash at maturity its $75 million 6.80% affiliated note. The aggregate maturities of long-term debt at December 31, 2016 were $1 million in 2017, $2 million in each of 2018, 2019, 2020 and 2021 and $772 million thereafter. Interest expense related to the Company's indebtedness is included in other expenses and was $67 million, $68 million and $73 million for the years ended December 31, 2016, 2015 and 2014, respectively. Letters of Credit The Company had access to unsecured revolving credit facilities from various banks, either directly with the bank or indirectly through letters of credit available to MetLife, Inc. for the benefit of the Company and certain other affiliates of MetLife, Inc. These facilities were used for collateral for certain of the Company's affiliated reinsurance liabilities. Total fees associated with letters of credit was $10 million, $5 million and $13 million for the years ended December 31, 2016, 2015 and 2014, respectively, and was included in other expenses. At December 31, 2016, the Company had $0 in letters of credit outstanding and the remaining availability was $3.3 billion. 13. Equity See Note 3 for a discussion on the Mergers. Common Stock In August 2014, MetLife Insurance Company of Connecticut, the predecessor to MetLife USA, redeemed for $1.4 billion and retired 4,595,317 shares of its common stock owned by MetLife Investors Group, LLC, an affiliate. Capital Contributions In February 2016, Brighthouse Life Insurance Company received a capital contribution of $1.5 billion in cash from MetLife, Inc. In August 2014, MetLife Insurance Company of Connecticut received a capital contribution of $231 million in cash from MetLife, Inc. 97
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Statutory Equity and Income The state of domicile of Brighthouse Life Insurance Company imposes risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). Regulatory compliance is determined by a ratio of a company's total adjusted capital, calculated in the manner prescribed by the NAIC ("TAC") to its authorized control level RBC, calculated in the manner prescribed by the NAIC ("ACL RBC"), based on the statutory-based filed financial statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC ("CAL RBC"). The CAL RBC ratio for Brighthouse Life Insurance Company was in excess of 400% for all periods presented. Brighthouse Life Insurance Company prepares statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the Delaware Department of Insurance. The NAIC has adopted the Codification of Statutory Accounting Principles ("Statutory Codification"). Statutory Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by the state insurance department may impact the effect of Statutory Codification on the statutory capital and surplus of Brighthouse Life Insurance Company. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt, reporting of reinsurance agreements and valuing securities on a different basis. In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by Brighthouse Life Insurance Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three years. The tables below present amounts from Brighthouse Life Insurance Company, which are derived from the statutory-basis financial statements as filed with the Delaware Department of Insurance. Statutory net income (loss) was as follows: [Download Table] Years Ended December 31, -------------------------- Company State of Domicile 2016 2015 2014 ----------------------------------- ------------------- ------ ------- ---------- (In millions) Brighthouse Life Insurance Company. Delaware $1,186 $(1,022) $ 1,543 Statutory capital and surplus was as follows at: [Download Table] December 31, --------------------- Company 2016 2015 ----------------------------------- ---------- ---------- (In millions) Brighthouse Life Insurance Company. $ 4,374 $ 5,942 98
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Dividend Restrictions Under Delaware Insurance Code, Brighthouse Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to MetLife, Inc. as long as the amount of the dividend when aggregated with all other dividends in the preceding 12 months does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its net statutory gain from operations for the immediately preceding calendar year (excluding realized capital gains). Brighthouse Life Insurance Company will be permitted to pay a dividend to MetLife, Inc. in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with the Delaware Commissioner and the Delaware Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as "unassigned funds (surplus)") as of the immediately preceding calendar year requires insurance regulatory approval. Under Delaware Insurance Code, the Delaware Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. During the years ended December 31, 2016 and 2015, Brighthouse Life Insurance Company paid dividends to MetLife, Inc. in the amount of $261 million and $500 million, respectively. Based on amounts at December 31, 2016, Brighthouse Life Insurance Company could pay a dividend to MetLife, Inc. in 2017 of $473 million without prior approval of the Delaware Commissioner. 99
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Accumulated Other Comprehensive Income (Loss) Information regarding changes on the balances of each component of AOCI was as follows: [Enlarge/Download Table] Unrealized Foreign Investment Gains Unrealized Gains Currency (Losses), Net of (Losses) on Translation Related Offsets (1) Derivatives Adjustments Total --------------------- ---------------- ------------- ------------ (In millions) Balance at January 1, 2014.......................... $ 916 $ 25 $ 39 $ 980 OCI before reclassifications........................ 2,301 242 (56) 2,487 Deferred income tax benefit (expense)............... (707) (85) 4 (788) --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 2,510 182 (13) 2,679 Amounts reclassified from AOCI...................... (28) 2 -- (26) Deferred income tax benefit (expense)............... 8 (1) -- 7 --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. (20) 1 -- (19) --------------------- ---------------- ------------- ------------ Sale of subsidiary (2).............................. (320) -- 6 (314) Deferred income tax benefit (expense)............... 80 -- -- 80 --------------------- ---------------- ------------- ------------ Sale of subsidiary, net of income tax............. (240) -- 6 (234) --------------------- ---------------- ------------- ------------ Balance at December 31, 2014........................ 2,250 183 (7) 2,426 OCI before reclassifications........................ (1,370) 92 (28) (1,306) Deferred income tax benefit (expense)............... 506 (32) 9 483 --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 1,386 243 (26) 1,603 Amounts reclassified from AOCI...................... 46 (6) -- 40 Deferred income tax benefit (expense)............... (17) 2 -- (15) --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. 29 (4) -- 25 --------------------- ---------------- ------------- ------------ Balance at December 31, 2015........................ 1,415 239 (26) 1,628 OCI before reclassifications........................ (348) 68 (3) (283) Deferred income tax benefit (expense)............... 110 (24) -- 86 --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 1,177 283 (29) 1,431 Amounts reclassified from AOCI...................... (1) (43) -- (44) Deferred income tax benefit (expense)............... -- 15 -- 15 --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. (1) (28) -- (29) --------------------- ---------------- ------------- ------------ Balance at December 31, 2016........................ $ 1,176 $ 255 $ (29) $ 1,402 ===================== ================ ============= ============ --------------- (1) See Note 8 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI. (2) See Note 4. 100
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Information regarding amounts reclassified out of each component of AOCI was as follows: [Enlarge/Download Table] Consolidated Statements of Operations and Comprehensive Income (Loss) AOCI Components Amounts Reclassified from AOCI Locations --------------------------------------- --------------------------------------- ------------------------------------- Years Ended December 31, --------------------------------------- 2016 2015 2014 ------------ ----------- ------------ (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses)............................... $ (6) $ (48) $ 13 Net investment gains (losses) Net unrealized investment gains (losses)............................... 1 12 11 Net investment income Net unrealized investment gains (losses)............................... 6 (10) 4 Net derivative gains (losses) ------------ ----------- ------------ Net unrealized investment gains (losses), before income tax........... 1 (46) 28 Income tax (expense) benefit........... -- 17 (8) ------------ ----------- ------------ Net unrealized investment gains (losses), net of income tax........... $ 1 $ (29) $ 20 ============ =========== ============ Unrealized gains (losses) on derivatives - cash flow hedges: Interest rate swaps...................... $ 33 $ 1 $ 1 Net derivative gains (losses) Interest rate swaps...................... 3 1 1 Net investment income Interest rate forwards................... 2 2 1 Net derivative gains (losses) Interest rate forwards................... 2 2 1 Net investment income Foreign currency swaps................... 3 -- (6) Net derivative gains (losses) ------------ ----------- ------------ Gains (losses) on cash flow hedges, before income tax...................... 43 6 (2) Income tax (expense) benefit........... (15) (2) 1 ------------ ----------- ------------ Gains (losses) on cash flow hedges, net of income tax...................... $ 28 $ 4 $ (1) ============ =========== ============ Total reclassifications, net of income tax...................................... $ 29 $ (25) $ 19 ============ =========== ============ 14. Other Expenses Information on other expenses was as follows: [Enlarge/Download Table] Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Compensation......................................... $ 346 $ 472 $ 320 Commissions.......................................... 542 650 492 Volume-related costs................................. 170 134 170 Affiliated expenses on ceded and assumed reinsurance. 314 205 325 Capitalization of DAC................................ (282) (325) (279) Interest expense on debt............................. 70 76 109 Premium taxes, licenses and fees..................... 56 67 53 Professional services................................ 84 21 58 Rent and related expenses............................ 45 53 41 Other................................................ 393 369 475 ------------ ------------ ------------ Total other expenses............................... $ 1,738 $ 1,722 $ 1,764 ============ ============ ============ 101
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Other Expenses (continued) Capitalization of DAC See Note 6 for additional information on the capitalization of DAC. Interest Expense on Debt Interest expense on debt includes interest expense on debt (see Note 12) and interest expense related to CSEs (see Note 8). Affiliated Expenses Commissions and capitalization of DAC include the impact of affiliated reinsurance transactions. See Notes 7, 12 and 17 for a discussion of affiliated expenses included in the table above. 15. Income Tax The provision for income tax was as follows: [Enlarge/Download Table] Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Current: Federal.......................................... $ (57) $ 281 $ (364) Foreign.......................................... 6 -- 6 ------------ ------------ ------------ Subtotal....................................... (51) 281 (358) ------------ ------------ ------------ Deferred: Federal.......................................... (1,720) (66) 355 Foreign.......................................... -- -- (2) ------------ ------------ ------------ Subtotal....................................... (1,720) (66) 353 ------------ ------------ ------------ Provision for income tax expense (benefit).... $ (1,771) $ 215 $ (5) ============ ============ ============ The Company's income (loss) before income tax expense (benefit) from domestic and foreign operations were as follows: [Download Table] Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ------------ (In millions) Income (loss): Domestic...... $ (4,720) $ 1,041 $ (174) Foreign....... 12 13 464 ----------- ----------- ------------ Total....... $ (4,708) $ 1,054 $ 290 =========== =========== ============ 102
