MOMENTUM(SM)
Retirement Planning from Equitable Life
PROSPECTUS DATED OCTOBER 18, 1999
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectus for EQ Advisors Trust, which contains important information about
its portfolios.
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WHAT IS MOMENTUM?
MOMENTUM is a group deferred annuity contract issued by THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES. It is a funding vehicle for employers
who sponsor qualified retirement plans. The MOMENTUM employer-sponsored
retirement program includes 401(a) and 401(k) plans, which are described in this
prospectus. The MOMENTUM program consists of a defined contribution master plan
and trust ("Master Plan and Trust"), which we sponsor, and a pooled trust
("Pooled Trust") for employers who prefer to use their own qualified plan.
The contract provides for the accumulation of retirement savings and for income.
The contract offers death benefit protection. It also offers a number of payout
options. Contributions accumulate on a tax-deferred basis. You may fund your
plan by selecting any number of our investment options. The investment options
include 36 variable investment options and one guaranteed interest account
option ("investment options").
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VARIABLE INVESTMENT OPTIONS
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FIXED INCOME OPTIONS:
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DOMESTIC FIXED INCOME AGGRESSIVE FIXED INCOME
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o Alliance Intermediate o Alliance High Yield
Government Securities
o Alliance Money Market
o Alliance Quality Bond
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EQUITY OPTIONS:
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DOMESTIC EQUITY INTERNATIONAL EQUITY
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o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth and Income o Capital Guardian
o EQ/Alliance Premier Growth international
o Calvert Socially Responsible* o Morgan Stanley Emerging
o Capital Guardian Research Markets Equity
o Capital Guardian U.S. Equity o EQ/Putnam International
o Lazard Large Cap Value* Equity
o Merrill Lynch Basic Value o T. Rowe Price International
Equity Stock
o MFS Growth with Income
o MFS Research
o EQ/Putnam Growth & Income
Value
o EQ/Putnam Investors Growth
o T. Rowe Price Equity Income
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AGGRESSIVE EQUITY
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o Alliance Aggressive Stock o MFS Emerging Growth
o Alliance Small Cap Growth Companies
o EQ/Evergreen o Warburg Pincus Small
o Lazard Small Cap Value* Company Value
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ASSET ALLOCATION OPTIONS:
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o Alliance Balanced o EQ/Evergreen Foundation
o Alliance Conservative o Merrill Lynch World Strategy
Investors o EQ/Putnam Balanced
o Alliance Growth Investors
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* May not currently be available in the state of California.
You may allocate amounts to any of the variable investment options subject to
any restrictions that may apply. Each variable investment option is a subaccount
of our Separate Account A. Each variable investment option, in turn, invests in
either Class IA or IB shares of a corresponding securities portfolio of EQ
Advisors Trust. Your investment results in a variable investment option will
depend on the investment performance of the related portfolio.
GUARANTEED INTEREST ACCOUNT OPTION. You also may allocate amounts to the
guaranteed interest account option. This option is part of our general account
and pays interest at guaranteed rates.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The Statement of Additional
Information ("SAI") dated October 18, 1999, is a part of the registration
statement. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-528-0204. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
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2 CONTENTS OF THIS PROSPECTUS
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Contents of this prospectus
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MOMENTUM(SM)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
MOMENTUM at a glance -- key features 8
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FEE TABLE 10
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Examples 14
Condensed financial information 15
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1
CONTRACT FEATURES AND BENEFITS 16
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How contributions can be made 16
What are your investment options under the contract? 16
Selecting investment options (employers and plan
trustees only) 19
Allocating your contributions 19
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2
DETERMINING YOUR CONTRACT'S VALUE 21
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Determining your retirement account value 21
Your contract's value in the variable investment
options 21
Your contract's value in the guaranteed interest
account option 21
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"We," "our" and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the employer, plan
trustee, or the individual who participates in an employer's plan funded by the
MOMENTUM contract. This individual is referred to as the "participant."
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CONTENTS OF THIS PROSPECTUS 3
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3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 22
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Transferring your retirement account value 22
Investment simplifier: automatic transfer options 22
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4
ACCESSING YOUR MONEY 24
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Withdrawals and termination 24
Forfeitures 24
Plan loans 24
When to expect payments 25
Choosing your annuity payout options 26
Minimum distributions (automatic minimum
withdrawal option) -- over age 70 1/2 27
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5
THE MOMENTUM PROGRAM 28
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Master Plan and Trust 28
Pooled Trust 28
Trustee 28
Employer's responsibilities 29
Adopting the MOMENTUM program 29
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6
PLAN RECORDKEEPING SERVICES 30
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Basic recordkeeping option 30
Full-service recordkeeping option 30
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7
CHARGES AND EXPENSES 31
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Charges that Equitable Life deducts 31
Charges that EQ Advisors Trust deducts 34
Charge reductions under special circumstances 34
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8
PAYMENT OF DEATH BENEFIT 36
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Death benefit amount 36
Distribution of the death benefit 36
Beneficiary's payment options 36
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9
TAX INFORMATION 38
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Overview 38
Tax aspects of contributions to a plan 38
Tax aspects of distributions from a plan 40
Certain rules applicable to plan loans 43
Impact of taxes to Equitable Life 44
Certain rules applicable to plans designed to comply
with Section 404(c) of ERISA 44
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10
MORE INFORMATION 45
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About Separate Account A 45
About EQ Advisors Trust 45
About the general account 46
Dates and prices at which contract events occur 46
About your voting rights 47
About our year 2000 progress 48
About legal proceedings 48
About our independent accountants 48
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11
INVESTMENT PERFORMANCE 49
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Benchmarks 49
Communicating performance data 61
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APPENDICES
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I -- Original certificates A-1
II -- Condensed financial information B-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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4 INDEX OF KEY WORDS AND PHRASES
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Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
PAGE
active loan 33
annuitant 27
annuity payout option 26
beneficiary 36
business day 46
contributions 16
default option 16
DOL 24
elective deferrals 39
ERISA 28
fixed-dollar option 22
guaranteed interest account option 19
interest sweep option 23
investment options cover
IRA 41
IRS 28
Master Plan and Trust 28
participant 2
participation date 9
participation year 9
Pooled Trust 28
portfolio cover
processing office 6
retirement account value 21
SAI cover
takeover loans 24
TOPS 6
unit 21
unit investment trust 45
variable investment options 16
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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variable investment options Investment Funds or Investment Divisions
units Accumulator Units
unit value Accumulation Unit Value
guaranteed interest account Guaranteed Interest Account
option
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We also have contracts that we refer to as "Original contracts/certificates."
These certificates are no longer available for new purchasers. Any information
about Original certificates which is different from the current contracts we
offer can be found in Appendix I, which will be referenced throughout this
prospectus when it applies.
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WHO IS EQUITABLE LIFE? 5
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Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$390.8 billion in assets as of June 30, 1999. For over 100 years Equitable Life
has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
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6 WHO IS EQUITABLE LIFE?
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Who is Equitable Life?
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
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FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN PAYMENTS, ETC.) SENT BY REGULAR MAIL:
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Equitable Life
MOMENTUM
P.O. Box 13629
Newark, NJ 07188-0629
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FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN PAYMENTS, ETC.) SENT BY EXPRESS
DELIVERY:
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Bank One, NA
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attention: MOMENTUM 13629
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FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN PAYMENTS, ETC.) SENT BY REGULAR MAIL AND
DATA TRANSMITTED VIA AUTOMATED MEDIA (E.G., TAPE, DISKETTE, ETC.):
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Equitable Life
MOMENTUM
P.O. Box 12094
Newark, NJ 07188
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FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN PAYMENTS, ETC.) SENT BY EXPRESS MAIL AND
DATA TRANSMITTED VIA AUTOMATED MEDIA (E.G., TAPE, DISKETTE, ETC.):
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Bank One, NA
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attention: MOMENTUM 13094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS OR WITHDRAWALS) SENT
BY REGULAR MAIL:
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MOMENTUM
P.O. Box 2919
New York, NY 10116
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS OR WITHDRAWALS) SENT
BY EXPRESS DELIVERY:
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MOMENTUM
200 Plaza Drive
Harmon Meadow
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o annual statement of retirement account; and
o semiannual statement of retirement account.
We reserve the right to change the frequency of these reports.
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TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") SYSTEM
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TOPS provides up-to-date information by touch-tone telephone. You may use TOPS
only if your employer elects this service. A personal identification number
("PIN") will automatically be assigned to you when you enroll in your plan. You
can use TOPS to obtain information on:
o the daily unit values for the variable investment options;
o the number of units held in the variable investment options under your
account;
o your current retirement account value;
o your current allocation percentages;
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WHO IS EQUITABLE LIFE? 7
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You can also:
o change your allocation percentages and transfer money among the variable
investment options and the guaranteed interest account option.
Your PIN number is required to use TOPS. We have established procedures to
reasonably confirm that the instructions communicated by telephone are genuine.
For example, we will require certain personal identification information before
we will act on telephone instructions and we will provide written confirmation
of instructions communicated by telephone. We reserve the right to terminate or
modify any telephone or automated transfer/withdrawal service we provide upon 90
days written notice.
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1-800-821-7777. Of course, for reasons beyond our control, the service
may sometimes be unavailable.
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TOLL FREE TELEPHONE SERVICE:
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You can reach our telephone consultants at 1-800-528-0204. Telephone consultants
are available 8:30 a.m. until 7:00 p.m., Monday through Thursday and 8:30 a.m.
until 5:00 p.m. on Fridays, Eastern time, on business days. You may obtain daily
unit values for the variable investment options and other information regarding
MOMENTUM and your account.
Hearing or speech-impaired clients may obtain information regarding MOMENTUM
contracts by dialing, toll-free, the SPRINT national relay number
(800-877-8973). This service enables clients with a telecommunications device
for the deaf ("TDD") to have their message or questions relayed to our customer
service department between the hours of 8:30 a.m. until 7:00 p.m. Eastern time
Monday through Thursday and 8:30 a.m. until 5 p.m. Eastern time on Fridays
(800-528-0204) by SPRINT personnel, who will communicate our reply back to them
via the TDD.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE WHICH SHOULD BE AVAILABLE THROUGH YOUR EMPLOYER OR PLAN
TRUSTEE:
(1) address changes;
(2) change of investments and allocations;
(3) transfers among investment options;
(4) election of the Investment simplifier: automatic transfer options;
(5) loan application;
(6) withdrawal requests; and
(7) contract termination.
TO TERMINATE OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) Investment simplifier:
- interest sweep option; or
- fixed-dollar option;
(2) the date annuity payments are to begin.
SIGNATURES:
You must sign and date all these requests. The proper person to sign forms,
notices and requests is normally the participant and the employer or plan
trustee.
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8 MOMENTUM AT A GLANCE -- KEY FEATURES
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MOMENTUM at a glance -- key features
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<TABLE>
<CAPTION>
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<S> <C> <C>
PROFESSIONAL MOMENTUM's variable investment options invest in 36 different portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
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GUARANTEED INTEREST o Principal and interest guarantees
ACCOUNT OPTION o Interest rates set periodically
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TAX ADVANTAGES o On earnings inside the No tax on investment gains until you make withdrawals
contract or receive distributions
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o On transfers inside the No tax on transfers among investment options
contract
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Because you are buying a contract to fund a retirement plan that already provides tax deferral,
you should do so for the contract's features and benefits other than tax deferral. Tax deferral
of the contract does not provide additional benefits.
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ACCESS TO YOUR o Partial withdrawals
MONEY o Automatic minimum withdrawals
o Plan loans
o Full withdrawal
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You may be subject to a withdrawal charge for certain withdrawals. You may also incur income
tax and a penalty tax.
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Depending on the terms of the employer's plan, not all features are available and access to
your funds may be limited.
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PAYOUT ALTERNATIVES o Five annuity payout options (available as fixed or variable annuity payments)
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ADDITIONAL FEATURES o Automatic transfer options
o Fixed-dollar option
o Interest sweep option
o Free transfers among investment options
o Waiver of withdrawal charge upon death
o Minimum death benefit
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SERVICES WE PROVIDE o Two plan recordkeeping options
o Educational materials and seminars to assist retirement planning needs of plan participants
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FEES AND CHARGES o We deduct a daily charge at a maximum effective annual rate of 1.34% of assets invested in
variable investment options; 1.49% for the Alliance Balanced, Alliance Common Stock, and
Alliance Money Market options. Also, for the Alliance Aggressive, Alliance Balanced, Alliance
Common Stock, and Alliance Money Market options, the combined option and portfolio expenses
may not exceed an annual rate of 1.75%.
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MOMENTUM AT A GLANCE - KEY FEATURES 9
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<TABLE>
<CAPTION>
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<S> <C>
FEES AND o Administrative charge:
CHARGES (CONTINUED) Generally $30 annually.
o Plan loan charges:
$25 set-up fee;
$6 quarterly recordkeeping fee while a loan is active.
o Plan recordkeeping services (billed to employer):
$300 annually for basic recordkeeping plan;
Additional fee for full-service recordkeeping plan.
o Withdrawal charge:
6% of partial withdrawals that exceed the free withdrawal amount or the amount withdrawn
attributable to contributions that were made in the current and five prior participation
years, whichever is less. There is no charge in any participation year in which the amount
withdrawn does not exceed 10% of your retirement account value plus any active loan at the
time of your withdrawal request, minus prior withdrawals in that participation year. This
is the free withdrawal amount. There are many circumstances under which the withdrawal
charge will not apply. They are discussed under "Charges and expenses" later in this
prospectus.
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The 12-month period beginning on your participation date and each 12-month period thereafter is a "participation year."
The "participation date" is the date we receive your properly completed and signed enrollment form at our processing
office or the date we receive your initial contribution, if earlier. For participants in plans that converted to
MOMENTUM from our EQUI-VEST(Reg. TM) Corporate Trusteed contract, the participation date is the same participation date
as in the EQUI-VEST Corporate Trusteed certificate relating to that participant. If more than one EQUI-VEST Corporate
Trusteed certificate is in force with respect to a participant, then the participation date will be the earliest
participation date.
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o We deduct a charge for applicable taxes such as state premium taxes that may be imposed in
your state. The current tax charge that might be imposed varies by state and ranges from 0%
to 2% (1% in Puerto Rico and 5% in the U.S. Virgin Islands).
o We generally deduct a $350 annuity administrative fee from amounts applied to purchase
certain life annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the average
daily net assets invested in each portfolio. These expenses include management and advisory
fees ranging from a maximum of 0.31% to 1.15% annually, other expenses, and for Class IB
shares 12b-1 fees of 0.25% annually.
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</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
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10 FEE TABLE
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Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the MOMENTUM contract, as well as charges and expenses of the portfolios
that you will bear indirectly. Charges for taxes, such as premium taxes, may
apply. However, certain expenses and fees shown in this table may not apply.
Also, an annuity administrative fee may apply when your annuity payments are to
begin. Each of the charges and expenses is more fully described under "Charges
and expenses" later in this prospectus. For a complete description of portfolio
charges and expenses, please see the attached prospectus for EQ Advisors Trust.
The guaranteed interest account option is not covered by the fee table and
examples. However, the withdrawal charge, the administrative charge and any
annuity administrative fee do apply to the guaranteed interest account option.
<TABLE>
<CAPTION>
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
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ALLIANCE MONEY MARKET,
ALLIANCE BALANCED, AND ALL OTHER VARIABLE
ALLIANCE COMMON STOCK INVESTMENT OPTIONS
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<S> <C> <C> <C>
Mortality and expense risk(1) 0.65% 0.50%
Other expenses 0.84% 0.84%
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Total Separate Account A annual expenses(2) 1.49% 1.34%
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TRANSACTION CHARGES WE DEDUCT FROM YOUR RETIREMENT ACCOUNT VALUE
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Sales load on purchases None
Transfer fees None
Maximum withdrawal charge (3) 6%
Plan loan charges (4) $25 when loan is made
+ $6 per quarter
Annual administrative charge (5) $30 Per Participant
Annual basic recordkeeping charge (6) $300 Per Plan
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</TABLE>
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FEE TABLE 11
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EQ ADVISORS TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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TOTAL
ANNUAL
EXPENSES
MANAGEMENT(7) OTHER (AFTER EXPENSE
CLASS IA SHARES FEES EXPENSES(7) LIMITATION)(8)
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<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.03% 0.57%
Alliance Balanced 0.41% 0.05% 0.46%
Alliance Common Stock 0.36% 0.04% 0.40%
Alliance Conservative Investors 0.48% 0.06% 0.54%
Alliance Equity Index 0.31% 0.04% 0.35%
Alliance Global 0.64% 0.08% 0.72%
Alliance Growth and Income 0.55% 0.04% 0.59%
Alliance Growth Investors 0.51% 0.05% 0.56%
Alliance High Yield 0.60% 0.04% 0.64%
Alliance Intermediate Government Securities 0.50% 0.06% 0.56%
Alliance International 0.90% 0.17% 1.07%
Alliance Money Market 0.35% 0.03% 0.38%
Alliance Quality Bond 0.53% 0.05% 0.58%
Alliance Small Cap Growth 0.90% 0.07% 0.97%
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</TABLE>
<TABLE>
<CAPTION>
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Total
Other Annual
Expenses Expenses
Management(7) (After expense (After expense
Class IB shares Fees 12b-1 Fee(9) limitation) limitation)(10)
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<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Calvert Socially Responsible 0.65% 0.25% 0.15% 1.05%
Capital Guardian International 0.75% 0.25% 0.20% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.75% 0.25% 0.05% 1.05%
EQ/Evergreen Foundation 0.63% 0.25% 0.07% 0.95%
Lazard Large Cap Value 0.55% 0.25% 0.15% 0.95%
Lazard Small Cap Value 0.80% 0.25% 0.15% 1.20%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
MFS Growth with Income 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
EQ/Putnam International Equity 0.70% 0.25% 0.25% 1.20%
EQ/Putnam Investors Growth 0.55% 0.25% 0.15% 0.95%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
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</TABLE>
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12 FEE TABLE
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Notes:
(1) A portion of this charge is for providing the minimum death benefit.
(2) The total Separate Account A annual expenses of the variable investment
options are guaranteed not to exceed an annual rate of 1.49% for the
Alliance Money Market, Alliance Balanced, and Alliance Common Stock options
and an annual rate of 1.34% for all other options. The total Separate
Account A annual expenses deducted from the variable investment options and
the total annual expenses of EQ Advisors Trust, when added together, are
not permitted to exceed a total annual rate of 1.75% of the value of the
assets held in each of the Alliance Aggressive Stock, Alliance Balanced,
Alliance Common Stock and Alliance Money Market options. Without this
expense limitation, total annual expenses deducted from those variable
investment options plus annual expenses of the corresponding portfolios of
EQ Advisors Trust for 1998 would have been as follows: 1.90% for the
Alliance Aggressive Stock option, 1.94% for Alliance Balanced option, 1.88%
for Alliance Common Stock option, and 1.86% for Alliance Money Market
option.
(3) The maximum withdrawal charge is 6% of the amount withdrawn or the
contributions made in the current and five prior participation years,
whichever is less. Important exceptions and limitations may eliminate or
reduce the withdrawal charge.
(4) Your employer may elect to pay these charges and we have reserved the right
to increase them.
(5) The administrative charge is currently $7.50 or, if less, 0.50% of your
retirement account value plus the amount of any active loan. We deduct this
charge quarterly. Your employer may elect to pay this charge. We do not
currently assess this charge for any calendar quarter in which the
retirement account value plus any active loan is $25,000 or more on the
last business day of that calendar quarter. We have reserved the right to
increase this charge.
(6) We will bill this charge directly to your employer if the employer elects
the basic plan recordkeeping option. We charge a fee of $25 per check drawn
if the employer elects to have us directly distribute plan benefits and
withdrawals. We reserve the right to waive, or increase these charges upon
90 days written notice to the employer or plan trustee.
(7) The management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders. Other expenses will fluctuate from year to year depending on
actual expenses.
(8) On October 18, 1999 these portfolios became part of EQ Advisors Trust. The
"Other Expenses" for these portfolios have been restated to reflect the
estimated expenses that would have been incurred had these portfolios been
portfolios of EQ Advisors Trust for the year ended December 31, 1998. The
restated expenses reflect an increase of 0.01%.
(9) The Class IB shares of EQ Advisors Trust are subject to fees imposed under
a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The 12b-1
fee will not be increased for participants enrolled under the MOMENTUM
contract.
