<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
AND
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT B
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
ALSO KNOWN AS
MODIFIED SINGLE PREMIUM INDIVIDUAL DEFERRED
VARIABLE ANNUITY CONTRACT
ISSUED BY
ML LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 100 CHURCH STREET, 11TH FLOOR
NEW YORK, NEW YORK 10080-6511
SERVICE CENTER: P.O. BOX 44222
JACKSONVILLE, FLORIDA 32231-4222
4804 DEER LAKE DRIVE EAST,
JACKSONVILLE, FLORIDA 32246
PHONE: (800) 333-6524
OFFERED THROUGH
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
This individual deferred variable annuity contract (the "Contract") is designed
to provide comprehensive and flexible ways to invest and to create a source of
income protection for later in life through the payment of annuity benefits. An
annuity is intended to be a long term investment. Contract owners should
consider their need for deferred income before purchasing the Contract. The
Contract is issued by ML Life Insurance Company of New York ("ML of New York")
both on a nonqualified basis, and as an Individual Retirement Annuity ("IRA")
that is given qualified tax status.
This Statement of Additional Information is not a Prospectus and should be read
together with the Contract's Prospectus dated May 1, 1999, which is available on
request and without charge by writing to or calling ML of New York at its
Service Center address or phone number set forth above.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
OTHER INFORMATION......................................................................................... 3
General Information and History........................................................................... 3
Principal Underwriter..................................................................................... 3
Financial Statements...................................................................................... 3
Administrative Services Arrangements...................................................................... 3
CALCULATION OF YIELDS AND TOTAL RETURNS................................................................... 3
FINANCIAL STATEMENTS OF ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A................................ S-1
FINANCIAL STATEMENTS OF ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT B................................ S-xx
FINANCIAL STATEMENTS OF ML LIFE INSURANCE COMPANY OF NEW YORK............................................. G-1
</TABLE>
2
<PAGE>
OTHER INFORMATION
GENERAL INFORMATION AND HISTORY
ML Life Insurance Company of New York ("ML of New York") is a stock life
insurance company organized under the laws of the State of New York on November
28, 1973. Prior to September 11, 1991, ML of New York conducted its business
under the name Royal Tandem Life Insurance Company. The name change was effected
under the authority of the New York Insurance Department.
PRINCIPAL UNDERWRITER
Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of ML of New
York, performs all sales and distribution functions regarding the Contracts and
may be deemed the principal underwriter of ML of New York Variable Annuity
Separate Account A and ML of New York Variable Annuity Separate Account B (the
"Accounts") under the Investment Company Act of 1940. The offering is
continuous. For the years ended December 31, 1998, 1997, and 1996, Merrill
Lynch, Pierce, Fenner & Smith Incorporated received $3.3 million, $3.5 million,
and $0.8 million, respectively, in commissions in connection with the sale of
the Contracts.
FINANCIAL STATEMENTS
The financial statements of ML of New York included in this Statement of
Additional Information should be distinguished from the financial statements of
the Accounts and should be considered only as bearing upon the ability of ML of
New York to meet any obligations it may have under the Contract.
ADMINISTRATIVE SERVICES ARRANGEMENTS
ML of New York has entered into a Service Agreement with its parent, Merrill
Lynch Insurance Group, Inc. ("MLIG") pursuant to which ML of New York can
arrange for MLIG to provide directly or through affiliates certain services.
Pursuant to this agreement, ML of New York has arranged for MLIG to provide
administrative services for the Accounts and the Contracts, and MLIG, in turn,
has
arranged for a subsidiary, Merrill Lynch Insurance Group Services, Inc. ("MLIG
Services"), to provide these services. Compensation for these services, which
will be paid by ML of New York, will be based on the charges and expenses
incurred by MLIG Services, and will reflect MLIG Services' actual costs. For the
years ended December 31, 1998, 1997, and 1996, ML of New York paid
administrative services fees of $4.8 million, $4.3 million, and $4.3 million,
respectively.
CALCULATION OF YIELDS AND TOTAL RETURNS
MONEY MARKET YIELDS
From time to time, ML of New York may quote in advertisements and sales
literature the current annualized yield for the Domestic Money Market Subaccount
of Account A and the Reserve Assets Subaccount of Account B for a 7-day period
in a manner that does not take into consideration any realized or unrealized
gains or losses on shares of the underlying Funds or on their respective
portfolio securities. The current annualized yield is computed by: (a)
determining the net change (exclusive of realized gains and losses on the sales
of securities and unrealized appreciation and depreciation) at the end of the
7-day period in the value of a hypothetical account under a Contract having a
balance of 1 unit at the beginning of the period, (b) dividing such net change
in account value by the value of the account at the beginning of the period to
determine the base period return; and (c) annualizing this quotient on a 365-day
basis. The net change in account value reflects: (1) net income from the Fund
attributable to the hypothetical account; and (2) charges and deductions imposed
under the Contract which are attributable to the hypothetical account. The
charges and deductions include the per unit charges for the hypothetical account
for: (1) the mortality and expense risk charge; (2) the administration charge in
the case of the Domestic Money Market Subaccount; and (3) the annual contract
maintenance charge. For purposes of calculating current yields for a Contract,
an average per unit
3
<PAGE>
contract maintenance charge is used, as described below. Current yield will be
calculated according to the following formula:
Current Yield = ((NCF - ES/UV) X (365/7)
Where:
<TABLE>
<S> <C> <C>
NCF = the net change in the value of the Fund (exclusive of realized gains and losses on
the sale of securities and unrealized appreciation and depreciation) for the 7-day
period attributable to a hypothetical account having a balance of 1 unit.
ES = per unit expenses for the hypothetical account for the 7-day period.
UV = the unit value on the first day of the 7-day period.
</TABLE>
ML of New York also may quote the effective yield of the Domestic Money Market
Subaccount or the Reserve Assets Subaccount for the same 7-day period,
determined on a compounded basis. The effective yield is calculated by
compounding the unannualized base period return according to the following
formula:
Effective Yield = (1 + ((NCF - ES)/UV)) TO THE POWER OF (365/7) = 1
Where:
<TABLE>
<S> <C> <C>
NCF = the net change in the value of the Fund (exclusive of realized gains and losses on
the sale of securities and unrealized appreciation and depreciation) for the 7-day
period attributable to a hypothetical account having a balance of 1 unit.
ES = per unit expenses of the hypothetical account for the 7-day period.
UV = the unit value for the first day of the 7-day period.
</TABLE>
The effective yield for the Domestic Money Market subaccount for the 7-day
period ended December 31, 1998 was 3.41%. The effective yield for the Reserve
Assets subaccount for the 7-day period ended December 31, 1998 was 4.02%.
Because of the charges and deductions imposed under the Contract, the yield for
the Domestic Money Market Subaccount and the Reserve Assets Subaccount will be
lower than the yield for the corresponding underlying Fund.
The yields on amounts held in the Domestic Money Market Subaccount or the
Reserve Assets Subaccount normally will fluctuate on a daily basis. Therefore,
the disclosed yield for any given past period is not an indication or
representation of future yields or rates of return. The actual yield for those
subaccounts is affected by changes in interest rates on money market securities,
average portfolio maturity of the underlying Fund, the types and qualities of
portfolio securities held by the Fund and the Fund's operating expenses. Yields
on amounts held in the Domestic Money Market Subaccount and Reserve Assets
Subaccount may also be presented for periods other than a 7-day period.
OTHER SUBACCOUNT YIELDS
From time to time, ML of New York may quote in sales literature or
advertisements the current annualized yield of one or more of the Account A
subaccounts (other than the Domestic Money Market Subaccount) for a Contract for
30-day or one-month periods. The annualized yield of a subaccount refers to
income generated by the subaccount over a specified 30-day or one-month period.
Because the yield is annualized, the yield generated by the subaccount during
the 30-day or one-month period is assumed to be generated each period over a
12-month period. The yield is computed by: (1) dividing
4
<PAGE>
the net investment income of the Fund attributable to the subaccount units less
subaccount expenses for the period; by (2) the maximum offering price per unit
on the last day of the period times the daily average number of units
outstanding for the period; then (3) compounding that yield for a 6-month
period; and then (4) multiplying that result by 2. Expenses attributable to the
subaccount include the mortality and expense risk charge, the administration
charge and the annual contract maintenance charge. For purposes of calculating
the 30-day or one-month yield, an average contract maintenance charge per dollar
of contract value in the subaccount is used to determine the amount of the
charge attributable to the subaccount for the 30-day or one-month period, as
described below. The 30-day or one-month yield is calculated according to the
following formula:
Yield = 2 ((((NY - ES)/(U X UV)) + 1) TO THE POWER OF (6) - 1)
Where:
<TABLE>
<S> <C> <C>
NI = net investment income of the Fund for the 30-day or one-month period attributable
to the subaccount's units.
ES = expenses of the subaccount for the 30-day or one-month period.
U = the average number of units outstanding.
UV = the unit value at the close of the last day in the 30-day or one-month period.
</TABLE>
Currently, ML of New York may quote yields on bond subaccounts within Account A.
The yield for those subaccounts for the 30-day period ended December 31, 1998
was:
<TABLE>
<CAPTION>
NAME OF SUBACCOUNT YIELD
- -------------------------------------------------------------------------------------- -----------
<S> <C>
Prime Bond 4.28%
High Current Income 8.86%
Global Bond Focus
(formerly, World Income Focus) 2.36%
Government Bond
(formerly, Intermediate Government Bond) 3.17%
</TABLE>
Because of the charges and deductions imposed under the contracts, the yield for
an Account A subaccount will be lower than the yield for the corresponding Fund.
The yield on the amounts held in the Account A subaccounts normally will
fluctuate over time. Therefore, the disclosed yield for any given past period is
not an indication or representation of future yields or rates of return. A
subaccount's actual yield is affected by the types and quality of portfolio
securities held by the corresponding Fund, and its operating expenses.
Yield calculations do not take into account the declining contingent deferred
sales charge under the Contract of amounts surrendered or withdrawn under the
Contract deemed to consist of premiums paid within the preceding seven years. A
contingent deferred sales charge will not be imposed on the first withdrawal in
any Contract year to the extent that it is deemed to consist of gain on premiums
paid during the preceding seven contract years and/or premiums not subject to
such a charge.