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported was as follows: [Enlarge/Download Table] Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ----------- (In millions) Tax provision at U.S. statutory rate............... $ (1,648) $ 369 $ 102 Tax effect of: Dividend received deduction...................... (105) (127) (114) Prior year tax................................... 23 (4) (20) Tax credits...................................... (20) (16) (14) Foreign tax rate differential.................... 2 (5) -- Goodwill impairment.............................. (20) -- 12 Sale of subsidiary............................... (6) -- 24 Other, net....................................... 3 (2) 5 ----------- ----------- ----------- Provision for income tax expense (benefit).... $ (1,771) $ 215 $ (5) =========== =========== =========== Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at: [Download Table] December 31, --------------------- 2016 2015 ---------- ---------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables........ $ 2,841 $ 1,638 Investments, including derivatives.............. 373 -- Tax credit carryforwards........................ 180 168 Other........................................... 52 39 ---------- ---------- Total deferred income tax assets.............. 3,446 1,845 ---------- ---------- Deferred income tax liabilities: Investments, including derivatives.............. -- 132 Intangibles..................................... 391 521 Net unrealized investment gains................. 736 837 DAC............................................. 1,301 1,158 ---------- ---------- Total deferred income tax liabilities......... 2,428 2,648 ---------- ---------- Net deferred income tax asset (liability).... $ 1,018 $ (803) ========== ========== 103
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The following table sets forth the general business credits, foreign tax credits, and other credit carryforwards for tax purposes as of December 31, 2016. [Download Table] Tax Credit Carryforwards ------------------------------------------------------- General Business Credits Foreign Tax Credits Other ------------------ -------------------- --------------- (In millions) Expiration 2017-2021.. $ -- $ -- $ -- 2022-2026.. -- 35 -- 2027-2031.. -- -- -- 2032-2036.. 7 -- -- Indefinite. -- -- 145 ------------------ -------------------- --------------- $ 7 $ 35 $ 145 ================== ==================== =============== The Company currently participates in a tax sharing agreement with MetLife, Inc., as described in Note 1. Pursuant to this tax sharing agreement, the amounts due from affiliates included $490 million and $14 million for the years ended December 31, 2016 and 2015 respectively. The Company also files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state or local income tax examinations for years prior to 2007. Management believes it has established adequate tax liabilities for all open years and any future resolve is not expected to have a material impact on the Company's financial statements. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: [Enlarge/Download Table] Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ----------- (In millions) Balance at January 1,......................................................... $ 42 $ 38 $ 26 Additions for tax positions of prior years.................................... 1 5 15 Reductions for tax positions of prior years................................... (9) -- (5) Additions for tax positions of current year................................... 5 3 2 Settlements with tax authorities.............................................. (2) (4) -- ----------- ----------- ----------- Balance at December 31,....................................................... $ 37 $ 42 $ 38 =========== =========== =========== Unrecognized tax benefits that, if recognized would impact the effective rate. $ 37 $ 32 $ 28 =========== =========== =========== The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while penalties are included in income tax expense. 104
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) Interest was as follows: [Enlarge/Download Table] Years Ended December 31, --------------------------------- 2016 2015 2014 --------- ---------- ------------ (In millions) Interest recognized on the consolidated statements of operations. $ 1 $ -- $ -- [Enlarge/Download Table] December 31, ----------------------- 2016 2015 ----------- ----------- (In millions) Interest included in other liabilities on the consolidated balance sheets. $ 1 $ 2 The Company had no penalties for each of the years ended December 31, 2016, 2015 and 2014. The U.S. Treasury Department and the IRS have indicated that they intend to address through regulations the methodology to be followed in determining the dividends received deduction ("DRD"), related to variable life insurance and annuity contracts. The DRD reduces the amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected amount determined using the federal statutory tax rate of 35%. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2016, 2015 and 2014, the Company recognized an income tax benefit of $84 million, $138 million and $135 million, respectively, related to the separate account DRD. The 2016 benefit included an expense of $21 million related to a true-up of the 2015 tax return. The 2015 and 2014 benefit included a benefit of $12 million and $21 million related to a true-up of the 2014 and 2013 tax returns, respectively. 16. Contingencies, Commitments and Guarantees Contingencies Litigation The Company is a defendant in a number of litigation matters. In some of the matters, large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at December 31, 2016. 105
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Matters as to Which an Estimate Can Be Made For some loss contingency matters, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of December 31, 2016, the aggregate range of reasonably possible losses in excess of amounts accrued for these matters was not material for the Company. Matters as to Which an Estimate Cannot Be Made For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Unclaimed Property Litigation On November 14, 2012, the West Virginia Treasurer filed an action against MetLife Investors USA Insurance Company in West Virginia state court (West Virginia ex rel. John D. Perdue v. MetLife Investors USA Insurance Company, Circuit Court of Putnam County, Civil Action No. 12-C-363) alleging that MetLife Investors USA Insurance Company violated the West Virginia Uniform Unclaimed Property Act (the "Act"), seeking to compel compliance with the Act, and seeking payment of unclaimed property, interest, and penalties. On December 28, 2012, the Treasurer filed a substantially identical suit against MetLife Insurance Company of Connecticut (West Virginia ex rel. John D. Perdue v. MetLife Insurance Company of Connecticut, Circuit Court of Putnam County, Civil Action No. 12-C-430). On January 31, 2017, the parties entered into a settlement agreement resolving these actions. 106
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Other Litigation Thrivent Financial for Lutherans v. MetLife Insurance Company USA, (E.D. Wis., filed September 12, 2016) Plaintiff filed a complaint against MetLife USA contending that its use of the Brighthouse Financial trademark and logo will infringe on its trademarks. Alleging violations of federal and state law, plaintiff sought preliminary and permanent injunctions, compensatory damages, and other relief. On December 23, 2016, plaintiff filed an amended complaint adding Brighthouse Financial, Inc. as an additional defendant. The parties have resolved this matter, and the action was voluntarily dismissed on February 15, 2017. Sales Practices Claims Over the past several years, the Company has faced claims and regulatory inquiries and investigations, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made on its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Summary Various litigation, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for on 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, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large and/or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations it is possible that an adverse outcome in certain cases could have a material effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments were as follows: [Enlarge/Download Table] December 31, ------------ 2016 2015 ---- ----- (In millions) Other Assets: Premium tax offset for future discounted and undiscounted assessments. $12 $ 13 Premium tax offsets currently available for paid assessments.......... 7 10 ---- ----- Total................................................................... $19 $ 23 ==== ===== Other Liabilities: Insolvency assessments................................................ $16 $ 17 ==== ===== 107
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Commitments Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $335 million and $124 million at December 31, 2016 and 2015, respectively. Commitments to Fund Partnership Investments and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under private corporate bond investments. The amounts of these unfunded commitments were $1.3 billion and $1.0 billion at December 31, 2016 and 2015, respectively. Other Commitments The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. At both December 31, 2016 and 2015, the Company had agreed to fund up to $20 million of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $25 million to custody accounts to secure the demand notes. Each of these affiliates is permitted by contract to sell or re-pledge this collateral. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from $6 million to $222 million, with a cumulative maximum of $228 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company's recorded liabilities were $2 million at both December 31, 2016 and 2015, for indemnities, guarantees and commitments. 108
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Related Party Transactions The Company has various existing relationships with MetLife for services necessary to conduct its activities. Non-Broker-Dealer Transactions The following table summarizes income and expense from transactions with MetLife (excluding broker-dealer transactions) for the years indicated: [Download Table] Years Ended December 31, Years Ended December 31, --------------------- ------------------------ 2016 2015 2014 2016 2015 2014 ----- ----- ------- --------- ---- ---- Income Expense --------------------- ------------------------ (In millions) MetLife. $(602) $(199) $(1,042) $ (265) $511 $539 The following table summarizes assets and liabilities from transactions with MetLife (excluding broker-dealer transactions) at: [Download Table] At December 31, At December 31, -------------- --------------- 2016 2015 2016 2015 ------ ------- ------ ------ Assets Liabilities -------------- --------------- (In millions) MetLife. $8,972 $12,277 $9,518 $9,479 The material arrangements between the Company and MetLife are as follows: Reinsurance Agreements The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MLIC, GALIC, MetLife Europe d.a.c., MRV, DELAM and ALICO, all of which are related parties. See Note 7 for further discussion of the affiliated reinsurance agreements. Financing Arrangements The Company has financing arrangements with MetLife that are used to support reinsurance obligations arising under affiliated reinsurance agreements. The Company recognized interest expense for affiliated debt of $65 million, $64 million and $70 million, for the years ended December 31, 2016, 2015 and 2014, respectively. See Note 12 for further discussion of the related party financing arrangements. Investment Transactions The Company has extended loans to certain subsidiaries of MetLife, Inc. Additionally, in the ordinary course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from MetLife affiliates. See Note 8 for further discussion of the related party investment transactions. 109