(10) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to each portfolio. Under this agreement
Equitable Life has agreed to waive or limit its fees and assume other
expenses. Under the expense limitation agreement, total annual operating
expenses of each portfolio (other than interest, taxes, brokerage
commissions, capitalized expenditures, extraordinary expenses and 12b-1
fees) are limited as a percentage of the average daily net assets of each
portfolio as follows: 0.90% for EQ/Alliance Premier Growth; 0.80% for
Calvert Socially Responsible; 0.95% for Capital Guardian International;
0.70% for Capital Guardian Research and Capital Guardian U.S. Equity; 0.80%
for EQ/Evergreen; 0.70% for EQ/Evergreen Foundation and Lazard Large Cap
Value; 0.95% for Lazard Small Cap Value; 0.60% for Merrill Lynch Basic
Value Equit; 0.95% for Merrill Lynch World Strategy; 0.60% for MFS Emerging
Growth Companies, MFS
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth with Income, and MFS Research; 1.50% for Morgan Stanley Emerging
Markets Equity; 0.65% for EQ/Putnam Balanced; 0.60% for EQ/Putnam Growth
and Income Value; 0.95% for EQ/Putnam International Equity; 0.70% for
EQ/Putnam Investors Growth; 0.60% for T. Rowe Price Equity Income; 0.95%
for T. Rowe Price International Stock; and 0.75% for Warburg Pincus Small
Company Value. The expenses shown for Lazard Large Cap Value and EQ/Putnam
Investors Growth portfolio reflect an increase effective on May 1, 1999.
Absent the expense limitation, "Other Expenses" for 1998 on an annualized
basis for each of the portfolios would have been as follows: 0.40% for
Lazard Large Cap Value; 0.49% for Lazard Small Cap Value; 0.26% for Merrill
Lynch Basic Value Equity; 0.66% for Merrill Lynch World Strategy; 0.24% for
MFS Emerging Growth Companies, 0.25% for MFS Research; 1.23% for Morgan
Stanley Emerging Markets Equity; 0.45% for EQ/ Putnam Balanced; 0.24% for
EQ/Putnam Growth & Income Value; 0.51% for EQ/Putnam International Equity;
0.29% for EQ/Putnam Investors Growth; 0.24% for T.Rowe Price Equity Income;
0.40% for T. Rowe Price International Stock; and 0.27% for Warburg Pincus
Small Company Value. For the following portfolios, the "Other Expenses" for
1999, absent the expense limitation, are estimated to be as follows: 0.74%
for EQ/Alliance Premier Growth; 0.43% for Calvert Socially Responsible;
1.03% for Capital Guardian International; 0.74% for Capital Guardian
Research and Capital Guardian U.S. Equity; 0.76% for EQ/Evergreen; 0.86%
for EQ/Evergreen Foundation; 0.59% for MFS Growth with Income. Initial seed
capital was invested on December 31, 1998 for the EQ/Evergreen,
EQ/Evergreen Foundation, and MFS Growth with Income portfolios; April 30,
1999 for the EQ/Alliance Premier Growth, Capital Guardian International,
Capital Guardian Research and Capital Guardian U.S. Equity portfolios; and
August 30, 1999 for the Calvert Socially Responsible portfolio.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life pursuant to the expense limitation agreement
provided, that among other things, such portfolio has reached sufficient
size to permit such reimbursement to be made and provided that the
portfolio's current annual operating expenses do not exceed the operating
expense limit determined for such portfolio. For more information see the
prospectus for EQ Advisors Trust.
<PAGE>
- --------------------------------------------------------------------------------
14 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical participant would pay
in the situations illustrated. We assume a $1,000 contribution is invested in
one of the variable investment options listed, and a 5% annual return on assets
in that option. We also assume there is no waiver of the withdrawal charge.(1)
We calculate the administrative charge by using an average of the total actual
annual administrative charges for 1998 under MOMENTUM contracts. These examples
do not reflect the $300 annual charge for basic recordkeeping services, which we
bill directly to the employer.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown.(2) Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
IF YOUR PARTICIPATION UNDER THE MOMENTUM
CONTRACT TERMINATES AT THE END OF EACH
PERIOD SHOWN, THE EXPENSES WOULD BE:
--------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $75.43 $120.26 $165.18 $227.23
Alliance Balanced $75.43 $120.26 $165.18 $227.23
Alliance Common Stock $75.43 $120.26 $165.18 $227.23
Alliance Conservative Investors $76.72 $124.15 $172.11 $241.35
Alliance Equity Index $74.84 $118.46 $161.97 $220.65
Alliance Global $78.51 $129.53 $181.65 $260.60
Alliance Growth and Income $77.22 $125.65 $174.77 $246.73
Alliance Growth Investors $76.92 $124.75 $173.18 $243.51
Alliance High Yield $77.72 $127.14 $177.42 $252.09
Alliance Intermediate Government
Securities $76.92 $124.75 $173.18 $243.51
Alliance International $81.98 $139.91 $199.99 $297.04
Alliance Money Market $75.43 $120.26 $165.18 $227.23
EQ/Alliance Premier Growth $82.77 $142.27 -- --
Alliance Quality Bond $77.12 $125.35 $174.24 $245.66
Alliance Small Cap Growth $80.99 $136.95 $194.77 $286.76
Calvert Socially Responsible $81.78 $139.32 -- --
Capital Guardian International $83.27 $143.75 -- --
Capital Guardian Research $80.79 $136.36 -- --
Capital Guardian U.S. Equity $80.79 $136.36 -- --
EQ/Evergreen $81.78 $139.32 -- --
EQ/Evergreen Foundation $80.79 $136.36 -- --
Lazard Large Cap Value $80.79 $136.36 -- --
Lazard Small Cap Value $83.27 $143.75 -- --
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
IF YOUR PARTICIPATION UNDER THE MOMENTUM
CONTRACT DOES NOT TERMINATE AT THE END OF
EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
--------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $19.80 $61.22 $105.18 $227.23
Alliance Balanced $19.80 $61.22 $105.18 $227.23
Alliance Common Stock $19.80 $61.22 $105.18 $227.23
Alliance Conservative Investors $21.17 $65.35 $112.11 $241.35
Alliance Equity Index $19.17 $59.31 $101.97 $220.65
Alliance Global $23.05 $71.04 $121.65 $260.60
Alliance Growth and Income $21.69 $66.93 $114.77 $246.73
Alliance Growth Investors $21.38 $65.98 $113.18 $243.51
Alliance High Yield $22.21 $68.51 $117.42 $252.09
Alliance Intermediate Government
Securities $21.38 $65.98 $113.18 $243.51
Alliance International $26.72 $82.05 $139.99 $297.04
Alliance Money Market $19.80 $61.22 $105.18 $227.23
EQ/Alliance Premier Growth $27.56 $84.56 -- --
Alliance Quality Bond $21.59 $66.61 $114.24 $245.66
Alliance Small Cap Growth $25.68 $78.91 $134.77 $286.76
Calvert Socially Responsible $26.51 $81.42 -- --
Capital Guardian International $28.09 $86.12 -- --
Capital Guardian Research $25.47 $78.29 -- --
Capital Guardian U.S. Equity $25.47 $78.29 -- --
EQ/Evergreen $26.51 $81.42 -- --
EQ/Evergreen Foundation $25.47 $78.29 -- --
Lazard Large Cap Value $25.47 $78.29 -- --
Lazard Small Cap Value $28.09 $86.12 -- --
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
IF YOUR PARTICIPATION UNDER THE MOMENTUM
CONTRACT TERMINATES AT THE END OF EACH
PERIOD SHOWN, THE EXPENSES WOULD BE:
- ----------------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value Equity $79.80 $133.39 $188.49 $274.28
Merrill Lynch World Strategy $83.27 $143.75 $206.73 $310.25
MFS Emerging Growth Companies $79.80 $133.39 $188.49 $274.28
MFS Growth with Income $79.80 $133.39 -- --
MFS Research $79.80 $133.39 $188.49 $274.28
Morgan Stanley Emerging Markets
Equity $88.73 $159.87 $233.33 $364.22
EQ/Putnam Balanced $80.29 $134.88 $191.11 $279.50
EQ/Putnam Growth & Income
Value $79.80 $133.39 $188.49 $274.28
EQ/Putnam International Equity $83.27 $143.75 -- --
EQ/Putnam Investors Growth $80.79 $136.36 -- --
T. Rowe Price Equity Income $79.80 $133.39 $188.49 $274.28
T. Rowe Price International Stock $83.27 $143.75 $206.73 $310.25
Warburg Pincus Small Company
Value $81.29 $137.84 $196.34 $289.85
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
IF YOUR PARTICIPATION UNDER THE MOMENTUM CONTRACT
DOES NOT TERMINATE AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
- ----------------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
(CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value Equity $24.42 $75.14 $128.49 $274.28
Merrill Lynch World Strategy $28.09 $86.12 $146.73 $310.25
MFS Emerging Growth Companies $24.42 $75.14 $128.49 $274.28
MFS Growth with Income $24.42 $75.14 -- --
MFS Research $24.42 $75.14 $128.49 $274.28
Morgan Stanley Emerging Markets
Equity $33.85 $103.21 $174.82 $364.22
EQ/Putnam Balanced $24.94 $76.71 $131.11 $279.50
EQ/Putnam Growth & Income
Value $24.42 $75.14 $128.49 $274.28
EQ/Putnam International Equity $28.09 $86.12 -- --
EQ/Putnam Investors Growth $25.47 $78.29 -- --
T. Rowe Price Equity Income $24.42 $75.14 $128.49 $274.28
T. Rowe Price International Stock $28.09 $86.12 $146.73 $310.25
Warburg Pincus Small Company
Value $25.99 $79.86 $136.34 $289.85
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount accumulated could not be paid in the form of an annuity payout
option at the end of any of the periods shown in the examples. This is
because the amount applied to purchase an annuity payout option must be at
least $3,500. See "Accessing your money." In some cases, charges for state
premium or other applicable taxes will be deducted from the amount applied,
if applicable.
(2) Actual administrative charges may be less if you, as employer, are billed
directly for the quarterly administrative charge or if we do not deduct the
quarterly administrative charge.
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a life annuity payout option, the expenses shown in the example for if
your participation under the MOMENTUM contract does not terminate would, in each
case, be increased by $4.43 based on the average amount applied to annuity
payout options in 1998. See "Annuity administrative fee" under "Charges and
expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix II at the end of this prospectus for the unit values and
number of units outstanding as of the periods shown for the variable investment
options available as of December 31, 1998.
<PAGE>
- --------------------------------------------------------------------------------
16 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
1
Contract features and benefits
- --------------------------------------------------------------------------------
HOW CONTRIBUTIONS CAN BE MADE
Employers and plan trustees may make contributions at any time by either wire
transfer or check. Participants should not send contributions directly to
Equitable Life. There is no minimum contribution amount, however, we have the
right to require a minimum aggregate amount of contributions. All contributions
made by check must be drawn on a U.S. bank, in U.S. dollars, and made payable to
Equitable Life. We do not accept third-party checks endorsed to us except for
rollover contributions from a qualified plan, tax-free exchanges or trustee
checks that involve no refund. All checks are subject to our ability to collect
the funds. We reserve the right to reject a payment if it is received in an
unacceptable form. We also have the right to stop accepting contributions upon
notice to employers and plan trustees.
Your initial contribution must generally be accompanied by all properly
completed forms. Failure to use the proper form, or to complete the form
properly, may result in a delay in crediting contributions. Employers should
send all contributions to Equitable Life at the processing office. See "How to
reach us."
If we receive your initial contribution before we receive the signed enrollment
form or the allocation instructions on the form are incomplete (e.g., do not add
up to 100%), we will allocate all or a portion of your initial contribution to
the plan's default option. The plan's default option may be either the
guaranteed interest account option or the Alliance Money Market option. If your
instructions add up to less than 100%, we will only allocate the portion of the
contribution for which we do not have instructions to the default option. If
your instructions add up to more than 100%, we will allocate the entire amount
of the contribution to the default option. We will then notify your employer or
plan trustee and request corrected instructions. If we do not receive corrected
instructions after sending three notices, but in no event later than 105 days
from the date a contribution is first credited to the default option, we will
return to the employer or plan trustee, whichever applies, all contributions for
which notices had been sent, plus earnings.
We will return the contribution to the employer or plan trustee in five business
days, if we have not received the signed form or corrected allocation
instructions, unless we have obtained your permission to continue to hold the
contribution.
- --------------------------------------------------------------------------------
Generally, our "business day" is any day on which Equitable Life is open and the
New York Stock Exchange is open for trading.
- --------------------------------------------------------------------------------
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the guaranteed
interest account option.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 36 variable investment options will
depend on the investment performance of the underlying portfolios. Only 25
variable investment options can be active at any one time. If, at a later date,
we offer additional investment options, a limit of 45 investment options can be
chosen over the life of the contract. Listed below are the currently available
portfolios, their investment objectives, and their advisers.
- --------------------------------------------------------------------------------
The employer or plan trustee can choose from among 36 variable investment
options.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Balanced High return through a combination of current Alliance Capital Management L.P.
income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before EQ Advisors Trust and Alliance Capital Management L.P.
Separate Account A annual expenses) that
approximates the total return performance of
the Standard & Poor's 500 Composite Stock
Price Index
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- -----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income Alliance Capital Management L.P.
and, to the extent consistent with that
objective, capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- -----------------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond High current income consistent with Alliance Capital Management L.P.
preservation of capital
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsible* Long-term capital appreciation Calvert Asset Management Company, Inc.
and Brown Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Capital Guardian International Long-term growth of capital by investing Capital Guardian Trust Company
primarily in non-United States equity
securities
- -----------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Currently not available in the state of California. Please call our
customer service department at 1-800-528-0204 for information regarding
state availability.
<PAGE>
- --------------------------------------------------------------------------------
18 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Capital appreciation Evergreen Asset Management Corp.
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital
appreciation
- -----------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value* Capital appreciation Lazard Asset Management
- -----------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value* Capital appreciation Lazard Asset Management
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and, secondarily, Merrill Lynch Asset Management, L.P.
income
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- -----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies Long-term capital growth Massachusetts Financial Services Company
- -----------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- -----------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future Massachusetts Financial Services Company
income
- -----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Long-term capital appreciation Morgan Stanley Asset Management Inc.
Equity
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value Capital growth, current income is a Putnam Investment Management, Inc.
secondary objective
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Capital appreciation Putnam Investment Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital and any Putnam Investment Management, Inc.
increased income that results from this
growth
- -----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also T. Rowe Price Associates, Inc.
capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Long-term growth of capital Rowe Price-Fleming International, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value Long-term capital appreciation Warburg Pincus Asset Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Currently not available in the state of California. Please call our
customer service department at 1-800-528-0204 for information regarding
state availability.
Other important information about the portfolios is included in the separate
prospectus for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEED INTEREST ACCOUNT OPTION
The guaranteed interest account option is part of our general account and pays
interest at guaranteed rates. We discuss our general account under "More
information."
We set interest rates periodically at our discretion according to our procedures
that we have in effect at the time. All interest rates are effective annual
interest rates, but before deduction of annual administrative charges or any
withdrawal charges.
We credit interest daily to amounts in the guaranteed interest account option.
There are three levels of interest rates in effect at the same time in the
guaranteed interest account option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
For the MOMENTUM program, we set quarterly "current" rates. The current rate
applies to the entire amount you have in the guaranteed interest account option
during the calendar quarter for which it is declared. This calendar quarter is
referred to as the "interest guarantee period." We may change the duration of
future interest guarantee periods, but no interest guarantee period will exceed
one year. We may assign different current rates based on when we receive
contributions. We may assign different current and yearly guaranteed rates to
different plans based upon when the plan became enrolled in the MOMENTUM
program.
A plan will be considered enrolled in the MOMENTUM program as of the earliest
participation date that applies to a participant in that plan. All participants
within the same plan will be subject to the same interest rates. Plans that
converted from our EQUI-VEST Corporate Trusteed contract to MOMENTUM will be
considered in the same group of participants, or class, regardless of the date
of the plan's enrollment under EQUI-VEST.
The yearly guaranteed interest rate is 4% for 1999 and 4% for the year 2000. The
yearly guaranteed interest rate will never be less than the minimum contract
guarantee of 3%, or 4% for participants in plans that converted to MOMENTUM from
our EQUI-VEST Corporate Trusteed contract. Current rates will never be less than
the yearly guaranteed interest rate. At least 15 days before the beginning of a
calendar year, we will notify you in writing of the guaranteed interest rate for
the next year.
SELECTING INVESTMENT OPTIONS (EMPLOYERS AND PLAN TRUSTEES ONLY)
Subject to state regulatory approval, you, as employer or plan trustee, can fund
your plan with up to 25 active variable investment options at any one time, and
a limit of 45 investment options over the life of the contract if we offer
additional investment options in the future. You make your selection on the
application. You may change this selection subject to our rules that we have in
effect at the time.
If you choose any one of the Alliance Conservative Investors, Alliance High
Yield, Alliance Intermediate Government Securities, or Alliance Quality Bond
options, you must also select the Alliance Money Market option. Also, if you
select the guaranteed interest account option and any of the above-listed
options, certain restrictions will apply to transfers out of the guaranteed
interest account option. See "Transferring your money among investment options."
Lastly, if you do not select any of the above-listed options, you must elect the
guaranteed interest account option as an investment option.
See Appendix I for information regarding investment choices available under
Original certificates.
ALLOCATING YOUR CONTRIBUTIONS
We allocate contributions to the investment options according to the allocation
percentages on the participant's enrollment form or as later changed. Under
participant-directed plans, you, as participant, will provide the allocation
percentages. In trustee-directed plans, the
<PAGE>
- --------------------------------------------------------------------------------
20 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
plan trustee will provide the percentages. Employee and employer contributions
may be allocated in different percentages.
You, as a participant, should review your confirmation notices carefully to
determine whether your contributions have been allocated correctly. We will send
you a certificate evidencing your participation under the MOMENTUM contract.
Unless restricted by your employer's plan, you can change your allocation
percentages at any time. To change your allocation instructions, you can file a
change of investment allocation form with your employer or plan trustee to be
forwarded to our processing office. If your employer elects to use TOPS, you can
change your allocation percentages over the phone. The change will remain in
effect for future contributions unless you request another change.
<PAGE>
- --------------------------------------------------------------------------------
DETERMINING YOUR CONTRACT'S VALUE 21
- --------------------------------------------------------------------------------
2
Determining your contract's value
- --------------------------------------------------------------------------------
DETERMINING YOUR RETIREMENT ACCOUNT VALUE
Your "retirement account value" is the total of the values you have in the
variable investment options and the guaranteed interest account option. These
amounts are subject to certain fees and charges discussed under "Charges and
expenses."
If you make a partial or full withdrawal, or if your employer terminates a
plan's participation in the MOMENTUM program, your retirement account value will
be reduced by any withdrawal charge that applies.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option, minus daily charges for mortality and expense risks
and other expenses. On any day, your value in any variable investment option
equals the number of units credited to you under that option, adjusted for any
units deducted from your contract under that option, multiplied by that day's
value for one unit. The number of your contract units in any variable investment
option does not change unless you make additional contributions, make a
withdrawal, take a loan, make a loan repayment, or transfer amounts among
investment options. In addition, when we deduct the withdrawal charge, the
quarterly administrative charge and certain other charges, the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED INTEREST ACCOUNT OPTION
Your value in the guaranteed interest account option at any time equals your
contributions, transfers, and repayments to that option, plus interest, less
withdrawals, loans, and transfers out of the option, and the charges we deduct.
<PAGE>
- --------------------------------------------------------------------------------
22 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
3
Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR RETIREMENT ACCOUNT VALUE
Subject to certain restrictions, the MOMENTUM contract permits transfers of all
or a portion of your retirement account value among the investment options at
any time. Your employer's plan may, however, impose restrictions on transfers.
We also offer an automatic transfer service described under "Investment
simplifier: automatic transfer option" below. There is no charge for transfers.
You, as a participant, may make transfer requests by filing a request form to
transfer with your employer or plan trustee to be forwarded to our processing
office. You can also use our TOPS system to make transfers among the investment
options if your employer has adopted the system.