5
<PAGE>
TOTAL RETURNS
From time to time, ML of New York also may quote in sales literature or
advertisements, total returns, including average annual total returns for one or
more of the subaccounts for various periods of time. ML of New York will always
include quotes of average annual total return for the period measured from the
date the subaccount commenced operations until it has been in operation for more
than 10 years. In addition, the average annual total returns will be provided
for an Account A subaccount or Account B for 1, 5 and 10 years, or for a shorter
period, if applicable. For the year ended December 31, 1998, returns were:
<TABLE>
<CAPTION>
SINCE
NAME OF SUBACCOUNT 1 YR 5 YR 10 YR INCEPTION
- ------------------------------------------ ---------- --------- ----- ----------
<S> <C> <C> <C> <C>
Prime Bond................................ -0.45% 4.46% N/A 6.16%
High Current Income....................... -10.47% 4.19% N/A 7.06%
Quality Equity............................ 6.91% 13.32% N/A 12.19%
Special Value Focus (formerly, Equity
Growth)................................. -13.60% 6.82% N/A 6.33%
Natural Resources Focus*.................. -21.67% -2.74% N/A -0.03%
Global Strategy Focus..................... 0.49% 6.47% N/A 7.86%
American Balanced*........................ 4.92% 9.03% N/A 9.38%
Basic Value Focus......................... 1.01% 13.37% N/A 13.91%
Global Bond Focus** (formerly, World
Income Focus)........................... 3.99% 4.72% N/A 5.39%
Global Utility Focus*..................... 15.27% 12.92% N/A 12.99%
International Equity Focus**.............. -0.49% 1.03% N/A 2.80%
Government Bond Fund (formerly,
Intermediate Government Bond)........... 0.39% N/A N/A 5.82%
Developing Capital Markets Focus.......... -34.58% N/A N/A -9.74%
Index 500................................. 19.42% N/A N/A 26.88%
Global Growth Focus....................... N/A N/A N/A 0.78%
Capital Focus............................. N/A N/A N/A -15.72%
Select Ten Trust.......................... N/A N/A N/A -9.07%
AIM V.I. Capital Appreciation............. 10.58% N/A N/A 12.34%
AIM V.I. Value............................ 23.49% N/A N/A 25.21%
Alliance Premier Growth................... 38.83% N/A N/A 36.08%
Alliance Quasar........................... N/A N/A N/A -31.85%
MFS Emerging Growth....................... 25.22% N/A N/A 22.47%
MFS Research.............................. 14.60% N/A N/A 18.03%
Hotchkis and Wiley International VIP...... N/A N/A N/A -18.66%
</TABLE>
Total returns assume the Contract was surrendered at the end of the period
shown, and are not indicative of performance if the Contract was continued for a
longer period.
- ------------------------
* This subaccount was closed to allocations of premiums or contract value
following the close of business on December 6, 1996.
** This subaccount was closed to allocations of premiums or contract value
following the close of business on June 5, 1998.
6
<PAGE>
Average annual total returns for other periods of time may also be disclosed
from time to time. For example, average annual total returns may be provided
based on the assumption that a subaccount had been in existence and had invested
in the corresponding underlying Fund for the same period as the corresponding
Fund had been in operation. The Funds commenced operations as indicated below:
<TABLE>
<CAPTION>
FUND COMMENCED OPERATIONS
- --------------------------------------------------------- -----------------------------
<S> <C>
Domestic Money Market Fund February 21, 1992
Prime Bond Fund April 29, 1982
High Current Income Fund April 29, 1982
Quality Equity Fund April 29, 1982
Equity Growth Fund April 29, 1982
Natural Resources Focus Fund* June 1, 1988
American Balanced Fund* June 1, 1988
Global Strategy Focus Fund February 21, 1992
Basic Value Focus Fund July 1, 1993
Global Bond Focus Fund** July 1, 1993
(formerly, World Income Focus)
Global Utility Focus Fund* July 1, 1993
International Equity Focus Fund** July 1, 1993
Government Bond Fund May 16, 1994
(formerly, Intermediate Government Bond)
Developing Capital Markets Focus Fund May 16, 1994
Reserve Assets Fund November 23, 1981
Index 500 Fund December 18, 1996
A.I.M. V.I. Capital Appreciation Fund May 5, 1993
A.I.M. V.I. Value Fund May 5, 1993
Alliance Premier Growth Portfolio March 12, 1992
Alliance Quasar Portfolio September 17, 1990
MFS Emerging Growth Series July 24, 1995
MFS Research Series July 26, 1995
Hotchkis and Wiley International VIP Portfolio June 10, 1990
</TABLE>
Average annual total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 under a Contract to the
redemption value of that investment as of the last day of each of the periods.
The ending date for each period for which total return quotations are provided
will generally be as of the most recent calendar quarter-end.
Average annual total returns are calculated using subaccount unit values
calculated on each valuation day based on the performance of the corresponding
underlying Fund, the deduction for the mortality and expense risk charge, the
administration charge (in the case of Account A subaccounts), and the contract
maintenance charge, and assume a surrender of the Contract at the end of the
period for the return quotation. Total returns therefore reflect a deduction of
the contingent deferred sales charge for any period of less than seven years.
For purposes of calculating total return, an average per dollar contract
maintenance charge attributable to the hypothetical account for the period is
used, as described below. The total return is then calculated according to the
following formula:
TR = ((ERV/P) TO THE POWER OF (1/N)) - 1
Where:
<TABLE>
<S> <C> <C>
TR = the average annual total return net of subaccount recurring charges (such as the
mortality and expense risk charge, administration charge, if applicable, and
contract maintenance charge).
ERV = the ending redeemable value (net of any applicable contingent deferred sales
charge) at the end of the period of the hypothetical account with an initial
payment of $1,000.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
</TABLE>
- ------------------------
* The subaccount corresponding to this Fund was closed to allocations of
premiums or contract value following the close of business on December 6,
1996.
** The subaccount corresponding to this Fund was closed to allocations of
premiums or contract value following the close of business on June 5, 1998.
7
<PAGE>
From time to time, ML of New York also may quote in sales literature or
advertisements, total returns that do not reflect the contingent deferred sales
charge. These are calculated in exactly the same way as average annual total
returns described above, except that the ending redeemable value of the
hypothetical account for the period is replaced with an ending value for the
period that does not take into account any contingent deferred sales charge on
surrender of the Contract. In addition, such nonstandard returns may also be
quoted for other periods.
For the year ended December 31, 1998 returns not reflecting any contingent
deferred sales charge were:
<TABLE>
<CAPTION>
SINCE
NAME OF SUBACCOUNT 1 YR 5 YR 10 YR INCEPTION
- ---------------------------------------------------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Prime Bond.......................................... 6.30% 4.96% N/A 6.27%
High Current Income................................. -4.48% 4.70% N/A 7.16%
Quality Equity...................................... 13.92% 13.69% N/A 12.27%
Special Value Focus (formerly, Equity Growth)....... -7.85% 7.28% N/A 6.44%
Natural Resources Focus*............................ -16.52% -2.21% N/A 0.10%
Global Strategy Focus............................... 7.31% 6.93% N/A 7.95%
American Balanced*.................................. 11.93% 9.46% N/A 9.46%
Basic Value Focus................................... 7.87% 13.74% N/A 14.11%
Global Bond Focus** (formerly, World Income
Focus)............................................ 11.00% 5.21% N/A 5.67%
Global Utility Focus*............................... 22.27% 13.29% N/A 13.20%
International Equity Focus**........................ 6.25% 1.59% N/A 3.12%
Government Bond Fund (formerly, Intermediate
Government Bond).................................. 7.20% N/A N/A 6.35%
Developing Capital Markets Focus.................... -30.40% N/A N/A -9.23%
Index 500........................................... 26.43% N/A N/A 28.80%
Global Growth Focus................................. N/A N/A N/A 13.02%
Capital Focus....................................... N/A N/A N/A -5.60%
Select Ten Trust.................................... N/A N/A N/A 1.90%
AIM V.I. Capital Appreciation....................... 17.59% N/A N/A 14.51%
AIM V.I. Value...................................... 30.50% N/A N/A 27.15%
Alliance Premier Growth............................. 45.84% N/A N/A 37.87%
Alliance Quasar..................................... N/A N/A N/A -23.80%
MFS Emerging Growth................................. 32.23% N/A N/A 24.45%
MFS Research........................................ 21.61% N/A N/A 20.09%
Hotchkis and Wiley International VIP................ N/A N/A N/A -8.92%
</TABLE>
From time to time, ML of New York also may quote in sales literature or
advertisements total returns or other performance information for a hypothetical
Contract assuming the initial premium is allocated to more than one subaccount
or assuming monthly transfers from the Domestic Money Market Subaccount to one
or more designated subaccounts under a dollar cost averaging program. These
returns will reflect the performance of the affected subaccount(s) for the
amount and duration of the allocation to each subaccount for the hypothetical
Contract. They also will reflect the deduction of charges described above except
for the contingent deferred sales corrge. For example, total return information
for a Contract with a dollar cost averaging program for a 12-month period will
assume commencement of the program at the beginning of the most recent 12-month
period for which average annual total return information is available. This
information will assume an initial lump-sum investment in the Domestic Money
Market Subaccount at the beginning of that period and monthly transfers of a
portion of the contract value from that subaccount to designated subaccount(s)
during the 12-month period. The total return for the Contract for this 12-month
period therefore will reflect the return on the portion of the contract value
that remains invested in the Domestic Money Market Subaccount for the period it
is assumed to be so invested, as affected by monthly transfers, and the return
on amounts transferred to the designated subaccounts for the period during which
those amounts are assumed to be invested in those subaccounts. The return for an
amount invested in a subaccount will be based on the performance of that
subaccount for the duration of the investment, and will reflect the charges
described above other than the contingent deferred sales
- --------------------------
* This subaccount was closed to allocations of premiums or contract value
following the close of business on December 6, 1996.
** This subaccount was closed to allocations of premiums or contract value
following the close of business on June 5, 1998.
8
<PAGE>
charge. Performance information for a dollar cost-averaging program also may
show the returns for various periods for a designated subaccount assuming
monthly transfers to the subaccount, and may compare those returns to returns
assuming an initial lump-sum investment in that subaccount. This information
also may be compared to various indices, such as the Merrill Lynch 91-day
Treasury Bills index or the U.S. Treasury Bills index and may be illustrated by
graphs, charts, or otherwise.
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
ML Life Insurance Company of New York:
We have audited the accompanying statement of net assets of
ML of New York Variable Annuity Separate Account A (the
"Account") as of December 31, 1998 and the related
statements of operations and changes in net assets for each
of the two years in the period then ended. These financial
statements are the responsibility of the management of ML
Life Insurance Company of New York (the "Company"). Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits 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 mutual fund securities owned at December 31, 1998. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in
all material respects, the financial position of the Account
at December 31, 1998 and the results of its operations and
the changes in its net assets for each of the two years in
the period then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The supplemental schedules included herein are presented for
the purpose of additional analysis and are not a required
part of the basic financial statements. These schedules are
the responsibility of the Company's management. Such
schedules have been subjected to the auditing procedures
applied in our audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects
when considered in relation to the basic financial
statements taken as a whole.