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Related Party Transactions (continued) Shared Services and Overhead Allocations MetLife provides the Company certain services, which include, but are not limited to, executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology, distribution services and investor relations. The Company is charged for these services based on direct and indirect costs. When specific identification is not practicable, an allocation methodology is used, primarily based on sales, in-force liabilities, or headcount. For certain agreements, charges are based on various performance measures or activity-based costing, such as sales, new policies/contracts issued, reserves, and in-force policy counts. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the Company and/or affiliate. Management believes that the methods used to allocate expenses under these arrangements are reasonable. Expenses incurred with MetLife related to these arrangements, recorded in other operating expenses, were $820 million, $1.0 billion and $985 million for the years ended December 31, 2016, 2015 and 2014, respectively. Sales Distribution Services In July 2016, MetLife, Inc. completed the sale to MassMutual of MetLife's retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MSI. MassMutual assumed all of the liabilities related to such assets and that arise or occur after the closing of the sale. Broker-Dealer Transactions The Company accrues related party revenues and expenses arising from transactions with MetLife's broker-dealers whereby the MetLife broker-dealers sell the Company's variable annuity and life products. The affiliated revenue for the Company is fee income from trusts and mutual funds whose shares serve as investment options of policyholders of the Company. The affiliated expense for the Company is commissions collected on the sale of variable products by the Company and passed through to the broker-dealer. The following table summarizes income and expense from transactions with related broker-dealers for the years indicated: [Download Table] Years Ended December 31, Years Ended December 31, ------------------------ ------------------------ 2016 2015 2014 2016 2015 2014 ---- ---- ---- ---- ---- ---- Fee Income Commission Expense ------------------------ ------------------------ (In millions) MetLife broker-dealers. $192 $208 $202 $606 $612 $572 The following table summarizes assets and liabilities from transactions with affiliated broker-dealers as follows: [Download Table] At December 31, At December 31, --------------- --------------- 2016 2015 2016 2015 ---- ---- ---- ---- Fee Income Receivables Secured Demand Notes --------------- --------------- (In millions) MetLife broker-dealers. $18 $18 $20 $20 110
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 18. Subsequent Events Effective January 1, 2017, the Company executed a novation and assignment agreement whereby it will replace MLIC as the reinsurer of certain variable annuities, including guaranteed minimum benefits, issued by Brighthouse NY and NELICO. This novation and assignment resulted in an increase in cash and cash equivalents of approximately $34 million, an increase in future policy benefits of approximately $79 million, an increase in policyholder account balances of approximately $387 million and a decrease in other liabilities of approximately $427 million. The Company will recognize no gain or loss as a result of this transaction. Effective January 1, 2017, MLIC recaptured risks related to guaranteed minimum benefit guarantees on certain variable annuities being reinsured by the Company. This recapture resulted in a decrease in investments and cash and cash equivalents of approximately $568 million, a decrease in future policy benefits of approximately $106 million, and a decrease in policyholder account balances of approximately $460 million. The Company will recognize a loss of approximately $2 million, net of income tax, as a result of this transaction. 111
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule I Consolidated Summary of Investments -- Other Than Investments in Related Parties December 31, 2016 (In millions) [Enlarge/Download Table] Amount at Cost or Estimated Fair Which Shown on Amortized Cost (1) Value Balance Sheet Types of Investments ------------------- -------------- --------------- Fixed maturity securities: Bonds: U.S. government and agency securities...... $ 10,517 $ 11,550 $ 11,550 State and political subdivision securities. 2,633 2,914 2,914 Public utilities........................... 1,637 1,815 1,815 Foreign government securities.............. 946 1,046 1,046 All other corporate bonds.................. 21,214 21,912 21,912 ------------------- -------------- --------------- Total bonds.............................. 36,947 39,237 39,237 Mortgage-backed and asset-backed securities.. 12,121 12,214 12,214 Redeemable preferred stock................... 244 334 334 ------------------- -------------- --------------- Total fixed maturity securities........ 49,312 51,785 51,785 ------------------- -------------- --------------- Equity securities: Common stock: Industrial, miscellaneous and all other.... 98 116 116 Public utilities........................... -- 2 2 Banks, trust and insurance companies....... 2 5 5 Non-redeemable preferred stock............... 180 177 177 ------------------- -------------- --------------- Total equity securities.................. 280 300 300 ------------------- -------------- --------------- Mortgage loans................................ 8,884 8,884 Policy loans.................................. 1,093 1,093 Real estate and real estate joint ventures.... 215 215 Other limited partnership interests........... 1,639 1,639 Short-term investments........................ 926 926 Other invested assets......................... 3,887 3,887 ------------------- --------------- Total investments..................... $ 66,236 $ 68,729 =================== =============== --------- (1) Cost or amortized cost for fixed maturity securities and mortgage loans represents original cost reduced by repayments, valuation allowances and impairments from other-than-temporary declines in estimated fair value that are charged to earnings and adjusted for amortization of premiums or accretion of discounts; for equity securities, cost represents original cost reduced by impairments from other-than-temporary declines in estimated fair value; for real estate, cost represents original cost reduced by impairments and adjusted for valuation allowances and depreciation; for real estate joint ventures and other limited partnership interests, cost represents original cost reduced for impairments or original cost adjusted for equity in earnings and distributions. 112
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] Future Policy DAC Benefits and Other Policyholder and Policy-Related Account Unearned Unearned Segment VOBA Balances Balances Premiums (1), (2) Revenue (1) ------------------ ---------- ------------------ ------------ ----------------- ----------- 2016 Annuities......... $ 4,521 $ 7,251 $ 24,265 $ -- $ 83 Life.............. 504 3,871 2,816 12 53 Run-off........... 112 16,522 8,505 -- 44 Corporate & Other. 137 7,424 1 6 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 5,274 $ 35,068 $ 35,587 $ 18 $ 180 ========== ================== ============ ================= =========== 2015 Annuities......... $ 3,510 $ 6,395 $ 20,975 $ -- $ 93 Life.............. 680 4,438 2,667 12 52 Run-off........... 510 15,446 12,017 -- 43 Corporate & Other. 109 7,164 2 6 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 4,809 $ 33,443 $ 35,661 $ 18 $ 188 ========== ================== ============ ================= =========== 2014 Annuities......... $ 3,548 $ 5,205 $ 20,161 $ -- $ 98 Life.............. 680 3,968 2,658 9 48 Run-off........... 601 15,860 12,666 -- 58 Corporate & Other. 61 6,766 1 5 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 4,890 $ 31,799 $ 35,486 $ 14 $ 204 ========== ================== ============ ================= =========== --------- (1)Amounts are included within the future policy benefits and other policy-related balances column. (2)Includes premiums received in advance. 113
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information -- (continued) December 31, 2016, 2015 and 2014 (In millions) [Enlarge/Download Table] Policyholder Premiums and Benefits and Claims Universal Life Net and Interest Credited Other and Investment-Type Investment to Policyholder Amortization of Operating Segment Product Policy Fees Income (1) Account Balances DAC and VOBA Expenses ------------------ ------------------- ------------ --------------------- --------------- ---------- 2016 Annuities......... $ 2,593 $ 1,290 $ 2,288 $ (825) $ 866 Life.............. 333 275 330 239 300 Run-off........... 579 1,135 1,256 392 347 Corporate & Other. 112 12 67 22 225 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 3,617 $ 2,712 $ 3,941 $(172) $ 1,738 =================== ============ ===================== =============== ========== 2015 Annuities......... $ 3,142 $ 1,120 $ 2,218 $ 358 $ 892 Life.............. 431 277 355 128 288 Run-off........... 552 1,270 954 86 368 Corporate & Other. 248 (52) 206 23 174 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 4,373 $ 2,615 $ 3,733 $ 595 $ 1,722 =================== ============ ===================== =============== ========== 2014 Annuities......... $ 3,374 $ 1,114 $ 2,536 $ 705 $ 939 Life.............. 282 281 291 172 278 Run-off........... 447 1,358 944 91 345 Corporate & Other. 242 (84) 55 22 202 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 4,345 $ 2,669 $ 3,826 $ 990 $ 1,764 =================== ============ ===================== =============== ========== --------- (1)See Note 2 of the Notes to the Consolidated Financial Statements for information on certain segment reporting changes which were retrospectively applied. 114
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Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule IV Consolidated Reinsurance December 31, 2016, 2015 and 2014 (Dollars in millions) [Enlarge/Download Table] % Amount Gross Amount Ceded Assumed Net Amount Assumed to Net ------------- ------------- ----------- ------------ -------------- 2016 Life insurance in-force..... $ 559,458 $ 483,391 $ 7,006 $ 83,073 8.4% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 1,894 $ 1,057 $ 76 $ 913 8.3% Accident & health insurance. 223 218 3 8 37.5% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,117 $ 1,275 $ 79 $ 921 8.6% ============= ============= =========== ============ 2015 Life insurance in-force..... $ 538,086 $ 497,017 $ 94,863 $ 135,932 69.8% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 2,046 $ 916 $ 288 $ 1,418 20.3% Accident & health insurance. 235 229 9 15 60.0% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,281 $ 1,145 $ 297 $ 1,433 20.7% ============= ============= =========== ============ 2014 Life insurance in-force..... $ 489,194 $ 450,342 $ 52,728 $ 91,580 57.6% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 1,995 $ 943 $ 94 $ 1,146 8.2% Accident & health insurance. 231 225 -- 6 0.0% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,226 $ 1,168 $ 94 $ 1,152 8.2% ============= ============= =========== ============ -------- (1)Includes annuities with life contingencies. For the year ended December 31, 2016, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $311.0 billion and $7.0 billion, respectively, and life insurance premiums of $928 million and $34 million, respectively. For the year ended December 31, 2015, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $321.0 billion and $86.4 billion, respectively, and life insurance premiums of $783 million and $227 million, respectively. For the year ended December 31, 2014, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $292.0 billion and $50.2 billion, respectively, and life insurance premiums of $830 million and $55 million, respectively. 115
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PART C OTHER INFORMATION Item 24. FINANCIAL STATEMENTS AND EXHIBITS a. Financial Statements ---------------------------------------------------------------------------- The financial statements and financial highlights of each of the Sub-Accounts of the Separate Account are included in Part B hereof and include: 1. Report of Independent Registered Public Accounting Firm 2. Statements of Assets and Liabilities as of December 31, 2016 3. Statements of Operations for the year ended December 31, 2016 4. Statements of Changes in Net Assets for the years ended December 31, 2016 and 2015 5. Notes to the Financial Statements The consolidated financial statements and financial statement schedules of the Company and subsidiaries are included in Part B hereof and include: 1. Report of Independent Registered Public Accounting Firm 2. Consolidated Balance Sheets as of December 31, 2016 and 2015 3. Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014 4. Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014 5. Consolidated Statements of Stockholder's Equity for the years ended December 31, 2016, 2015 and 2014 6. Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014 7. Notes to the Consolidated Financial Statements 8. Financial Statement Schedules b. Exhibits 1. (i) Certification of Restated Resolutions of the Board of Directors of MetLife Investors USA Insurance Company authorizing the establishment of the Separate Account (adopted May 18, 2004) (4) (ii) Resolution of Board of Directors of MetLife Investors USA Insurance Company (including Agreement and Plan of Merger attached as Exhibit B to the resolutions) (adopted August 13, 2014) (3) (iii) Resolutions of the Board of Directors of MetLife Insurance Company of Connecticut authorizing the acceptance of the Separate Account (adopted September 17, 2014) (3) 2. Not Applicable. 3. (i)(a)Distribution and Principal Underwriting Agreement between MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company (effective November 24, 2009) (2) (i)(b)Amendment to the Distribution and Principal Underwriting Agreement between MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company (effective August 18, 2014) (3) (i)(c)Amendment No. 2 to the Distribution and Principal Underwriting Agreement between MetLife Insurance Company USA and MetLife Investors Distribution Company (effective December 7, 2015). (18) (ii) Form of Enterprise Selling Agreement 09-12 (MetLife Investors Distribution Company Sales Agreement) (17) (iii) Principal Underwriting and Distribution Agreement between Brighthouse Life Insurance Company and Brighthouse Securities, LLC (effective March 6, 2017) (20) (iv) Brighthouse Securities, LLC Sales Agreement (20) 4. (i) Form 226R1 Contract (3) (ii) Form 226R1 Certificate and Riders (3) (iii) Contract Loan Endorsement (3) (iv) Loan Endorsement (3) (v) Individual Retirement Annuity Endorsement (3) (vi) 403(b) Nationwide Tax Sheltered Annuity Endorsement (MLIU-398-3 (12/08)) (13) (vii) MetLife Insurance Company USA 457(B) Plan Endorsement (Governmental and Tax-Exempt). (MLIU-457-2 (5/11) (16) (viii)Endorsement (Name Change -- effective March 1, 2001) (MetLife Investors USA Insurance Company, formerly Security First Life Insurance Company) MI -- 2023 (6) (ix) Merger Endorsement (effective November 14, 2014) (MetLife Investors USA Insurance Company merged into MetLife Insurance Company USA) 6-E118-14 (3) (x) Brighthouse Life Insurance Company Name Change Endorsement (effective March 6, 2017) 5-E132-6 (20) 5. Form of Enrollment Form (3) 6. (i) Copy of Certificate of Incorporation of the Company and Certificate of Amendment (effective November 14, 2014) (3) (ii) Copy of the Bylaws of the Company (3) (iii) Copy of Certificate of Amendment of Certificate of Incorporation of the Company (effective March 6, 2017) (19) (iv) Copy of Amended and Restated Bylaws of the Company (19) C-1
