MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
N-30D, 2000-02-24
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Massachusetts Mutual Variable Annuity Separate Account 1 --
Flex Extra (Qualified)

Part 11

Part 11 was not included with the Annual Report (N30-D filing) sent to the contract owners in February, 2000. The contract owners did receive the accompanying Separate Account financial statements and the respective underlying Fund reports that the Massachusetts Mutual Variable Annuity Separate Account 1-Flex Extra (Qualified) invest in.

The following underlying Funds that were sent to the contract owners are incorporated by reference in this filing to the SEC as part of the Edgarization filing:

1.
 

The MML Series Investment Fund was edgarized and filed with the SEC in February, 2000 under File number 811-0224.

     
2.  

The Oppenheimer Variable Account Fund was edgarized and filed with the SEC in February, 2000 under File number 811-04108.

 

 
A Message To Our Contract Owners:
 
We are pleased to forward this combined Annual Report of the segment of Massachusetts Mutual Variable Annuity Separate Account 1 (“Separate Account 1”) pertaining to Flex Extra (Qualified) (the “Segment ”), four Funds of the MML Series Investment Fund, (“MML Trust ”) and three Funds of the Oppenheimer Variable Account Funds available to owners of Flex Extra contracts. These reports are for the year ended December 31, 1999.
 
The Annual Report for the Segment begins on page 2. The Segment has net assets of $4,708,027,474 as of December 31, 1999. Net asset values per accumulation unit for the MML Equity, MML Money Market, MML Managed Bond and MML Blend, Oppenheimer Capital Appreciation, Oppenheimer Global Securities and Oppenheimer Strategic Bond Divisions of the Segment as of December 31, 1999 are shown in detail in the table on page 2.
 
The Annual Report for the MML Trust follows the Segment’s Annual Report. This report contains a detailed description of the financial results of the MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend Fund for the year ended December 31, 1999.
 
The Annual Report for the Oppenheimer Variable Account Funds follows the MML Trust’s Annual Report. This report contains a detailed description of the financial results of the Oppenheimer Aggressive Growth Fund/VA, Oppenheimer Global Securities Fund/VA and Oppenheimer Strategic Bond Fund/VA for the year ended December 31, 1999.
 
We appreciate the interest and confidence you have shown in Separate Account 1.
 
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
 
Robert J. O ’Connell
President and Chief Executive Officer
 
February 1, 2000
 
Massachusetts Mutual Variable Annuity Separate Account 1 -  Flex Extra (Qualified)
 
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
 
     MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   * Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

 
ASSETS
 
Investments                     
  Number of shares (Note 2)    42,051,500    97,496,294    10,410,767    70,765,817    8,952,508    12,064,160    14,213,510
    
 
 
 
 
 
 
  Identified cost (Note 3B)    $1,145,995,171    $    97,496,294    $  127,484,076    $1,451,559,429    $  357,296,415    $  229,051,704    $    72,130,129
    
 
 
 
 
 
 
  Value (Note 3A)    $1,537,208,799        $     97,496,294    $  120,872,748    $1,663,472,319    $  736,880,929    $  403,063,573    $    70,641,144
Dividends receivable    48,169,944    419,198    1,838,966    45,843,938    -    -    -
 
Receivable from Massachusetts Mutual Life Insurance
  Company
   -    -    -    -    -    -    -
 
Other assets    2,041    19    336    3,191    368    223    122
    
 
 
 
 
 
 
 
      Total assets    1,585,380,784       97,915,511      122,712,050    1,709,319,448      736,881,297      403,063,796       70,641,266
 
LIABILITIES
 
Annuitant mortality fluctuation reserve (Note 3D)    31,410    354    2,655    56,579    4,774    2,984    627
 
Payable to Massachusetts Mutual Life Insurance Company    6,079,967    433,486    487,564    6,840,457    2,449,397    1,077,277    419,147
    
 
 
 
 
 
 
 
      Total liabilities    6,111,377    433,840    490,219    6,897,036    2,454,171    1,080,261    419,774
    
 
 
 
 
 
 
 
NET ASSETS    $1,579,269,407    $     97,481,671    $  122,221,831    $1,702,422,412    $  734,427,126    $  401,983,535    $     70,221,492
    