If your employer elects to fund your plan with the guaranteed interest account
option and any of the Alliance Money Market, Alliance Intermediate Government
Securities, Alliance Quality Bond, Alliance High Yield, or Alliance Conservative
Investors options, the maximum amount that may be transferred from the
guaranteed interest account option to any other variable investment option
during a "transfer period" is the greater of:
(i) 25% of the amount you had in the guaranteed interest account option as of
the last business day of the calendar year immediately preceding the
current calendar quarter, or
(ii) the total of all amounts you transferred out of the guaranteed interest
account option during the same immediately preceding calendar year.
A transfer period is the calendar quarter in which the transfer request is made
and the preceding three calendar quarters.
Generally, this means that new participants will not be able to transfer funds
out of the guaranteed interest account option during the first calendar year of
their participation under the contract.
See Appendix I for transfer restrictions under "Original certificates."
We will not permit transfers out of the guaranteed interest account option for
90 days after we receive notice of a plan termination. However, automatic
transfers under the fixed-dollar option and the interest sweep option will
continue during this 90-day period. After 90 days, the transfer limitation
described above will go into effect for all transfers (regardless of which
variable investment options are available under your employer's plan).
Transfers you make from the guaranteed interest account option when there is no
transfer limitation in effect will not count against the maximum transfer amount
if the transfer limitation subsequently goes into effect.
If the employer or plan trustee has transferred assets to the MOMENTUM contract
from another funding vehicle, you may transfer, for the remainder of the
calendar year in which the assets have been transferred, up to 25% of the amount
that is initially allocated to the guaranteed interest account option on your
behalf.
We may, at any time, restrict the use of market timers and other agents acting
under a power of attorney who are acting on behalf of more than one participant.
Any agreements to use market timing services to make transfers are subject to
our rules in effect at that time.
A transfer request does not change your percentages for allocating current or
future contributions among the investment options. We will confirm all transfers
in writing.
INVESTMENT SIMPLIFIER: AUTOMATIC TRANSFER OPTION
Your employer can elect to provide one of two automatic options for transferring
amounts from the guaranteed interest account option to the variable investment
options. The transfer options are the "Fixed-dollar option" and the "Interest
sweep option."
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 23
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guaranteed interest account option and into the variable investment options of
your choice on a monthly basis. You can specify the number of monthly transfers
or instruct us to continue to make monthly transfers until available amounts in
the guaranteed interest account option have been transferred out.
See Appendix I for transfer restrictions under "Original certificates."
In order to elect the fixed-dollar option you must have a minimum of $5,000 in
the guaranteed interest account option on the date we receive your election form
at our processing office. You also must elect to transfer at least $50 per
month. The fixed-dollar option is subject to the guaranteed interest account
option transfer limitation described above.
The fixed-dollar option is a form of dollar-cost averaging. Dollar-cost
averaging allows you to gradually allocate amounts to the variable investment
options by periodically transferring approximately the same dollar amount to the
variable investment options you select. This will cause you to purchase more
units if the unit's value is low and fewer units if the unit's value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or be
protected against losses.
INTEREST SWEEP OPTION. Under the interest sweep option, each month we transfer
the interest credited to amounts you have in the guaranteed interest account
option from the last business day of the prior month to the last business day of
the current month. You must have at least $7,500 in the guaranteed interest
account option on the date we receive your election form and on the last
business day of each month after that to participate in the interest sweep
option. The interest sweep option is not subject to the transfer restrictions
mentioned above.
You may elect an automatic transfer option by completing an election form and
sending it to our processing office. You can obtain a form from your employer,
plan trustee, or financial professional. For the fixed-dollar option, the first
monthly transfer will occur on the last business day of the month in which we
receive your election form at our processing office. For the interest sweep
option, the first monthly transfer will occur on the last business day of the
month following the month in which we receive your election form at our
processing office.
TERMINATION OF AN AUTOMATIC TRANSFER OPTION
Your participation in an automatic transfer option will end:
o Under the fixed-dollar option, when either the number of designated monthly
transfers have been completed or the amount you have available for transfer
from the guaranteed interest account option has been transferred out.
o Under the interest sweep option, when the amount you have in the guaranteed
interest account option falls below $7,500 (determined on the last business
day of the month) for two months in a row.
o Under either option, on the date we receive your written request to cancel
automatic transfers, or on the date your contract terminates.
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24 ACCESSING YOUR MONEY
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4
Accessing your money
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WITHDRAWALS AND TERMINATION
Subject to any restrictions in your employer's plan, the contract allows your
employer or plan trustee, whichever applies, to make a withdrawal from your
retirement account value on your behalf by submitting a completed withdrawal
form to our processing office. We will process your withdrawal request on the
business day we receive the required information. We will send withdrawal
proceeds to your employer or plan trustee, unless your employer has elected our
full-service plan recordkeeping option, which provides for direct distribution
to participants. If we receive only partially completed information, we will
return the request to the employer or plan trustee for completion before we can
process it.
As a deterrent to premature withdrawal (generally before age 59 1/2), federal
income tax rules provide certain restrictions on and penalties for early
withdrawals. In addition, for payments made directly to participants, we
withhold income taxes from the amount withdrawn unless an exception applies. See
"Tax information."
The employer or plan trustee may also terminate its entire participation under
the contract by writing to our processing office. In addition, if a plan does
not qualify under federal income rules, or, if you fail to provide us with the
participant data necessary to administer the contract, we may return the plan
assets to the employer or plan trustee.
Withdrawals or terminations may result in a withdrawal charge, explained fully
in "Charges and expenses."
While you have a loan outstanding, an amount equal to 10% of your loan balance
will be restricted, and may not be withdrawn from your retirement account value.
FORFEITURES
Forfeitures can arise when a participant who is not fully vested under a plan
terminates employment. Under the terms of the Master Plan and Trust and the
Pooled Trust, when a forfeiture occurs, we will withdraw the unvested portion of
the retirement account value and deposit such amount in a forfeiture account. We
allocate amounts in the forfeiture account to the "default option." The default
option is the Alliance Money Market option, if that is an option under your
plan. Otherwise, the guaranteed interest account option is the default option.
For more information on vesting, refer to the SAI.
See Appendix I for the default option under Original certificates.
Ex-participants returning to active service would have their forfeiture account
returned to them as a contribution account as their plan permits. Special rules
apply to how the withdrawal charge will apply when forfeitures have occurred.
See "Withdrawal charge" under "Charges and expenses."
PLAN LOANS
The contract permits your employer, or plan trustee, to withdraw funds from your
retirement account value, without incurring a withdrawal charge, in order to
make a loan to you under your employer's plan. Your employer can tell you
whether loans are available under your plan.
Employers who adopt the Master Plan and Trust may choose to offer its loan
feature. The availability of loans under an individually designed or prototype
plan depends on the terms of the plan.
Employers transferring plan assets to the MOMENTUM program may also transfer
outstanding plan loans to the contract. We call these "takeover loans." We will
allocate repayments of loans to the default option.
You presently may not borrow from your vested retirement account value without
first obtaining a prohibited transaction exemption from the Department of Labor
("DOL") if:
o you are a partner who owns more than 10% of the business, or
o a shareholder-employee of an S Corporation who owns more than 5% of the
business.
Participants should apply for a plan loan through their employer or the plan
trustee, whichever applies. The
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ACCESSING YOUR MONEY 25
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employer or plan trustee and the participant must complete and sign a loan
agreement and application before we make any plan loan. Before taking a plan
loan, married participants must generally obtain written consent of their
spouse. In addition, participants should always consult their tax adviser before
taking out a plan loan.
We permit only one outstanding plan loan at any time. We will permit any number
of takeover loans at any time. You may not have both takeover loans and plan
loans outstanding at the same time. The minimum loan amount is $1,000 and the
maximum is 50% of your vested retirement account value and cannot exceed
$50,000. This $50,000 limit is reduced by the excess (if any) of the highest
outstanding loan balance over the previous twelve months over the outstanding
balance of plan loans on the date the loan was made. See "Additional loan
provisions" in the SAI and "Tax information" of this prospectus.
While you have a plan loan outstanding, an amount equal to 10% of your loan
balance will be restricted, and may not be withdrawn from your retirement
account value. See "Plan loan charges" under "Charges and expenses" for a
description of charges associated with plan loans.
Your employer or the plan trustee will set the interest rate that applies to
your plan loan under the terms of your employer's plan. Each employer or plan
trustee is responsible for determining the interest rate that applies to each
loan. We will add all interest (as well as principal) that you pay to your
retirement account value. The interest paid in repaying a loan may not be
deductible, but amounts paid as interest on your loan will be taxable when it is
distributed.
Plan loan repayments covering interest and principal will be due according to
the repayment schedule determined according to the terms of the employer's plan.
Participants should send plan loan repayments to the plan administrator and not
to Equitable Life. All plan loan payments made by the plan administrator to us
must be made by check or wire transfer subject to the same rules for
contributions. See "How contributions can be made."
You may prepay a plan loan in whole or in part at any time. We will apply any
payments we receive to interest first, and principal second. Plan loan
repayments will be allocated to the investment options according to instructions
we receive on the loan request form.
A plan loan will be in default if:
o we do not receive the amount of any scheduled repayment within 90 days of
its due date,
o the participant dies, or
o participation under the contract terminates.
We may treat the plan loan principal as a withdrawal subject to the withdrawal
charge.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to an
annuity payout option, payment of a death benefit, payment of any portion of
your retirement account value (less any withdrawal charge). We may postpone such
payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
account option for up to six months while you are living.
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26 ACCESSING YOUR MONEY
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CHOOSING YOUR ANNUITY PAYOUT OPTIONS
MOMENTUM offers you several choices for receiving retirement income. You may
choose fixed or variable annuity payments.
You can choose from among the five different annuity payout options listed
below.
Your choices are always subject to the terms of your employer's plan.
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Annuity Payout Options Life annuity
Life annuity -- period certain
Life annuity -- refund certain
Period certain annuity
Qualified joint and survivor life
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ANNUITY PAYOUT OPTIONS
You can choose from among the following annuity payout options:
o Life annuity: An annuity that guarantees payments for the rest of your life.
Payments end with the last monthly payment before your death. Because there is
no death benefit with this payout option, it provides the highest monthly
payment of any of the life annuity options. The monthly payments terminate
with your death.
o Life annuity -- period certain: An annuity that guarantees payments for the
rest of your life, and, if you die before the end of a selected period of time
("period certain"), provides payments to the beneficiary for the balance of
the period certain. The period certain is usually 5, 10, 15, or 20 years.
o Life annuity -- refund certain: An annuity that guarantees payments for the
rest of your life, and, if you die before the amount applied to purchase the
annuity option has been recovered, provides payments to the beneficiary that
will continue until that amount has been recovered. This payout option is
available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This option does not guarantee
payments for the rest of your life.
o Qualified joint and survivor life annuity: An annuity that guarantees lifetime
income to you, and after your death, continuation of income to your surviving
spouse. Generally, unless married participants elect otherwise with the
written consent of their spouse, this will be the normal form of annuity
payment for plans such as the Master Plan and Trust.
The MOMENTUM contract offers both fixed and variable annuity payout options.
With fixed annuities, we guarantee fixed annuity payments that will be based
either on the tables of guaranteed annuity payments in your contract or on our
then current annuity rates, whichever is more favorable for the participant.
Variable annuities will be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust through the purchase of
annuity units. The contract also offers a fixed annuity payout option that can
be elected in combination with the variable annuity payout options. The amount
of each variable annuity payment will fluctuate, depending upon the performance
of the variable investment options, and whether the actual rate of return is
higher or lower than an assumed base rate. Please see "Calculating annuity
payments" in the SAI.
The life annuity, life annuity -- period certain, and life annuity -- refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
your life and, after your death, continuation of payments to your surviving
spouse.
We offer other payout options not outlined here. Your financial professional can
provide details.
SELECTING AN ANNUITY PAYOUT OPTION
In order to elect an annuity payout option, a retirement account value must be
at least $3,500. You, the participant, choose whether these payments will be
either fixed or
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ACCESSING YOUR MONEY 27
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variable. Once you have selected a payout option and payments have begun, no
change can be made.
The amount of the annuity payments will depend on:
(1) the amount applied to purchase the annuity;
(2) the type of annuity chosen, and whether it is fixed or variable. If you
choose a variable annuity, we use an assumed base rate of either 5% or
3 1/2% to calculate the level of payments. We provide information about the
assumed base rate in the SAI; and
(3) in the case of a life annuity, the participant's age (or the participant's
and joint annuitant's ages).
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An annuitant is the measuring life for determining payments. You, the
participant, are also an annuitant.
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MINIMUM DISTRIBUTIONS (AUTOMATIC MINIMUM WITHDRAWAL OPTION) -- OVER AGE 70 1/2
Under federal income tax rules, distributions from qualified plans generally
must begin by April 1st of the calendar year after the calendar year in which
the participant reaches age 70 1/2, or retires from the employer sponsoring the
plan, whichever is later. For participants who own more than 5% of the business,
minimum distributions must begin after age 70 1/2 even if they are still
working. Subsequent distributions must be made by December 31st of each calendar
year (including the calendar year in which distributions must begin).
If you, the participant, take less than the required minimum distribution in any
year, you could have to pay a 50% penalty tax on the "shortfall" (required
amount less amount actually taken).
AUTOMATIC MINIMUM WITHDRAWAL OPTION
The "automatic minimum withdrawal option" is a payment option we designed to
help you, the participant, meet the required minimum distributions. If you elect
the automatic minimum withdrawal option, we will withdraw the amount that the
federal income tax rules require you to withdraw from your retirement account
value. We calculate the amount to be withdrawn under this option based on the
information you give us, the various choices you make, and certain assumptions.
We assume that the funds you hold under your certificate are the only funds
subject to the required minimum distributions. We are not responsible for errors
that result from inaccuracies of information you provide. We describe the
choices you can make in the SAI.
You may elect the automatic minimum withdrawal option if you, the participant,
are at least age 70 1/2 and have a retirement account value of at least $3,500.
You can elect the automatic minimum withdrawal option by filing the proper
election form with your employer.
You may discontinue the automatic minimum withdrawals program at any time.
Generally, electing this option does not restrict you from taking additional
partial withdrawals or subsequently electing an annuity payout option.
The automatic minimum withdrawal option is not available if you have an
outstanding loan.
The minimum amount that you may receive under this option is $300, or your
retirement account value, whichever is less. We will also deduct any withdrawal
charges that apply.
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28 THE MOMENTUM PROGRAM
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5
The MOMENTUM program
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This section is primarily directed at employers and plan trustees.
The MOMENTUM program offers, according to the terms of either the Master Plan
and Trust or the Pooled Trust, a group variable annuity contract as a funding
vehicle for employers who sponsor "qualified retirement plans." A qualified
retirement plan provides for an individual account for each plan participant,
and benefits based solely on the amounts contributed to such an account and any
income, expenses, gains and losses. A qualified retirement plan meets the
requirements of Section 401(a) of the Internal Revenue Code and Treasury
regulations that apply.
You, the employer or plan trustee, whichever applies, are responsible for
determining whether the MOMENTUM contract is a suitable funding vehicle for your
qualified retirement plan. You should read this prospectus and the MOMENTUM
contract before entering into the contract.
MASTER PLAN AND TRUST
As an employer, subject to Equitable Life's underwriting requirements, you can
use the MOMENTUM program to adopt the Master Plan and Trust, in which case the
Master Trust will be the sole funding vehicle for your plan. The Master Trust is
funded by the MOMENTUM contract.
The Master Plan and Trust consists of Internal Revenue Service ("IRS") approved
master defined contribution plans, all of which use the same basic plan
document. They include:
o a standardized and nonstandardized profit-sharing plan (both with an
optional qualified cash or deferred arrangement pursuant to Section 401(k)
of the Internal Revenue Code); and
o a standardized and a nonstandardized defined contribution pension plan.
An employer may adopt one or more of these plans. The plans are all
participant-directed. That means the plan participants choose which variable
investment options to use for the investment of their plan accounts. The plans
are designed to meet the requirements of The Employee Retirement Income Security
Act of 1974, as amended ("ERISA") Section 404(c). However, as an employer, you
are responsible for making sure the variable investment options chosen
constitute a broad range of investment choices as required by the Department of
Labor's ("DOL") regulation under 404(c). See "Certain rules applicable to plans
designed to comply with section 404(c) of ERISA" under "Tax information."
If you adopt the Master Plan and Trust, you must choose our full-service plan
recordkeeping option. The SAI contains more information about the Master Plan
and Trust.
POOLED TRUST
If you want to use your own individually designed or a prototype qualified
defined contribution plan, you may adopt the Pooled Trust as a funding vehicle.
The Pooled Trust is for investment only. You may use it as your plan's only
funding vehicle or in addition to other funding vehicles. The same group
variable annuity contract (i.e., the MOMENTUM contract) is used under the Pooled
Trust and the Master Plan and Trust.
The Pooled Trust is available for qualified defined contribution plans with
either participant-directed or trustee-directed investments. If you adopt the
Pooled Trust, only the basic plan recordkeeping option is available. However, we
may offer to perform additional plan recordkeeping services for an additional
charge. We will provide such services according to the terms of a written
service agreement between us and the plan trustee.
TRUSTEE
Chase Manhattan Bank N.A. currently is the trustee under both the Pooled Trust
and the Master Plan and Trust. The sole responsibility of Chase Manhattan Bank
N.A. is to serve as a party to the MOMENTUM contract. It has no responsibility
for the administration of the MOMENTUM program or for any distributions or
duties under the MOMENTUM contract. The Master Plan and Trust and the Pooled
Trust will not be available in certain states where the MOMENTUM contract may
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THE MOMENTUM PROGRAM 29
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only be issued directly to the employer or plan trustee. Employers will not be
able to use our full-service plan recordkeeping option in those states.
EMPLOYER'S RESPONSIBILITIES
If you elect the full-service recordkeeping option, your responsibilities
relating to the administration and qualification of your plan will include:
o sending us contributions at the proper time;
o determining the amount of all contributions for each participant;
o maintaining all personnel records necessary for administering your plan;
o determining who is eligible to receive benefits;
o forwarding all forms to us that the employees are required to submit;
o arranging to have all reports distributed to employees and former employees
if you elect to have them sent to you;
o arranging to have our prospectuses distributed;
o filing an annual information return for your plan with the IRS, if
required;
o providing us with the information needed for running special
nondiscrimination tests, if you have a 401(k) plan or if your plan accepts
post-tax employee or employer matching contributions, and making any
corrections if you do not pass the test;
o selecting interest rates and monitoring default procedures, if you elect to
offer participant loans in your plan; and
o meeting the requirements of ERISA Section 404(c) if you intend for your
plan to comply with that section.
The plan recordkeeping services agreement contains other responsibilities of the
employer relating to the administration and qualification of your plan. All
plans that elect the full-service plan recordkeeping option must enter into the
recordkeeping services agreement. We will give you guidance and assistance in
performing your responsibilities; however, you are ultimately responsible.
Employers who use an individually designed or a prototype plan already have most
of these responsibilities; therefore, adopting the Pooled Trust will not
increase such responsibilities.
ADOPTING THE MOMENTUM PROGRAM
To adopt the Master Plan and Trust, you, as the employer, must complete and sign
a participation agreement, and complete certain other installation forms and
agreements.
To adopt the Pooled Trust, a plan trustee must execute a Pooled Trust
participation agreement. Return your completed participation agreement to the
address specified on the form. You should keep copies of all completed forms for
your own records. In addition, the employer or plan trustee, whichever applies,
must complete a contract application in order to participate in the MOMENTUM
contract.
Your financial professional can help you complete the participation agreement
and the application for the MOMENTUM contract. We recommend that your tax or
benefits adviser review the participation agreement.
The provisions of your plan or applicable laws or regulations may be more
restrictive than the MOMENTUM contract. We reserve the right to amend the
MOMENTUM contract without the consent of any other person to comply with any
laws and regulations that may apply.
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30 PLAN RECORDKEEPING SERVICES
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6
Plan recordkeeping services
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We offer two plan recordkeeping options: basic recordkeeping or full-service
recordkeeping. Employers must elect one of these options for each plan. If you
elect the full-service recordkeeping option, you must adopt the Master Plan and
Trust.
BASIC RECORDKEEPING OPTION
Our basic recordkeeping option includes:
o accounting by participant;
o accounting by source of contributions;
o plan administration manual and forms (including withdrawal, transfer, loan
processing, and account allocation forms);
o provision of annual 5500 series Schedule A report information for use in
making the plan's annual report to the IRS and the DOL; and
o plan loan processing, if applicable.