February 4, 1999
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
STATEMENT OF NET ASSETS AT DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Market
Cost Shares Value
======================= ======================= =======================
<S> <C> <C> <C>
ASSETS:
Investments in Merrill Lynch
Variable Series Funds, Inc. (Note 1):
Domestic Money Market Fund $ 33,650,875 33,650,875 $ 33,650,875
Prime Bond Fund 43,753,430 3,673,187 44,996,538
High Current Income Fund 34,739,225 3,098,436 31,325,188
Quality Equity Fund 42,673,010 1,388,359 52,924,246
Special Value Focus Fund 34,774,182 1,481,213 29,550,205
American Balanced Fund 12,614,386 901,430 15,089,930
Natural Resources Focus Fund 1,066,572 93,901 718,345
Global Strategy Focus Fund 43,554,565 3,439,561 46,124,510
Global Utility Focus Fund 5,151,377 476,654 8,141,246
International Equity Focus Fund 11,163,337 996,665 10,644,379
Global Bond Focus Fund 4,222,943 447,376 4,429,022
Basic Value Focus Fund 42,362,660 3,029,042 44,436,047
Government Bond Fund 21,664,932 2,052,127 22,327,137
Developing Capital Markets Focus Fund 5,170,890 563,198 3,621,360
Index 500 Fund 25,993,194 1,975,581 32,061,982
Global Growth Focus Fund 1,233,106 126,349 1,367,096
Capital Focus Fund 1,056,088 113,398 1,106,764
----------------------- -----------------------
364,844,772 382,514,870
----------------------- -----------------------
Investments In Hotchkis & Wiley
Variable Trust (Note 1):
International VIP Portfolio 22,220,943 2,297,008 21,867,517
----------------------- -----------------------
22,220,943 21,867,517
----------------------- -----------------------
Investments In Defined Asset Funds,
Equity Investor Fund (Note 1):
1998 ML Select Ten V.I. Trust 1,886,079 1,904,528 1,931,267
----------------------- -----------------------
1,886,079 1,931,267
----------------------- -----------------------
Investments in Alliance
Variable Products Series Fund, Inc. (Note 1):
Quasar Portfolio 825,293 72,513 807,790
Premier Growth Portfolio 35,739,648 1,591,110 49,372,147
----------------------- -----------------------
36,564,941 50,179,937
----------------------- -----------------------
Investments in MFS
Variable Insurance Trust (Note 1):
MFS Emerging Growth Series 16,128,553 968,473 20,793,124
MFS Research Series 14,450,754 888,306 16,922,227
----------------------- -----------------------
30,579,307 37,715,351
----------------------- -----------------------
(continued)
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
STATEMENT OF NET ASSETS AT DECEMBER 31, 1998 (continued)
================================================================================
<TABLE>
<CAPTION>
Market
Cost Shares Value
======================= ======================= =======================
<S> <C> <C> <C>
Investments in AIM
Variable Insurance Funds, Inc. (Note 1):
AIM V.I. Value Fund 22,756,036 1,011,785 26,559,346
AIM V.I. Capital Appreciation Fund 7,665,502 334,760 8,435,959
----------------------- -----------------------
30,421,538 34,995,305
----------------------- -----------------------
TOTAL ASSETS $ 486,517,580 529,204,247
======================= -----------------------
LIABILITIES:
Due to ML Life Insurance Company of New York 253,502
-----------------------
TOTAL LIABILITIES 253,502
-----------------------
NET ASSETS $ 528,950,745
=======================
</TABLE>
See Notes to Financial Statements
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
================================================================================
<TABLE>
<CAPTION>
1998 1997
======================= =======================
<S> <C> <C>
Investment Income:
Reinvested Dividends $ 44,880,050 $ 19,823,996
Mortality and Expense Charges (Note 3) (6,329,552) (4,729,318)
----------------------- -----------------------
Net Investment Income 38,550,498 15,094,678
----------------------- -----------------------
Realized and Unrealized Gains on Investments:
Net Realized Gains 2,687,979 6,167,098
Net Change in Unrealized Gains 6,025,721 13,593,179
----------------------- -----------------------
Net Gain on Investments 8,713,700 19,760,277
----------------------- -----------------------
Increase in Net Assets
Resulting from Operations 47,264,198 34,854,955
----------------------- -----------------------
Changes from Principal Transactions:
Transfer of Net Premiums 97,074,808 100,897,509
Transfer of Contract Owner Withdrawals (19,903,885) (14,728,085)
Transfers Out - Net (2,741,911) (1,903,053)
Transfer of Contract Maintenance Charges (Note 3) (130,287) (107,946)
----------------------- -----------------------
Increase in Net Assets
Resulting from Principal Transactions 74,298,725 84,158,425
----------------------- -----------------------
Increase in Net Assets 121,562,923 119,013,380
Net Assets Beginning Balance 407,387,822 288,374,442
----------------------- -----------------------
Net Assets Ending Balance $ 528,950,745 $ 407,387,822
======================= =======================
</TABLE>
See Notes to Financial Statements
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
ML of New York Variable Annuity Separate Account A
("Separate Account A"), a separate account of ML Life
Insurance Company of New York ("ML of New York"), was
established to support ML of New York's operations with
respect to certain variable annuity contracts
("Contracts"). Separate Account A is governed by New York
State Insurance Law. ML of New York is an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("Merrill
Lynch & Co."). Separate Account A is registered as a
unit investment trust under the Investment Company Act of
1940 and consists of twenty-five investment divisions.
The investment divisions are as follows:
Merrill Lynch Variable Series Funds, Inc.: Seventeen
of the investment divisions each invest in the
securities of a single mutual fund portfolio of the
Merrill Lynch Variable Series Funds, Inc. ("Merrill
Variable Funds"). The investment advisor to the
funds of the Merrill Variable Funds is Merrill Lynch
Asset Management, L.P.("MLAM"), an indirect subsidiary
of Merrill Lynch & Co. Effective following the close
of business on June 5, 1998, the International Equity
Focus Fund and Global Bond Focus Fund were closed to
allocations of premiums and contract value. Three
other investment divisions; Natural Resources Focus
Fund, American Balanced Fund and Global Utility Focus
Fund have been closed to allocations of premiums and
contract value since 1996.
Hotchkis & Wiley Variable Trust: One of the investment
divisions invests in the securities of a single mutual
fund portfolio of the Hotchkis & Wiley Variable Trust
("H&W Trust"). The investment advisor to the fund of
the H&W Trust is Hotchkis & Wiley, a division of
Merrill Lynch Capital Management Group of MLAM.
Defined Asset Funds, Equity Investor Fund: One of the
investment divisions invests in the securities of a
single unit investment trust of the Equity Investor
Fund. Equity Investor Fund is sponsored by Merrill
Lynch, Pierce, Fenner & Smith, Incorporated, a wholly-
owned subsidiary of Merrill Lynch & Co.
Alliance Variable Products Series Fund, Inc.: Two
investment divisions each invest in the securities of
a single mutual fund portfolio of the Alliance
Variable Products Series Fund, Inc. ("Alliance
Variable Fund"). The investment advisor to the funds
of the Alliance Variable Fund is Alliance Capital
Management, L.P.
MFS Variable Insurance Trust: Two of the investment
divisions each invest in the securities of a single
mutual fund portfolio of the MFS Variable Insurance
Trust ("MFS Variable Trust"). The investment advisor
to the funds of the MFS Variable Trust is
Massachusetts Financial Services Company.
AIM Variable Insurance Funds, Inc.: Two of the
investment divisions each invest in the securities of
a single mutual fund portfolio of the AIM Variable
Insurance Funds, Inc. ("AIM Variable Funds"). The
investment advisor to the funds of the AIM Variable
Funds is AIM Advisors, Inc.
The assets of Separate Account A are registered in the
name of ML of New York. The portion of Separate Account
A's assets applicable to the Contracts are not chargeable
with liabilities arising out of any other business ML of
New York may conduct.
The change in net assets accumulated in Separate Account
A provides the basis for the periodic determination of
the amount of increased or decreased benefits under the
Contracts.
The net assets may not be less than the amount required
under New York State Insurance Law to provide for death
benefits (without regard to the minimum death benefit
guarantee) and other Contract benefits.
The financial statements included herein have been
prepared in accordance with generally accepted accounting
principles for variable annuity separate accounts
registered as unit investment trusts. 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.
2. SIGNIFICANT ACCOUNTING POLICIES
Investments in the divisions are included in the
statement of net assets at the net asset value of the
shares held.
Dividend income is recognized on the ex-dividend date.
All dividends are automatically reinvested.
Realized gains and losses on the sales of investments are
computed on the first in first out method.
Investment transactions are recorded on the trade date.
The operations of Separate Account A are included in the
Federal income tax return of ML of New York. Under the
provisions of the Contracts, ML of New York has the right
to charge Separate Account A for any Federal income tax
attributable to Separate Account A. No charge is
currently being made against Separate Account A for such
tax since, under current tax law, ML of New York pays no
tax on investment income and capital gains reflected in
variable annuity contract reserves. However, ML of New
York retains the right to charge for any Federal income
tax incurred that is attributable to Separate Account A
if the law is changed. Charges for state and local taxes,
if any, attributable to Separate Account A may also be
made.
3. CHARGES AND FEES
ML of New York assumes mortality and expense risks
related to Contracts investing in Separate Account A and
deducts daily charges at a rate of 1.25% (on an annual
basis) of the net assets of Separate Account A to cover
these risks.
An administration charge of .10% annually is deducted
daily from the net asset value of Separate Account A.
This charge is made to reimburse ML of New York for costs
associated with the establishment and administration of
Separate Account A.
ML of New York deducts a contract maintenance charge of
$40 for each Contract on each Contract's anniversary that
occurs on or prior to the annuity date. It is also
deducted when the Contract is surrendered if it is
surrendered on any date other than a contract anniversary
date. The contract maintenance charge is borne by
Contract owners by redeeming accumulation units with a
value equal to the charge. This charge is waived on all
Contracts with a Contract value equal to or greater than
$50,000 on the date the charge would otherwise be
deducted, and in certain circumstances where multiple
contracts are owned.
Contract owners may make up to six transfers among the
Separate Account A divisions per contract year without
charge. Certain transfers from the Equity Investor Fund
do not count towards the six transfers. Additional
transfers may be permitted at a charge of $25 per
transfer.