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[Enlarge/Download Table] 7. Not Applicable. 8. (i) Participation Agreement among The Alger Portfolios, MetLife Insurance Company USA and Fred Alger & Company, Inc. effective November 17, 2014 (3) (ii) (a) Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company effective October 1, 1999 and amendments to the Participation Agreement (respectively effective May 1, 2001, December 31, 2002, April 14, 2003, October 20, 2005 and April 28, 2008.) (7) (b) Amendment dated April 30, 2010 (8) (c) Amendment effective November 17, 2014 (3) [Enlarge/Download Table] (d) Eighth Amendment to the Participation Agreement between MetLife Insurance Company USA, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company dated May 15, 2015. (Incorporated herein by reference to Exhibit 8(e)(iii) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/21262, filed on April 6, 2016.) (e) Ninth Amendment to the Participation Agreement between MetLife Insurance Company USA, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company dated November 19, 2014 . (Incorporated herein by reference to Exhibit 8(e)(iv) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/21262, filed on April 6, 2016.) [Enlarge/Download Table] (iii) (a) Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, Travelers Distribution LLC, Scudder Variable Series I, Scudder Distributors, Inc. and Deutsche Asset Management effective June 5, 2003 and Amendments to the Participation Agreement (respectively effective August 1, 2003, December 12, 2003, May 3, 2004 and April 15, 2005.) (12) (b) Amendment dated April 30, 2010 (14) (c) Amendment effective November 17, 2014 (3) (iv) (a) Amended and Restated Participation Agreement among The Travelers Insurance Company, Fidelity Distributors Corporation, VIP Fund, VIP Fund II and VIP Fund III effective May 1, 2001 and amendments to the Amended and Restated Participation Agreement (respectively effective May 1, 2003 and December 8, 2004.) (7) (b) Summary Prospectus Agreement (8) (c) Amendments effective November 17, 2014 (3) (d) Amendments to the Participation Agreement Among MetLife Insurance Company USA (formerly MetLife Insurance Company of Connecticut), Fidelity Variable Insurance Products Funds and Fidelity Distributors Corporation (effective June 1, 2015, April 28, 2008, May 16, 2007 and October 1, 2005) (19) (v) (a) Participation Agreement among Met Investors Series Trust, Met Investors Advisory, LLC, MetLife Investors Distribution Company, The Travelers Insurance Company and The Travelers Life and Annuity Company effective November 1, 2005. (14) (b) First Amendment dated May 1, 2009 (10) (c) Amendment dated April 30, 2010. (10) (d) Amendment effective November 17, 2014 (3) (vi) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut dated August 31, 2007. (9) (a) Amendment dated April 30, 2010. (10) (vii) (a) T. Rowe Price Participation Agreement (3) (b) Amendment to Participation Agreement among MetLife Insurance Company USA, T. Rowed Price Associates, Inc., T. Rowe Price Funds and T. Rowe Price Investment Services, Inc. (effective July 22, 2016) (11) (viii) Participation Agreement among Brighthouse Funds Trust I, Brighthouse Investment Advisers, LLC, Brighthouse Securities, LLC and Brighthouse Life Insurance Company (effective March 6, 2017) (20) (ix) Participation Agreement among Brighthouse Funds Trust II, Brighthouse Investment Advisers, LLC, Brighthouse Securities, LLC and Brighthouse Life Insurance Company (effective March 6, 2017) (20) 9. Opinion of Counsel (3) 10. Consent of Independent Registered Public Accounting Firm (Deloitte & Touche LLP) (11) 11. Not Applicable 12. Not Applicable 13. Powers of Attorney for Eric T. Steigerwalt, Myles J. Lambert, Kieran Mullins, John L. Rosenthal, Anant Bhalla and Lynn A. Dumais. (11) (1)All previously filed Exhibits to MetLife Investors USA Separate Account A Registration Statement and all Post-Effective Amendments thereto are specifically incorporated herein by reference. (2)Incorporated herein by reference to MetLife of CT Separate Account Eleven for Variable Annuities Post-Effective Amendment No. 1 to Form N-4 (File Nos. 333-152199 and 811-21262) electronically filed on April 8, 2009. (3)Incorporated herein by reference to this Registration Statement on Form N-4 (File Nos 333-200240/811-03365) electronically filed on November 17, 2014. (4)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 6 to Form N-4 (File Nos. 333-54464 and 811-03365) electronically filed on July 15, 2004. (5)[RESERVED] (6)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 1 to Form N-4 (File Nos. 333-54464 and 811-03365) electronically filed on April 13, 2001. (7)Incorporated herein by reference to MetLife of CT Separate Account Eleven for Variable Annuities Post-Effective Amendment No. 19 to Form N-4 (File Nos. 333-101778 and 811-21262) electronically filed on April 7, 2009. (8)Incorporated herein by reference to MetLife of CT Separate Account Eleven for Variable Annuities Post-Effective Amendment No. 3 to Form N-4 (File Nos. 333-152194 and 811-21262) electronically filed on April 5, 2011. (9)Incorporated herein by reference to MetLife of CT Separate Account Nine for Variable Annuities Post-Effective Amendment No. 11 to Form N-4 (File Nos. 333-65926 and 811-09411) electronically filed on October 31, 2007. (10)Incorporated herein by reference to MetLife of CT Separate Account Eleven for Variable Annuities Post-Effective Amendment No. 4 to Form N-4 (File Nos. 333-152189 and 811-21262) electronically filed on April 4, 2012. (11)Filed herewith. (12)Incorporated herein by reference to MetLife of CT Separate Account Eleven for Variable Annuities Post-Effective Amendment No. 21 to Form N-4 (File Nos. 333-101778 and 811-21262) electronically filed on April 5, 2011. (13)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 8 to Form N-4 (File Nos. 333-137968 and 811-03365) electronically filed on April 21, 2011. (14)Incorporated herein by reference to The Travelers Fund ABD for Variable Annuities Post-Effective Amendment No. 14 to Form N-4 (File Nos. 033-65343 and 811-07465) electronically filed on April 6, 2006. (15)[RESERVED] (16)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 23 to Form N-4 (File Nos. 033-37128 and 811-03365) electronically filed on April 13, 2012. (17)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 12 to Form N-4 (File Nos. 333-176374 and 811-03365) electronically filed on April 10, 2013. (18)Incorporated herein by reference to Exhibit 3(a)(ii) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778 and 811-21262, filed electronically on April 6, 2016. (19)Incorporated herein by reference to Exhibit 8(l)(iii) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4 (File Nos. 333-101778 and 811-21262) electronically filed on April 5, 2017. (20)Incorporated herein by reference to Registrant's Post-Effective Amendment No. 1 to Form N-4 (File Nos. 333-209053 and 811-03365) electronically filed on April 12, 2017. C-2
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ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR The following are the Officers and Directors who are engaged directly or indirectly in activities relating to the Registrant or the variable annuity contracts offered by the Registrant and the executive officers of the Company: [Enlarge/Download Table] NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH DEPOSITOR -------------------- ---------------------- Eric T. Steigerwalt Director, Chairman of the Board, President and Chief Executive Gragg Building Officer 11225 North Community House Road Charlotte, NC 28277 [Download Table] Anant Bhalla Director and Chief Financial Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277
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EXHIBITNUMBER DESCRIPTION ------ ----------- [Download Table] Myles Lambert Director and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Kieran Mullins Director and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] John Rosenthal Director, Vice President and Chief Investment Officer 334 Madison Avenue Morristown, NJ 07960 [Download Table] Kimberly Berwanger Vice President 11225 North Community House Road Charlotte, NC 28277 [Download Table] Patrisha Cox Vice President 11225 North Community House Road Charlotte, NC 28277 [Download Table] Mark Davis Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Andrew DeMarco Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] David Dooley Vice President 334 Madison Avenue Morristown, NJ 07960 [Download Table] Meghan Doscher Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Tara Figard Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Jason Frain Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Gregory Illson Vice President Gragg Building 11225 North Community House Road Charlotte, NC 29277
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EXHIBITNUMBER DESCRIPTION ------ ----------- [Download Table] James Hamalainen Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Donald Leintz Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Timothy J. McLinden Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Marc Pucci Vice President 334 Madison Avenue Morristown, NJ 07960 [Download Table] Mark Reilly Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Douglas Rodgers Vice President 11225 North Community House Road Charlotte, NC 28277 [Download Table] Kenneth Samuelson III Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Andrew Vigar Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] James Wiviott Vice President 334 Madison Avenue Morristown, NJ 07960 [Download Table] Natalie Wright Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Meredith Ratajczak Vice President and Appointed Actuary Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Jacob Jenkelowitz Vice President and Assistant Secretary 285 Madison Avenue New York, NY 10017
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EXHIBITNUMBER DESCRIPTION ------ ----------- [Download Table] Lynn Dumais Vice President and Chief Accounting Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Jeffrey Halperin Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] David Chamberlin Vice President and Controller 18205 Crane Nest Drive Tampa, FL 33647 [Download Table] Frans teGroen Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Alan Igielski Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] D. Burt Arrington Vice President and Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Phyllis Zanghi Vice President and Tax Director Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Enlarge/Download Table] Christine DeBiase Vice President, General Counsel and Assistant Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Janet Morgan Vice President, Treasury Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Scott Peterson Vice President, Treasury Gragg Building 11225 North Community House Road Charlotte, NC 28277 ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT The Registrant is a separate account of Brighthouse Insurance Company under Delaware insurance law. Brighthouse Insurance Company is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. No person is controlled by the Registrant. The following outline indicates those entities that are controlled by MetLife, Inc. or are under the common control of MetLife, Inc.