For an additional fee, we will also, based on information submitted by
employers, direct distribution of plan benefits and withdrawals to participants,
including tax withholding and reporting to the IRS. Employers who elect this
service must enter into a written agreement with Equitable Life. The written
agreement specifies the fees for this service.
FULL-SERVICE RECORDKEEPING OPTION
A full-service recordkeeping option is available for employers who adopt the
Master Plan and Trust. Under this option, we will provide the following plan
recordkeeping services in addition to the services described above:
o Master Plan and Trust documents approved by the IRS;
o assistance in interpreting the Master Plan and Trust, including plan
installation and ongoing administrative support;
o assistance in annual reporting with the IRS and the DOL;
o plan administration manual and forms (including withdrawal, transfer, loan
processing, and account allocation forms);
o performance of vesting calculations;
o performance of special nondiscrimination tests applicable to Internal
Revenue Code Section 401(k) plans;
o tracking of hardship withdrawal amounts in Internal Revenue Code Section
401(k) plans; and
o direct distribution of plan benefits and withdrawals to participants,
including tax withholding and reporting to the IRS.
Employers or plan trustees who elect the full-service recordkeeping option must
sign a plan recordkeeping services agreement. This agreement specifies the fees
for the recordkeeping services and describes any additional services that we
will provide.
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CHARGES AND EXPENSES 31
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7
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit value of each
variable investment option:
o A mortality and expense risk charge.
o An expense charge.
We deduct the following charges from each retirement account value. When we
deduct these charges, the number of units is reduced. Any portion of the charge
deducted from the guaranteed interest account option is withdrawn in dollars:
o A quarterly administrative charge.
o A withdrawal charge when you make certain withdrawals.
o A loan set-up charge when a plan loan is made.
o A recordkeeping charge on the last business day of each calendar quarter if
there is an active loan.
o Charges at the time annuity payments begin - charges for state premium and
other applicable taxes. An annuity administrative fee may also apply.
We also bill the employer directly an annual charge for plan recordkeeping
services. More information about these charges appears below.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the minimum death
benefit. The daily charge is a percentage of the net assets in each of the
variable investment options. We deduct this charge daily at a maximum annual
rate that will not exceed 0.65% for the Alliance Money Market, Alliance Balanced
and Alliance Common Stock options. The daily charge for all other variable
investment options is equivalent to an annual rate that will not exceed 0.50%.
We assume a mortality risk by our obligation to make annuity payments for the
life of the annuitant under guaranteed annuity payout options, regardless of how
long the annuitant lives. We also assume a mortality risk by our guarantees
relating to annuity purchase rates. We can change the actuarial basis for such
rates only for new contributions and only on every fifth anniversary of the
contract date. We assume a mortality risk to the extent that at the time of
death, the minimum death benefit exceeds your retirement account value. In
addition, we waive any withdrawal charge upon the payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge is for providing administrative and financial accounting
services under the contracts. The daily charge is equivalent to a maximum annual
rate of 0.84% of net assets in each variable investment option. 0.60% of this
charge is designed to reimburse us for research and development costs and for
administrative expenses that are not covered by the quarterly administrative
charges described below. The remaining 0.24% is to reimburse us for the cost of
financial accounting services we provide under the contracts.
To the extent the above charges are not needed to cover the actual expenses
incurred, they may be considered an indirect reimbursement for certain sales and
promotional expenses relating to the MOMENTUM contract.
QUARTERLY ADMINISTRATIVE CHARGE
On the last business day of each calendar quarter, we deduct an administrative
charge from each retirement account value to compensate us for administrative
expenses relating to the contract. The charge is currently equal to $7.50 or, if
less, 0.50% of the total of the retirement account value plus the amount of any
active loan. We deduct this charge from each variable investment option in a
specified order based on the source of the contributions. We describe how we
deduct this
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32 CHARGES AND EXPENSES
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charge in more detail under "How we deduct the quarterly administrative charge"
in the SAI.
There is currently no charge for any calendar quarter in which the retirement
account value plus any active loan is at least $25,000 as of the last business
day of that quarter. We reserve the right to increase this charge if our
administrative costs increase. We will give employers or plan trustees 90 days
written notice of any increase. We may also reduce this charge under certain
circumstances. See "Charge reductions under special circumstances" in this
section.
You, as employer, may choose to have this quarterly administrative charge billed
to you directly.
WITHDRAWAL CHARGE
We do not deduct a sales charge from contributions. However, we assess a charge
on amounts withdrawn from retirement account values to help pay the various
sales and promotional expenses incurred in selling the contract.
A withdrawal charge may apply in three circumstances:
(1) if you make a withdrawal in excess of the 10% free withdrawal amount during
a participation year, or
(2) upon a full withdrawal of a participant's retirement account value, or
(3) termination of the MOMENTUM contract.
In order to provide the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of any withdrawal charges
from your retirement account value. Any amount deducted to pay withdrawal
charges is also subject to a withdrawal charge.
The amount of the withdrawal charge we deduct is equal to 6% of the lesser of:
o partial withdrawals in excess of the free withdrawal amount, or
o the amount withdrawn attributable to contributions made in the current and
five prior participation years.
In the case of terminations or full withdrawals, we will pay the plan the
greater of:
o your retirement account value after any withdrawal charge has been imposed,
or
o the free withdrawal amount plus 94% of the remaining retirement account
value and any active loan, less the active loan.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested for the longest period as
having been withdrawn first. Active loans do not include takeover loans for this
purpose.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each participation year, you can withdraw up to 10%
of the sum of the retirement account value and any active loan at the time you
request the withdrawal, minus any other withdrawals made during that
participation year (including any defaulted loan amounts and forfeited amounts).
If you, as the employer, have transferred your plan assets to the MOMENTUM
program from another qualified plan and we have not yet received from you the
allocation of values among participants, we will treat the total amount we hold
as one retirement account value. Withdrawals from this retirement account value
will not have the benefit of a free withdrawal amount. However, once the amount
we hold is allocated among the various participants, withdrawals will have the
benefit of the free withdrawal amount.
FORFEITED RETIREMENT ACCOUNT VALUE. If a portion of your retirement account
value is forfeited under the terms of your plan, we will assess a withdrawal
charge only against vested contribution amounts. Under the basic plan
recordkeeping option, the plan trustee must tell us the vested balance. We will
waive the balance of the withdrawal charge at that time. However, if you, as the
employer or plan trustee, withdraw the forfeited amount
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CHARGES AND EXPENSES 33
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from the MOMENTUM contract before it is reallocated to other participants, we
will charge you the balance of the withdrawal charge at that time.
WE WILL WAIVE THE WITHDRAWAL CHARGE IF:
o the amount withdrawn is applied to the election of a life annuity payout
option;
o you, the participant, die;
o you, the participant, have been a participant for at least five
participation years and are at least age 59 1/2;
o you, the participant, are at least age 59 1/2 and have separated from
service (regardless of the number of participation years);
o the amount withdrawn is the result of a request for a refund of "excess
contributions" or "excess aggregate contributions" as such terms are
defined in Section 401(k)(8)(B) and 401(m)(6)(B), respectively, of the
Internal Revenue Code, including any gains or losses, and the withdrawal is
made no later than the end of the plan year following the plan year for
which such contributions were made;
o the amount withdrawn is a request for a refund of "excess deferrals" as
such term is defined in Section 402(g)(2) of the Internal Revenue Code,
including any gains or losses, provided the withdrawal is made no later
than April 15th, following the calendar year in which such excess deferrals
were made;
o the amount withdrawn is a request for a refund of contributions made due to
a mistake of fact made in good faith, provided the withdrawal is made
within 12 months of the date such mistake of fact contributions were made
and any earnings that apply to such contributions are not included in such
withdrawal;
o the amount withdrawn is a request for a refund of contributions disallowed
as a deduction by the employer for federal income tax purposes, provided
such withdrawal is made within 12 months after the disallowance of the
deduction has occurred and no earnings attributable to such contributions
are included in such withdrawal; or
o the amount withdrawn is a withdrawal for disability as defined in Section
72(m) of the Internal Revenue Code.
There is no withdrawal charge on conversions from an EQUI-VEST Corporate
Trusteed contract to a MOMENTUM contract. For participants in plans that
converted to MOMENTUM from our EQUI-VEST Corporate Trusteed contract, for
purposes of the withdrawal charge, the contribution date is the same
contribution date as under the EQUI-VEST Corporate Trusteed contract relating to
that participant. For example, if an EQUI-VEST Corporate Trusteed contract was
purchased on behalf of a participant on June 1, 1987 with a single $5,000
contribution, we will continue to treat the $5,000 contribution as made on June
1, 1987 under the MOMENTUM contract.
PLAN LOAN CHARGES
We will deduct a $25 charge from your retirement account value when a plan loan
is made. Also, we will deduct a recordkeeping charge of $6 from your retirement
account value on the last business day of each calendar quarter if there is an
active loan on that date. An "active loan" is the principal amount of any
participant plan loan that has neither been repaid nor considered distributed
under Section 72(p) of the Internal Revenue Code.
We intend these charges to reimburse us for the added administrative costs
associated with processing loans. The $6 per-quarter recordkeeping charge (but
not the $25 set-up charge) will apply to takeover loans and to loans converted
from EQUI-VEST Corporate Trusteed contracts to MOMENTUM.
Your employer may elect to pay these charges. We reserve the right to increase
these administrative charges if our costs increase. We will give employers or
plan trustees 90 days written notice of any increase.
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34 CHARGES AND EXPENSES
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We will assess a withdrawal charge against any defaulted loan amount as
described above under "Withdrawal charge."
CHARGE FOR PLAN RECORDKEEPING SERVICES
The annual charge for the basic plan recordkeeping option is $300 (prorated in
the first year). We will bill this charge directly to the employer. The $300
charge is not imposed on plans that converted to the MOMENTUM contract from our
EQUI-VEST Corporate Trusteed contract. Employers may enter into a written
agreement with us for direct distribution of plan benefits and withdrawals to
participants, including tax withholding and reporting to the IRS. We charge a
$25 checkwriting fee for each check drawn under this service. We reserve the
right to increase these charges if our plan recordkeeping costs increase. We
will give employers or plan trustees 90 days written notice of any increase.
There are additional charges if the employer or plan trustee elects to use our
full-service plan recordkeeping option. The additional charges will be set out
in the recordkeeping services agreement and will depend on the services used.
LIMITATION ON CHARGES FOR CERTAIN VARIABLE INVESTMENT OPTIONS
Under the terms of the MOMENTUM contract, for the Alliance Aggressive Stock,
Alliance Balanced, Alliance Common Stock and Alliance Money Market options, the
aggregate amount of the Separate Account A charges imposed for those options,
and the charges for investment advisory fees and the direct operating expenses
of the corresponding portfolios of EQ Advisors Trust may not exceed a total
annual rate of 1.75% of the value of the assets held in those options for the
MOMENTUM contract.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as state premium taxes that may be
imposed in your state. Currently, we deduct the charge from the amount applied
to provide an annuity payout option. The current tax charge that might be
imposed varies by state and ranges from 0% to 2% (1% in Puerto Rico and 5% in
the U.S. Virgin Islands).
We reserve the right to deduct any such charge from each contribution or from
distributions or upon termination. If we deduct any applicable tax charges from
contributions, we will not deduct a charge for the same taxes at a later time.
If, however, we are charged an additional tax when you make a partial or full
withdrawal, or your contract is terminated, or you begin receiving annuity
payments, we reserve the right to deduct a charge at that time.
ANNUITY ADMINISTRATION FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Investment advisory fees ranging from 0.31% to 1.15%.
o 12b-1 fees of 0.25% for Class IB shares.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, custodian fees, and liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
CHARGE REDUCTIONS UNDER SPECIAL CIRCUMSTANCES
Subject to any necessary governmental or regulatory approvals, we may reduce or
eliminate charges when sales
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CHARGES AND EXPENSES 35
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are made in a manner that results in savings of sales and administrative
expenses. Our rights to such a reduction or elimination will be determined by us
based on factors such as the number of participants, performance of sales or
administrative functions by the employer or plan administrator, frequency of
contributions or the use of automated techniques in transmitting data.
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36 PAYMENT OF DEATH BENEFIT
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8
Payment of death benefit
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DEATH BENEFIT AMOUNT
In general, the death benefit is equal to the greater of:
o the retirement account value, or
o the "minimum death benefit."
The minimum death benefit equals all contributions made, less withdrawals of
contributions (including loans that default upon death). For example, assume
that a $1,000 contribution is made, and that the contribution earns $1,000 (for
a balance of $2,000). A $1,500 withdrawal is then made, leaving a balance of
$500. Assume that a new $500 contribution is subsequently made. If the
participant subsequently dies, the minimum death benefit will be $500 because
there was a $500 contribution that had not been withdrawn, borrowed or
forfeited.
If the participant dies while a loan is outstanding, the loan will automatically
default and be subject to federal income tax as a plan distribution. We will
treat this defaulted loan as a withdrawal for purposes of calculating the
minimum death benefit. Defaulted takeover loans will not, however, be considered
withdrawals for this purpose.
DISTRIBUTION OF THE DEATH BENEFIT
If a participant dies before the entire benefit has been paid, the remaining
benefits will be paid to the participant's beneficiary. If a participant dies
before he or she begins receiving benefits, the law generally requires the
entire benefit to be distributed no more than five years after death. There are
exceptions:
(1) A beneficiary who is not the participant's spouse may elect payments over
his or her life or a fixed period which does not exceed the beneficiary's
life expectancy, provided payments begin within one year of death, or
(2) if the benefit is payable to the spouse, the spouse may elect to receive
benefits over his or her life or a fixed period which does not exceed
his/her life expectancy beginning any time up to the date the participant
would have turned age 70 1/2.
If, at death, a participant was already receiving benefits, the beneficiary can
continue to receive benefits based on the payment option selected by the
participant.
Under the Master Plan and Trust and the Pooled Trust, on the day we receive
proof of death, we automatically transfer the participant's retirement account
value to the default option unless the beneficiary gives us other written
instructions. We hold all monies in the default option until your beneficiary
requests a distribution or transfer.
To designate a beneficiary or to change an earlier designation, a participant
must have the employer send us a beneficiary designation form. In some cases,
the spouse must consent in writing to a designation of any non-spouse
beneficiary, as explained under "Tax information."
BENEFICIARY'S PAYMENT OPTIONS
The beneficiary may elect to:
(a) receive the death benefit in a single sum,
(b) apply the death benefit to an annuity payout option we offer,
(c) apply the death benefit to provide any other form of benefit payment we
offer, or
(d) have the death benefit credited to an account under the MOMENTUM contract
maintained on behalf of the beneficiary in accordance with the
beneficiary's investment allocation instructions. If the beneficiary elects
the last option then:
(1) the beneficiary will be entitled to delay distribution of his or her
account as permitted under the terms of the employer's plan and the
minimum distribution rules under federal income tax rules;
(2) we will determine the value of the beneficiary's account at the time
of distribution to the beneficiary which, depending upon investment
gains or losses, may be worth more or less than the value of the
beneficiary's initial account; and
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PAYMENT OF DEATH BENEFIT 37
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(3) if the beneficiary dies prior to taking a distribution of his or her
entire account, the beneficiary of the deceased beneficiary will be
entitled to a death benefit as though the deceased beneficiary were a
participant, based on the deceased beneficiary's initial account.
The beneficiary's choices may be limited by the terms of the plan, our rules in
effect at the time, and federal income tax rules.
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38 TAX INFORMATION
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9
Tax information
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OVERVIEW
Employer retirement plans that may qualify for tax-favored treatment are
governed by the provisions of the Internal Revenue Code and ERISA. The Internal
Revenue Code is administered by the IRS. ERISA is administered primarily by the
DOL.
Provisions of the Internal Revenue Code and ERISA include requirements for
various features including:
o participation, vesting and funding;
o nondiscrimination;
o limits on contributions and benefits;
o distributions;
o penalties;
o duties of fiduciaries;
o prohibited transactions; and
o withholding, reporting and disclosure.
IT IS THE RESPONSIBILITY OF THE EMPLOYER, PLAN TRUSTEE AND PLAN ADMINISTRATOR TO
SATISFY THE REQUIREMENTS OF THE INTERNAL REVENUE CODE AND ERISA.
This prospectus does not provide detailed tax or ERISA information. The
following discussion briefly outlines the Internal Revenue Code provisions
relating to contributions to and distributions from certain tax-qualified
retirement plans, although some information on other provisions is also
provided. Various tax disadvantages, including penalties, may result from
actions that conflict with requirements of the Internal Revenue Code or ERISA,
and regulations or other interpretations of them. In addition, federal tax laws
and ERISA are continually under review by the Congress, and any changes in those
laws, or in the regulations pertaining to those laws, may affect the tax
treatment of amounts contributed to tax-qualified retirement plans or the
legality of fiduciary actions under ERISA. Any such change could have
retroactive effects regardless of the date of enactment.
Certain tax advantages of a tax-qualified retirement plan may not be available
under certain state and local tax laws. This outline does not discuss the effect
of any state or local tax laws. It also does not discuss the effect of federal
estate and gift tax laws (or state and local estate, inheritance and other
similar tax laws). This outline assumes that the participant does not
participate in any other qualified retirement plan. Finally, it should be noted
that many tax consequences depend on the particular jurisdiction or
circumstances of a participant or beneficiary.
Because you are buying a contract to fund a retirement plan that already
provides tax deferral, you should do so for the contract's features and benefits
other than tax deferral. The tax deferral of the contract does not provide
additional benefits.
THE PROVISIONS OF THE INTERNAL REVENUE CODE AND ERISA ARE HIGHLY COMPLEX. FOR
COMPLETE INFORMATION ON THESE PROVISIONS, AS WELL AS ALL OTHER FEDERAL, STATE,
LOCAL AND OTHER TAX CONSIDERATIONS, QUALIFIED LEGAL AND TAX ADVISERS SHOULD BE
CONSULTED.
TAX ASPECTS OF CONTRIBUTIONS TO A PLAN
Corporations, partnerships and self-employed individuals can establish qualified
plans for the working owners and their employees who participate in the plan.
Both employer and employee contributions to these plans are subject to a variety
of limitations, some of which are discussed here briefly. See your tax adviser
for more information. Violation of contribution limits may result in plan
disqualification and/or imposition of monetary penalties. The trustee or plan
administrator may make contributions on behalf of the plan participants which
are deductible from the employer's federal gross income. Employer contributions
which exceed the amount currently deductible are subject to a 10% penalty tax.
The limits on the amount of contributions that can be made and/or forfeitures
that can be allocated to each participant in defined contribution plans is the
lesser of $30,000 or 25% of the compensation or earned income for each
participant. In 1999, the employer may not consider compensation in
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TAX INFORMATION 39
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excess of $160,000 in calculating contributions to the plan. This amount may be
adjusted for cost-of-living changes in future years. For self-employed
individuals, earned income is defined so as to exclude deductible contributions
made to all tax-qualified retirement plans, including Keogh plans, and takes
into account the deduction for one-half the individual's self-employment tax.
Deductions for aggregate contributions to profit-sharing plans may not exceed
15% of all participants' compensation.
Special limits on contributions apply to anyone who participates in more than
one qualified plan or who controls another trade or business. In addition, there
is an overall limit on the total amount of contributions and benefits under all
tax-qualified retirement plans in which an individual participates. Special
limits on deductions for contributions to one or more defined contribution plans
and one or more defined benefit plans are in effect through 1999, but will be
eliminated thereafter.
A qualified plan may allow the participant to direct the employer to make
contributions that will not be included in the employee's income ("elective
deferrals") by entering into a salary reduction agreement with the employer
under Section 401(k) of the Internal Revenue Code. The 401(k) plan, otherwise
known as a cash or deferred arrangement, must not allow withdrawals of elective
deferrals and the earnings on them before the earliest of the following events:
(1) reaching age 59 1/2,
(2) death,
(3) disability,
(4) certain business dispositions and plan terminations, or
(5) termination of employment. In addition, in-service withdrawals of elective
deferrals (but not earnings after 1988) may be made in the case of
financial hardship.
A participant cannot elect to defer more than $7,000 ($10,000 as indexed for
inflation in 1999) annually under all salary reduction arrangements with all
employers in which the individual participates.
Employer matching contributions to a 401(k) plan for self-employed individuals
are no longer treated as elective deferrals, and are treated the same as
employer matching contributions for other employees.
A qualified plan must not discriminate in favor of highly compensated employees.