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
=======================================================
Domestic
Total Money Prime
Separate Market Bond
Account Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 44,880,050 $ 1,497,439 $ 2,711,273
Mortality and Expense Charges (6,329,552) (399,394) (574,804)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 38,550,498 1,098,045 2,136,469
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 2,687,979 0 (213,502)
Net Change In Unrealized Gains (Losses) 6,025,721 0 716,500
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 8,713,700 0 502,998
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 47,264,198 1,098,045 2,639,467
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 97,074,808 90,172,681 328,368
Transfer of Contract Owner Withdrawals (19,903,885) (1,128,980) (2,718,345)
Transfers In (Out) - Net (2,741,911) (85,073,226) 4,870,790
Transfer of Contract Maintenance Charges (130,287) (5,129) (11,117)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 74,298,725 3,965,346 2,469,696
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 121,562,923 5,063,391 5,109,163
Net Assets Beginning Balance 407,387,822 28,571,274 39,865,760
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 528,950,745 $ 33,634,665 $ 44,974,923
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 2,714,662.2 2,943,385.0
=========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 12.39 $ 15.28
=========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
High Special
Current Quality Value
Income Equity Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 3,220,838 $ 7,271,957 $ 6,953,329
Mortality and Expense Charges (441,055) (694,958) (419,355)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 2,779,783 6,576,999 6,533,974
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) (637,087) 1,809,709 159,298
Net Change In Unrealized Gains (Losses) (3,767,853) (1,468,227) (8,979,417)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments (4,404,940) 341,482 (8,820,119)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations (1,625,157) 6,918,481 (2,286,145)
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 510,831 415,437 397,820
Transfer of Contract Owner Withdrawals (1,368,987) (2,575,192) (1,159,909)
Transfers In (Out) - Net 3,425,551 (2,988,996) 2,624,849
Transfer of Contract Maintenance Charges (8,456) (15,290) (10,172)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 2,558,939 (5,164,041) 1,852,588
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 933,782 1,754,440 (433,557)
Net Assets Beginning Balance 30,376,355 51,144,547 29,969,654
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 31,310,137 $ 52,898,987 $ 29,536,097
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 1,935,113.5 2,374,281.3 1,911,721.5
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 16.18 $ 22.28 $ 15.45
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Natural Global
American Resources Strategy
Balanced Focus Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 1,740,216 $ 213,456 $ 8,290,880
Mortality and Expense Charges (202,187) (13,390) (652,992)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 1,538,029 200,066 7,637,888
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 289,567 (146,792) 105,416
Net Change In Unrealized Gains (Losses) (95,892) (216,716) (4,324,379)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 193,675 (363,508) (4,218,963)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 1,731,704 (163,442) 3,418,925
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 0 0 220,343
Transfer of Contract Owner Withdrawals (699,889) (71,390) (2,851,994)
Transfers In (Out) - Net (1,579,197) (449,075) (5,336,133)
Transfer of Contract Maintenance Charges (4,825) (430) (18,650)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions (2,283,911) (520,895) (7,986,434)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets (552,207) (684,337) (4,567,509)
Net Assets Beginning Balance 15,634,916 1,402,337 50,669,947
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 15,082,709 $ 718,000 $ 46,102,438
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 805,270.1 70,808.7 2,708,721.4
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 18.73 $ 10.14 $ 17.02
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Global International Global
Utility Equity Bond
Focus Focus Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 568,715 $ 2,178,749 $ 266,877
Mortality and Expense Charges (104,208) (254,404) (61,364)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 464,507 1,924,345 205,513
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 413,976 (911,762) (30,323)
Net Change In Unrealized Gains (Losses) 684,665 993,764 300,269
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 1,098,641 82,002 269,946
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 1,563,148 2,006,347 475,459
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 0 219,304 36,400
Transfer of Contract Owner Withdrawals (525,821) (940,810) (303,400)
Transfers In (Out) - Net (635,109) (16,704,845) (744,029)
Transfer of Contract Maintenance Charges (2,200) (6,649) (1,675)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions (1,163,130) (17,433,000) (1,012,704)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 400,018 (15,426,653) (537,245)
Net Assets Beginning Balance 7,737,336 26,065,940 4,964,134
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 8,137,354 $ 10,639,287 $ 4,426,889
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 408,706.9 893,307.1 324,790.1
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 19.91 $ 11.91 $ 13.63
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Basic Developing
Value Government Capital Markets
Focus Bond Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 5,989,857 $ 885,840 $ 102,086
Mortality and Expense Charges (592,549) (210,898) (89,956)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 5,397,308 674,942 12,130
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 1,307,153 21,921 (1,984,770)
Net Change In Unrealized Gains (Losses) (3,899,825) 376,997 (748,648)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments (2,592,672) 398,918 (2,733,418)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 2,804,636 1,073,860 (2,721,288)
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 976,498 133,863 49,574
Transfer of Contract Owner Withdrawals (1,697,647) (443,784) (256,648)
Transfers In (Out) - Net 4,906,706 10,338,448 (1,668,298)
Transfer of Contract Maintenance Charges (13,967) (3,354) (1,979)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 4,171,590 10,025,173 (1,877,351)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 6,976,226 11,099,033 (4,598,639)
Net Assets Beginning Balance 37,438,471 11,217,213 8,218,270
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 44,414,697 $ 22,316,246 $ 3,619,631
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 2,134,295.9 1,670,377.7 563,805.5
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 20.81 $ 13.36 $ 6.42
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Global
Index Growth Capital
500 Focus Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 1,044,538 $ 0 $ 0
Mortality and Expense Charges (350,886) (5,308) (3,930)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 693,652 (5,308) (3,930)
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 1,108,492 (1,580) (3,032)
Net Change In Unrealized Gains (Losses) 3,963,311 133,989 50,676
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 5,071,803 132,409 47,644
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 5,765,455 127,101 43,714
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 761,712 17,675 16,218
Transfer of Contract Owner Withdrawals (695,098) (391) (18,482)
Transfers In (Out) - Net 9,694,889 1,222,092 1,064,830
Transfer of Contract Maintenance Charges (5,343) (35) (47)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 9,756,160 1,239,341 1,062,519
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 15,521,615 1,366,442 1,106,233
Net Assets Beginning Balance 16,525,021 0 0
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 32,046,636 $ 1,366,442 $ 1,106,233
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 1,908,674.0 127,229.2 114,280.3
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 16.79 $ 10.74 $ 9.68
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
International 1998 ML
VIP Select Ten Quasar
Portfolio V.I. Trust Portfolio
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 88,965 $ 11,454 $ 4,730
Mortality and Expense Charges (141,560) (8,050) (3,058)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) (52,595) 3,404 1,672
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) (69,682) (179) (11,769)
Net Change In Unrealized Gains (Losses) (353,425) 45,189 (17,503)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments (423,107) 45,010 (29,272)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations (475,702) 48,414 (27,600)
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 21,540 110,797 13,850
Transfer of Contract Owner Withdrawals (297,160) (638) (7,094)
Transfers In (Out) - Net 22,610,549 1,771,805 828,288
Transfer of Contract Maintenance Charges (2,171) (37) (38)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 22,332,758 1,881,927 835,006
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 21,857,056 1,930,341 807,406
Net Assets Beginning Balance 0 0 0
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 21,857,056 $ 1,930,341 $ 807,406
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 2,303,167.1 190,745.2 94,213.1
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 9.49 $ 10.12 $ 8.57
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
MFS
Premier Emerging MFS
Growth Growth Research
Portfolio Series Series
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 30,324 $ 115,462 $ 256,314
Mortality and Expense Charges (428,132) (195,235) (171,803)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) (397,808) (79,773) 84,511
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 398,722 154,517 479,127
Net Change In Unrealized Gains (Losses) 12,276,747 4,193,375 2,010,778
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 12,675,469 4,347,892 2,489,905
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 12,277,661 4,268,119 2,574,416
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 736,818 487,662 490,100
Transfer of Contract Owner Withdrawals (783,743) (348,319) (264,981)
Transfers In (Out) - Net 20,305,587 9,279,946 7,071,255
Transfer of Contract Maintenance Charges (7,186) (3,428) (3,362)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 20,251,476 9,415,861 7,293,012
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 32,529,137 13,683,980 9,867,428
Net Assets Beginning Balance 16,819,459 7,099,242 7,046,718
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 49,348,596 $ 20,783,222 $ 16,914,146
=========================== =========================== ===========================
Units Outstanding at December 31, 1998 2,559,574.5 1,327,153.4 1,161,685.9
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 19.28 $ 15.66 $ 14.56
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
=======================================================
AIM V.I.
AIM V.I. Capital
Value Appreciation
Fund Fund
=========================== ===========================
<S> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 1,211,631 $ 225,120
Mortality and Expense Charges (224,703) (85,373)
--------------------------- ---------------------------
Net Investment Income (Loss) 986,928 139,747
--------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 182,903 267,656
Net Change In Unrealized Gains (Losses) 3,635,052 516,294
--------------------------- ---------------------------
Net Gain (Loss) on Investments 3,817,955 783,950
--------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 4,804,883 923,697
--------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 697,010 260,307
Transfer of Contract Owner Withdrawals (567,674) (177,509)
Transfers In (Out) - Net 12,917,014 (495,602)
Transfer of Contract Maintenance Charges (3,396) (1,351)
--------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 13,042,954 (414,155)
--------------------------- ---------------------------
Increase (Decrease) in Net Assets 17,847,837 509,542
Net Assets Beginning Balance 8,698,822 7,922,406
--------------------------- ---------------------------
Net Assets Ending Balance $ 26,546,659 $ 8,431,948
=========================== ===========================
Units Outstanding at December 31, 1998 1,623,648.9 637,817.5
=========================== ===========================
Accumulation Unit Value at December 31, 1998 $ 16.35 $ 13.22
=========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
=======================================================
Domestic
Total Money Prime
Separate Market Bond
Account Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 19,823,996 $ 1,289,520 $ 2,573,009
Mortality and Expense Charges (4,729,318) (340,808) (526,595)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 15,094,678 948,712 2,046,414
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 6,167,098 0 (843,730)
Net Change In Unrealized Gains (Losses) 13,593,179 0 1,472,775
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 19,760,277 0 629,045
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 34,854,955 948,712 2,675,459
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 100,897,509 92,525,230 534,726
Transfer of Contract Owner Withdrawals (14,728,085) (1,022,456) (1,831,891)
Transfers In (Out) - Net (1,903,053) (83,169,568) (814,376)
Transfer of Contract Maintenance Charges (107,946) (4,690) (11,761)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 84,158,425 8,328,516 (2,123,302)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 119,013,380 9,277,228 552,157
Net Assets Beginning Balance 288,374,442 19,294,046 39,313,603
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 407,387,822 $ 28,571,274 $ 39,865,760
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 2,392,904.0 2,776,167.1
=========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 11.94 $ 14.36
=========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
High Special
Current Quality Value
Income Equity Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 2,309,221 $ 2,398,409 $ 1,330,574
Mortality and Expense Charges (342,867) (642,638) (369,227)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 1,966,354 1,755,771 961,347
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) (71,138) 1,710,486 1,122,704
Net Change In Unrealized Gains (Losses) 358,380 5,703,018 434,251
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 287,242 7,413,504 1,556,955
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 2,253,596 9,169,275 2,518,302
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 1,118,397 1,052,777 368,601
Transfer of Contract Owner Withdrawals (1,108,863) (2,184,323) (985,698)
Transfers In (Out) - Net 7,387,844 (1,682,406) 2,478,993
Transfer of Contract Maintenance Charges (7,337) (16,266) (9,758)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 7,390,041 (2,830,218) 1,852,138
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 9,643,637 6,339,057 4,370,440
Net Assets Beginning Balance 20,732,718 44,805,490 25,599,214
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 30,376,355 $ 51,144,547 $ 29,969,654
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 1,794,232.4 2,617,428.2 1,789,233.1
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 16.93 $ 19.54 $ 16.75
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Natural Global
American Resources Strategy
Balanced Focus Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 1,977,020 $ 144,142 $ 2,569,175
Mortality and Expense Charges (218,517) (25,092) (699,824)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 1,758,503 119,050 1,869,351
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 302,250 61,968 1,080,156
Net Change In Unrealized Gains (Losses) 251,324 (396,055) 2,073,480
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 553,574 (334,087) 3,153,636
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 2,312,077 (215,037) 5,022,987
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 0 0 930,225
Transfer of Contract Owner Withdrawals (533,003) (101,426) (2,432,059)
Transfers In (Out) - Net (3,446,357) (315,734) (2,139,579)
Transfer of Contract Maintenance Charges (5,829) (712) (20,587)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions (3,985,189) (417,872) (3,662,000)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets (1,673,112) (632,909) 1,360,987
Net Assets Beginning Balance 17,308,028 2,035,246 49,308,960
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 15,634,916 $ 1,402,337 $ 50,669,947
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 935,102.6 115,513.8 3,196,842.1
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 16.72 $ 12.14 $ 15.85
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Global International Global
Utility Equity Bond
Focus Focus Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 255,641 $ 494,406 $ 327,948
Mortality and Expense Charges (101,216) (313,946) (67,311)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 154,425 180,460 260,637
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 437,714 21,501 (185,732)
Net Change In Unrealized Gains (Losses) 1,012,728 (2,233,592) (68,589)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 1,450,442 (2,212,091) (254,321)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 1,604,867 (2,031,631) 6,316
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 0 490,188 97,579
Transfer of Contract Owner Withdrawals (225,066) (961,611) (262,356)
Transfers In (Out) - Net (2,112,968) 10,301,573 (480,361)
Transfer of Contract Maintenance Charges (2,484) (7,684) (1,752)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions (2,340,518) 9,822,466 (646,890)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets (735,651) 7,790,835 (640,574)
Net Assets Beginning Balance 8,472,987 18,275,105 5,604,708
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 7,737,336 $ 26,065,940 $ 4,964,134
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 475,558.5 2,327,316.1 404,574.9
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 16.27 $ 11.20 $ 12.27
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
Basic Developing
Value Government Capital Markets
Focus Bond Focus
Fund Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 3,142,695 $ 513,895 $ 77,082
Mortality and Expense Charges (430,256) (106,786) (87,234)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) 2,712,439 407,109 (10,152)
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 1,473,426 28,055 89,268
Net Change In Unrealized Gains (Losses) 883,128 229,149 (947,132)
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 2,356,554 257,204 (857,864)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 5,068,993 664,313 (868,016)
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 931,327 28,066 112,851
Transfer of Contract Owner Withdrawals (1,454,906) (165,492) (394,234)
Transfers In (Out) - Net 4,303,155 6,034,373 5,256,705
Transfer of Contract Maintenance Charges (10,873) (1,683) (1,782)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 3,768,703 5,895,264 4,973,540
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 8,837,696 6,559,577 4,105,524
Net Assets Beginning Balance 28,600,775 4,657,636 4,112,746
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 37,438,471 $ 11,217,213 $ 8,218,270
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 1,942,837.1 900,981.0 892,320.3
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 19.27 $ 12.45 $ 9.21
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
MFS
Index Premier Emerging
500 Growth Growth
Fund Portfolio Series
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 258 $ 8,100 $ 203
Mortality and Expense Charges (137,941) (106,345) (44,429)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) (137,683) (98,245) (44,226)
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 359,815 151,438 43,411
Net Change In Unrealized Gains (Losses) 2,106,223 1,355,752 475,223
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 2,466,038 1,507,190 518,634
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 2,328,355 1,408,945 474,408
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 609,447 617,554 465,471
Transfer of Contract Owner Withdrawals (147,803) (205,625) (78,950)
Transfers In (Out) - Net 13,630,951 14,999,924 6,091,193
Transfer of Contract Maintenance Charges (1,639) (1,339) (350)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 14,090,956 15,410,514 6,477,364
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 16,419,311 16,819,459 6,951,772
Net Assets Beginning Balance 105,710 0 147,470
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 16,525,021 $ 16,819,459 $ 7,099,242
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 1,245,291.7 1,273,236.9 600,105.0
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 13.27 $ 13.21 $ 11.83
=========================== =========================== ===========================
</TABLE>
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT A
ML LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTAL CONSOLIDATING SCHEDULE OF OPERATIONS AND
CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Divisions Investing In
===================================================================================
AIM V.I.