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ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF December 31, 2016 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2016. 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 Home Loans LLC (DE) C. Metropolitan Tower Life Insurance Company (DE) 1. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 2. Plaza Drive Properties, LLC (DE) 3. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. d) 1320 Venture LLC (DE) i) 1320 Owner LP (DE) - a 99.9% limited partnership of 1320 Owner LP is held by 1320 Venture LLC and 0.1% general partnership is held by 1320 GP LLC. e) 1320 GP LLC (DE) D. MetLife Chile Inversiones Limitada (Chile) - 72.35109659% is owned by MetLife, Inc., 24.8823628% by American Life Insurance Company ("ALICO"), 2.76654057% is owned by Inversiones MetLife Holdco Dos Limitada and 0.00000004% is owned by Natiloportem Holdings, LLC. 1. MetLife Chile Seguros de Vida S.A. (Chile) - 99.996% of MetLife Chile Seguros de Vida S.A. is held by MetLife Chile Inversiones Limitada and 0.003% by International Technical and Advisory Services Limited ("ITAS") and the rest by third parties. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile) - 99.9% of MetLife Chile Administradora de Mutuos Hipotecarios S.A. is held by MetLife Chile Seguros de Vida S.A. and 0.1% is held by MetLife Chile Inversiones Limitada. 2. Legal Chile S.A. (Chile) - 51% of Legal Chile S.A. is owned by MetLife Chile Inversiones Limitada and the remaining interest is owned by a third party. a) Legagroup S.A. (Chile) - 99% of Legagroup S.A. is owned by Legal Chile S.A. and the remaining interest is owned by a third party. 3. Inversiones MetLife Holdco Tres Limitada (Chile) - 97.13% of Inversiones MetLife Holdco Tres Limitada is owned by MetLife Chile Inversiones Limitada and 2.87% is owned by Inversiones MetLife Holdco Dos Limitada. a) AFP Provida S.A. (Chile) - 42.3815% of AFP Provida S.A. is owned by Inversiones MetLife Holdco Dos Limitada., 42.3815% is owned by Inversiones MetLife Holdco Tres Limitada, 10.9224% is owned by MetLife Chile Inversiones Limitada and the remainder is owned by the public. i) Provida Internacional S.A. (Chile) - 99.99% of Provida Internacional S.A. is owned by AFP Provida S.A and 0.01% is owned by MetLife Chile Inversiones Limitada. 1) AFP Genesis Administradora de Fondos y Fidecomisos S.A. (Ecuador) - 99.9% of AFP Genesis Administradora de Fondos y Fidecomisos S.A. is owned by Provida Internacional S.A. and 0.1% by AFP Provida S.A. 4. MetLife Chile Seguros Generales S.A. (Chile) - 99.98% of MetLife Chile Seguros Generales, S.A. is owned by MetLife Chile Inversiones Limitada and 0.02% is owned by Inversiones MetLife Holdco Dos Limitada. E. Enterprise General Insurance Agency, Inc. (DE) F. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. MetLife Auto & Home Insurance Agency, Inc. (RI) 5. Metropolitan Group Property and Casualty Insurance Company (RI) 6. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 7. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) G. First MetLife Investors Insurance Company (NY) H. Newbury Insurance Company, Limited (DE) I. MetLife Investors Group, LLC (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Investments Securities, LLC (DE) 1
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J. Metropolitan Life Insurance Company ("MLIC") (NY) 1. 334 Madison Euro Investments, Inc. (DE) 2. St. James Fleet Investments Two Limited (Cayman Islands) a) Park Twenty Three Investments Company (United Kingdom) i) Convent Station Euro Investments Four Company (United Kingdom) 1) OMI MLIC Investments Limited (Cayman Islands) 3. Sandpiper Cove Associates II, LLC (DE) 4. MLIC Asset Holdings II LLC (DE) a) El Conquistador MAH II LLC (DE) b) Mansell Office, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. i) Mansell Retail, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. 5. CC Holdco Manager, LLC (DE) 6. Alternative Fuels I, LLC (DE) 7. Transmountain Land & Livestock Company (MT) 8. HPZ Assets LLC (DE) 9. Missouri Reinsurance, Inc. (Cayman Islands) 10. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 11. ML New River Village III, LLC (DE) 12. MetLife RC SF Member, LLC (DE) 13. 23rd Street Investments, Inc. (DE) a) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. b) MetLife Capital, Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. i) Long Island Solar Farm, LLC ("LISF")(DE) - 9.61% membership interest is held by MetLife Renewables Holding, LLC and 90.39% membership interest is held by LISF Solar Trust in which MetLife Capital Limited Partnership has 100% beneficial interest. ii) Met Canada Solar ULC (Canada) 14. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 15. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 16. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 17. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 18. Corporate Real Estate Holdings, LLC (DE) 19. MetLife Tower Resources Group, Inc. (DE) 20. Headland-Pacific Palisades, LLC (CA) 21. Headland Properties Associates (CA) - 99% is owned by Metropolitan Life Insurance Company and 1% is owned by Headland-Pacific Palisades, LLC. 22. WFP 1000 Holding Company GP, LLC (DE) 23. White Oak Royalty Company (OK) 24. 500 Grant Street GP LLC (DE) 25. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC. 26. MetLife Mall Ventures Limited Partnership (DE) - 99% LP interest of MetLife Mall Ventures Limited Partnership is owned by MLIC and 1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 27. MetLife Retirement Services LLC (NJ) 28. Euro CL Investments, LLC (DE) 29. MEX DF Properties, LLC (DE) a) LAR Vivienda XVII, S. de R.L. de C.V. (Mexico) - 99.99% of LAR Vivienda XVII S. de R.L. de C.V. is owned by MEX DF Properties, LLC and 0.01% is owned by Euro CL Investments LLC. 30. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company. 31. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (United Kingdom) 32. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) - 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 33. MLIC Asset Holdings LLC (DE) 34. 85 Broad Street Mezzanine LLC (DE) 35. The Building at 575 Fifth Avenue Mezzanine LLC (DE) a) The Building at 575 Fifth Retail Holding LLC (DE) b) The Building at 575 Fifth Retail Owner LLC (DE) 36. ML Bridgeside Apartments LLC (DE) 37. Para-Met Plaza Associates (FL)- 75% of the General Partnership is held by Metropolitan Life Insurance Company and 25% of the General Partnership is held by Metropolitan Tower Realty Company, Inc. 38. MLIC CB Holdings LLC (DE) 39. MetLife CC Member, LLC (DE) - 95.122% of MetLife CC Member, LLC is owned by Metropolitan Life Insurance Company and 4.878% is owned by General American Life Insurance Company. 40. Oconee Hotel Company, LLC (DE) 41. Oconee Land Company, LLC (DE) a) Oconee Land Development Company, LLC (DE) b) Oconee Golf Company, LLC (DE) c) Oconee Marina Company, LLC (DE) 2
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42. 1201 TAB Manager, LLC (DE) 43. MetLife 1201 TAB Member, LLC (DE) - 96.9% of MetLife 1201 TAB Member, LLC is owned by Metropolitan Life Insurance Company and 3.1% is owned by Metropolitan Property and Casualty Insurance Company. 44. MetLife LHH Member, LLC (DE) - 99% of MetLife LHH Member, LLC is owned by Metropolitan Life Insurance Company, and 1% is owned by General American Life Insurance Company. 45. 1001 Properties, LLC (DE) 46. Riverway Residential, LP (DE) - 99.9% LP interest of Riverway Residential, LP is owned by Metropolitan Life Insurance Company and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 47. 6104 Hollywood, LLC (DE) 48. Boulevard Residential, LLC (DE) 49. ML-AI MetLife Member 3, LLC (DE) 50. Ashton Judiciary Square, LLC (DE) 51. Sandpiper Cove Associates, LLC (DE) - 90.59% membership interest of Sandpiper Cove Associates, LLC is owned by MLIC and 9.41% is owned by Metropolitan Tower Realty Company. 52. 1900 McKinney Properties, LP (DE) - 99.9% LP interest of 1900 McKinney Properties, LP is owned by MLIC and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 53. Marketplace Residences, LLC (DE) 54. ML Swan Mezz, LLC (DE) a) ML Swan GP, LLC (DE) 55. ML Dolphin Mezz, LLC (DE) a) ML Dolphin GP, LLC (DE) 56. Haskell East Village, LLC (DE) 57. MetLife Cabo Hilton Member, LLC (DE) - 54.129% of MetLife Cabo Hilton Member, LLC is owned by MLIC, 16.9% by General American Life Insurance Company, 28.971% by MetLife Insurance Company USA 58. ML Terraces, LLC (DE) 59. Chestnut Flats Wind, LLC (DE) 60. MetLife 425 MKT Member, LLC (DE) 61. MetLife OFC Member, LLC (DE) 62. MetLife THR Investor, LLC (DE) 63. ML Southmore, LLC (DE) - 99% of ML Southmore, LLC is owned by MLIC and 1% by General American Life Insurance Company. 64. ML - AI MetLife Member 1, LLC (DE) - 95.199% of the membership interest is owned by MLIC and 4.801% by Metropolitan Property and Casualty Insurance Company. 65. MetLife CB W/A, LLC (DE) 66. MetLife Camino Ramon Member, LLC (DE) - 99% of MetLife Camino Ramon Member, LLC is owned by MLIC and 1% by General American Life Insurance Company. 67. 10700 Wilshire, LLC (DE) 68. Viridian Miracle Mile, LLC (DE) 69. MetLife 555 12th Member, LLC (DE) - 94.6% is owned by MLIC and 5.4% by General American Life Insurance Company 70. MetLife OBS Member, LLC (DE) 71. MetLife 1007 Stewart, LLC (DE) 72. ML-AI MetLife Member 2, LLC (DE) - 98.97% of ML-AI MetLife Member 2, LLC's ownership interest is owned by MLIC and 1.03% by General American Life Insurance Company. 73. MetLife Treat Towers Member, LLC (DE) 74. MetLife FM Hotel Member, LLC (DE) a) LHCW Holdings (U.S.) LLC (DE) i) LHC Holdings (U.S.) LLC (DE) 1) LHCW Hotel Holding LLC (DE) aa) LHCW Hotel Holding (2002) LLC (DE) bb) LHCW Hotel Operating Company (2002) LLC (DE) 75. ML Mililani Member, LLC (DE)- is owned at 95% by MLIC and 5% by General American Life Insurance Company. 76. MetLife SP Holdings, LLC (DE) a) MetLife Private Equity Holdings, LLC (DE) 77. Buford Logistics Center, LLC (DE) 78. ML North Brand Member, LLC (DE) 79. MetLife Park Tower Member, LLC (DE) a) Park Tower REIT, Inc. (DE) i) Park Tower JV Member, LLC (DE) 80. MCPP Owners, LLC (DE) - 84.503% is owned by MLIC, 0.603% by General American Life Insurance Company, 1.616% by Metropolitan Tower Life Insurance Company, and 13.278% by MTL Leasing, LLC. 81. MetLife HCMJV 1 GP, LLC (DE) 82. MetLife ConSquare Member, LLC (DE) 83. MetLife Ontario Street Member, LLC (DE) 84. 1925 WJC Owner, LLC (DE) K. MetLife Capital Trust IV (DE) L. MetLife Insurance Company USA (DE) 1. MetLife Property Ventures Canada ULC (Canada) 2. MetLife Canadian Property Ventures LLC (NY) 3. Metropolitan Connecticut Properties Ventures, LLC (DE) 4. Euro TI Investments LLC (DE) 5. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company USA. 6. MetLife USA Assignment Company (CT) 7. TIC European Real Estate LP, LLC (DE) 8. Euro TL Investments LLC (DE) 9. TLA Holdings LLC (DE) a) The Prospect Company (DE) 10. MetLife Renewables Holding, LLC (DE) a) Greater Sandhill I, LLC (DE) 11. TLA Holdings II LLC (DE) 12. TLA Holdings III LLC (DE) 13. Sino-US United MetLife Insurance Co., Ltd. (China) - Sino-US United MetLife Insurance Co., Ltd. is owned at 27.8% by MetLife Insurance Company USA, 22.2% by MLIC and 50% by a third party. 14. ML 1065 Hotel, LLC 15. Daniel/MetLife Midtown Atlanta Master Limited Liability Company (DE) a) 1075 Peachtree, LLC (DE) 16. Brighthouse Reinsurance Company of Delaware (DE) 3