Two special nondiscrimination rules limit contributions and benefits for highly
compensated employees in the case of (1) a 401(k) plan and (2) any defined
contribution plan, whether or not a 401(k) plan, which provides for employer
matching contributions to employee post-tax contributions or elective deferrals.
Generally, these nondiscrimination tests require an employer to compare the
deferrals or the aggregate contributions, as the case may be, made by the
eligible highly compensated employees with those made by the non-highly
compensated employees, although alternative simplified tests are available.
Highly compensated participants include five percent owners and employees
earning more than $80,000 for the prior year. (If desired, the latter group can
be limited to employees who are in the top 20% of all employees based on
compensation.) In addition, special "top heavy" rules apply to plans where more
than 60% of the contributions or benefits are allocated to certain highly
compensated employees known as "key employees."
Certain 401(k) plans can adopt a "SIMPLE 401(k)" feature, which will enable the
plan to meet nondiscrimination requirements without testing. The SIMPLE 401(k)
feature requires the 401(k) plan to meet specified contribution, vesting and
exclusive plan requirements.
Effective January 1, 1999 employers may adopt a safe harbor 401(k) arrangement.
Under this arrangement, an employer agrees to offer a matching contribution
equal to (a) 100% of salary deferral contributions up to 3% of compensation; and
(b) 50% of salary deferral contributions that exceed 3% but are less than 5% of
compensation. These contributions must be nonforfeitable. If the employer makes
these contributions and gives proper notification, the plan is not subject to
nondiscrimination testing on salary deferral and the above contributions.
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40 TAX INFORMATION
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If a 401(k) plan or defined contribution plan with an employer match makes
contributions to highly compensated employees exceeding applicable
nondiscrimination limits for any plan year, the plan may be disqualified unless
the excess amounts including earnings are distributed before the close of the
next plan year. In addition, the employer is subject to a 10% penalty on any
such excess contributions or excess aggregate contributions. The employer may
avoid the penalty by distributing the excess contributions or excess aggregate
contributions, plus income, within two and one-half months after the close of
the plan year. Except where the distribution is under $100, the participant
receiving any such distribution is taxed on the distribution and the related
income for the year of the excess contribution or excess aggregate contribution.
Such a distribution is not treated as an impermissible withdrawal by the
employee or an eligible rollover distribution and will not be subject to the 10%
penalty tax on premature distributions.
Contributions to a 401(k) plan or a defined contribution plan as matching
contributions, within the meaning of section 401(m) of the Internal Revenue
Code, may not be deductible by the employer for a particular taxable year if the
plan contributions are attributable to compensation earned by a participant
after the end of the taxable year.
TAX ASPECTS OF DISTRIBUTIONS FROM A PLAN
Amounts held under qualified plans are generally not subject to federal income
tax until benefits are distributed to the participant or other recipient. In
addition, there will not be any tax liability for transfers of any part of the
retirement account value among the investment options.
The various types of benefit payments include withdrawals, annuity payments and
lump sum distributions. Each benefit payment made to the participant or other
recipient is generally fully taxable as ordinary income. An exception to this
general rule is made, however, when a distribution is treated as a recovery of
post-tax contributions made by the participant.
In addition to income tax, the taxable portion of any distribution may be
subject to a 10% penalty tax. See "Penalty tax on premature distributions" in
this section.
INCOME TAXATION OF WITHDRAWALS
The amount of any distribution prior to the annuity starting date is treated as
ordinary income except to the extent the distribution is treated as a withdrawal
of post-tax contributions. Withdrawals from a qualified plan are normally
treated as pro rata withdrawals of post-tax contributions and earnings on those
contributions. If the plan allowed withdrawals prior to separation from service
as of May 5, 1986, however, all post-tax contributions made prior to January 1,
1987 may be withdrawn tax free prior to withdrawing any taxable amounts.
As discussed in this section in "Certain rules applicable to plan loans," taking
a loan or failing to repay an outstanding loan as required may, in certain
situations, be treated as a taxable withdrawal.
INCOME TAXATION OF ANNUITY PAYMENTS
In the case of a distribution in the form of an annuity, the amount of each
annuity payment is treated as ordinary income except where the participant has a
cost basis in the annuity.
The cost basis is equal to the amount of after-tax contributions, plus any
employer contributions that had to be included in gross income in prior years.
If the participant has a cost basis in the annuity, a portion of each payment
received will be excluded from gross income to reflect the return of the cost
basis. The remainder of each payment will be included in gross income as
ordinary income. The excludable portion is based on the ratio of the
participant's cost basis in the annuity on the annuity starting date to the
expected return, generally determined in accordance with a statutory table,
under the annuity as of such date. The full amount of the payments received
after the cost basis of the annuity is recovered is fully taxable. If there is a
refund feature under the annuity, the beneficiary of the refund may recover the
remaining cost basis as payments are made. If the participant (and beneficiary
under a joint and survivor
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TAX INFORMATION 41
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annuity) dies prior to recovering the full cost basis of the annuity, a
deduction is allowed on the participant's (or beneficiary's) final tax return.
INCOME TAXATION OF LUMP SUM DISTRIBUTIONS
If benefits are paid in a lump sum, the payment may be eligible for the special
tax treatment accorded lump sum distributions. Under the five-year averaging
method (and in certain cases, favorable ten-year averaging and long-term capital
gain treatment), the tax on the distribution is calculated separately from taxes
on other income for that year. To qualify, the participant must have
participated in the plan for at least five years and the distribution must
consist of the entire balance to the credit of the participant. The distribution
must be made within one taxable year of the recipient and must be made:
o after the participant has reached age 59 1/2, or
o on account of the participant's
(a) death,
(b) separation from service (not applicable to self-employed individuals),
or
(c) disability (applicable only to self-employed individuals).
This provision will be eliminated after December 31, 1999.
ELIGIBLE ROLLOVER DISTRIBUTION
Many types of distributions from qualified plans are "eligible rollover
distributions" that can be rolled over directly to another qualified plan or a
traditional individual retirement arrangement ("IRA"), or rolled over by the
individual to another plan or IRA within 60 days of receipt. Death benefits
received by a spouse's beneficiary may only be rolled over into an IRA. To the
extent a distribution is rolled over, it remains tax deferred. Distributions not
rolled over directly are subject to 20% mandatory withholding. See "Federal
income tax withholding" in this section.
The taxable portion of most distributions will generally be an "eligible
rollover distribution" unless the distribution falls within the following list
of exceptions:
o One of a series of substantially equal periodic payments is made (not less
frequently than annually):
(a) for the life (or life expectancy) of the participant or the joint
lives (or joint life expectancies) of the participant and his or her
designated beneficiary, or
(b) for a specified period of ten years or more.
o nondeductible voluntary contributions;
o a hardship withdrawal;
o any distribution to the extent that it is a required distribution under
Section 401(a)(9) of the Internal Revenue Code (see "Distribution
requirements and limits" below);
o certain corrective distributions in plans subject to Sections 401(k),
401(m), or 402(g) of the Internal Revenue Code;
o loans that are treated as deemed distributions under Section 72(p) of the
Internal Revenue Code;
o P.S. 58 costs (incurred if the plan provides life insurance protection for
participants);
o dividends paid on employer securities as described in Section 404(k) of the
Internal Revenue Code; and
o a distribution to a non-spousal beneficiary.
If a distribution is made to a participant's surviving spouse, or to a current
or former spouse under a qualified domestic relations order, the distribution
may be an eligible rollover distribution, subject to mandatory 20% withholding,
unless one of the exceptions described above applies.
If distributions eligible for rollover are in fact rolled over, the favorable
averaging rules discussed above in "Income taxation of lump sum distributions"
will not be available for any future distributions made before 2000.
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42 TAX INFORMATION
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PENALTY TAX ON PREMATURE DISTRIBUTIONS
An additional 10% penalty tax is imposed on all taxable amounts distributed to a
participant who has not reached age 59 1/2 unless the distribution falls within
a specified exception or is rolled over into an IRA or other qualified plan. The
specified exceptions are for:
(a) distributions made on account of the participant's death or disability,
(b) distributions (which begin after separation from service) in the form of a
life annuity or substantially equal periodic installments over the
participant's life expectancy (or the joint life expectancy of the
participant and the beneficiary),
(c) distributions due to separation from active service after age 55; and
(d) distributions used to pay certain extraordinary medical expenses.
FEDERAL INCOME TAX WITHHOLDING
Mandatory federal income tax withholding at a 20% rate will apply to all
"eligible rollover distributions" unless the participant elects to have the
distribution directly rolled over to another qualified plan or traditonal IRA.
See the description in this section of "Eligible rollover distributions."
For all other distributions, federal income tax must also be withheld on the
taxable portion of pension and annuity payments, unless the recipient is
eligible to elect out and elects out of withholding. The rate of withholding
will depend on the type of distribution and, in certain cases, the amount of the
distribution. Special rules may apply to foreign recipients, or United States
citizens residing outside the United States. If a recipient does not have
sufficient income tax withheld, or does not make sufficient estimated income tax
payments, the recipient may incur penalties under the estimated income tax
rules. Recipients should consult their tax advisers to determine whether they
should elect out of withholding.
Requests not to withhold federal income tax must be made in writing prior to
receiving payments and submitted in accordance with the terms of the employer
plan. No election out of withholding is valid unless the recipient provides the
recipient's correct Taxpayer Identification Number and a U.S. residence address.
STATE INCOME TAX WITHHOLDING
Certain states have indicated that pension and annuity withholding will apply to
payments made to residents of such states. In some states a recipient may elect
out of state income tax withholding, even if federal withholding applies. It is
not clear whether such states may require mandatory withholding with respect to
eligible rollover distributions that are not rolled over (as described in this
section under "Eligible rollover distributions"). Contact your tax adviser to
see how state withholding may apply to your payment.
DISTRIBUTION REQUIREMENTS
Distributions from qualified plans generally must commence no later than April
1st of the calendar year following the calendar year in which the participant
reaches age 70 1/2 (or retires from service with the employer sponsoring the
plan, if later). 5% owners of qualified plans must commence minimum
distributions after age 70 1/2 even if they are still working. Distributions can
generally be made:
(1) in a lump sum payment,
(2) over the life of the participant,
(3) over the joint lives of the participant and his or her designated
beneficiary,
(4) over a period not extending beyond the life expectancy of the participant,
or
(5) over a period not extending beyond the joint life expectancies of the
participant and his or her designated beneficiary.
The minimum amount required to be distributed in each year after minimum
distributions are required to begin is described in the Internal Revenue Code,
Treasury Regulations and IRS guidelines.
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TAX INFORMATION 43
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If the participant dies after required distribution has begun, payment of the
remaining interest under the plan must be made at least as rapidly as under the
method used prior to the participant's death. If a participant dies before
required distribution has begun, payment of the entire interest under the plan
must be completed within five years after death. An exception is if payments to
a designated beneficiary begin within one year of the participant's death and
are made over the beneficiary's life or over a period certain which does not
extend beyond the beneficiary's life expectancy. If the surviving spouse is the
designated beneficiary, the spouse may delay the commencement of such payments
up until the date that the participant would have attained age 70 1/2.
Distributions received by a beneficiary are generally given the same tax
treatment the participant would have received if distribution had been made to
the participant.
If there is an insufficient distribution in any year, a 50% tax may be imposed
on the amount by which the minimum required to be distributed exceeds the amount
actually distributed. Failure to have distributions made as the Internal Revenue
Code and Treasury Regulations require may result in plan disqualification.
SPOUSAL REQUIREMENTS
In the case of many corporate and Keogh plans, if a participant is married at
the time benefit payments become payable, unless the participant elects
otherwise with written consent of the spouse, the benefit must be paid in the
form of a qualified joint and survivor annuity (QJSA). A QJSA is an annuity
payable for the life of the participant with a survivor annuity for the life of
the spouse in an amount which is not less than one-half of the amount payable to
the participant during his or her lifetime. In addition, most plans require that
a married participant's beneficiary must be the spouse, unless the spouse
consents in writing to the designation of a different beneficiary.
CERTAIN RULES APPLICABLE TO PLAN LOANS
The following are federal tax and ERISA rules that apply to loan provisions of
all employer plans. Employer plans may have additional restrictions. Employers
and participants should review these matters with their own tax advisers before
requesting a loan. There will not generally be any tax liability with respect to
properly made loans in accordance with an employer plan. A loan may be in
violation of applicable provisions unless it complies with the following
conditions:
o with respect to specific loans made by the plan to a plan participant, the
plan administrator determines the interest rate, the maximum term and all
other terms and conditions of the loan;
o in general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence;
o all principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly;
o the amount of a loan to a participant, when aggregated with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the greater of $10,000 or 50% of the participant's non-forfeitable accrued
benefits, and cannot exceed $50,000 in any event. This $50,000 limit is
reduced by the excess (if any) of the highest outstanding loan balance over
the previous twelve months over the outstanding balance of plan loans on
the date the loan was made;
o for loans made prior to January 1, 1987 and not renewed, modified,
renegotiated or extended after December 31, 1986, the $50,000 maximum
aggregate loan balance is not required to be reduced, the quarterly
amortization requirement does not apply, and the term of a loan may exceed
five years if used to purchase the principal residence of the participant
or a member of his or her family, as defined in the Internal Revenue Code;
o only 50% of the participant's vested account balance may serve as security
for a loan. To the extent that a participant borrows an amount which should
be secured by more than
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44 TAX INFORMATION
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50% of the participant's vested account balance, it is the responsibility
of the trustee or plan administrator to obtain the additional security;
o loans must be available to all plan participants, former participants who
still have account balances under the plan, beneficiaries and alternate
payees on a reasonably equivalent basis;
o each new or renewed loan must bear a reasonable rate of interest
commensurate with the interest rates charged by persons in the business of
lending money for loans that would be made under similar circumstances;
o many plans provide that the participant's spouse must consent in writing to
the loan; and
o except to the extent permitted in accordance with the terms of a prohibited
transaction exemption issued by the DOL, loans are not available (i) in a
Keogh (non-corporate) plan to an owner-employee or a partner who owns more
than 10% of a partnership or (ii) to 5% shareholders in an S corporation.
If the loan does not qualify under the conditions above, the participant fails
to repay the interest or principal when due, or in some instances, if the
participant separates from service or the plan is terminated, the amount
borrowed or not repaid may be treated as a distribution. The participant may be
required to include as ordinary income the unpaid amount due and a 10% penalty
tax on early distributions may apply. The plan should report the amount of the
unpaid loan balance to the IRS as a distribution. See "Tax aspects of
distributions from a plan" in this section.
The loan requirements and provisions of MOMENTUM shall apply regardless of the
plan administrator's guidelines.
IMPACT OF TAXES TO EQUITABLE LIFE
Under existing federal income tax rules, Equitable Life does not pay tax on
investment income and capital gains of the variable investment options if they
are applied to increase the reserves under the contracts. Accordingly, Equitable
Life does not anticipate that it will incur any federal income tax liability
attributable to income allocated to the variable annuity contracts participating
in the variable investment options and it does not currently impose a charge for
federal income tax on this income when it computes unit values for the variable
investment options. If changes in federal tax laws or interpretations of them
would result in our being taxed, then we may impose a charge against the
variable investment options (on some or all contracts) to provide for payment of
such taxes.
CERTAIN RULES APPLICABLE TO PLANS DESIGNED TO COMPLY WITH SECTION 404(C) OF
ERISA
Section 404(c) of ERISA, and the related DOL regulation, provide that if a plan
participant or beneficiary exercises control over the assets in his or her plan
account, plan fiduciaries will not be liable for any loss that is the direct and
necessary result of the plan participant's or beneficiary's exercise of control.
As a result, if the plan complies with Section 404(c) and the DOL regulation
thereunder, the plan participant can make, and is responsible for the results
of, his or her own investment decisions.
Section 404(c) plans must provide, among other things, that a broad range of
investment choices are available to plan participants and beneficiaries and must
provide such plan participants and beneficiaries with enough information to make
informed investment decisions. Compliance with the Section 404(c) regulation is
completely voluntary by the plan sponsor, and the plan sponsor may choose not to
comply with Section 404(c).
The MOMENTUM program provides employer plans with the broad range of investment
choices and information needed in order to meet the requirements of the Section
404(c) regulation. If the plan is intended to be a Section 404(c) plan, it is,
however, the plan sponsor's responsibility to see that the requirements of the
DOL regulation are met. Equitable Life and its representatives shall not be
responsible if a plan fails to meet the requirements of Section 404(c).
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MORE INFORMATION 45
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10
More information
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ABOUT SEPARATE ACCOUNT A
Each variable investment option is a subaccount of our Separate Account A. We
established Separate Account A in 1968 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account A and may withdraw any amounts that exceed our
reserves and other liabilities with respect to variable investment options under
our contracts. The results of Separate Account A's operations are accounted for
without regard to Equitable Life's other operations.
Separate Account A is registered under the Investment Company Act of 1940 and is
classified by that act as a "unit investment trust." The SEC, however, does not
manage or supervise Equitable Life or Separate Account A.
Each subaccount (variable investment option) within Separate Account A invests
solely in Class IA or Class IB shares issued by the corresponding portfolio of
EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account A, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account A or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account A or a
variable investment option directly);
(5) to deregister Separate Account A under the Investment Company Act of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account A; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
We will notify MOMENTUM employers if any changes result in a material change in
the underlying investments of a variable investment option. We may make other
changes in the contracts that do not reduce any retirement account value,
annuity benefit, or other accrued rights or benefits.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999, EQ Financial Consultants,
Inc. the predecessor to AXA Advisors, LLC and a subsidiary of Equitable Life,
served as investment manager to EQ Advisors Trust.)
For periods prior to October 18, 1999, the Alliance portfolios (other than
EQ/Alliance Premier Growth) were part of The Hudson River Trust. On October 18,
1999, these portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional
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46 MORE INFORMATION
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portfolios or eliminate existing portfolios at any time. More detailed
information about EQ Advisors Trust, its investment objectives, policies,
restrictions, risks, expenses, multiple class distribution systems, the Rule
12b-1 plan relating to the Class IB shares, and other aspects of its operations,
appear in the prospectus for EQ Advisors Trust attached at the end of this
prospectus, or in its SAI, which is available upon request.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest account option, as well as
our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The disclosure, however, may
be subject to certain provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that give rise to exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our "business day" is any day on which Equitable Life is open and the New York
Stock Exchange is open for trading. We are closed on national business holidays
including Martin Luther King, Jr. Day and the Friday after Thanksgiving.
Additionally, we may choose to close on the day immediately preceding or
following a national business holiday or due to emergency conditions. Our
business day ends at 4:00 p.m., Eastern time for purposes of determining the
date when contributions are applied and any other transaction requests are
processed. Contributions will be applied and any other transaction requests will
be processed when they are received along with all the required information
unless another date applies as indicated below.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 on a business day, we will use the next business day.
o When a charge is to be deducted on a participation date anniversary that is
a non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to the guaranteed interest account option will
receive the guaranteed interest rate in effect on that business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to the guaranteed interest account option will receive the
guaranteed interest rate in effect on that business day.
o For the fixed-dollar option, the first monthly transfer will occur on the
last business day of the month in which we receive your election form at
our processing office.
o For the interest sweep option, the first monthly transfer will
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MORE INFORMATION 47
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occur on the last business day of the month following the month in which we
receive your election form at our processing office.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o The election of trustees; or
o The formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give participants or plan trustees, as applicable, the opportunity to
instruct us how to vote the number of shares attributable to their retirement
account values if a shareholder vote is taken. If we do not receive instructions
in time from all participants or plan trustees, whichever applies, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that
participants or plan trustees, whichever applies, vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies both
affiliated and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the participants and plan
trustees, we currently do not foresee any disadvantages because of this. The
Board of Trustees of EQ Advisors Trust intends to monitor events in order to
identify any material irreconcilable conflicts that may arise and to determine
what action, if any, should be taken in response. If we believe that a response
to any of those events insufficiently protects our participants, we will see to
it that appropriate action is taken.
SEPARATE ACCOUNT A VOTING RIGHTS
If actions relating to Separate Account A require participant approval,
participants will be entitled to one vote for each unit they have in the
variable investment options. Each participant who has elected a variable annuity
payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the unit value for that option. We will cast votes attributable to any
amounts we have in the variable investment options in the same proportion as
votes cast by participants or plan trustees, as it applies.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
IRS DISQUALIFICATION
If a retirement plan funded by the contract is found not to qualify under
federal income tax rules, we may terminate your participation in the MOMENTUM
program and pay you, the plan trustee, or other designated person, the
retirement account value balance. We will, however, make a deduction for any
federal income tax payable by us because of the non-qualification.