MFS AIM V.I. Capital
Research Value Appreciation
Series Fund Fund
=========================== =========================== ===========================
<S> <C> <C> <C>
Investment Income (Loss):
Reinvested Dividends $ 0 $ 308,656 $ 104,042
Mortality and Expense Charges (54,593) (50,595) (63,098)
--------------------------- --------------------------- ---------------------------
Net Investment Income (Loss) (54,593) 258,061 40,944
--------------------------- --------------------------- ---------------------------
Realized and Unrealized Gains (Losses)
On Investments:
Net Realized Gains (Losses) 296,427 85,546 3,533
Net Change In Unrealized Gains (Losses) 460,695 168,258 254,163
--------------------------- --------------------------- ---------------------------
Net Gain (Loss) on Investments 757,122 253,804 257,696
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Operations 702,529 511,865 298,640
--------------------------- --------------------------- ---------------------------
Changes from Principal Transactions:
Transfer of Net Premiums 295,874 424,766 294,430
Transfer of Contract Owner Withdrawals (366,386) (233,173) (32,764)
Transfers In (Out) - Net 6,415,168 7,995,616 7,362,801
Transfer of Contract Maintenance Charges (467) (252) (701)
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 6,344,189 8,186,957 7,623,766
--------------------------- --------------------------- ---------------------------
Increase (Decrease) in Net Assets 7,046,718 8,698,822 7,922,406
Net Assets Beginning Balance 0 0 0
--------------------------- --------------------------- ---------------------------
Net Assets Ending Balance $ 7,046,718 $ 8,698,822 $ 7,922,406
=========================== =========================== ===========================
Units Outstanding at December 31, 1997 589,190.5 694,794.1 705,468.0
=========================== =========================== ===========================
Accumulation Unit Value at December 31, 1997 $ 11.96 $ 12.52 $ 11.23
=========================== =========================== ===========================
</TABLE>
<PAGE>
\
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
ML Life Insurance Company of New York:
We have audited the accompanying statement of net assets of
ML of New York Variable Annuity Separate Account B (the
"Account") as of December 31, 1998 and the related
statements of operations and changes in net assets for each
of the two years in the period then ended. These financial
statements are the responsibility of the management of ML
Life Insurance Company of New York (the "Company"). Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audits 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 mutual fund securities owned at December 31,
1998. An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in
all material respects, the financial position of the Account
at December 31, 1998 and the results of its operations and
the changes in its net assets for each of the two years in
the period then ended in conformity with generally accepted
accounting principles.
February 4, 1999
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT B
ML LIFE INSURANCE COMPANY OF NEW YORK
STATEMENT OF NET ASSETS AT DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Market
Cost Shares Value
======================= ======================= =======================
<S> <C> <C> <C>
ASSETS:
Investments in Merrill Lynch
Variable Series Funds, Inc. (Note 1):
Reserve Assets Fund $ 1,223,158 1,223,158 $ 1,223,158
----------------------- -----------------------
TOTAL ASSETS $ 1,223,158 1,223,158
======================= -----------------------
LIABILITIES:
Due to ML Life Insurance Company of New York 289
-----------------------
TOTAL LIABILITIES 289
-----------------------
NET ASSETS $ 1,222,869
=======================
</TABLE>
See Notes to Financial Statements
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT B
ML LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
================================================================================
<TABLE>
<CAPTION>
1998 1997
======================= =======================
<S> <C> <C>
Investment Income:
Reinvested Dividends $ 61,838 $ 51,804
Mortality and Expense Charges (Note 3) (8,083) (6,677)
----------------------- -----------------------
Net Investment Income 53,755 45,127
----------------------- -----------------------
Increase in Net Assets
Resulting from Operations 53,755 45,127
----------------------- -----------------------
Changes from Principal Transactions:
Transfer of Net Premiums 90,383 75,662
Transfer of Contract Owner Withdrawals (2,852,928) (2,265,531)
Transfers In - Net 2,917,556 1,966,884
Transfer of Contract Maintenance Charges (Note 3) (271) (341)
----------------------- -----------------------
Increase (Decrease) in Net Assets
Resulting from Principal Transactions 154,740 (223,326)
----------------------- -----------------------
Increase (Decrease) in Net Assets 208,495 (178,199)
Net Assets Beginning Balance 1,014,374 1,192,573
----------------------- -----------------------
Net Assets Ending Balance $ 1,222,869 $ 1,014,374
======================= =======================
1998 1997
Reserve Assets Fund: ======================= =======================
Units Outstanding at December 31, 95,017.0 82,335.6
======================= =======================
Accumulation Unit Value at December 31, $ 12.87 $ 12.32
======================= =======================
</TABLE>
See Notes to Financial Statements
<PAGE>
ML OF NEW YORK VARIABLE ANNUITY SEPARATE ACCOUNT B
ML LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
ML of New York Variable Annuity Separate Account B
("Separate Account B"), a separate account of ML Life
Insurance Company of New York ("ML of New York"), was
established to support ML of New York's operations with
respect to certain variable annuity contracts
("Contracts"). Separate Account B is governed by New
York State Insurance Law. ML of New York is an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc.
("Merrill Lynch & Co."). Separate Account B is
registered as a unit investment trust under the
Investment Company Act of 1940 and consists of one
investment division. The investment division invests in
the securities of the Reserve Assets Fund portfolio of
the Merrill Lynch Variable Series Funds, Inc. ("Merrill
Variable Funds"). The investment advisor to the Reserve
Assets Fund portfolio is Merrill Lynch Asset Management,
L.P. ("MLAM"), an indirect subsidiary of Merrill Lynch &
Co.
The assets of Separate Account B are registered in the
name of ML of New York. Separate Account B's assets are
not chargeable with liabilities arising out of any other
business ML of New York may conduct.
The change in net assets accumulated in Separate Account
B provides the basis for the periodic determination of
the amount of increased or decreased benefits under the
Contracts.
The net assets may not be less than the amount required
under New York State Insurance Law to provide for death
benefits (without regard to the minimum death benefit
guarantee) and other Contract benefits.
The financial statements included herein have been
prepared in accordance with generally accepted accounting
principles for variable annuity separate accounts
registered as unit investment trusts. 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.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES
Investments in the division are included in the statement
of net assets at the net asset value of the shares held.
Dividend income is recognized on the ex-dividend date.
All dividends are automatically reinvested.
Investment transactions are recorded on the trade date.
The operations of Separate Account B are included in the
Federal income tax return of ML of New York. Under the
provisions of the Contracts, ML of New York has the right
to charge Separate Account B for any Federal income tax
attributable to Separate Account B. No charge is
currently being made against Separate Account B for such
tax since, under current tax law, ML of New York pays no
tax on investment income and capital gains reflected in
variable annuity contract reserves. However, ML of New
York retains the right to charge for any Federal income
tax incurred that is attributable to Separate Account B
if the law is changed. Charges for state and local
taxes, if any, attributable to Separate Account B may
also be made.
3. CHARGES AND FEES
ML of New York assumes mortality and expense risks
related to Contracts investing in Separate Account B and
deducts a daily charge at a rate of .65% (on an annual
basis) of the net assets of Separate Account B to cover
these risks.
ML of New York deducts a contract maintenance charge of
$40 for each Contract on each Contract's anniversary that
occurs on or prior to the annuity date. It is also
deducted when the Contract is surrendered if it is
surrendered on any date other than a contract anniversary
date. The contract maintenance charge is borne by
Contract owners by redeeming accumulation units with a
value equal to the charge. This charge is waived on all
Contracts with a Contract value equal to or greater than
$50,000 on the date the charge would otherwise be
deducted, and in certain circumstances where multiple
contracts are owned.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors of
ML Life Insurance Company of New York:
We have audited the accompanying balance sheets of ML Life
Insurance Company of New York (the "Company"), a wholly-owned
subsidiary of Merrill Lynch Insurance Group, Inc., as of December
31, 1998 and 1997, and the related statements of earnings,
comprehensive income, stockholder's equity, and cash flows for
each of the three years in the period ended December 31, 1998.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with 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. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company at
December 31, 1998 and 1997, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted
accounting principles.