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M. MetLife Reinsurance Company of South Carolina (SC) N. MetLife Investment Advisors, LLC (DE) 1. MetLife Alternatives GP, LLC (DE) a) MetLife International PE Fund I, LP (Cayman Islands) - 92.593% of the Limited Partnership interests of this entity is owned by MetLife Insurance K.K., 4.115% is owned by MetLife Mexico S.A., 2.716% is owned by MetLife Limited (Hong Kong) and the remaining 0.576% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. b) MetLife International PE Fund II, LP (Cayman Islands) - 94.54% of the limited partnership interests of MetLife International PE Fund II, LP is owned by MetLife Insurance K.K., 2.77% is owned by MetLife Limited (Hong Kong), 2.1% by MetLife Mexico, S.A. and 0.59% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. c) MetLife International HF Partners, LP (Cayman Islands) - 88.22% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K. and 9.47% is owned by MetLife Insurance Company of Korea Limited, 2.29% is owned by MetLife Limited (Hong Kong) and 0.02% is owned by MetLife Alternatives, GP d) MetLife International PE Fund III, LP - 88.93% of the limited partnership interests of MetLife International PE Fund III LP is owned by MetLife Insurance K.K, 7.91% is owned by MetLife Insurance Company of Korea Limited, 2.61% is owned by MetLife Limited (Hong Kong), and 0.55% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. e) MetLife International PE Fund IV, LP (Cayman Islands) - 94.70% of the limited partnership interests of MetLife International PE Fund IV, LP is owned by MetLife Insurance K.K, 3.79% is owned by MetLife Insurance Company of Korea Limited, 1.51% is owned by Metlife Limited (Hong Kong). 2. MetLife Loan Asset Management LLC (DE) 3. MetLife Core Property Fund GP, LLC (DE) a) MetLife Core Property Fund, LP (DE) - MetLife Core Property Fund GP, LLC is the general partner of MetLife Core Property Fund, LP (the "Fund"). A substantial majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 20.06%, Metropolitan Life Insurance Company (on behalf of Separate Account 746) owns 3.24%, MetLife Insurance Company of Korea Limited owns 2.91%, General American Life Insurance Company owns 0.07% and MetLife Insurance Company USA owns 0.14%. i) MetLife Core Property REIT, LLC (DE) 1) MetLife Core Property Holdings, LLC - MetLife Core Property Holdings, LLC also holds the following single-property limited liability companies: MCP Alley 24 East, LLC, MCP Denver Pavilions Member, LLC, MCP SoCal Industrial-Springdale, LLC, MCP SoCal Industrial-Redondo, LLC, MCP SoCal Industrial-Concourse, LLC, MCP SoCal Industrial-Kellwood, LLC, MCP SoCal Industrial-Bernardo, LLC, MCP SoCal Industrial-Canyon, LLC, MCP SoCal Industrial-Anaheim, LLC, MCP SoCal Industrial-LAX, LLC, MCP SoCal Industrial-Fullerton, LLC, MCP SoCal Industrial-Ontario, LLC, MCP SoCal Industrial-Loker, LLC, MCP Paragon Point, LLC, MCP 4600 South Syracuse, LLC, MCP The Palms Doral, LLC, MCP Waterford Atrium, LLC, MCP EnV Chicago, LLC, MCP 100 Congress, LLC, MCP 1900 McKinney, LLC, MCP 550 West Washington, LLC, MCP Main Street Village, LLC, MCP Lodge At Lakecrest LLC, MCP Ashton South End, LLC, MCP 3040 Post Oak, LLC, MCP Plaza at Legacy, LLC, MCP VOA Holdings, LLC, MCP VOA I& III, LLC, MCP VOA II, LLC, MCP Highland Park Lender, LLC, MCP One Westside, LLC, MCP 7 Riverway, LLC, MCP Trimble Campus, LLC, MCP 9020 Murphy Road, LLC, MCP Buford Logistics Center 2 Member, LLC, and MCPF Acquisition, LLC, MCP 60 11th Street Member, LLC, MCP Magnolia Park Member, LLC, and MCP Fife Enterprise Member, LLC, MCP Northyards Holdco, LLC, MCP Northyards Owner, LLC, MCP Northyards Master Lessee, LLC, 60 11th Street, LLC, Magnolia Park Greenville,Venture, LLC, Magnolia Park Greenville, LLC, MCP 22745 & 22755 Relocation Drive, LLC, MCP DMCBP Phase II Member, LLC, MetLife Core Property TRS, LLC. aa) MCP Property Management, LLC (DE) 4. MIM Property Management, LLC (DE) 5. MetLife Commercial Mortgage Income Fund GP, LLC (DE) a) MetLife Commercial Mortgage Income Fund, LP (DE) - MetLife Commercial Mortgage Income Fund GP, LLC is the general partner of MetLife Commercial Mortgage Income Fund, LP (the "Fund"). A majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 28.83%, MetLife Insurance Company USA owns 9.61%, MetLife Insurance Company of Korea, Limited. owns 5.66%, MetLife Limited owns 3.81%, and Metropolitan Life Insurance Company of Hong Kong Limited owns 0.76%. i) MetLife Commercial Mortgage REIT, LLC (DE) 1) MetLife Commercial Mortgage Originator, LLC (DE) aa) MCMIF Holdco I, LLC (DE) O. MetLife Standby I, LLC (DE) P. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) a) MetLife Services East Private Limited (India) b) MetLife Global Operations Support Center Private Limited (India) - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, LLC. Q. SafeGuard Health Enterprises, Inc. (DE) 1. MetLife Health Plans, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) R. MetLife Capital Trust X (DE) S. Cova Life Management Company (DE) T. MetLife Reinsurance Company of Charleston (SC) U. MetLife Reinsurance Company of Vermont (VT) V. Delaware American Life Insurance Company (DE) W. Federal Flood Certification LLC (TX) X. MetLife Global Benefits, Ltd. (Cayman Islands) Y. Inversiones Metlife Holdco Dos Limitada (Chile) - 99.99946% of Inversiones MetLife Holdco Dos Limitada is owned by MetLife, Inc., 0.000535% is owned by MetLife International Holdings, LLC and 0.0000054% is owned by Natiloportem Holdings, LLC. Z. MetLife Consumer Services, Inc. (DE) AA. MetLife Reinsurance Company of Delaware (DE) AB. MetLife Global, Inc. (DE) AC. Brighthouse Services, LLC (DE) AD. Brighthouse Holdings, LLC (DE) AE. Brighthouse Securities, LLC (DE) AF. Brighthouse Financial, Inc. (DE) AG. MetLife Insurance Brokerage, Inc. (NY) 4
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AH. American Life Insurance Company (ALICO) (DE) 1. MetLife Insurance K.K. (Japan) a) Communication One Kabushiki Kaisha (Japan) 2. MetLife Global Holding Company I GmbH (Swiss I) (Switzerland) a) MetLife, Life Insurance Company (Egypt) - 84.125% of MetLife, Life Insurance Company is owned by MetLife Global Holding Company I GmbH and the remaining interests are owned by third parties. b) MetLife Global Holding Company II GmbH (Swiss II) (Switzerland) i) MetLife Emeklilik ve Hayat A.S. (Turkey) - 99.98% of MetLife Emeklilik ve Hayat A.S. is owned by Metlife Global Holding Company II GmbH (Swiss II) and the remainder by third parties. ii) ALICO European Holdings Limited (Ireland) 1) ZAO Master D (Russia) aa) Joint Stock Company MetLife Insurance Company (Russia) - 51% of Joint Stock Company MetLife Insurance Company is owned by ZAO Master D and 49% is owned by MetLife Global Holding Company II GmbH. iii) MetLife Asia Holding Company Pte. Ltd. (Singapore) 1) MetLife Innovation Centre Pte. Ltd. (Singapore) iv) MetLife Reinsurance Company of Bermuda Ltd. (Bermuda) v) MetLife Investment Management Limited (United Kingdom) vi) MM Global Operations Support Center, S.A. de C.V. (Mexico) - 99.999509% of MM Global Operations Support Center, S.A. de C.V. is held by MetLife Global Holding Company II GmbH (Swiss) and 0.000491% is held by MetLife Global Holding Company I GmbH (Swiss). 1. Fundacion MetLife Mexico, A.C. (Mexico) vii) MetLife Colombia Seguros de Vida S.A. (Colombia) - 89.999966393% of MetLife Colombia Seguros de Vida S.A. is owned by MetLife Global Holding Company II GmbH, 10.000029508% is owned by MetLife Global Holding Company I GmbH, 0.000001366% is owned by International Technical and Advisory Services Limited, 0.000001366% is owned by Borderland Investments Limited and 0.000001366% by Natiloportem Holdings, LLC. viii) PJSC MetLife (Ukraine) - 99.9988% of PJSC MetLife is owned by MetLife Global Holding Company II GmbH, .0006% is owned by ITAS and the remaining .0006% is owned by Borderland Investments Limited. ix) MetLife Innovation Centre Limited (Ireland) x) MetLife EU Holding Company Limited (Ireland) 1) MetLife Europe d.a.c (Ireland) - MetLife EU Holding Company Limited holds 96.00315040176985% of this entity. ALICO holds 3.996758255760741% and ITAS holds 0.000091342469407%. 1. MetLife Pension Trustees Limited (United Kingdom) 2) Agenvita S.r.l. (Italy) 3) MetLife Europe Insurance d.a.c (Ireland)- 93% of MetLife Europe Insurance d.a.c is owned by MetLife EU Holding Company Limited and 7% is owned by ALICO. 