 
 
 
 
 
 
 
Net Assets:                     
Accumulation units value    $1,578,222,391    $    97,469,874    $  122,133,320    $1,700,536,460    $  734,267,997    $  401,884,077    $    70,200,599
 
Annuity reserves (Note 3E)    1,047,016    11,797    88,511    1,885,952    159,129    99,458    20,893
    
 
 
 
 
 
 
 
      Net assets    $1,579,269,407    $     97,481,671    $  122,221,831    $1,702,422,412    $  734,427,126    $  401,983,535    $     70,221,492
    
 
 
 
 
 
 
 
Accumulation units (Note 8)                     
 
   Contractowners    391,979,714    57,438,136    54,486,992    515,226,264    211,951,583    178,746,173    51,370,362
 
  Massachusetts Mutual Life Insurance Company    -    -    -    -    5,000    5,000    5,000
    
 
 
 
 
 
 
 
      Total units    391,979,714    57,438,136    54,486,992    515,226,264    211,956,583    178,751,173    51,375,362
    
 
 
 
 
 
 
 
NET ASSET VALUE PER ACCUMULATION UNIT                     
 
  December 31, 1999    $                 4.03    $                 1.70    $                 2.24    $                 3.30    $                 3.46    $                 2.25    $                 1.37
 
  December 31, 1998    4.24    1.64    2.31    3.39    1.91    1.44    1.35
 
  December 31, 1997    3.70    1.58    2.17    3.02    1.72    1.28    1.33
 
  December 31, 1996    2.91    1.52    2.00    2.53    1.56    1.05    1.23
 
  December 31, 1995    2.45    1.47    1.96    2.25    1.32    0.91    1.12
 
*
This division invests in the Oppenheimer Aggressive Growth Fund/VA.
 
See Notes to Financial Statements.
 
F-2
 
Massachusetts Mutual Variable Annuity Separate Account 1 -  Flex Extra (Qualified)
 
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1999
 
     MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   * Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

 
Investment income
 
Dividends (Note 3B)    $  48,184,517      $    4,189,261    $  8,204,015      $  93,148,022      $                   -      $  11,529,949    $4,314,109  
 
Expenses
 
Mortality and expense risk fees and administrative expenses
  (Note 4)
   22,846,112      1,161,684    1,733,391      24,323,942      6,123,138      3,729,058    968,036  
    
    
 
    
    
    
 
  
 
Net investment income (loss) (Note 3C)    25,338,405         3,027,577    6,470,624      68,824,080      (6,123,138 )    7,800,891    3,346,073  
    
    
 
    
    
    
 
  
 
Net realized and unrealized gain (loss) on investments
 
Net realized gain (loss) on investments (Notes 3B, 3C and 7)    105,459,577      -    (1,317,346 )    85,411,666      12,275,364      7,289,689    93,999  
 
Change in net unrealized appreciation/depreciation of
  investments
   (217,242,437 )    -      (9,397,685 )    (199,070,966 )    314,988,560      128,092,626    (2,408,568 )
    
    
 
    
    
    
 
  
 
Net gain (loss) on investments    (111,782,860 )    -    (10,715,031 )    (113,659,300 )    327,263,924      135,382,295    (2,315,109 )
    
    
 
    
    
    
 
  
 
Net increase (decrease) in net assets resulting from
  operations
   $ (86,444,455 )    $     3,027,677    $  (4,244,407 )    $ (44,835,220 )    $321,140,786      $143,183,186    $1,030,904  
    
    
 
    
    
    
 
  
 
*
This division invests in the Oppenheimer Aggressive Growth Fund/VA.
 
See Notes to Financial Statements.
 