February 22, 1999
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1997
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS 1998 1997
- -------- ------------- -------------
<S> <C> <C>
INVESTMENTS:
Fixed maturity securities, at estimated fair value
(amortized cost: 1998 - $197,588; 1997 - $250,695) $ 200,681 $ 255,958
Equity securities, at estimated fair value
(cost: 1998 - $14,684; 1997 - $5,830) 13,718 5,029
Policy loans on insurance contracts 88,083 88,163
------------- -------------
Total Investments 302,482 349,150
CASH AND CASH EQUIVALENTS 18,707 10,063
ACCRUED INVESTMENT INCOME 4,968 5,416
DEFERRED POLICY ACQUISITION COSTS 29,742 30,406
REINSURANCE RECEIVABLES 652 429
OTHER ASSETS 4,261 3,405
SEPARATE ACCOUNTS ASSETS 887,170 739,712
------------- -------------
TOTAL ASSETS $ 1,247,982 $ 1,138,581
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------
1998 1997
------------- -------------
<S> <C> <C>
LIABILITIES:
POLICY LIABILITIES AND ACCRUALS:
Policyholders' account balances $ 269,246 $ 307,333
Claims and claims settlement expenses 2,986 2,007
------------- -------------
Total policy liabilities and accruals 272,232 309,340
OTHER POLICYHOLDER FUNDS 1,783 1,941
FEDERAL INCOME TAXES - DEFERRED 119 1,905
FEDERAL INCOME TAXES - CURRENT 1,347 2,255
AFFILIATED PAYABLES - NET 1,253 3,492
OTHER LIABILITIES 2,124 2,155
SEPARATE ACCOUNTS LIABILITIES 887,170 739,712
------------- -------------
Total Liabilities 1,166,028 1,060,800
------------- -------------
STOCKHOLDER'S EQUITY:
Common stock, $10 par value - 220,000 shares
authorized, issued and outstanding 2,200 2,200
Additional paid-in capital 66,259 66,259
Retained earnings 14,462 9,692
Accumulated other comprehensive loss (967) (370)
------------- -------------
Total Stockholder's Equity 81,954 77,781
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,247,982 $ 1,138,581
============= =============
</TABLE>
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES:
Investment revenue:
Net investment income $ 21,549 $ 25,465 $ 27,520
Net realized investment gains (losses) (1,998) 1,947 2,169
Policy charge revenue 15,484 13,064 11,959
------------- ------------- -------------
Total Revenues 35,035 40,476 41,648
------------- ------------- -------------
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances 13,832 14,532 16,586
Market value adjustment expense 567 232 301
Policy benefits (net of reinsurance recoveries: 1998 - $1,191
1997 - $690; 1996 - $1,584) 1,630 781 1,311
Reinsurance premium ceded 1,705 1,584 1,262
Amortization of deferred policy acquisition costs 5,759 4,119 3,784
Insurance expenses and taxes 4,900 4,563 4,595
------------- ------------- -------------
Total Benefits and Expenses 28,393 25,811 27,839
------------- ------------- -------------
Earnings Before Federal Income Tax Provision 6,642 14,665 13,809
FEDERAL INCOME TAX PROVISION (BENEFIT):
Current 3,337 2,905 102
Deferred (1,465) 2,068 4,488
------------- ------------- -------------
Total Federal Income Tax Provision 1,872 4,973 4,590
------------- ------------- -------------
NET EARNINGS $ 4,770 $ 9,692 $ 9,219
============= ============= =============
</TABLE>
See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------ -------------
<S> <C> <C> <C>
NET EARNINGS $ 4,770 $ 9,692 $ 9,219
------------- ------------ -------------
OTHER COMPREHENSIVE LOSS, NET OF TAX:
Net unrealized gains (losses) on investment securities:
Net unrealized holding losses arising during the period (4,329) (413) (4,206)
Reclassification adjustment for (gains) losses included
in net earnings 1,994 (1,771) (1,858)
------------- ------------ -------------
Net unrealized losses on investment securities (2,335) (2,184) (6,064)
Adjustments for:
Policyholder liabilities 1,417 (70) 5,380
Income tax benefit related to items of
other comprehensive loss 321 789 240
------------- ------------ -------------
Other comprehensive loss, net of tax (597) (1,465) (444)
------------- ------------ -------------
COMPREHENSIVE INCOME $ 4,173 $ 8,227 $ 8,775
============= ============ =============
</TABLE>
See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
Accumulated
Additional other Total
Common paid-in Retained comprehensive Stockholder's
stock Capital earnings income (loss) equity
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 2,200 $ 83,006 $ 24,034 $ 1,539 $ 110,779
Dividend to Parent (10,966) (24,034) (35,000)
Net earnings 9,219 9,219
Other comprehensive loss, net of tax (444) (444)
----------- ----------- ------------ ------------ ------------
BALANCE, DECEMBER 31, 1996 2,200 72,040 9,219 1,095 84,554
Dividend to Parent (5,781) (9,219) (15,000)
Net earnings 9,692 9,692
Other comprehensive loss, net of tax (1,465) (1,465)
----------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 2,200 66,259 9,692 (370) 77,781
Net earnings 4,770 4,770
Other comprehensive loss, net of tax (597) (597)
----------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1998 $ 2,200 $ 66,259 $ 14,462 $ (967) $ 81,954
=========== ============ ============ ============ ============
</TABLE>
See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 4,770 $ 9,692 $ 9,219
Adjustments to reconcile net earnings to net cash and
cash equivalents provided (used) by operating activities:
Amortization of deferred policy acquisition costs 5,759 4,119 3,784
Capitalization of policy acquisition costs (5,095) (5,253) (2,134)
Amortization (accretion) of investments (262) (239) 1
Net realized investment (gains) losses 1,998 (1,947) (2,169)
Interest credited to policyholders' account balances 13,832 14,532 16,586
Provision (benefit) for deferred Federal income tax (1,465) 2,068 4,488
Changes in operating assets and liabilities:
Accrued investment income 448 536 651
Claims and claims settlement expenses 979 (565) (329)
Federal income taxes - current (908) 156 1,914
Other policyholder funds (158) 781 421
Affiliated payables - net (2,239) (1,534) 964
Policy loans on insurance contracts 80 (2,615) (3,475)
Other, net (1,110) 2,306 (3,951)
------------ ------------ ------------
Net cash and cash equivalents provided by operating activites 16,629 22,037 25,970
------------ ------------ ------------
INVESTING ACTIVITIES:
Sales of available-for-sale securities 102,967 88,882 155,645
Maturities of available-for-sale securities 59,161 51,060 34,455
Purchases of available-for-sale securities (119,611) (120,965) (162,828)
Mortgage loans principal payments received - 2,057 1,975
------------ ------------ ------------
Net cash and cash equivalents provided by investing activities 42,517 21,034 29,247
------------ ------------ ------------
</TABLE>
See notes to financial statements.
(Continued)
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Continued) (Dollars In Thousands)
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Dividends paid to parent $ - $ (15,000) $ (35,000)
Policyholders' account balances:
Deposits 94,226 106,983 32,158
Withdrawals (including transfers to/from Separate Accounts) (144,728) (132,819) (61,934)
------------- ------------- -------------
Net cash and cash equivalents used by financing activites (50,502) (40,836) (64,776)
------------- ------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,644 2,235 (9,559)
CASH AND CASH EQUIVALENTS:
Beginning of year 10,063 7,828 17,387
------------- ------------- -------------
End of year $ 18,707 $ 10,063 $ 7,828
============= ============= =============
Supplementary Disclosure of Cash Flow Information:
Cash paid to (received from) affiliates for:
Federal income taxes $ 4,245 $ 2,749 $ (1,812)
Interest 148 494 440
</TABLE>
See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group,Inc.)
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business: ML Life Insurance Company of New York
(the "Company") is a wholly-owned subsidiary of Merrill Lynch
Insurance Group, Inc. ("MLIG"). The Company is an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("Merrill
Lynch & Co.").
The Company sells non-participating life insurance and annuity
products primarily variable life insurance, variable annuities,
market value adjusted annuities and immediate annuities. The
Company is licensed to sell insurance in nine states; however,
it currently limits its marketing activities to the State of
New York. The Company markets its products solely through the
retail network of Merrill Lynch, Pierce, Fenner & Smith,
Incorporated ("MLPF&S"), a wholly-owned broker-dealer
subsidiary of Merrill Lynch & Co.
Basis of Reporting: The accompanying financial statements have
been prepared in conformity with generally accepted accounting
principles and prevailing industry practices, both of which
require management to make estimates that affect the reported
amounts and disclosure of contingencies in the financial
statements. Actual results could differ from those estimates.
For the purpose of reporting cash flows, cash and cash
equivalents include cash on hand and on deposit and short-term
investments with original maturities of three months or less.
Revenue Recognition: Revenues for the Company's interest-
sensitive life, interest-sensitive annuity, variable life and
variable annuity products consist of policy charges for the
mortality risk and cost of insurance, deferred sales charges,
policy administration charges and/or withdrawal charges assessed
against policyholders' account balances during the period.
Investments: The Company's investments in fixed maturity and
equity securities are classified as available-for-sale and are
carried at estimated fair value with unrealized gains and
losses included in stockholder's equity as a component of
accumulated other comprehensive loss, net of tax. If a decline
in value of a security is determined by management to be other-
than-temporary, the carrying value is adjusted to the estimated
fair value at the date of this determination and recorded as
net realized investment gains (losses).
For fixed maturity securities, premiums are amortized to the
earlier of the call or maturity date, discounts are accreted to
the maturity date, and interest income is accrued daily. For
equity securities, dividends are recognized on the ex-dividend
date. Realized gains and losses on the sale or maturity of the
investments are determined on the basis of specific identification.
Certain fixed maturity securities are considered non-investment
grade. The Company defines non-investment grade fixed maturity
securities as unsecured debt obligations that do not have a rating
equivalent to Standard and Poor's (or similar rating agency)
BBB- or higher.
<PAGE>
All outstanding mortgage loans were repaid during 1997. The
Company recognized income from mortgage loans based on the cash
payment interest rate of the loan, which may have been
different from the accrual interest rate of the loan for
certain mortgage loans. The Company recognized a realized gain
at the date of the satisfaction of the loan at contractual
terms for loans where there was a difference between the cash
payment interest rate and the accrual interest rate. For all
loans, the Company stopped accruing income when an interest
payment default either occurred or was probable. Impairments
of mortgage loans were established as valuation allowances and
recorded to net realized investment gains or losses.
Policy loans on insurance contracts are stated at unpaid
principal balances.
Deferred Policy Acquisition Costs: Policy acquisition costs for
life and annuity contracts are deferred and amortized based on
the estimated future gross profits for each group of contracts.
These future gross profit estimates are subject to periodic
evaluation by the Company, with necessary revisions applied
against amortization to date. It is reasonably possible that
estimates of future gross profits could be reduced in the
future, resulting in a material reduction in the carrying
amount of deferred policy acquisition costs.
Policy acquisition costs are principally commissions and a
portion of certain other expenses relating to policy
acquisition, underwriting and issuance that are primarily
related to and vary with the production of new business.
Certain costs and expenses reported in the statements of
earnings are net of amounts deferred. Policy acquisition costs
can also arise from the acquisition or reinsurance of existing
in-force policies from other insurers. These costs include
ceding commissions and professional fees related to the
reinsurance assumed. The deferred costs are amortized in
proportion to the estimated future gross profits over the
anticipated life of the acquired insurance contracts utilizing
an interest methodology.
The Company has entered into an assumption reinsurance
agreement with an unaffiliated insurer. The acquisition costs
relating to this agreement are being amortized over a twenty-
year period using an effective interest rate of 7.5%. This
reinsurance agreement provides for payment of contingent ceding
commissions based upon the persistency and mortality experience
of the insurance contracts assumed. Any payments made for the
contingent ceding commissions will be capitalized and amortized
using an identical methodology as that used for the initial
acquisition costs. The following is a reconciliation of the
acquisition costs related to the reinsurance agreement for the
years ended December 31:
1998 1997 1996
------------ ------------ ------------
Beginning balance $ 16,550 $ 17,151 $ 17,654
Capitalized amounts 691 577 577
Interest accrued 1,241 1,651 1,566
Amortization (5,698) (2,829) (2,646)
------------ ------------ ------------
Ending balance $ 12,784 $ 16,550 $ 17,151
============ ============ ============
<PAGE>
The following table presents the expected amortization, net of
interest accrued, of these deferred acquisition costs over the
next five years. The amortization may be adjusted based on
periodic evaluation of the expected gross profits on the
reinsured policies.
1999 $905
2000 $785
2001 $747
2002 $712
2003 $700
Separate Accounts: Separate Accounts are established in
conformity with New York State Insurance Law, the Company's
domiciliary state, and are generally not chargeable with
liabilities that arise from any other business of the Company.