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48 MORE INFORMATION
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ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer your
contract and operate the investment options. Some of these systems belong to
service providers who are not affiliated with Equitable Life.
In 1995, Equitable Life began addressing the question of whether its computer
systems would recognize the year 2000 before, on or after January 1, 2000, and
Equitable Life has identified those of its systems critical to business
operations that were not year 2000 compliant. Equitable Life has completed the
work of modifying or replacing non-compliant systems and has confirmed, through
testing, that its systems are year 2000 compliant. Equitable Life has contacted
third-party vendors and service providers to seek confirmation that they are
acting to address the year 2000 issue with the goal of avoiding any material
adverse effect on services provided to contract owners and on operations of the
investment options. All third-party vendors and service providers considered
critical to Equitable Life's business, and substantially all vendors and service
providers considered non-critical, have provided us confirmation of their year
2000 compliance or a satisfactory plan for compliance. If confirmation is not
received from any of the remaining non-critical vendors or service providers,
the vendor or service provider will be replaced, eliminated, or the subject of
contingency plans. Additionally, Equitable Life has supplemented its existing
business continuity and disaster recovery plans to cover certain categories of
contingencies that could arise as a result of year 2000 related failures.
There are many risks associated with year 2000 issues, including the risk that
Equitable Life's computer systems will not operate as intended. Additionally,
there can be no assurance that the systems of third parties will be year 2000
compliant. Any significant unresolved difficulty related to the year 2000
compliance initiatives could result in an interruption in, or a failure of,
normal business operations and, accordingly, could have a material adverse
effect on our ability to administer your contract and operate the investment
options.
To the fullest extent permitted by law, the foregoing year 2000 discussion is a
"Year 2000 Readiness Disclosure" within the meaning of The Year 2000 Information
and Readiness Disclosure Act (P.L. 105-271) (1998).
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account A, our ability to meet our obligations under the
contracts, or the contract's distribution.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Separate Account A as at December 31, 1998 and for
the periods ended December 31, 1998 and 1997, and the consolidated financial
statements of Equitable Life as at December 31, 1998 and 1997 and for each of
the three years ended December 31, 1998 included in the SAI have been so
included in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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INVESTMENT PERFORMANCE 49
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11
Investment performance
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all fees and charges under the contract but do not reflect the charges for any
applicable taxes such as premium taxes, or any applicable annuity administrative
fee.
Tables 3, 4 and 5 show the rates of return of the variable investment options on
an annualized, cumulative, and year-by-year basis. These tables take into
account all fees and charges under the contract, but do not reflect the
quarterly administrative charge, any withdrawal charge, or the charges for any
applicable taxes such as premium taxes, or any applicable annuity administrative
fee. If the charges were reflected they would effectively reduce the rates of
return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolio in which the variable investment option invests. In
some cases, the results shown relate to periods when the variable investment
options and/or the contract were not available. In those cases, we adjusted the
results of the portfolios to reflect the charges under the contract that would
have applied had the investment options and/or contract been available.
The results shown for the Alliance Money Market, Alliance Balanced, Alliance
Common Stock and Alliance Aggressive Stock options for periods before those
options were operated as part of a unit investment trust has been adjusted to
reflect the investment advisory fee and expense structure that became applicable
to Separate Account A, as a unit investment trust. See "The Reorganization" in
the SAI for additional information.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
charges such as the mortality and expense risks charge, other expenses,
administrative charge, or any withdrawal charges under the contracts.
Comparisons with these benchmarks, therefore, may be of limited use. We include
them because they are widely known and may help you to understand the universe
of securities from which each portfolio is likely to select its holdings.
Benchmark data reflect the reinvestment of dividend income. The benchmarks
include:
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50 INVESTMENT PERFORMANCE
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ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE BALANCED: 50% Standard & Poor's 500 and 50%
Lehman Government/Corporate Bond Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury
Bond Composite Index and 30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World
Index.
ALLIANCE GROWTH AND INCOME: 75% Standard & Poor's 500
Index and 25% Value Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 30% Lehman
Government/Corporate Bond Index and 70% Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month
T-Bill Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE QUALITY BOND: Lehman Aggregate Bond Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Russell 2000 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500
Index.
MERRILL LYNCH WORLD STRATEGY: 36% Standard & Poor's 500
Index/24% Morgan Stanley Capital International Europe, Australia,
Far East Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+
14% Salomon Brothers World Government Bond (excluding
U.S.)/and 5% Three-Month U.S. Treasury Bill.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan
Stanley Capital International Emerging Markets Free Price Return
Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and
40% Lehman Government/Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's
500 Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital
International Europe, Australia, Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Russell 2000
Index.
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LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the MOMENTUM performance relative to other
variable annuity products.
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INVESTMENT PERFORMANCE 51
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TABLE 1
AVERAGE ANNUAL TOTAL RETURN FOR A PARTICIPANT TERMINATION ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
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LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------
SINCE SINCE
OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION* INCEPTION**
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock (8.12)% 5.43% 7.01% 15.99% 14.93% 14.93%
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Alliance Balanced 8.27% 9.49% 6.23% 9.05% 9.11% 9.11%
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Alliance Common Stock 19.09% 22.13% 17.41% 15.13% 15.00% 10.75%
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Alliance Conservative Investors 4.18% 5.27% 4.81% -- 4.90% 6.41%
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Alliance Equity Index 17.85% 22.18% -- -- 21.41% 19.79%
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Alliance Global 11.78% 10.46% 9.69% 11.38% 9.61% 9.08%
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Alliance Growth and Income 10.88% 17.09% 13.30% -- 13.42% 12.38%
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Alliance Growth Investors 9.20% 10.70% 9.34% -- 9.52% 12.68%
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Alliance High Yield (13.23)% 5.93% 5.41% 7.68% 5.37% 7.06%
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Alliance Intermediate Government Securities (1.43)% 0.86% 0.79% -- 1.90% 3.56%
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Alliance International 1.15% 0.23% -- -- 1.13% 2.31%
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Alliance Money Market (3.68)% 0.00% 0.57% 2.10% 3.31% 3.31%
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Alliance Quality Bond (0.57)% 2.28% 2.18% -- 2.23% 1.80%
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Alliance Small Cap Growth (12.99)% -- -- -- (1.82)% 4.50%
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Lazard Large Cap Value 9.52% -- -- -- -- 9.49%
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Lazard Small Cap Value (15.24)% -- -- -- -- (15.20)%
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Merrill Lynch Basic Value Equity 1.43% -- -- -- 5.01% 9.24%
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Merrill Lynch World Strategy (2.90)% -- -- -- (3.36)% (0.44)%
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MFS Emerging Growth Companies 22.28% -- -- -- 20.68% 26.00%
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MFS Research 12.81% -- -- -- 12.27% 15.86%
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Morgan Stanley Emerging Markets Equity (33.66)% -- -- -- (37.90)% (37.90)%
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E/Q Putnam Balanced 1.64% -- -- -- 5.61% 7.94%
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E/Q Putnam Growth & Income Value 2.55% -- -- -- 6.66% 9.51%
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EQ/Putnam International Equity 9.49% -- -- -- -- 9.84%
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EQ/Putnam Investors Growth 25.70% -- -- -- -- 28.86%
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T. Rowe Price Equity Income (0.85)% -- -- -- 7.91% 10.56%
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T. Rowe Price International Stock 3.35% -- -- -- (2.65)% (0.37)%
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Warburg Pincus Small Company Value (18.20)% -- -- -- (6.97)% (2.95)%
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</TABLE>
Notes to Table 1 are on following page.
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52 INVESTMENT PERFORMANCE
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* The variable investment option inception dates are: Alliance Aggressive
Stock (5/1/84), Alliance Balanced (5/1/84), Alliance Common Stock
(8/27/81), Alliance Conservative Investors (1/4/94), Alliance Equity Index
(6/1/94), Alliance Global (1/4/94), Alliance Growth and Income (1/4/94),
Alliance Growth Investors (1/4/94), Alliance High Yield (1/4/94), Alliance
Intermediate Government Securities (6/1/94), Alliance International
(9/1/95), Alliance Money Market (5/11/82), Alliance Quality Bond (1/4/94),
Alliance Small Cap Growth (6/2/97), MFS Emerging Growth Companies (6/2/97),
MFS Research (6/2/97), Merrill Lynch Basic Value Equity (6/2/97), Merrill
Lynch World Strategy (6/2/97), Morgan Stanley Emerging Markets Equity
(8/20/97), EQ/Putnam Balanced (6/2/97), EQ/Putnam Growth & Income Value
(6/2/97), T. Rowe Price Equity Income (6/2/97), T. Rowe Price International
Stock (6/2/97), Warburg Pincus Small Company Value (6/2/97). The inception
dates for the variable investment options that became available on or after
12/31/98 and are therefore not shown in this table are: EQ/Alliance Premier
Growth, Calvert Socially Responsible, Capital Guardian International,
Capital Guardian Research, Capital Guardian U.S. Equity, EQ/Evergreen,
EQ/Evergreen Foundation, Lazard Large Cap Value, Lazard Small Cap Value,
MFS Growth with Income, EQ/Putnam International Equity, and EQ/Putnam
Investors Growth (8/30/99).
** The portfolio inception dates for the underlying Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on 10/18/99. The portfolio inception dates are:
Alliance Aggressive Stock (5/1/84), Alliance Balanced (5/1/84), Alliance
Common Stock (8/1/68), Alliance Conservative Investors (10/2/89), Alliance
Equity Index (3/1/94), Alliance Global (8/27/87), Alliance Growth and
Income (10/1/93), Alliance Growth Investors (10/2/89), Alliance High Yield
(1/2/87), Alliance Intermediate Government Securities (4/1/91), Alliance
International (4/3/95), Alliance Money Market (5/11/82), Alliance Quality
Bond (10/1/93), Alliance Small Cap Growth (5/1/97), Lazard Large Cap Value
(12/31/97), Lazard Small Cap Value (12/31/97), MFS Emerging Growth
Companies (5/1/97), MFS Research (5/1/97), Merrill Lynch Basic Value Equity
(5/1/97), Merrill Lynch World Strategy (5/1/97), Morgan Stanley Emerging
Markets Equity (8/20/97), EQ/Putnam Balanced (5/1/97), EQ/Putnam Growth &
Income Value (5/1/97), EQ/Putnam International Equity (5/1/97), EQ/Putnam
Investors Growth (5/1/97), T. Rowe Price Equity Income (5/1/97), T. Rowe
Price International Stock (5/1/97), and Warburg Pincus Small Company Value
(5/1/97). The inception dates for the Portfolios that became available on
or after 12/31/98 and are therefore not shown in the tables are:
EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income
(12/31/98); EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, and Capital Guardian International (4/30/99);
and Calvert Socially Responsible (8/30/99).
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 53
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT TERMINATED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
VARIABLE INVESTMENT OPTIONS 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $ 918.79 $1,171.96 $1,403.13 $4,409.12 $ 7,702.57
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,082.70 $1,312.48 $1,353.08 $2,377.47 $ 3,595.12
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,190.88 $1,821.45 $2,230.95 $4,090.44 $22,317.61
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,041.77 $1,166.63 $1,264.59 -- $ 1,775.40
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,178.48 $1,824.00 -- -- $ 2,394.47
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Global $1,117.83 $1,347.85 $1,587.98 $2,937.23 $ 2,680.14
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $1,108.78 $1,605.30 $1,867.06 -- $ 1,845.51
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,092.00 $1,356.43 $1,562.44 -- $ 3,016.38
- ------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 867.68 $1,188.51 $1,301.59 $2,096.76 $ 2,266.07
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 985.66 $1,026.15 $1,039.99 -- $ 1,311.89
- ------------------------------------------------------------------------------------------------------------------------------
Alliance International $1,011.47 $1,006.83 -- -- $ 1,089.10
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 963.25 $ 999.97 $1,028.84 $1,230.45 $ 1,719.24
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 994.27 $1,070.08 $1,113.71 -- $ 1,098.02
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 870.12 -- -- -- $ 1,076.14
- ------------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value $1,095.16 -- -- -- $ 1,095.16
- ------------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value $ 847.63 -- -- -- $ 847.63
- ------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $1,014.27 -- -- -- $ 1,158.73
- ------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 971.02 -- -- -- $ 992.63
- ------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,222.76 -- -- -- $ 1,470.15
- ------------------------------------------------------------------------------------------------------------------------------
MFS Research $1,128.12 -- -- -- $ 1,278.13
- ------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 663.37 -- -- -- $ 521.56
- ------------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced $1,016.38 -- -- -- $ 1,135.93
- ------------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value $1,025.54 -- -- -- $ 1,163.52
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity $1,094.87 -- -- -- $ 1,169.75
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth $1,256.95 -- -- -- $ 1,527.69
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 991.47 -- -- -- $ 1,182.13
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,033.51 -- -- -- $ 993.76
- ------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 818.04 -- -- -- $ 951.35
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
54 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (0.91)% 9.37% 10.06% 17.39% -- 16.15%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 16.33% 14.87% 15.44% -- 13.95%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 17.77% 15.56% 16.49% -- 15.78%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.58% 13.38% 9.33% 11.05% -- 10.81%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 15.79% 13.84% 12.97% -- 13.56%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 18.70% 16.88% 15.21% -- 15.37%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.62% 25.85% 20.24% 17.02% 17.21% 12.10%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 22.23% 18.63% 16.72% 16.30% 11.34%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% 24.06% 19.21% 17.76% 12.75%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.35% 9.21% 7.93% -- -- 8.52%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% -- -- 12.55%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% -- -- 12.08%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.36% 25.89% -- -- -- 22.67%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% -- -- -- 24.31%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% -- -- -- 24.79%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.17% 14.35% 12.72% 13.27% -- 11.04%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 14.67% 11.98% 11.21% -- 9.64%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 17.77% 15.68% 10.66% -- 9.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 19.25% 20.89% 16.23% -- -- 15.28%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% -- -- 17.89%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% -- -- 20.48%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 17.53% 14.58% 12.38% -- -- 14.53%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% -- -- 12.55%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% -- -- 15.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.42)% 9.86% 8.51% 9.67% -- 9.01%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 8.21% 7.37% 9.34% -- 8.97%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 9.11% 9.01% 11.08% -- 10.72%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.30% 4.83% 3.98% -- -- 5.66%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% -- -- 7.25%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% -- -- 7.60%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.09% 4.17% -- -- -- 5.88%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% -- -- -- 10.74%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% -- -- -- 9.68%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.89% 3.93% 3.75% 4.16% -- 5.33%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 4.87% 4.77% 5.20% -- 6.34%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 5.18% 5.11% 5.44% -- 6.41%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 55
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE QUALITY BOND 7.23% 6.27% 5.35% -- -- 4.92%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% -- -- 6.21%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% -- -- 6.92%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.56)% -- -- -- -- 10.76%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 16.72%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 16.58%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 17.86% -- -- -- -- 17.86%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 24.16% -- -- -- -- 24.16%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 28.58%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE (8.58)% -- -- -- -- (8.58)%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 1.53%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- (2.54)%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.09% -- -- -- -- 15.78%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.39% -- -- -- -- 5.52%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 11.15%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 20.00%
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.72% -- -- -- -- 33.08%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 22.72%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.44% -- -- -- -- 22.79%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 28.73%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY (28.00)% -- -- -- -- (33.58)%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (36.28)%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (28.92)%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.31% -- -- -- -- 14.41%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 17.83%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 23.48%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME
VALUE 11.31% -- -- -- -- 16.07%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
56 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM INTERNATIONAL EQUITY 17.83% -- -- -- -- 15.49%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 9.06%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 13.43%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH 34.36% -- -- -- -- 34.57%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 28.73%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.61% -- -- -- -- 17.18%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 19.07%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.17% -- -- -- -- 5.59%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 9.06%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 13.43%
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.21)% -- -- -- -- 2.86%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 16.77%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 57
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (0.91)% 30.83% 61.49% 397.00% -- 799.21%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 58.64% 102.73% 334.88% -- 613.05%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 63.35% 106.12% 360.30% -- 759.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.58% 45.76% 56.21% 185.23% -- 350.72%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 55.60% 91.92% 240.69% -- 553.21%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 67.24% 118.08% 311.86% -- 715.64%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.62% 99.33% 151.34% 381.63% 2,294.60% 3,127.81%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 84.52% 138.97% 388.00% 2,185.68% 1,203.81%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% 193.91% 479.62% 2,530.43% 3,755.68%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE
INVESTORS 12.35% 30.27% 46.43% -- -- 113.01%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% -- -- 202.48%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% -- -- 187.40%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.36% 99.53% -- -- -- 168.57%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% -- -- -- 186.34%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% -- -- -- 192.17%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.17% 49.51% 81.98% 247.55% -- 228.23%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 51.58% 77.94% 194.96% -- 188.08%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 63.34% 107.19% 175.31% -- 181.57%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 19.25% 76.67% 112.15% -- -- 110.90%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% -- -- 139.10%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% -- -- 166.00%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 17.53% 50.42% 79.23% -- -- 250.67%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% -- -- 202.48%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% -- -- 280.88%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.42)% 32.59% 50.47% 151.76% -- 181.50%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 26.80% 43.00% 145.62% -- 182.21%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 29.90% 53.96% 186.01% -- 239.69%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.30% 15.20% 21.53% -- -- 53.24%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% -- -- 72.35%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% -- -- 76.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.09% 13.03% -- -- -- 23.88%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% -- -- -- 47.74%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% -- -- -- 41.40%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.89% 12.26% 20.23% 50.36% -- 137.22%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 15.34% 26.25% 66.09% -- 178.83%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 16.35% 28.27% 69.88% -- 181.74%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.23% 20.01% 29.75% -- -- 28.66%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 20.42% 37.37% -- -- 37.26%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 23.51% 42.06% -- -- 42.14%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
58 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE SMALL CAP GROWTH (5.56)% -- -- -- -- 18.57%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 28.98%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 29.23%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 17.86% -- -- -- -- 17.86%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 24.16% -- -- -- -- 24.09%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 28.58%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE (8.58)% -- -- -- -- (8.58)%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 1.53%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- (2.54)%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE
EQUITY 10.09% -- -- -- -- 27.67%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 15.59%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD
STRATEGY 5.39% -- -- -- -- 9.37%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 19.41%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 33.33%
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH
COMPANIES 32.72% -- -- -- -- 61.04%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 42.16%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.44% -- -- -- -- 40.83%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 52.86%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY (28.00)% -- -- -- -- (42.82)%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (45.67)%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (36.71)%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.31% -- -- -- -- 25.16%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 31.59%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 42.22%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME
VALUE 11.31% -- -- -- -- 28.20%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 38.49%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL
EQUITY 17.83% -- -- -- -- 27.16%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 15.88%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 23.42%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 59
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM INVESTORS
GROWTH 34.36% -- -- -- -- 64.12%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 52.86%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.61% -- -- -- -- 30.25%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 33.92%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL
STOCK 12.17% -- -- -- -- 9.49%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 15.88%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 23.42%
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL
COMPANY VALUE (11.21)% -- -- -- -- 4.82%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 29.95%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
60 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK 42.95% 5.76% 84.65% (4.37)% 15.28%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 24.60% (1.46)% 40.02% (4.15)% 10.81%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 24.07% (9.27)% 35.81% 1.82% 23.11%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 2.75%+ 4.98% 18.24% 4.37% 9.28%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 25.04% (7.32)% 28.81% (1.85)% 30.36%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME -- -- -- -- (0.59)%+
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 3.65%+ 9.13% 46.92% 3.53% 13.72%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD 3.72% (2.42)% 22.79% 10.81% 21.50%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES -- -- 10.94%+ 4.18% 9.10%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 7.72% 6.82% 4.69% 2.19% 1.59%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND -- -- -- -- (0.84)%+
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
E/Q PUTNAM BALANCED -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
E/Q PUTNAM GROWTH & INCOME
VALUE -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL
STOCK -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (5.03)% 29.97% 20.63% 9.45% (0.91)%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED (9.27)% 18.13% 10.16% 13.49% 16.58%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK (3.48)% 30.64% 22.55% 27.45% 27.62%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS (5.38)% 18.79% 3.79% 11.71% 12.35%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX (0.04)%+ 34.66% 20.73% 30.79% 26.36%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 3.82% 17.23% 13.06% 10.05% 20.17%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME (1.90)% 22.42% 18.47% 25.06% 19.25%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS (4.44)% 24.68% 11.09% 15.21% 17.53%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (4.09)% 18.32% 21.23% 16.88% (6.42)%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES (5.65)% 11.81% 2.38% 5.85% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL -- 9.60%+ 8.33% (4.35)% 9.09%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 2.63 4.35% 3.92% 3.98% 3.89%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND (6.37)% 15.46% 3.94% 7.68% 7.23%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH -- -- -- 25.55%+ (5.56)%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE -- -- -- -- 17.86%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE -- -- -- -- (8.58)%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY -- -- -- 15.97%+ 10.09%
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY -- -- -- 3.77%+ 5.39%
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES -- -- -- 21.34%+ 32.72%
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH -- -- -- 15.01%+ 22.44%
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY -- -- -- (20.59)%+ (28.00)%
- ------------------------------------------------------------------------------------------------------------------------------
E/Q PUTNAM BALANCED -- -- -- 13.46%+ 10.31%
- ------------------------------------------------------------------------------------------------------------------------------
E/Q PUTNAM GROWTH & INCOME
VALUE -- -- -- 15.17%+ 11.31%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY -- -- -- 7.92%+ 17.83%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH -- -- -- 22.15%+ 34.36%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME -- -- -- 21.04%+ 7.61%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL
STOCK -- -- -- (2.39)%+ 12.17%
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE -- -- -- 18.06%+ (11.21)%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------
+ Return for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio's inception date as shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 61
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Money Management Letter
Morningstar's Variable Annuity Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
Investment Management Weekly
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data as discussed under "Lipper" above:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the other options will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the same
30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The current yields and
effective yields assume the deduction of all contract charges and expenses other
than the quarterly administrative charge, withdrawal charge, and any charge
<PAGE>
- --------------------------------------------------------------------------------
62 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
for taxes such as premium tax. For more information, see "Alliance Money Market
option yield information" and "Other Alliance yield information" in the SAI.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX I: ORIGINAL CERTIFICATES A-1
- --------------------------------------------------------------------------------
Appendix I: Original certificates
- --------------------------------------------------------------------------------
Original certificates are MOMENTUM certificates under which the MOMENTUM
employer has not elected to add any new variable investment options. Therefore,
only Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock and
Alliance Money Market variable investment options are available.