F-3
 
Massachusetts Mutual Variable Annuity Separate Account 1 -  Flex Extra (Qualified)
 
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1999
 
     MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   *Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

 
Increase (decrease) in net assets
 
Operations:
 
  Net investment income (loss)    $    25,338,405      $  3,027,577      $    6,470,624      $    68,824,080      $    (6,123,138 )    $    7,800,891      $  3,346,073  
 
  Net realized gain (loss) on investments    105,459,577      -      (1,317,346 )    85,411,666      12,272,364      7,289,669      93,399  
 
  Change in net unrealized appreciation/depreciation of
    investments
   (217,242,437 )    -      (9,397,685 )    (199,070,966 )    314,988,560      128,092,626      (2,408,568 )
    
    
    
    
    
    
    
  
 
Net increase (decrease) in net assets resulting from operations    (86,444,455 )    3,027,577      (4,244,407 )    (44,835,220 )    321,140,786      143,183,186      1,030,904  
    
    
    
    
    
    
    
  
Capital transactions: (Note 8)
 
  Net contract payments (Note 6)    164,645,688      19,644,103      16,726,627      149,366,064      56,528,672      31,599,299      7,656,857  
 
  Transfer to Guaranteed Principal Account    (8,753,787 )    (2,715,818 )    (2,073,037 )    (9,495,444 )    (2,006,535 )    (1,224,243 )    (566,782 )
 
  Withdrawal of funds    (270,663,968 )     (25,419,093 )    (19,036,479 )    (279,479,979 )    63,645,151 )    (38,695,742 )    (9,830,387 )
 
  Reimbursement (payment) of accumulation unit value
    fluctuation
   992,502      238      11,679      715,142      (819,486 )    (359,503 )    (8,303 )
 
  Net charge (credit) to annuitant mortality fluctuation
    reserve (Note 3D)
   (9,233 )    173      (338 )    27,176      (917 )    (6,298 )    166  
 
  Annuity benefit payments    (171,472 )    (1,323 )    (12,953 )    (225,008 )    (10,812 )    (448 )    (1,422 )
 
  Withdrawals due to administrative and contingent deferred sales
    charges (Note 6)
   (4,721,356 )    (315,856 )    (849,178 )    (5,112,680 )    (1,201,712 )    (619,457 )    (143,093 )
 
  Divisional transfers    (21,378,081 )    18,313,858      (6,189,342 )    (37,650,302 )    40,441,196      14,318,058      (7,855,387 )
    
    
    
    
    
    
    
  
Net increase (decrease) in net assets resulting from
  capital transactions
   (140,059,707 )    9,506,282      (11,429,021 )    (181,855,031 )    29,285,255      5,011,666       (10,748,351 )
    
    
    
    
    
    
    
  
 
Total increase (decrease)    (226,504,162 )    12,533,859      (15,667,428 )    (226,690,251 )    350,426,041      148,194,852      (9,717,447 )
 
NET ASSETS, at beginning of the year    1,805,773,569      84,947,812      137,889,259      1,929,112,663      384,001,085      253,788,683      79,938,939  
    
    
    
    
    
    
    
  
 
NET ASSETS, at end of the year    $1,579,269,407      $97,481,671      $122,221,831      $1,702,422,412      $734,427,126      $401,983,535      $70,221,492  
    
    
    
    
    
    
    
  
 
*
This division invests in the Oppenheimer Aggressive Growth Fund/VA.
 
See Notes to Financial Statements.
 
F-4
 
Massachusetts Mutual Variable Annuity Separate Account 1 -  Flex Extra (Qualified)
 
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1998
 
     MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   *Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

 
Increase (decrease) in net assets
 
Operations:
 
  Net investment income    $    65,832,910      $         2,754,174      $         6,435,688      $  137,290,071      $         4,621,601      $       18,312,826      $         1,029,818  
 
  Net realized gain on investments    40,715,247      -      175,578      40,453,309      3,796,453      2,316,249      585,727  
 
  Change in net unrealized appreciation/depreciation of
    investments
   120,868,915      -      1,355,721      31,568,535      27,334,115      5,708,659      (647,713 )
    
    
    
    
    
    
    
  
 
Net increase in net assets resulting from operations    227,417,072      2,754,174      7,966,987      209,311,915      35,752,169      26,337,734      967,832  
    
    
    
    
    
    
    
  
Capital transactions: (Note 8)
 
  Net contract payments (Note 6)    234,334,365      42,984,690      25,793,792      226,272,450      78,684,856      49,990,108      24,010,666  
 
  Transfer to Guaranteed Principal Account    (8,680,723 )    (2,534,720 )    (626,871 )    (10,542,006 )    (1,459,346 )    (1,195,538 )    (566,275 )
 