Separate Accounts assets may be subject to general claims of
the Company only to the extent the value of such assets exceeds
Separate Accounts liabilities.
Net investment income and net realized and unrealized gains
(losses) attributable to Separate Accounts assets accrue
directly to the policyholder and are not reported as revenue in
the Company's Statement of Earnings.
Assets and liabilities of Separate Accounts, representing net
deposits and accumulated net investment earnings less fees,
held primarily for the benefit of policyholders, are shown as
separate captions in the balance sheets.
Policyholders' Account Balances: Liabilities for the Company's
universal life type contracts, including its life insurance and
annuity products, are equal to the full accumulation value of
such contracts as of the valuation date plus deficiency
reserves for certain products. Interest-crediting rates for the
Company's fixed-rate products are as follows:
Interest-sensitive life products 4.00% - 5.00%
Interest-sensitive deferred annuities 3.70% - 8.23%
Immediate annuities 3.00% - 10.00%
These rates may be changed at the option of the Company,
subject to minimum guarantees, after initial guaranteed rates
expire.
Claims and Claims Settlement Expenses: For life insurance
products, the liability equals the death benefit for claims
that have been reported to the Company and an estimate based
upon prior experience for unreported claims. For annuity
products, the liability equals the guaranteed minimum death
benefit reserve.
Income Taxes: The results of operations of the Company are
included in the consolidated Federal income tax return of
Merrill Lynch & Co. The Company has entered into a tax-sharing
agreement with Merrill Lynch & Co. whereby the Company will
calculate its current tax provision based on its operations.
Under the agreement, the Company periodically remits to Merrill
Lynch & Co. its current federal tax liability.
<PAGE>
The Company uses the asset and liability method in providing
income taxes on all transactions that have been recognized in
the financial statements. The asset and liability method
requires that deferred taxes be adjusted to reflect the tax
rates at which future taxable amounts will be settled or
realized. The effects of tax rate changes on future deferred
tax liabilities and deferred tax assets, as well as other
changes in income tax laws, are recognized in net earnings in
the period such changes are enacted. Valuation allowances are
established when necessary to reduce deferred tax assets to the
amounts expected to be realized.
Insurance companies are generally subject to taxes on premiums
and in substantially all states are exempt from state income
taxes.
Accounting Pronouncements: During 1998, the Company adopted
SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information". This pronouncement requires a Company to
present disaggregated information based on the internal
segments used in managing its business. Adoption did not impact
the Company's financial position or results of operations, but
it did affect the presentation of the Company's disclosures
(See note 9).
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and for Hedging Activities". This
pronouncement will be effective for annual periods beginning
after June 15, 1999. Adoption of this pronouncement is not
expected to have a material impact on the Company's financial
position or results of operations.
NOTE 2. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments are carried at fair value or amounts that
approximate fair value. The carrying value of financial
instruments as of December 31 were:
1998 1997
------------ ------------
Assets:
Fixed maturity securities (1) $ 200,681 $ 255,958
Equity securities (1) 13,718 5,029
Policy loans on insurance contracts (2) 88,083 88,163
Cash and cash equivalents (3) 18,707 10,063
Separate Accounts assets (4) 887,170 739,712
------------ ------------
Total financial instruments $ 1,208,359 $ 1,098,925
============ ============
(1) For publicly traded securities, the estimated fair value
is determined using quoted market prices. For securities
without a readily ascertainable market value, the Company
has determined an estimated fair value using a discounted
cash flow model, including provision for credit risk,
based upon the assumption that such securities will be
held to maturity. Such estimated fair values do not
necessarily represent the values for which these
securities could have been sold at the dates of the
balance sheets. At December 31, 1998 and 1997, securities
without a readily ascertainable market value, having an
amortized cost of $33,427 and $47,064, had an estimated
fair value of $33,879 and $48,188, respectively.
<PAGE>
(2) The Company estimates the fair value of policy loans as
equal to the book value of the loans. Policy loans are
fully collateralized by the account value of the
associated insurance contracts, and the spread between the
policy loan interest rate and the interest rate credited
to the account value held as collateral is fixed.
(3) The estimated fair value of cash and cash equivalents
approximates the carrying value.
(4) Assets held in Separate Accounts are carried at quoted
market values.
NOTE 3: INVESTMENTS
The amortized cost and estimated fair value of investments in
fixed maturity and equity securities as of December 31 were:
<TABLE>
<CAPTION>
1998
------------------------------------------------------------------
Cost / Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fixed maturity securities:
Corporate debt securities $ 159,421 $ 3,404 $ 1,224 $ 161,601
Mortgage-backed securities 13,258 443 54 13,646
U.S. government and agencies 22,912 869 48 23,734
Foreign governments 1,997 - 297 1,700
------------ ------------ ------------ ------------
Total fixed maturity securities $ 197,588 $ 4,716 $ 1,623 $ 200,681
============ ============ ============ ============
Equity securities:
Non-redeemable preferred stocks $ 13,361 $ 58 $ 257 $ 13,162
Common stocks 1,323 - 767 556
------------ ------------ ------------ ------------
Total equity securities $ 14,684 $ 58 $ 1,024 $ 13,718
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------
Cost / Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fixed maturity securities:
Corporate debt securities $ 198,266 $ 4,595 $ 777 $ 202,084
Mortgage-backed securities 34,726 1,135 5 35,856
U.S. government and agencies 13,593 268 11 13,850
Municipals 2,090 90 - 2,180
Foreign governments 2,020 - 32 1,988
------------ ------------ ------------ ------------
Total fixed maturity securities $ 250,695 $ 6,088 $ 825 $ 255,958
============ ============ ============ ============
Equity securities:
Non-redeemable preferred stocks $ 4,507 $ - $ 34 $ 4,473
Common stocks 1,323 - 767 556
------------ ------------ ------------ ------------
Total equity securities $ 5,830 $ - $ 801 $ 5,029
============ ============ ============ ============
</TABLE>
The amortized cost and estimated fair value of fixed maturity
securities at December 31, 1998 by contractual maturity were:
Estimated
Amortized Fair
Cost Value
----------- -----------
Fixed maturity securities:
Due in one year or less $ 30,410 $ 29,997
Due after one year through five years 79,961 81,584
Due after five years through ten years 47,930 48,689
Due after ten years 26,029 26,765
----------- -----------
184,330 187,035
Mortgage-backed securities 13,258 13,646
----------- -----------
Total fixed maturity securities $ 197,588 $ 200,681
=========== ===========
Fixed maturity securities not due at a single maturity date
have been included in the preceding table in the year of final
maturity. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penelties.
<PAGE>
The amortized cost and estimated fair value of fixed maturity
securities at December 31, 1998 by rating agency equivalent were:
Estimated
Amortized Fair
Cost Value
----------- -----------
AAA $ 53,959 $ 55,431
AA 5,484 5,515
A 53,720 54,593
BBB 74,577 76,069
Non-investment grade 9,848 9,073
----------- -----------
Total fixed maturity securities $ 197,588 $ 200,681
=========== ===========
The Company has recorded certain adjustments to deferred policy
acquisition costs and policyholders' account balances in
conjunction with investments classified as available-for-sale.
The Company adjusts those assets and liabilities as if the
unrealized investment gains or losses from available-for-sale
investments had actually been realized, with corresponding
credits or charges reported in stockholder's equity as a
component of accumulated other comprehensive loss, net of
taxes. The following reconciles net unrealized investment gains
(losses) on available-for-sale investments as of December 31:
1998 1997
----------- -----------
Assets:
Fixed maturity securities $ 3,093 $ 5,263
Equity securities (966) (801)
----------- -----------
2,127 4,462
----------- -----------
Liabilities:
Policyholders' account balances 3,615 5,032
Federal income taxes - deferred (521) (200)
----------- -----------
3,094 4,832
----------- -----------
Stockholder's equity:
Accumulated other comprehensive loss $ (967) $ (370)
=========== ===========
<PAGE>
Proceeds and gross realized investment gains and losses from
the sale of available-for-sale securities for the years ended
December 31 were:
1998 1997 1996
----------- ----------- -----------
Proceeds $ 102,967 $ 88,882 $ 155,645
Gross realized investment gains 2,096 4,077 2,677
Gross realized investment losses 4,094 2,130 508
The company owned investment securities of $1,104 and $1,076
that were deposited with insurance regulatory authorities at
December 31, 1998 and 1997, respectively.
Net investment income arose from the following sources for the
years ended December 31:
1998 1997 1996
----------- ----------- -----------
Fixed maturity securities $ 16,244 $ 19,815 $ 22,153
Equity securities 734 761 183
Mortgage loans - 81 388
Policy loans on insurance contracts 4,316 4,333 4,133
Cash and cash equivalents 761 1,293 1,559
Other 29 65 -
----------- ----------- -----------
Gross investment income 22,084 26,348 28,416
Less investment expenses (535) (883) (896)
----------- ----------- -----------
Net investment income $ 21,549 $ 25,465 $ 27,520
=========== =========== ===========
Net realized investment gains (losses), including changes in
valuation allowances, for the years ended December 31:
1998 1997 1996
----------- ----------- -----------
Fixed maturity securities $ (1,944) $ (1,268) $ 657
Equity securities (54) 3,215 1,512
----------- ----------- -----------
Net realized investment gains (losses) $ (1,998) $ 1,947 $ 2,169
=========== =========== ===========
<PAGE>
NOTE 4: FEDERAL INCOME TAXES
The following is a reconciliation of the provision for income
taxes based on earnings before federal income taxes, computed
using the Federal statutory tax rate, with the provision for
income taxes for the years ended December 31:
1998 1997 1996
----------- ----------- -----------
Provision for income taxes computed at
Federal statutory rate $ 2,325 $ 5,133 $ 4,833
State corporate income taxes - - (10)
Decrease in income taxes resulting from:
Dividend received deduction (300) (160) (235)
Foreign tax credit (153) - -
Other - - 2
----------- ----------- -----------
Federal income tax provision $ 1,872 $ 4,973 $ 4,590
=========== =========== ===========
The Federal statutory rate for each of the three years in the
period ended December 31, 1998 was 35%.
The Company provides for deferred income taxes resulting from
temporary differences that arise from recording certain
transactions in different years for income tax reporting
purposes than for financial reporting purposes. The sources of
these differences and the tax effect of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Deferred policy acquisition costs $ (158) $ 315 $ (259)
Policyholders' account balances (659) (140) 4,053
Liability for guaranty fund assessments - (50) 50
Investment adjustments (629) 1,943 642
Other (19) - 2
----------- ----------- -----------
Deferred Federal income tax provision (benefit) $ (1,465) $ 2,068 $ 4,488
=========== =========== ===========
</TABLE>
<PAGE>
Deferred tax assets and liabilities as of December 31 are
determined as follows:
1998 1997
----------- -----------
Deferred tax assets:
Policyholders' account balances $ 5,023 $ 4,364
Investment adjustments 625 (4)
Net unrealized investment loss 521 200
Other 19 -
----------- -----------
Total deferred tax assets 6,188 4,560
----------- -----------
Deferred tax liabilities:
Deferred policy acquisition costs 6,307 6,465
----------- -----------
Net deferred tax liability $ 119 $ 1,905
=========== ===========
The Company anticipates that all deferred tax assets will be
realized, therefore no valuation allowance has been provided.