4) MetLife Europe Services Limited (Ireland) 5) MetLife Insurance Limited (United Kingdom) 6) MetLife Services, Sociedad Limitada (Spain) 7) MetLife Slovakia S.r.o. (Slovakia) - 99.956% of MetLife Slovakia S.r.o. is owned by MetLife EU Holding Company Limited and 0.044% is owned by ITAS. 8) MetLife Solutions S.A.S. (France) 9) Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. (Romania) - 99.9836% of Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. is owned by MetLife EU Holding Company Limited and 0.0164% is owned by MetLife Services Sp z.o.o. 10) MetLife Towarzystwo Ubezpieczen na Zycie I Reasekuracji S.A. (Poland) aa) MetLife Services Sp z.o.o. (Poland) bb) MetLife Towarzystwo Funduszy Inwestycyjnych, S.A. (Poland) cc) MetLife Powszechne Towarzystwo Emerytalne S.A. (Poland) 11) MetLife Services Cyprus Limited (Cyprus) aa) Hellenic Alico Life Insurance Company, Ltd. (Cyprus) - 27.5% of Hellenic Alico Life Insurance Company, Ltd. Is owned by MetLife Services Cyprus Limited and the remaining is owned by a third party. 12) MetLife Services EOOD (Bulgaria) 13) MetLife Life Insurance S.A. (Greece) aa) MetLife Mutual Fund Company (Greece) - 90% of MetLife Mutual Fund Company is owned by MetLife Life Insurance S.A. (Greece) and the remaining interests are owned by third parties. 14) First American-Hungarian Insurance Agency Limited (Hungary) 15) MetLife SK, s.r.o. (Slovakia) - 99.8788% of MetLife SK, s.r.o. is owned by MetLife EU Holding Company Limited, 0.1212% is owned by ITAS 16) UBB-MetLife Zhivotozastrahovatelno Drujestvo AD (Bulgaria) - 40% of UBB-MetLife Zhivotozastrahovatelno Drujestvo AD is owned by MetLife EU Holding Company Limited and the rest by third parties. xi) MetLife International Holdings, LLC (DE) 1. Natiloportem Holdings, LLC (DE) aa) Excelencia Operativa y Tecnologica, S.A. de C.V. (Mexico) - 99% of Excelencia Operativa y Tecnologica, S.A. de C.V. is held by Natiloportem Holdings, LLC and 1% by MetLife Mexico Servicios S.A. de C.V. i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. 2. PNB MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, LLC and 74% is owned by third parties. 3. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, Inc. and 0.00065% is owned by Natiloporterm Holdings, LLC. 4. MetLife Seguros S.A. (Argentina)- 95.5242% is owned by MetLife International Holdings, LLC, 2.6753% is owned by Natiloportem Holdings, LLC and 1.8005% by ITAS. 5. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)-66.662% is owned by MetLife International Holdings, LLC, 33.337% is owned by MetLife Worldwide Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 6. MetLife Administradora de Fundos Multipatrocinados Ltda. (Brazil) - 99.99998% of MetLife Administradora de Fundos Multipatrocinados Ltda. is owned by MetLife International Holdings, LLC and 0.00002% by Natiloportem Holdings, LLC. 7. MetLife Seguros de Retiro S.A. (Argentina) - 96.8897% is owned by MetLife International Holdings, LLC, 3.1102% is owned by Natiloportem Holdings, LLC and 0.0001% by ITAS 8. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, LLC and 95% is owned by MetLife International Holdings, LLC. 9. Compania Inversora MetLife S.A. (Argentina) - 95.46% is owned by MetLife International Holdings, LLC and 4.54% is owned by Natiloportem Holdings, LLC. aa) MetLife Servicios S.A. (Argentina) - 18.87% of the shares of MetLife Servicios S.A. are held by Compania Inversora MetLife S.A., 79.88% is owned by MetLife Seguros S.A., 0.99% is held by Natiloportem Holdings, LLC and 0.26% is held by MetLife Seguros de Retiro S.A. 10. MetLife Worldwide Holdings, LLC (DE) aa) MetLife Limited (Hong Kong) i) BIDV MetLife Life Insurance Limited Liability Company (Vietnam) - 60% of BIDV MetLife Life Insurance Limited Liability Company is held by MetLife Limited (Hong Kong) and the remainder by third parties 11. MetLife International Limited, LLC (DE) 12. MetLife Planos Odontologicos Ltda. (Brazil) - 99.999% is owned by MetLife International Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 13. MetLife Asia Limited (Hong Kong) 14. AmMetLife Insurance Berhad (Malaysia) - 50.000001% of AmMetLife Insurance Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 15. AmMetLife Takaful Berhad (Malaysia) - 49.999999% of AmMetLife Takaful Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 16. MAXIS GBN S.A.S. (France) - 50% of MAXIS GBN S.A.S. is held by MetLife International Holdings, LLC and the remainder by third parties. 17. MetLife Mas S.A. de C.V. (Mexico) - 99.99964399% MetLife Mas, SA de CV is owned by MetLife International Holdings, LLC and .00035601% is owned by International Technical and Advisory Services Limited. 5
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18. MetLife Ireland Holdings One Limited (Ireland) aa) MetLife Global Holdings Corporation S.A. de C.V. (Mexico/Ireland) - 98.9% is owned by MetLife Ireland Holdings One Limited and 1.1% is owned by MetLife International Limited, LLC. i) MetLife Ireland Treasury d.a.c (Ireland) 1) MetLife General Insurance Limited (Australia) 2) MetLife Insurance Limited (Australia) - 91.16468% of MetLife Insurance Limited (Australia) is owned by MetLife Ireland Treasury Limited and 8.83532% is owned by MetLife Global Holdings Corp. S.A. de C.V. a) The Direct Call Centre PTY Limited (Australia) b) MetLife Investments PTY Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investments PTY Limited ("MIPL"). MIPL is a wholly owned subsidiary of MetLife Insurance Limited. ii) Metropolitan Global Management, LLC (DE/Ireland) - 99.7% is owned by MetLife Global Holdings Corporation S.A. de C.V. and 0.3% is owned by MetLife International Holdings, LLC. aaa) MetLife Pensiones Mexico S.A. (Mexico)- 97.5125% is owned by Metropolitan Global Management, LLC and 2.4875% is owned by MetLife International Holdings, LLC. bbb) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by Metropolitan Global Management, LLC and 2% is owned by MetLife International Holdings, LLC. ccc) MetLife Mexico S.A. (Mexico)- 99.050271% is owned by Metropolitan Global Management, LLC and 0.949729% is owned by MetLife International Holdings, LLC. 1) MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. aaaa) Met1 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. bbbb) Met2 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. cccc) MetA SIEFORE Adicional, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. dddd) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. eeee) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. ffff) Met0 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. 2) ML Capacitacion Comercial S.A. de C.V.(Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ddd) MetLife Insurance Company of Korea Limited (South Korea)- 14.64% is owned by MetLife Mexico, S.A. and 85.36% is owned by Metropolitan Global Management, LLC. 1) MetLife Financial Services, Co., Ltd. eee) MetLife Mexico Holdings, S. de R.L. de C.V. (Mexico) - 99.99995% is owned by Metropolitan Global Management, LLC, and the remainder is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. xii) MetLife Investment Management Holding (Ireland) Limited aaa) MetLife Investment Asia Limited (Hong Kong) xiii) ALICO Operations LLC (DE) aaa) MetLife Asset Management Corp. (Japan) bbb) MetLife Seguros S.A. (Uruguay) 3. International Investment Holding Company Limited (Russia) 4. Borderland Investments Limited (USA-Delaware) a) ALICO Hellas Single Member Limited Liability Company (Greece) 5. International Technical and Advisory Services Limited ("ITAS") (USA-Delaware) 6. ALICO Properties, Inc. (USA-Delaware) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. a) Global Properties, Inc. (USA-Delaware) 7. Alpha Properties, Inc. (USA-Delaware) 8. Beta Properties, Inc. (USA-Delaware) 9. Delta Properties Japan, Inc. (USA-Delaware) 10. Epsilon Properties Japan, Inc. (USA-Delaware) 11. Iris Properties, Inc. (USA-Delaware) 12. Kappa Properties Japan, Inc. (USA-Delaware) 13. MetLife American International Group and Arab National Bank Cooperative Insurance Company (Saudi Arabia) - 30% of MetLife American International Group and Arab National Bank Cooperative Insurance Company is owned by ALICO and the remaining interest by third parties. The Delaware Department of Insurance approved a disclaimer of affiliation and therefore, this company is not considered an affiliate under Delaware Law. AI. General American Life Insurance Company (MO) a. GALIC Holdings LLC (DE) AJ. New England Life Insurance Company (MA) AK. MetLife European Holdings, LLC (DE) 1) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. 2) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. 3) The MetLife, Inc. organizational chart does not include real estate joint ventures and partnerships of which MetLife, Inc. and/or its subsidiaries is an investment partner. In addition, certain inactive subsidiaries have also been omitted. 4) MetLife Services EEIG is a cost-sharing mechanism used in the EU for EU- affiliated members. 6
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ITEM 27. NUMBER OF CONTRACT OWNERS As of January 31, 2017, there were 410,733 owners of qualified contracts and 171,781 owners of non-qualified contracts offered by the Registrant (Brighthouse Separate Account A). ITEM 28. INDEMNIFICATION Pursuant to applicable provisions of Brighthouse Life Insurance Company's by-laws or internal corporate policies adopted by Brighthouse Life Insurance Company or MetLife, Inc. its ultimate parent, the directors, officers and other controlling persons of Brighthouse Life Insurance Company and of Brighthouse Life Insurance Company's affiliate and the underwriter, Brighthouse Securities, LLC, who are made or threatened to be made a party to an action or proceeding, may be eligible to obtain indemnification against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred as a result of such action or proceeding. Under the principal underwriting agreement between Brighthouse Life Insurance Company and Brighthouse Securities, LLC the parties have agreed to indemnify each other against certain liabilities and expenses from legal proceedings arising out of Brighthouse Securities' distribution of the Contracts. MetLife, Inc. also maintains a Directors and Officers Liability and Corporate Reimbursement Insurance Policy under which the Registrant, the Depositor and the Underwriter, as well as certain other subsidiaries of MetLife, are covered. MetLife, Inc. also has secured a Financial Institutions Bond. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. C-5