SELECTING YOUR INVESTMENT METHOD. Employers and plan trustees should note that
for Original certificates, only the guaranteed interest account option, Alliance
Aggressive Stock, Alliance Balanced, Alliance Common Stock and Alliance Money
Market options are available.
TRANSFERRING YOUR RETIREMENT ACCOUNT VALUE. If you own an Original certificate,
the Alliance Money Market option is always available. However, we will not
permit transfers into the Alliance Money Market option from any other investment
option. There will not be any other transfer limitations under your Original
certificate.
DEFAULT OPTION FOR THE FORFEITURE ACCOUNT. We allocate amounts in the forfeiture
account to the default option. For Original certificates, the guaranteed
interest account option is the default option.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-1
- --------------------------------------------------------------------------------
Appendix II: Condensed financial information
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $55.68 $52.88 $68.73 $82.91 $90.75 $89.92
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 258 620 969 1,281 1,437 1,401
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $28.85 $26.18 $30.92 $34.06 $38.66 $45.07
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 348 776 957 1,057 1,052 986
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $128.81 $124.32 $162.42 $199.05 $253.68 $323.75
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 120 270 403 519 591
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $95.10 $112.97 $117.25 $130.98 $147.17
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 3 11 18 22 24
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $100.95 $135.94 $164.12 $214.66 $271.24
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1 12 51 94 135
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $104.12 $122.06 $138.00 $151.87 $182.50
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 16 62 116 147 156
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $98.86 $121.02 $143.37 $179.30 $213.81
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 4 17 41 69 96
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $96.31 $120.08 $133.40 $153.69 $180.63
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 10 57 110 147 159
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $95.88 $113.44 $137.53 $160.74 $150.42
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1 7 18 29 37
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $98.19 $109.80 $112.40 $118.98 $126.48
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1 7 10 10 11
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $104.15 $104.15 $112.82 $107.92 $117.72
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 0 0 19 32 37
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- ------------------------------------------------------------------------------------------------------------------------------
Unit value $25.41 $26.08 $27.22 $28.28 $29.41 $30.55
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 56 166 188 240 308 367
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-2 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION.
(CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE QUALITY BOND
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- $93.87 $108.38 $112.65 $121.30 $130.07
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 1 4 7 10 15
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- $125.55 $118.57
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- 6 27
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $127.67
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 3
- ------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $109.37
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH
COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $161.04
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 5
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $140.83
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 4
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $57.18
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $125.16
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME
VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $128.20
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 1
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $130.25
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 1
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $109.49
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 1
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE
- ------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $104.82
- ------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Additional information about the MOMENTUM program 2
How we deduct the MOMENTUM quarterly administrative charge 3
Description of contribution sources for the MOMENTUM program 3
Additional loan provisions 4
Automatic minimum withdrawal option 4
Unit values 5
Calculation of annuity payments 6
The reorganization 7
Custodian and independent accountants 7
Alliance Money Market option yield information 7
Other Alliance yield information 8
Distribution 8
Long-term market trends 9
Financial statements 12
HOW TO OBTAIN A MOMENTUM STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE
ACCOUNT A
Call 1-800-528-0204 or Send this request form to:
MOMENTUM
P.O. Box 2919
New York, NY 10116
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me a MOMENTUM SAI dated October 18, 1999:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
888-1229
<PAGE>
MOMENTUM(SM)
A group variable and fixed deferred annuity contract
STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 18, 1999
- --------------------------------------------------------------------------------
This statement of additional information ("SAI") is not a prospectus. It should
be read in conjunction with the related MOMENTUM prospectus, dated October 18,
1999. That prospectus provides detailed information concerning the contract and
the variable investment options, as well as the fixed interest option, that fund
the contract. Each variable investment option is a subaccount of Equitable
Life's Separate Account A. Definitions of special terms used in the SAI are
found in the prospectus.
A copy of the prospectus is available free of charge by writing the processing
office (Post Office Box 2919, New York, NY 10116), by calling toll free,
1-800-528-0204, or by contacting your financial professional.
TABLE OF CONTENTS
Additional information about the MOMENTUM program 2
How we deduct the MOMENTUM quarterly administrative charge 3
Description of contribution sources for the MOMENTUM
program 3
Additional loan provisions 4
Automatic minimum withdrawal option 4
Unit values 5
Calculation of annuity payments 6
The reorganization 7
Custodian and independent accountants 7
Alliance Money Market option yield information 7
Other Alliance yield information 8
Distribution 8
Long-term market trends 9
Financial statements 12
Copyright 1999 The Equitable Life Assurance Society of the United States.
All rights reserved. Momentum is a service mark of
The Equitable Life Assurance Society of the United States.
888-1229
<PAGE>
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
Additional information about the MOMENTUM program
MASTER PLAN ELIGIBILITY REQUIREMENTS
Under the Master Plan, the employer specifies the eligibility requirements for
its plan in the participation agreement. The employer may exclude any employee
who has not attained a specified age (not to exceed 21) and completed a
specified number of years (not to exceed two) in each of which he completed
1,000 hours of service. The employer may not require more than one year of
eligibility service for a 401(k) plan.
The Master Plan provides that a sole proprietor, partner or shareholder may
elect not to participate in the plan. However, provisions of the Internal
Revenue Code may require that the plan cover all employees even if they
previously elected not to participate.
VESTING UNDER THE MASTER PLAN
Vesting refers to the nonforfeitable portion of a participant's retirement
account value and loans attributable to employer and matching contributions
under the Master Plan. The participant's retirement account value attributable
to salary-deferral contributions, post-tax employee contributions, prior plan
contributions, qualified non-elective and qualified matching contributions is
nonforfeitable at all times.
A participant becomes fully vested in all benefits if still employed at death,
disability, attainment of normal retirement age or upon termination of the plan.
A participant who terminates employment before that time, forfeits any benefits
that are not already vested under the plan's vesting schedule.
Benefits generally must vest in accordance with any of the schedules below or
one at least as favorable to participants as Schedule B or C:
- ---------------------------------------------------------
SCHEDULE A SCHEDULE B SCHEDULE C
YEARS OF VESTED VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE PERCENTAGE
- ---------------------------------------------------------
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
- ---------------------------------------------------------
If the plan requires more than one year of service for participation, it must
use Schedule A or one at least as favorable to participants.
If the plan is not top "heavy"and does not require more than one year of service
for participation, an employer may, in accordance with provisions of the Master
Plan, instead elect one of the following vesting schedules or one at least as
favorable to participants:
- ---------------------------------------------------------
SCHEDULE F SCHEDULE G
YEARS OF VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE
- ---------------------------------------------------------
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
- ---------------------------------------------------------
BENEFIT DISTRIBUTIONS
If we receive your properly completed forms, you will be eligible to receive a
distribution as follows:
<PAGE>
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
- ----------------------------------------------------------
FORM RECEIVED
AT THE WHEN ELIGIBLE
TYPE OF PROCESSING TO RECEIVE
DISTRIBUTION OFFICE DISTRIBUTION
- ----------------------------------------------------------
Single N/A The 1st
Sum Payments business day
that is 7
calendar days
after we receive
Annuities the form.
- ----------------------------------------------------------
In-Service N/A The business
Withdrawals day on which we
receive the form.
Hardship
Withdrawals
Withdrawals of
Post-Tax
Employee
Contributions
- ----------------------------------------------------------
Installment 1st through 25th The 1st business
Payments business day of day of the
month inclusive. following
26th through calendar month.
31st business The 1st business
day of month day of the second
inclusive. following
calendar month.
- ----------------------------------------------------------
In order for you to begin receiving benefits (including annuity payments) under
an individually designed or prototype defined contribution plan, your employer
must send us a properly completed request for disbursement form. We will send
single sum payments to your plan trustee as of the close of business on the
business day we receive a properly completed form. If you wish to receive
annuity payments, your plan trustee may purchase an annuity contract from us.
The annuity contract will be purchased on the business day we receive a properly
completed form, and payments will commence on that business day.
HOW WE DEDUCT THE MOMENTUM QUARTERLY ADMINISTRATIVE CHARGE
Each calendar quarter we currently deduct an administrative charge of $7.50 or,
if less, .50% of the total of your retirement account value plus the amount of
any active loan from your retirement account value. We do not make any deduction
if your retirement account value equals or exceeds $25,000. We will deduct this
charge in a specified order of contribution sources and investment options. The
order of contribution sources is: employer contributions, matching
contributions, qualified non-elective and qualified matching contributions,
prior plan contributions, elective contributions and post-tax contributions. The
order of investment options is: guaranteed interest account option, Alliance
Common Stock, Alliance Balanced, Alliance Aggressive Stock, Alliance Money
Market, Alliance Intermediate Government Securities, Alliance Growth Investors,
Alliance Conservative Investors, Alliance High Yield, Alliance Global, Alliance
Growth and Income, Alliance Equity Index, Alliance Quality Bond, Alliance
International and Alliance Small Cap Growth options. The last contribution
source is the EQ Advisors Trust variable investment options. If necessary we
will deduct the administrative charge on a pro rata basis from these options.
For example, on the last business day of a calendar quarter we will first
attempt to deduct the administrative charge from employer contributions within
the guaranteed interest account option. If there is no money in the guaranteed
interest account option, we will attempt to deduct the charge from the Alliance
Common Stock option, then Alliance Balanced, etc. If there are no employer
contributions in any of the investment options, we will go to the next
contribution source, employer matching contributions, and attempt to deduct the
charge from the investment options in the same order described above.
DESCRIPTION OF CONTRIBUTION SOURCES FOR THE MOMENTUM PROGRAM
There are six types of sources of contributions under qualified plans:
<PAGE>
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
EMPLOYER CONTRIBUTIONS
These are contributions made to a plan for the benefit of participants and
beneficiaries by the employer not covered by the remaining sources.
MATCHING CONTRIBUTIONS
These are employer contributions that are allocated to a participant's account
under a plan by reason of the participant's post-tax contributions or
elective contributions to the plan.
POST-TAX CONTRIBUTIONS
These are after-tax contributions made by a participant in accordance with the
terms of a plan.
SALARY-DEFERRAL CONTRIBUTIONS
These are contributions to a plan that are made pursuant to a cash or deferred
election (normally in accordance with the terms of a qualified cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code).
PRIOR PLAN CONTRIBUTIONS
These are contributions that are transferred or rolled over from another
qualified plan or a conduit IRA (as described in Section 408(d)(3)(A)(ii) of the
Internal Revenue Code).
QUALIFIED NON-ELECTIVE AND QUALIFIED MATCHING
CONTRIBUTIONS
These are employer contributions made pursuant to the terms of a plan subject to
either or both of the special nondiscrimination tests applicable to plans that
are subject to Section 401(k) (qualified cash or deferred arrangements) or
Section 401(m) (applicable to plans that accept matching contributions and/or
post-tax contributions) of the Internal Revenue Code. Employers make such
qualified non-elective and qualified matching contributions to meet the
nondiscrimination requirements of Section 401(k) and/or 401(m) of the Internal
Revenue Code. This source is called the employer 401(k) Account in the Master
Plan.
ADDITIONAL LOAN PROVISIONS
Under the MOMENTUM contract, (1) the minimum amount of the loan is $1,000 and
(2) the maximum amount of the loan is 50% of the participant's vested retirement
account value. A plan loan may never be greater than $50,000 less the highest
outstanding loan balance in the preceding twelve calendar months. We will deduct
the plan loan from the investment options you specify when you request the loan.
The loan term must comply with applicable law. See "Tax information" in the
prospectus.
If there is a loan outstanding under an EQUI-VEST corporate trusteed contract
and you convert it to the MOMENTUM contract, the retirement account value
established for the participant under the MOMENTUM contract will be equal to the
account value under the EQUI-VEST contract, less the principal amount of the
loan outstanding on the effective date of conversion. That means we will reduce
the account value under the EQUI-VEST contract by the principal amount of the
loan. You may withdraw or transfer amounts that were in the EQUI-VEST loan
reserve account in excess of the principal balance of the loan, subject to any
restrictions in the MOMENTUM contract.
If you, as the employer, are transferring plan assets to the MOMENTUM program,
outstanding plan loans may also be transferred to the MOMENTUM contract. We
refer to these loans as "takeover loans." We will not impose a withdrawal charge
if a takeover loan defaults. Also, we will not deem defaulted takeover loans as
withdrawals for purposes of calculating the minimum death benefits. We will
allocate repayments of takeover loans to the guaranteed interest account option.
Loans converted from EQUI-VEST corporate trusteed to MOMENTUM are not takeover
loans.
AUTOMATIC MINIMUM WITHDRAWAL OPTION
If you elect this feature designed for participants age 70 1/2 or older,
described in the prospectus, each year we calculate your minimum distribution
amount by using the retirement account value as of December 31 of the prior
calendar year. We then calculate the minimum distribution amount based on the
<PAGE>
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
various choices you make. This calculation takes into account partial
withdrawals made during the current calendar year but prior to the date we
determine your minimum distribution withdrawal amount. However, when the
automatic minimum withdrawal option is elected in the year in which the
participant attains age 71 1/2, no adjustment will be made for any withdrawals
made between January 1 and April 1 in satisfaction of the minimum distribution
requirements for the prior year.
You may choose whether we will calculate the automatic minimum withdrawals based
on your life expectancy alone, or based on the joint-life expectancies of you
and your spouse. You may also choose (1) to have us recalculate your life
expectancy, or joint-life expectancies, each year, or (2) to have us determine
your life expectancy, or joint life expectancies, once and then subtract one
year, each year, from that amount. If you have chosen a joint-life expectancy
method of calculation with your spouse, you must choose to have both lives
recalculated or neither life recalculated.
When we recalculate life expectancy, that means that each calendar year we see
what each individual's life expectancy is under Treasury Regulations.
If you do not specify a method, we will base a calculation on your life
expectancy alone, recalculating it each year. If you do not specify that we
should recalculate life expectancy, you cannot later apply your retirement
account value to an annuity payout.
You should not elect the automatic minimum withdrawal option if you, the
participant, continue to work beyond age 70 1/2 and you continue to make
contributions into the contract. To do so could result in an insufficient
distribution. You must request the amount to be separately calculated each year
to ensure that you withdraw the correct amount.
Note that our automatic minimum withdrawal option is less flexible than federal
law allows. For example, federal law permits you to recalculate your life
expectancy and not your spouse's and to choose the joint-life expectancy method
with a beneficiary other than your spouse. See your tax adviser.
UNIT VALUES
Unit values are determined at the end of each valuation period for each of the
variable investment options. The unit values may vary.
The unit value for a variable investment option for any valuation period is
equal to: (i) the unit value for the preceding valuation period multiplied by
(ii) the net investment factor for that variable investment option for that
valuation period. A valuation period is each business day together with any
preceding non-business days. The net investment factor is:
(a/b) - c
where:
(a) is the value of the variable investment option's shares of the
corresponding portfolio at the end of the valuation period. Any amounts
allocated to or withdrawn from the option for the valuation period are not
taken into account. For this purpose, we use the share value reported to us
by EQ Advisors Trust. This share value is after deduction for investment
advisory fees and other fees and direct expenses of the trusts.
(b) is the value of the variable investment option's shares of the
corresponding portfolio at the end of the preceding valuation period. (Any
amounts allocated or withdrawn for that valuation period are taken into
account.)
<PAGE>
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6
- --------------------------------------------------------------------------------
(c) is the daily charges relating to the contracts for mortality risks,
expenses, expense risks, death benefits and financial accounting, times the
number of calendar days in the valuation period, plus any charge for taxes
or amounts set aside as a reserve for taxes. These charges are at an
effective annual rate not to exceed a total of 1.49% for the Alliance Money
Market, Alliance Balanced and Alliance Common Stock options and 1.34% for
all other variable investment options.
CALCULATION OF ANNUITY PAYMENTS
The calculation of monthly annuity payment under a contract takes into account
the number of annuity units of each variable investment option credited under a
contract, their respective annuity unit values, and a net investment factor.
Annuity unit values will also vary by variable investment option.
For each valuation period, the adjusted net investment factor is equal to the
net investment factor for the option reduced for each day in the valuation
period by:
o .00013366 of the net investment factor if the assumed base rate of net
investment return is 5% a year; or
o .00009425 of the net investment factor if the assumed base rate of net
investment return is 3 1/2%.
Because of this adjustment, the annuity unit value rises and falls depending on
whether the actual rate of net investment return (after charges) is higher or
lower than the assumed base rate.
All contracts have a 5% assumed base rate of net investment return, except in
states where that rate is not permitted. Annuity payments under contracts with
an assumed base rate of 3 1/2% will at first be smaller than those under
contracts with a 5% assumed base rate. Payments under the 3 1/2% contracts,
however, will rise more rapidly when unit values are rising, and payments will
fall more slowly when unit values are falling than those under 5% contracts.
The amounts of variable annuity payments are determined as follows:
Payments normally start on the business day specified on your election form, or
on such other future date as you specify. The first three monthly payments are
the same. The initial payment will be calculated using the basis guarantee in
the contract or our current basis, whichever would provide the higher initial
benefit.
The first three payments depend on the assumed base rate of net investment
return and the form of annuity chosen (and any fixed period). If the payments
under the annuity depend on the life of an annuitant, the risk class and the age
of the annuitant(s) will affect payments.
Payments after the first three will vary according to the investment performance
of the variable investment option(s) selected to fund the variable payments. We
will calculate each monthly payment by multiplying the number of annuity units
credited by the average annuity unit value for the selected option for the
second calendar month immediately preceding the due date of the payment. We
calculate the number of units by dividing the first monthly payment by the
annuity unit value for the valuation period. This includes the due date of the
first monthly payment. The average annuity unit value is the average of the
annuity unit values for the valuation periods ending in that month.
ILLUSTRATION OF CALCULATION OF ANNUITY PAYMENTS
To show how we determine variable annuity payments, assume that the retirement
account value on a retirement date is enough to fund an annuity with a monthly
payment of $100. Also assume that the annuity unit value of the selected
variable investment option for the valuation period that includes the due date
of the first annuity payment is $3.74. The number of annuity units credited
under the contract would be 26.74 (100 divided by 3.74 = 26.74). Based on a
hypothetical average annuity unit value of $3.56 in October 1998, the annuity
payment due in December 1998 would be $95.19 (the number of units (26.74) times
$3.56).