  Withdrawal of funds    (188,939,283 )    (15,932,582 )    (15,269,421 )    (216,569,542 )    (34,226,369 )    (22,863,954 )    (7,045,668 )
 
  Reimbursement (payment) of accumulation unit value
    fluctuation
   (338,003 )    3,327      (171,552 )    (558,141 )    (81,958 )    (34,093 )    (7,199 )
 
  Net charge (credit) to annuitant mortality fluctuation
    reserve (Note 3D)
   36,577      99      2,739      (3,721 )    5,939      (796 )    1,944  
 
  Annuity benefit payments    (137,922 )    (1,329 )    (12,651 )    (200,531 )    (7,154 )    (2,900 )    (3,404 )
 
  Withdrawals due to administrative and contingent
    deferred sales charges (Note 6)
   (3,928,657 )    (230,496 )    (778,593 )    (4,707,537 )    (764,333 )    (395,028 )    (102,820 )
 
  Divisional transfers    15,051,030      (11,732,070 )    8,131,600      (9,727,276 )    80,515      1,576,742      (3,380,541 )
    
    
    
    
    
    
    
  
 
Net increase (decrease) in net assets resulting from capital
  transactions
   47,397,384      12,556,919      17,069,043      (16,036,304 )    42,232,150      27,074,541      12,906,703  
    
    
    
    
    
    
    
  
 
Total increase    274,814,456      15,311,093      25,036,030      193,275,611      77,984,319      53,412,275      13,874,535  
 
NET ASSETS, at beginning of the year    1,530,959,113      69,636,719      112,853,229      1,735,837,052      306,016,766      200,376,408      66,064,404  
    
    
    
    
    
    
    
  
 
NET ASSETS, at end of the year    $1,805,773,569      $   84,947,812      $  137,889,259      $1,929,112,663      $  384,001,085      $  253,788,683      $   79,938,939  
    
    
    
    
    
    
    
  
 
*
This division invests in the Oppenheimer Aggressive Growth Fund/VA. Prior to May 1, 1998, Oppenheimer Aggressive Growth Fund was called the Oppenheimer Capital Appreciation Fund.
 
See Notes to Financial Statements.
 
F-5
 
Massachusetts Mutual Variable Annuity Separate Account 1 -  Flex Extra (Qualified)
 
Notes To Financial Statements
 
1.
HISTORY
 
Massachusetts Mutual Variable Annuity Separate Account 1 (“Separate Account 1”) is a separate investment account established on April 8, 1981 by Massachusetts Mutual Life Insurance Company (“MassMutual”). Separate Account 1 operates as a registered unit investment trust pursuant to the Investment Company Act of 1940 (“the 1940 Act”) and the rules promulgated thereunder.
 
MassMutual maintains three segments within Separate Account 1. The segments are Variable Annuity Fund 4, Flex-Annuity IV (Qualified) and Flex Extra (Qualified.) These notes and the financial statements presented herein, with the exception of Note 9, describe and consist only of the Flex Extra (Qualified) segment (the “Segment”).
 
On September 13, 1994, MassMutual paid $15,000 to provide the initial capital for the Segment ’s three most recently established divisions: 1,516 shares were purchased in the management investment company described in Note 2 supporting the three Oppenheimer divisions of the Segment.
 
2.
INVESTMENT OF THE SEGMENT’S ASSETS
 
The Flex Extra (Qualified) Segment maintains seven divisions. The MML Equity Division invests in shares of MML Equity Fund, the MML Money Market Division invests in shares of MML Money Market Fund, the MML Managed Bond Division invests in shares of MML Managed Bond Fund, the MML Blend Division invests in shares of MML Blend Fund, the Oppenheimer Capital Appreciation Division invests in shares of Oppenheimer Aggressive Growth Fund/VA, the Oppenheimer Global Securities Division invests in shares of Oppenheimer Global Securities Fund/VA and the Oppenheimer Strategic Bond Division invests in shares of Oppenheimer Strategic Bond Fund/VA.
 
MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend Fund are four of the eight separate series of shares of the MML Series Investment Fund (the “MML Trust”). The MML Trust is an open-end, management investment company registered under the 1940 Act. MassMutual serves as the investment adviser to the MML Trust. David L. Babson & Company, Inc. ( “Babson”) a controlled subsidiary of MassMutual, served as the investment sub-adviser to MML Equity Fund and the equity sector of the MML Blend Fund (effective January 1, 2000, Babson will continue to serve as the sub-adviser to the MML Equity Fund and will become the sub-advisor to the MML Money Market Fund, MML Managed Bond Fund and the entire MML Blend Fund).
 
Oppenheimer Aggressive Growth Fund/VA, Oppenheimer Global Securities Fund/VA and Oppenheimer Strategic Bond Fund/VA are part of the Oppenheimer Variable Account Funds (the “Oppenheimer Trust”). The Oppenheimer Trust is a diversified, open-end, management investment company registered under the 1940 Act, for which OppenheimerFunds, Inc. (“OFI”), a controlled subsidiary of MassMutual, serves as investment adviser.
 
In addition to the seven divisions of the Segment, a contract owner may also allocate funds to the Guaranteed Principal Account, which is part of MassMutual’s general account. Because of exemptive and exclusionary provisions, interests in the Guaranteed Principal Account, which is part of MassMutual’s general account, are not registered under the Securities Act of 1933. Also, the general account is not registered as an investment company under the 1940 Act.
 
3.
SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies followed consistently by the Segment in preparation of the financial statements in conformity with generally accepted accounting principles.
 
A.     Investment Valuation
 
Investments in MML Trust and Oppenheimer Trust are each stated at market value which is the net asset value of each of the respective underlying funds.
 
Notes To Financial Statements (Continued)
 
B.     Accounting for Investments
 
Investment transactions are accounted for on trade date and identified cost is the basis followed in determining the cost of investments sold for financial statement purposes. Dividend income is recorded on the ex-dividend date.
 
C.     Federal Income Taxes
 
Operations of the Segment form a part of the total operations of MassMutual, and the Segment is not taxed separately. MassMutual is taxed as a life insurance company under the provisions of the 1986 Internal Revenue Code, as amended. The Segment will not be taxed as a “regulated investment company” under Subchapter M of the Internal Revenue Code. Under existing federal law, no taxes are payable on investment income and realized capital gains attributable to contracts which depend on the Segment’s investment performance. Accordingly, no provision for federal income tax has been made. MassMutual may, however, make such a charge in the future if an unanticipated change of current law results in a company tax liability attributable to the Segment.
 
D.     Annuitant Mortality Fluctuation Reserve
 
The Segment maintains a reserve as required by regulatory authorities to provide for mortality losses incurred. The reserve is increased quarterly for mortality gains and its proportionate share of any increases in value. The reserve is charged quarterly for mortality losses and its proportionate share of any decreases in value. Transfers to or from MassMutual are then made quarterly to adjust the Segment. Net transfers from MassMutual to the segment totaled $18,448 and $218,271 for the years ended December 31, 1999 and 1998. The reserve is subject to a maximum of 3% of the Segment‘s annuity reserves. Any mortality losses in excess of this reserve will be assumed by MassMutual. The reserve is not available to owners of contracts except to the extent necessary to cover mortality losses under the contracts.
 
E.     Annuity Reserves
 
Annuity reserves are developed by using accepted actuarial methods and are computed using the 1971 Individual Annuity Mortality Table, as modified.
 
F.     Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
4.
CHARGES FOR MORTALITY AND EXPENSE RISKS AND ADMINISTRATIVE EXPENSES
 
Daily charges are made which are currently equivalent on an annual basis to 1.30% of the net asset value of the Segment (the “Net Asset Value”). The mortality and expense risk part of this charge is made daily at an annual rate which is currently equal to 1.15%, and will not exceed 1.25% of the Net Asset Value. The administrative expense part of this charge is made daily at an annual rate of 0.15% of the Net Asset Value.
 
5.
DISTRIBUTION AGREEMENT
 
MML Distributors, LLC ( “MML Distributors”), a wholly-owned subsidiary of MassMutual, serves as the principal underwriter for the contracts pursuant to an underwriting and servicing agreement among MML Distributors, MassMutual and Separate Account 1. MML Distributors is registered with the Securities and Exchange Commission (the “SEC”) as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. (the “NASD”). MML Distributors may enter into selling agreements with other broker-dealers who are registered with the SEC and are members of the NASD in order to sell the contracts.
 