NOTE 5: REINSURANCE
In the normal course of business, the Company seeks to limit
its exposure to loss on any single insured life and to recover
a portion of benefits paid by ceding reinsurance to other
insurance enterprises or reinsurers under indemnity reinsurance
agreements, primarily excess coverage and coinsurance
agreements. The maximum amount of mortality risk retained by
the Company is approximately $500 on a single life.
Indemnity reinsurance agreements do not relieve the Company
from its obligations to policyholders. Failure of reinsurers to
honor their obligations could result in losses to the Company.
The Company regularly evaluates the financial condition of its
reinsurers so as to minimize its exposure to significant losses
from reinsurer insolvencies. The Company holds collateral under
reinsurance agreements in the form of letters of credit and
funds withheld totaling $154 that can be drawn upon for
delinquent reinsurance recoverables.
<PAGE>
As of December 31, 1998, the Company had the following life
insurance in-force:
<TABLE>
<CAPTION>
Percentage
Ceded to Assumed of amount
Gross other from other Net assumed to
amount companies companies amount net
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Life insurance
in force $ 900,964 $ 159,582 $ 1,116,951 $ 1,858,333 60%
</TABLE>
NOTE 6: RELATED PARTY TRANSACTIONS
The Company and MLIG are parties to a service agreement whereby
MLIG has agreed to provide certain accounting, data processing,
legal, actuarial, management, advertising and other services to
the Company. Expenses incurred by MLIG, in relation to this
service agreement, are reimbursed by the Company on an
allocated cost basis. Charges billed to the Company by MLIG
pursuant to the agreement were $4,767, $4,305 and $4,258 for
1998, 1997 and 1996 respectively. The Company is allocated
interest expense on its accounts payable to MLIG that
approximates the daily Federal funds rate. Total intercompany
interest paid was $69, $64 and $74 for 1998, 1997 and 1996,
respectively.
The Company and Merrill Lynch Asset Management, LP ("MLAM") are
parties to a service agreement whereby MLAM has agreed to
provide certain invested asset management services to the
Company. The Company pays a fee to MLAM for these services
through the MLIG service agreement. Charges attributable to
this agreement and allocated to the Company by MLIG were $157,
$159 and $186 for 1998, 1997 and 1996, respectively.
The Company has a general agency agreement with Merrill Lynch
Life Agency Inc. ("MLLA") whereby registered representatives of
MLPF&S, who are the Company's licensed insurance agents,
solicit applications for contracts to be issued by the Company.
MLLA is paid commissions for the contracts sold by such agents.
Commissions paid to MLLA were $3,798, $4,130 and $1,334 for
1998, 1997 and 1996, respectively. Substantially all of these
commissions were capitalized as deferred policy acquisitions
costs and are being amortized in accordance with the policy
discussed in Note 1.
<PAGE>
In connection with the acquisition of a block of variable life
insurance business from Monarch Life Insurance Company
("Monarch Life"), the Company borrowed funds from Merrill Lynch
& Co. to partially finance the transaction. As of December 31,
1998 and 1997, the outstanding loan balance was $434 and
$1,156, respectively. Repayments made on this loan during 1998
and 1997 were $722 and $1,919, respectively. There were no
repayments made during 1996. Loan interest was calculated at
LIBOR plus 150 basis points. Intercompany interest paid during
1998, 1997 and 1996 was $79, $359 and $366, respectively.
Affiliated agreements generally contain reciprocal indemnity
provisions pertaining to each party's representations and
contractual obligations thereunder.
NOTE 7: STOCKHOLDER'S EQUITY AND STATUTORY REGULATIONS
Notice of intention to declare a dividend must be filed with
the New York Superintendent of Insurance who may disallow the
payment. During 1998, no dividend request was filed. During
1997 and 1996, the Company paid dividends of $15,000 and
$35,000, respectively, to MLIG. Statutory capital and surplus
at December 31, 1998 and 1997, was $55,851 and $51,080,
respectively.
Applicable insurance department regulations require that the
Company report its accounts in accordance with statutory
accounting practices. Statutory accounting practices primarily
differ from the principals utilized in these financial
statements by charging policy acquisition costs to expense as
incurred, establishing future policy benefit reserves using
different actuarial assumptions, not providing for deferred
income taxes and valuing securities on a different basis. The
Company's statutory net income for 1998, 1997 and 1996 was
$5,405, $9,888 and $12,884, respectively.
The National Association of Insurance Commissioners ("NAIC")
utilizes the Risk Based Capital ("RBC") adequacy monitoring
system. The RBC calculates the amount of adjusted capital that
a life insurance company should have based upon that company's
risk profile. As of December 31, 1998, and 1997, based on the
RBC formula, the Company's total adjusted capital level was
761% and 649%, respectively, of the minimum amount of capital
required to avoid regulatory action.
In March 1998, the NAIC adopted the Codification of Statutory
Accounting Principles ("Codification"). The Codification,
which is intended to standardize regulatory accounting and
reporting for the insurance industry, is proposed to be
effective January 1, 2001. However, statutory accounting
principles will continue to be established by individual state
laws and permitted practices and it is uncertain when, or if,
the state of New York will require adoption of Codification for
the preparation of statutory financial statements.
Codification is not expected to have a material impact on the
Company's capital requirements or statutory financial
statements.
<PAGE>
NOTE 8: COMMITMENTS AND CONTINGENCIES
State insurance laws generally require that all life insurers
who are licensed to transact business within a state become
members of the state's life insurance guaranty association.
These associations have been established for the protection of
policyholders from loss (within specified limits) as a result
of the insolvency of an insurer. At the time an insolvency
occurs, the guaranty association assesses the remaining members
of the association an amount sufficient to satisfy the
insolvent insurer's policyholder obligations (within specified
limits). Based upon the public information available at this
time, management believes the Company has no material financial
obligations to state guaranty associations.
In the normal course of business, the Company is subject to
various claims and assessments. Management believes the
settlement of these matters would not have a material effect on
the financial position or results of operations of the Company.
NOTE 9. SEGMENT INFORMATION
In reporting to management, the Company's operating results are
categorized into two business segments: Life Insurance and
Annuities. The Company's Life Insurance segment consists of
variable life insurance products and interest-sensitive life
insurance products. The Company's Annuity segment consists of
variable annuities and interest-sensitive annuities.
The Company's organization is structured in accordance with its
two business segments. Each segment has its own administrative
service center that provides product support to the Company and
customer service support to the Company's policyholders.
Additionally, the marketing and sales management functions,
within MLIG, are organized according to these two business
segments.
The accounting policies of the business segments are the same
as those described in the summary of significant accounting
policies. All revenue and expense transactions are recorded at
the product level and accumulated at the business segment level
for review by management.
The "Other" category, presented in the following segment
financial information, represents assets and related earnings
that do not support policyholder liabilities.
<PAGE>
The following table summarizes each business segment's
contribution to the consolidated amounts:
<TABLE>
<CAPTION>
Life
1998 Insurance Annuities Other Total
- -------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net interest spread (a) $ 789 $ 3,876 $ 3,052 $ 7,717
Other revenues 8,472 5,377 (363) 13,486
----------- ----------- ----------- -----------
Net revenues 9,261 9,253 2,689 21,203
----------- ----------- ----------- -----------
Policy benefits 1,570 60 - 1,630
Reinsurance premium ceded 1,705 - - 1,705
DAC amortization 3,571 2,188 - 5,759
Other non-interest expenses 1,973 3,494 - 5,467
----------- ----------- ----------- -----------
Total non-interest expenses 8,819 5,742 - 14,561
----------- ----------- ----------- -----------
Net earnings before Federal income
tax provision (benefit) 442 3,511 2,689 6,642
Income tax expense (benefit) (7) 938 941 1,872
----------- ----------- ----------- -----------
Net earnings $ 449 $ 2,573 $ 1,748 $ 4,770
=========== =========== =========== ===========
Balance Sheet Information:
Total assets $ 481,305 $ 720,478 $ 46,182 $1,247,965
Deferred policy acquisition costs $ 15,325 $ 14,417 $ - $ 29,742
Policy liabilities and accruals $ 103,926 $ 168,306 $ - $ 272,232
Other policyholder funds $ 1,319 $ - $ 464 $ 1,783
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Life
1997 Insurance Annuities Other Total
- -------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net interest spread (a) $ 1,399 $ 6,060 $ 3,474 $ 10,933
Other revenues 7,759 7,172 80 15,011
----------- ----------- ----------- -----------
Net revenues 9,158 13,232 3,554 25,944
----------- ----------- ----------- -----------
Policy benefits 781 - - 781
Reinsurance premium ceded 1,584 - - 1,584
DAC amortization 1,992 2,127 - 4,119
Other non-interest expenses 1,747 3,048 - 4,795
----------- ----------- ----------- -----------
Total non-interest expenses 6,104 5,175 - 11,279
----------- ----------- ----------- -----------
Net earnings before Federal income
tax provision 3,054 8,057 3,554 14,665
Income tax expense 987 2,742 1,244 4,973
----------- ----------- ----------- -----------
Net earnings $ 2,067 $ 5,315 $ 2,310 $ 9,692
=========== =========== =========== ===========
Balance Sheet Information:
Total assets $ 456,240 $ 635,673 $ 46,668 $1,138,581
Deferred policy acquisition costs $ 17,506 $ 12,900 $ - $ 30,406
Policy liabilities and accruals $ 103,677 $ 205,663 $ - $ 309,340
Other policyholder funds $ 974 $ - $ 967 $ 1,941
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Life
1996 Insurance Annuities Other Total
- -------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net interest spread (a) $ 1,400 $ 5,721 $ 3,813 $ 10,934
Other revenues 7,680 6,431 17 14,128
----------- ----------- ----------- ------------
Net revenues 9,080 12,152 3,830 25,062
----------- ----------- ----------- ------------
Policy benefits 1,311 - - 1,311
Reinsurance premium ceded 1,262 - - 1,262
DAC amortization 1,736 2,048 - 3,784
Other non-interest expenses 1,755 3,141 - 4,896
----------- ----------- ----------- ------------
Total non-interest expenses 6,064 5,189 - 11,253
----------- ----------- ----------- ------------
Net earnings before Federal income
tax provision 3,016 6,963 3,830 13,809
Income tax expense 923 2,335 1,332 4,590
----------- ----------- ----------- ------------
Net earnings $ 2,093 $ 4,628 $ 2,498 $ 9,219
=========== =========== =========== ============
Balance Sheet Information:
Total assets $ 429,330 $ 534,376 $ 44,361 $ 1,008,067
Deferred policy acquisition costs $ 18,213 $ 11,059 $ - $ 29,272
Policy liabilities and accruals $ 101,689 $ 219,450 $ - $ 321,139
Other policyholder funds $ 994 $ - $ 166 $ 1,160
</TABLE>
(a) Management considers investment income net of interest
credited to policyholders' account balances in evaluating
results.
The table below summarizes the Company's net revenues by
product for 1998, 1997, and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
<S> <C> <C> <C>
Life Insurance
Variable Life $ 9,045 $ 8,828 $ 8,790
Interest-sensitive whole life 216 330 290
----------- ----------- ----------
Total Life Insurance 9,261 9,158 9,080
----------- ----------- ----------
Annuities
Variable annuities 6,240 4,673 3,602
Interest-sensitive annuities 3,013 8,559 8,550
----------- ----------- ----------
Total Annuities 9,253 13,232 12,152
----------- ----------- ----------
Other 2,689 3,554 3,830
----------- ----------- ----------
Total $ 21,203 $ 25,944 $ 25,062
=========== =========== ==========
</TABLE>