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ITEM 29. PRINCIPAL UNDERWRITERS (a)Brighthouse Securities, LLC is the principal underwriter for the following investment companies (including the Registrant): Brighthouse Fund UL for Variable Life Insurance Brighthouse Fund UL III for Variable Life Insurance Brighthouse Funds Trust I Brighthouse Funds Trust II Brighthouse Separate Account A Brighthouse Separate Account Eleven for Variable Annuities Brighthouse Separate Account QPN for Variable Annuities Brighthouse Variable Annuity Account B Brighthouse Variable Annuity Account C Brighthouse Variable Life Account A Brighthouse Variable Life Account One New England Variable Annuity Separate Account New England Variable Life Separate Account C-6
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(b)Brighthouse Securities, LLC is the principal underwriter for the Contracts. The following persons are the officers and managers of Brighthouse Securities, LLC. The principal business address for Brighthouse Securities, LLC is 11225 North Community House Road, Charlotte, NC 28277. [Enlarge/Download Table] NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER --------------------------------- --------------------------------------------------------- Myles Lambert Manager, Chairman, President and Chief Executive Officer 11225 North Community House Road Charlotte, NC 28277 [Download Table] Philip Beaulieu Manager and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Gerard Nigro Manager and Senior Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Kieran R. Mullins Executive Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Jeffrey Halperin Senior Vice President and Chief Compliance Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Phyllis Zanghi Senior Vice President and Tax Director Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Melissa Cox Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Michael Davis Vice President 11225 North Community House Road Charlotte, NC 28277 [Download Table] Donald Leintz Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Timothy McLinden Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Janet Morgan Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
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[Download Table] Matthew Quale Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Jacob Jenkelowitz Vice President and Assistant Secretary 285 Madison Avenue New York, NY 10017 [Download Table] D. Burt Arrington Vice President and Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277 [Download Table] Paul Scott Peterson Vice President and Treasurer Gragg Building 11225 North Community House Road Charlotte, NC 28277
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(c) MetLife Investors Distribution Company served as principal underwriter prior to March 6, 2017. Compensation to the Distributor. The following aggregate amount of commissions and other compensation was received by the Distributor, directly or indirectly, from the Registrant and the other separate accounts of the Depositor, which also issue variable annuity contracts, during their last fiscal year: [Download Table] (3) COMPENSATION ON EVENTS (2) OCCASIONING THE (1) NET UNDERWRITING DEDUCTION OF A (4) (5) NAME OF PRINCIPAL DISCOUNTS AND DEFERRED SALES BROKERAGE OTHER UNDERWRITER COMMISSIONS LOAD COMMISSIONS COMPENSATION --------------------- ---------------- --------------- ----------- ------------ MetLife Investors Distribution Company $568,161,672 $0 $0 $0 ITEM 30. LOCATION OF ACCOUNTS AND RECORDS The following companies will maintain possession of the documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder: (a)Registrant (b)Brighthouse Financial Annuity Operations, 4700 Westown Parkway, Bldg. 4, Suite 200, West Des Moines, IA 50266 (c)Brighthouse Securities, LLC, 11225 North Community House Road, Charlotte, NC 28277 (d)Brighthouse Life Insurance Company, 11225 North Community House Road, Charlotte, NC 28277 (e)Brighthouse Financial, 18205 Crane Nest Drive, Tampa, FL 33647 (f)Brighthouse Financial, One Financial Center, Boston, 21st Floor, MA 02111 ITEM 31. MANAGEMENT SERVICES Not Applicable. ITEM 32. UNDERTAKINGS a. Registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen (16) months old for so long as payments under the variable annuity contracts may be accepted. C-8
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b. Registrant hereby undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. c. Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statement required to be made available under this Form promptly upon written or oral request. REPRESENTATIONS a. Brighthouse Life Insurance Company (the "Company") hereby represents that the fees and charges deducted under the Contracts described in the Prospectus, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred and the risks assumed by the Company. b. The Company hereby represents that it is relying upon a No-Action Letter issued to the American Council of Life Insurance dated November 28, 1988 (Commission ref. IP-6-88) and that the following provisions have been complied with: 1. Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in each registration statement, including the prospectus, used in connection with the offer of the contract; 2. Include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract; 3. Instruct sales representatives who solicit participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential participants; 4. Obtain from each plan participant who purchases a Section 403(b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the participant's understanding of (1) the restrictions on redemption imposed by Section 403(b)(11), and (2) other investment alternatives available under the employer's Section 403(b) arrangement to which the participant may elect to transfer his contract value. c. The Company hereby represents that is relying upon a No-Action Letter issued to ING Life Insurance and Annuity Company dated August 30, 2012 and that it has complied with the provisions of such letter. C-9
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SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this registration statement and has caused this registration statement to be signed on its behalf, in the city of Charlotte, and state of North Carolina, on the 12th day of April, 2017. BRIGHTHOUSE SEPARATE ACCOUNT A (Registrant) By: BRIGHTHOUSE LIFE INSURANCE COMPANY By: /s/ Gregory E. Illson -------------------------- Gregory E. Illson Vice President By: BRIGHTHOUSE LIFE INSURANCE COMPANY (Depositor) By: /s/ Gregory E. Illson -------------------------- Gregory E. Illson Vice President
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As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on April 12, 2017. [Download Table] /s/ Eric T. Steigerwalt* Chairman of the Board, President, --------------------------------------- Chief Executive Officer and a Director Eric T. Steigerwalt /s/ Myles J. Lambert* Director and Vice President --------------------------------------- Myles J. Lambert /s/ Kieran Mullins* Director and Vice President --------------------------------------- Kieran Mullins /s/ John L. Rosenthal* Director, Vice President and Chief --------------------------------------- Investment Officer John L. Rosenthal /s/ Anant Bhalla* Director, Vice President and Chief --------------------------------------- Financial Officer Anant Bhalla /s/ Lynn A. Dumais* Vice President and Chief Accounting --------------------------------------- Officer Lynn A. Dumais [Download Table] *By: /s/ Michele H. Abate ---------------------------------------- Michele H. Abate, Attorney-In-Fact April 12, 2017 * Brighthouse Life Insurance Company. Executed by Michele H. Abate, Esquire on behalf of those indicated pursuant to powers of attorney filed herewith.
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EXHIBIT INDEX [Enlarge/Download Table] EXHIBIT NUMBER DESCRIPTION -------------- ----------- 8.(vii)(b) Amendment to Participation Agreement with T. Rowe Price 10. Consent of Independent Registered Public Accounting Firm (Deloitte & Touche LLP) 13. Powers of Attorney

Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘485BPOS’ Filing    Date First  Last      Other Filings
12/15/19253
12/15/18253
4/30/1812
12/15/17252253
Effective on:5/1/17183485BPOS
Filed on:4/14/171485BPOS
4/12/17347365485BPOS
4/5/17347
3/28/17231
3/24/1792
3/6/1715362485APOS,  497
2/15/17336
1/31/17335358
1/3/17253497
1/1/17340
12/31/161035224F-2NT,  N-30D,  NSAR-U
12/23/16336
12/15/16252
12/6/16190
12/1/16272
10/5/16190238
9/12/16336
7/22/16347CORRESP,  UPLOAD
7/21/16190238497
4/6/16347UPLOAD
1/12/16190238
1/1/16195251
12/31/1515134624F-2NT,  N-30D,  NSAR-U
12/15/15195
12/7/15346
6/1/15347
5/15/15347
5/1/15151211485BPOS
1/1/15319
12/31/1423034624F-2NT,  N-30D,  NSAR-U
11/19/14151347
11/18/14251N-4
11/17/1415347N-4
11/14/1415346485APOS,  N-4
11/1/14254
9/17/14346
8/18/14346497
8/13/14346
1/1/14239329
12/31/1323524F-2NT,  N-30D,  NSAR-U
9/18/1354
4/10/13347485BPOS
12/31/125424F-2NT,  N-30D,  NSAR-U
12/28/12335497,  497J
11/14/12335
8/30/12363
4/13/12347485BPOS,  N-4/A
4/4/12347
4/21/11347485BPOS
4/5/11347
4/30/10347
11/24/09346
5/1/09347485BPOS
4/8/09347
4/7/09347
4/28/08347485BPOS
12/7/0785
10/31/07347485BPOS,  497
8/31/07347
5/16/07347
11/9/0685
5/1/0685485BPOS
4/6/06347
11/1/05347
10/20/05347
10/1/05347
4/15/05347
12/8/04347
7/15/04347485BPOS
5/18/04346
5/3/04347
12/12/03347
8/1/03347
6/5/03347
5/1/03347485BPOS
4/14/03347
12/31/0234724F-2NT,  NSAR-U
12/31/0127224F-2NT,  NSAR-U
5/1/01347497J
4/13/01347485BPOS
3/1/01346497J
2/12/0185
1/8/0185
4/1/00272
12/31/99474824F-2NT,  NSAR-U
10/1/99347
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3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/12/23  Brighthouse Separate Account A    485BPOS     5/01/23   10:4M                                     Donnelley … Solutions/FA
 4/18/22  Brighthouse Separate Account A    485BPOS     4/29/22   10:2.4M                                   Donnelley … Solutions/FA
 4/15/21  Brighthouse Separate Account A    485BPOS     4/30/21    3:2.1M                                   Donnelley … Solutions/FA
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