MML Investors Services, Inc. (“MMLISI”), a wholly-owned subsidiary of MassMutual, serves as co-underwriter for the contracts pursuant to underwriting and servicing agreements among MMLISI, MassMutual and Separate Account 1. MMLISI is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the NASD. Registered representatives of MMLISI sell the contracts as authorized variable life insurance agents under applicable state insurance laws.
 
Pursuant to the underwriting and servicing agreements, commissions or other fees due to registered representatives for selling and servicing the contracts are paid by MassMutual on behalf of MML Distributors or MMLISI. MML Distributors and MMLISI also receive compensation for their activities as underwriters of the contracts.
 
6.
CHARGES/DEDUCTIONS FOR ADMINISTRATIVE CHARGES, CONTINGENT DEFERRED SALES CHARGES AND PREMIUM TAXES
 
For The Year  Ended    MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

December 31, 1999
  
 
Gross contract payments    $164,686,863      $19,649,016      $16,730,810      $149,403,418      $56,542,809      $31,607,202      $  7,658,772  
 
Less deduction for premium taxes    41,175      4,913      4,183      37,354      14,137      7,903      1,915  
    
    
    
    
    
    
    
  
 
Net contract payments    $164,645,688      $19,644,103      $16,726,627      $149,366,064      $56,528,672      $31,599,299      $  7,656,857  
    
    
    
    
    
    
    
  
 
Administrative and contingent deferred sales charges    $    4,721,356      $       315,856      $       849,178      $    5,112,680      $  1,201,712      $       619,457      $       143,093  
    
    
    
    
    
    
    
  
 
 
For The Year  Ended    MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

December 31, 1998
  
 
Gross contract payments    $234,397,808      $42,996,327      $25,800,775      $226,333,711      $78,706,159      $50,003,642      $24,017,166  
 
Less deduction for premium taxes    63,443      11,637      6,983      61,261      21,303      13,534      6,500  
    
    
    
    
    
    
    
  
 
Net contract payments    $234,334,365      $42,984,690      $25,793,792      $226,272,450      $78,684,856      $49,990,108      $24,010,666  
    
    
    
    
    
    
    
  
 
Administrative and contingent deferred sales charges    $    3,928,657      $       230,496      $       778,593      $    4,707,537      $       764,333      $       395,028      $       102,820  
    
    
    
    
    
    
    
  
 
7. PURCHASES AND SALES OF INVESTMENTS  
For The Year  Ended    MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

December 31, 1999
  
 
Cost of purchases    $113,184,124      $54,791,840      $18,301,810      $180,145,631      $49,993,441      $31,818,034      $  7,105,848  
Proceeds from sales     (191,688,452 )     (41,442,134 )     (22,583,716 )     (225,913,597 )     (26,105,368 )     (19,060,596 )     (14,319,599 )
 
Notes To Financial Statements (Continued)
 
 
8.
NET INCREASE (DECREASE) IN ACCUMULATION UNITS
 
For The Year  Ended    MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

December 31, 1999
  
 
Units purchased    38,936,751      11,902,635      7,356,213      44,140,390      25,073,912      19,756,450      5,694,099  
 
Units withdrawn and transferred to Guaranteed Principal Account    (67,035,132 )     (17,105,478 )    (9,683,176 )    (86,782,229 )    (28,711,271 )    (24,736,079 )    (7,827,696 )
 
Units transferred between divisions    (5,425,289 )    10,867,957      (2,749,545 )    (11,292,201 )    14,746,187      7,187,999      (5,852,216 )
 
Units transferred to annuity reserves    (92,733 )    -      (6,103 )    (48,954 )    (15,364 )    (27,665 )    -  
    
    
    
    
    
    
    
  
 
Net increase (decrease)    (33,616,403 )    5,665,114      (5,082,611 )    (53,982,994 )    11,093,464      2,180,705      (7,985,813 )
 
Units, at beginning of the year    425,596,117      51,773,022       59,569,603      569,209,258      200,863,119      176,570,468       59,361,175  
    
    
    
    
    
    
    
  
Units, at end of the year    391,979,714      57,438,136      54,486,992      515,226,264      211,956,583      178,751,173      51,375,362  
    
    
    
    
    
    
    
  
 
   
For The Year  Ended    MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   Oppenheimer
Capital
Appreciation
Division

   Oppenheimer
Global
Securities
Division

   Oppenheimer
Strategic
Bond
Division

December 31, 1998
  
 
Units purchased    59,734,461      26,754,409      11,399,352      71,075,656      44,410,224      37,130,101      17,833,894  
 
Units withdrawn and transferred to Guaranteed Principal Account    (51,636,826 )    (11,662,859 )    (7,400,382 )    (72,902,856 )    (20,774,729 )    (18,331,820 )    (5,759,178 )
 
Units transferred between divisions    3,612,016      (7,379,349 )    3,535,629      (3,097,482 )    (359,270 )    710,523      (2,540,000 )
 
Units transferred to annuity reserves    (48,546 )    -      -      (78,931 )    (17,205 )    (6,958 )    -  
    
    
    
    
    
    
    
  
 
Net increase (decrease)    11,661,105      7,712,201      7,534,599      (5,003,613 )    23,259,020      19,501,846      9,534,716  
 
Units, at beginning of the year    413,935,012      44,060,821      52,035,004      574,212,871      177,604,099      157,068,622      49,826,459  
    
    
    
    
    
    
    
  
 
Units, at end of the year    425,596,117       51,773,022       59,569,603      569,209,258      200,863,119      176,570,468       59,361,175  
    
    
    
    
    
    
    
  
 
9.
CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
 
As discussed in Note 1, the financial statements only represent activity of the Flex Extra (Qualified) segment of the Massachusetts Mutual Variable Annuity Separate Account 1. The combined net assets as of December 31, 1999 for the Massachusetts Mutual Variable Annuity Separate Account 1, which includes the segments pertaining to the Variable Annuity Fund 4, Flex-Annuity IV (Qualified) and Flex Extra (Qualified) are as follows:
 
     MML
Equity
Division

   MML
Money
Market
Division

   MML
Managed
Bond
Division

   MML
Blend
Division

   *Oppenheimer
Capital
Appreciation
Division

   *Oppenheimer
Global
Securities
Division

   *Oppenheimer
Strategic
Bond
Division

 
Total assets    $1,703,866,600    $107,644,771    $132,667,722    $1,912,871,928    $736,881,297    $403,063,796    $70,641,266
 
Total liabilities    6,450,532    461,959    521,566    7,579,548    2,454,171    1,080,261    419,774
    
 
 
 
 
 
 
 
Net assets    $1,697,416,068    $107,182,812    $132,146,156    $1,905,292,380    $734,427,126    $401,983,535    $70,221,492
    
 
 
 
 
 
 
 
Net assets consist of:
 
Accumulation units —value    $1,695,899,210    $107,114,013    $132,019,299    $1,902,938,611    $734,267,997    $401,884,077    $70,200,599
 
Annuity reserves    1,516,858    68,799    126,857    2,353,769    159,129    99,458    20,893
    
 
 
 
 
 
 
 
Net assets    $1,697,416,068    $107,182,812    $132,146,156    $1,905,292,380    $734,427,126    $401,983,535    $70,221,492
    
 
 
 
 
 
 
 
*
Offered on the Flex Extra (Qualified) Contracts only.
 
Independent Auditors’ Report
 
The Board of Directors and Policyowners of
Massachusetts Mutual Life Insurance Company
 
We have audited the accompanying statement of Assets and Liabilities of each of the divisions of the Flex Extras (Qualified) Segment of Massachusetts Mutual Variable Annuity Separate Account I (“the Account ”), as of December 31, 1999, and the related statements of Operations and of Changes in Net Assets for the year then ended. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The Financial Statements of the account for the year ended December 31, 1998, were audited by other auditors, whose report, dated February 25, 1999, expressed an unqualified opinion on those statements.
 
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 1999 by correspondence with the investment company. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
 
In our opinion, such financial statements present fairly, in all material respects, the financial position of the Account at December 31, 1999, and the results of its operations and its changes in net assets for the year then ended in conformity with generally accepted accounting principles.
 
Deloitte & Touche LLP
New York, New York
February 1, 2000


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