<PAGE>
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7
- --------------------------------------------------------------------------------
THE REORGANIZATION
Equitable Life established Separate Account A as a stock account on August 1,
1968. It was one of four separate investment accounts used to fund retirement
benefits under variable annuity certificates issued by us. Each of these
separate accounts, which included the predecessors to the Alliance Money Market
option, the Alliance Balanced option, the Alliance Common Stock option and the
Alliance Aggressive Stock option, was organized as an open-end management
investment company. Each separate account had its own investment objectives and
policies. Collectively these separate accounts, as well as two other separate
accounts which had been used to fund retirement benefits under certain other
annuity contracts, are called the Predecessor Separate Accounts.
On December 18, 1987, the Predecessor Separate Accounts were combined in part
and reorganized into the Alliance Money Market, Alliance Balanced, Alliance
Common Stock and Alliance Aggressive Stock options of Separate Account A. In
connection with the Reorganization, all of the assets and investment-related
liabilities of the Predecessor Separate Accounts were transferred to a
corresponding portfolio of The Equitable Trust in exchange for shares of the
portfolios of The Equitable Trust, which were issued to these corresponding
variable investment options of Separate Account A. As described in "Investment
performance" in the prospectus, on September 6, 1991, all of the shares of The
Equitable Trust held by these variable investment options were replaced by
shares of portfolios of The Hudson River Trust corresponding to these variable
investment options of Separate Account A.
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for shares of the Trust owned by Separate
Account A.
The financial statements of Separate Account A as of December 31, 1998 and for
the periods ended December 31, 1998 and 1997, and the consolidated financial
statements of Equitable Life as at December 31, 1998 and 1997, and for each of
the three years ended December 31, 1998 included in this SAI have been so
included in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
ALLIANCE MONEY MARKET OPTION YIELD INFORMATION
The Alliance Money Market option calculates yield information for seven-day
periods. To determine the seven-day rate of return, the net change in a unit
value is computed by subtracting the unit value at the beginning of the period
from a unit value, exclusive of capital changes, at the end of the period.
The net change is then reduced by the average administrative charge factor for
your contract. This reduction is made to recognize the deduction of the
quarterly administrative charge, which is not reflected in the unit value. See
the applicable "Administrative charge" under "Charges and expenses" in the
prospectus. Unit values reflect all other accrued expenses of the Alliance Money
Market option.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This seven-day
adjusted base period return is then multiplied by 365/7 to produce an annualized
seven-day current yield figure carried to the nearest one-hundredth of one
percent.
The actual dollar amount of the quarterly administrative charge that is deducted
for MOMENTUM from the Alliance Money Market option will vary for each
participant depending upon how the retirement account value is allocated among
the investment options. To determine the effect of the quarterly administrative
charge on the yield, we start with the total dollar amount of the charges
deducted from the option during the twelve-month period ending on the last day
of the prior year divided by 4. We multiply this amount by 7/91.25 to produce an
average administrative charge factor which we use in all weekly yield
computations for the next quarter. The average administrative charge is then
divided by the number of MOMENTUM Alliance Money Market option units as of the
<PAGE>
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
end of the prior calendar year. We deduct the resulting quotient from the net
change in unit value for the seven-day period.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature of the Alliance Money Market option's investments, as
follows: the unannualized adjusted base period return is compounded by adding
one to the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield = (base
period return + 1)365/7 - 1. The Alliance Money Market option yields will
fluctuate daily. Accordingly, yields for any given period are not necessarily
representative of future results. In addition, the value of units of the
Alliance Money Market option will fluctuate and not remain constant.
The Alliance Money Market option yields reflect charges that are not normally
reflected in the yields of other investments. Therefore they may be lower when
compared with yields of other investments. The Alliance Money Market option
yields should not be compared to the return on fixed-rate investments which
guarantee rates of interest for specified periods, such as the guaranteed
interest account option or bank deposits. Nor should the yields be compared to
the yields of money market funds made available to the general public. Yields of
money market funds usually are calculated on the basis of a constant $1 price
per share and they pay out earnings in dividends which accrue on a daily basis.
The seven-day current yield for the Alliance Money Market option was 3.22% for
the period ended December 31, 1998. The effective yield for the Alliance Money
Market option for that period was 3.28%. Because these yields reflect the
deduction of variable investment option expenses, including the quarterly
administrative charge, they are lower than the corresponding yield figures for
the Alliance Money Market portfolio which reflect only the deduction of
Trust-level expenses.
OTHER ALLIANCE YIELD INFORMATION
The effective yield is obtained by giving effect to the compounding nature of
the option's investments, as follows: the sum of the 30-day adjusted return,
plus one, is raised to a power equal to 365 divided by 30, and subtracting one
from the result.
The 30-day yields for the period ended December 31, 1998 were 3.30% for the
Alliance Intermediate Government Securities option, 3.68% for the Alliance
Quality Bond option and 13.05% for the Alliance High Yield option. Because these
yields reflect the deduction of variable investment option expenses, including
the quarterly administrative charge, they are lower than the yield figures for
the corresponding portfolios which reflect only the deduction of Trust-level
expenses.
DISTRIBUTION
AXA Advisors, LLC ("AXA Advisors"), the successor to Equitable Financial
Consultants, Inc. and an indirect subsidiary of Equitable Life, is the
distributor of the contracts and has responsibility for sales and marketing
functions for Separate Account A. AXA Advisors serves as the principal
underwriter of Separate Account A. AXA Advisors is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. AXA Advisors' principal business address is 1290 Avenue of the Americas,
New York, NY 10104. Under a Distribution and Servicing Agreement between AXA
Advisors, Equitable Life, and certain of Equitable Life's separate accounts,
including Separate Account A, Equitable Life paid AXA Advisors fees of $325,380
for 1998 and $325,380 for 1997, as distributor of certain contracts and as the
principal underwriter of certain separate accounts including Separate Account A.
By year end 1999, AXA Advisors will no longer be a subsidiary of Equitable Life,
but will remain an indirect subsidiary of AXA Financial, Inc., Equitable Life's
parent.
The contracts will be sold by financial professionals who are registered
representatives of AXA Advisors, and are also our licensed insurance agents. AXA
Advisors may also receive compensation and reimbursement for its marketing
services
<PAGE>
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9
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under the terms of its distribution agreement with Equitable Life. The
offering of the contracts is intended to be continuous.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the variable investment options, helps to provide
a perspective on the potential returns of different asset classes over different
periods of time. By combining this information with your knowledge of your own
financial needs (e.g., the length of time until you retire, your financial
requirements at retirement), you may be able to better determine how you wish to
allocate plan contributions among the investment options available under your
plan.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus is
on long-term growth potential and protection against inflation, there may be
advantages to allocating some or all of their annuity account value or
retirement account value to those variable investment options that invest in
stocks.
Growth of $1 Invested on January 1, 1958
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A
SHADED AREA GRAPH IN THE PRINTED DOCUMENT:]
Common Stock Inflation
1958 1.00 1.00
1959 1.12 1.01
1960 1.12 1.03
1961 1.43 1.04
1962 1.30 1.05
1963 1.60 1.07
1964 1.86 1.08
1965 2.10 1.10
1966 1.88 1.14
1967 2.34 1.17
1968 2.59 1.23
1969 2.37 1.30
1970 2.47 1.37
1971 2.82 1.42
1972 3.36 1.47
1973 2.87 1.60
1974 2.11 1.79
1975 2.89 1.92
1976 3.58 2.01
1977 3.32 2.15
1978 3.54 2.34
1979 4.19 2.65
1980 5.55 2.98
1981 5.28 3.25
1982 6.41 3.37
1983 7.86 3.50
1984 8.35 3.64
1985 11.03 3.78
1986 13.07 3.82
1987 13.75 3.99
1988 16.07 4.16
1989 21.13 4.36
1990 20.46 4.62
1991 26.74 4.76
1992 28.75 4.90
1993 31.63 5.04
1994 32.04 5.17
1995 44.03 5.30
1996 54.19 5.48
1997 72.27 5.57
1998 92.93 5.67
[LIGHT SHADED AREA = COMMON STOCK]
[DARK SHADED AREA = INFLATION]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
Over shorter periods of time, however, common stocks tend to be subject to more
dramatic changes in value than fixed-income (debt) securities. Investors who are
nearing retirement age, or who have a need to limit short-term risk, may find it
preferable to allocate a smaller percentage of their account value to those
variable investment options that invest in common stocks. The following graph
illustrates the monthly fluctuations in value of $1 based on monthly returns of
the Standard & Poor's 500 during 1990, a year that reflects the volatility
inherent in the investment of common stocks.
<PAGE>
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10
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Growth of $1 Invested on January 1, 1990
(Values are as of last business day)
[THE FOLLOWING DATA WAS REPRESENTED AS A BLACK AND WHITE LINE GRAPH
IN THE PRINTED DOCUMENT:]
Intermediate-Term
Govt. Bonds Common Stocks
1/1/90 1.00 1.00
Jan. 0.99 0.93
Feb. 0.99 0.94
Mar. 0.99 0.97
Apr. 0.98 0.95
May 1.01 1.04
June 1.02 1.03
July 1.04 1.03
Aug. 1.03 0.93
Sep. 1.04 0.89
Oct. 1.06 0.89
Nov. 1.08 0.94
Dec. 1.10 0.97
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1998 for different types
of securities: common stocks, long-term government bonds, long-term corporate
bonds, intermediate-term government bonds and U.S. Treasury Bills. For
comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. Investment
management fees or expenses, and charges typically associated with deferred
annuity products, are not reflected. The information presented is merely a
summary of past experience for unmanaged groups of securities and is neither an
estimate nor guarantee of future performance. Any investment in securities,
whether equity or debt, involves varying degrees of potential risk, in addition
to offering varying degrees of potential reward.
- --------------------------------------------------------------------------------
The rates of return illustrated do not represent returns of the variable
investment options. In addition, there is no assurance that the performance of
the variable investment options will correspond to rates of return such as those
illustrated in the chart.
- --------------------------------------------------------------------------------
For a comparative illustration of performance results of the variable investment
options (which reflect charges for EQ Advisors Trust, as applicable, and
variable investment option charges), see "Investment performance" in the
prospectus.
<PAGE>
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11
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<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
- -----------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE- U.S.
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T. TREASURY CONSUMER
ENDING DECEMBER 31, 1998 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 28.58% 13.06% 10.76% 10.21% 4.86% 1.80%
- -----------------------------------------------------------------------------------------------------------------------
3 Years 28.27 9.07 8.25 6.84 5.11 2.27
- -----------------------------------------------------------------------------------------------------------------------
5 Years 24.06 9.52 8.74 6.20 4.96 2.41
- -----------------------------------------------------------------------------------------------------------------------
10 Years 19.19 11.66 10.85 8.74 5.29 3.14
- -----------------------------------------------------------------------------------------------------------------------
20 Years 17.75 11.14 10.86 9.85 7.17 4.53
- -----------------------------------------------------------------------------------------------------------------------
30 Years 12.67 9.09 9.14 8.71 6.76 5.24
- -----------------------------------------------------------------------------------------------------------------------
40 Years 12.00 7.20 7.43 7.39 5.94 4.44
- -----------------------------------------------------------------------------------------------------------------------
50 Years 13.56 5.89 6.20 6.21 5.07 3.92
- -----------------------------------------------------------------------------------------------------------------------
60 Years 12.49 5.43 5.62 5.50 4.26 4.19
- -----------------------------------------------------------------------------------------------------------------------
Since 12/31/26 11.21 5.29 5.78 5.32 3.78 3.15
- -----------------------------------------------------------------------------------------------------------------------
Inflation Adjusted Since 1926 7.82 2.08 2.55 2.11 0.62 --
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1999
YearbookTM, Ibbotson Associates, Inc., Chicago. All rights reserved.
COMMON STOCKS (S&P 500)--Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS--Measured using a one-bond portfolio constructed each
year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
LONG-TERM CORPORATE BONDS--For the period 1969-1998, represented by the Salomon
Brothers Long-Term, High-Grade Corporate Bond Index; for the period 1946-1968,
the Salomon Brothers Index was backdated using Salomon Brothers monthly yield
data and a methodology similar to that used by Salomon Brothers for 1969-1998;
for the period 1927-1945, the Standard and Poor's monthly High-Grade Corporate
Composite yield data were used, assuming a 4 percent coupon and a twenty-year
maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS--Measured by a one-bond portfolio constructed
each year containing a bond with approximately a five-year maturity.
U.S. TREASURY BILLS--Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION--Measured by the Consumer Price Index for all Urban Consumers (CPI-U),
not seasonally adjusted.
<PAGE>
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12
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Financial statements
The consolidated financial statements of Equitable Life included herein should
be considered only as bearing upon the ability of Equitable Life to meet its
obligations under the contracts.
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Report of Independent Accountants.................................................................................. FSA-2
Financial Statements:
Statements of Assets and Liabilities, December 31, 1998...................................................... FSA-3
Statements of Operations for the Year Ended December 31, 1998................................................ FSA-6
Statements of Changes in Net Assets for the Years Ended December 31, 1998 and 1997........................... FSA-9
Notes to Financial Statements................................................................................ FSA-16
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants.................................................................................. F-1
Consolidated Financial Statements:
Consolidated Balance Sheets, December 31, 1998 and 1997...................................................... F-2
Consolidated Statements of Earnings, Years Ended December 31, 1998, 1997 and 1996............................ F-3
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1998,
1997 and 1996............................................................................................. F-4
Consolidated Statements of Cash Flows, Years Ended December 31, 1998, 1997 and 1996.......................... F-5
Notes to Consolidated Financial Statements................................................................... F-6
</TABLE>
FSA-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account A
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Alliance Money Market Fund,
Alliance Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, Alliance Growth & Income Fund, Alliance Equity Index
Fund, Alliance Common Stock Fund, Alliance Global Fund, Alliance International
Fund, Alliance Aggressive Stock Fund, Alliance Small Cap Growth Fund, Alliance
Conservative Investors Fund, Alliance Growth Investors Fund, Alliance Balanced
Fund ("Hudson River Trust funds") and the T. Rowe Price Equity Income Fund,
EQ/Putnam Growth & Income Value Fund, Merrill Lynch Basic Value Equity Fund, MFS
Research Fund, T. Rowe Price International Stock Fund, Morgan Stanley Emerging
Markets Equity Fund, Warburg Pincus Small Company Value Fund, MFS Emerging
Growth Companies Fund, EQ/Putnam Balanced Fund, and Merrill Lynch World Strategy
Fund ("EQ Advisors Trust funds"), separate investment funds of The Equitable
Life Assurance Society of the United States ("Equitable Life") Separate Account
A at December 31, 1998 and the results of each of their operations and changes
in each of their net assets for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Equitable Life's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which 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, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The Hudson River Trust
and in The EQ Advisors Trust at December 31, 1998 with the transfer agent,
provide a reasonable basis for the opinion expressed above. The unit value
information presented in Note 6 for the year ended December 31, 1992 and for
each of the periods indicated prior thereto, were audited by other independent
accountants whose report dated February 16, 1993 expressed an unqualified
opinion on the financial statements containing such information.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
--------------------------------------------------------------
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531.................................... $126,082,971
52,884,907.................................... $53,855,750
81,574,491.................................... $81,903,603
234,155,055.................................... $198,398,150
132,387,446....................................
68,826,963....................................
507,038,678....................................
860,530,108....................................
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 443,930 94,544 181,937 255,904
------------ ------------ ------------ -------------
Total assets........................................ 126,526,901 53,950,294 82,085,540 198,654,054
------------ ------------ ------------ -------------
LIABILITIES:
Payable for Trust shares purchased......................... 440,784 96,954 173,181 263,793
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 179,001 351,346 445,982 206,805
------------ ------------ ------------ -------------
Total liabilities................................... 619,785 448,300 619,163 470,598
------------ ------------ ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $125,907,116 $53,501,994 $81,466,377 $198,183,456
============ ============ ============ =============
<CAPTION>
EQUITY SERIES:
-------------------------------------------------------------------
EQ/
T.ROWE PRICE PUTNAM ALLIANCE ALLIANCE
EQUITY GROWTH & GROWTH & EQUITY
INCOME INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $126,393,531....................................
52,884,907....................................
81,574,491....................................
234,155,055....................................
132,387,446.................................... $139,978,924
68,826,963.................................... $74,988,792
507,038,678.................................... $599,468,994
860,530,108................................... $1,153,005,368
Receivable for Trust shares sold............................ -- -- -- --
Due from Equitable Life's General Account
(Note 3)................................................. 1,106,116 672,410 1,904,968 11,149,643
------------ ----------- ------------ --------------
Total assets........................................ 141,085,040 75,661,202 601,373,962 1,164,155,011
------------ ----------- ------------ --------------
LIABILITIES:
Payable for Trust shares purchased......................... 1,106,116 672,410 1,608,787 11,151,657
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 163,834 162,192 742,644 715,187
------------ ----------- ------------ --------------
Total liabilities................................... 1,269,950 834,602 2,351,431 11,866,844
------------ ----------- ------------ --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $139,815,090 $74,826,600 $599,022,531 $1,152,288,167
============ =========== ============ ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-------------------------------------------------------------------
MERRILL
LYNCH ALLIANCE
BASIC VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
------------ -------------- -------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556............................. $57,472,290
5,604,901,871............................. $7,729,532,779
88,527,561............................. $102,398,515
609,414,934............................. $727,190,716
127,648,223.............................
66,625,462.............................
17,147,883.............................
3,378,240,751.............................
Receivable for Trust shares sold........................... -- -- -- 568,149
Due from Equitable Life's General Account
(Note 3)................................................. 556,978 5,851,659 4,489,476 --
----------- -------------- ------------ -------------
Total assets........................................ 58,029,268 7,735,384,438 106,887,991 727,758,865
----------- -------------- ------------ -------------
LIABILITIES:
Payable for Trust shares purchased.......................... 556,953 5,468,912 4,489,434 --
Due to Equitable Life's General Account
(Note 3)................................................. -- -- -- 600,419
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 119,600 4,142,124 148,866 358,278
----------- -------------- ------------ -------------
Total liabilities................................... 676,553 9,611,036 4,638,300 958,697
----------- -------------- ------------ -------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
=========== ============== ============ =============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
T.ROWE MORGAN
PRICE STANLEY
INTER- EMERGING ALLIANCE
ALLIANCE NATIONAL MARKETS AGGRESSIVE
INTERNATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 56,223,556.............................
5,604,901,871.............................
88,527,561.............................
609,414,934.............................
127,648,223............................. $130,220,038
66,625,462............................. $73,881,887
17,147,883............................. $16,084,234
3,378,240,751............................. $3,168,974,945
Receivable for Trust shares sold........................... 211,881 -- -- 6,354,007
Due from Equitable Life's General Account
(Note 3)................................................. -- 179,720 115,594 --
------------ ----------- ----------- --------------
Total assets........................................ 130,431,919 74,061,607 16,199,828 3,175,328,952
------------ ----------- ----------- --------------
LIABILITIES:
Payable for Trust shares purchased.......................... -- 179,720 115,594 --
Due to Equitable Life's General Account
(Note 3)................................................. 216,890 -- -- 6,160,056
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 193,242 90,602 3,574,314 670,310
------------ ----------- ----------- --------------
Total liabilities................................... 410,132 270,322 3,689,908 6,830,366
------------ ----------- ----------- --------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $130,021,787 $73,791,285 $12,509,920 $3,168,498,586
============ =========== =========== ==============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSET
ALLOCATION
EQUITY SERIES (CONCLUDED): SERIES
----------------------------------------------- ---------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................ $90,331,538
128,288,230............................ $139,300,122
141,554,053............................ $177,252,578
111,402,771............................ $120,069,941
32,776,608............................
739,431,816............................
1,207,545,862............................
10,547,792............................
Receivable for Trust shares sold........................... -- 1,068,050 -- --
Due from Equitable Life's General Account
(Note 3)................................................. 680,223 -- 2,139,886 181,219
----------- ------------ ------------ ------------
Total assets........................................ 91,011,761 140,368,172 179,392,464 120,251,160
----------- ------------ ------------ ------------
LIABILITIES:
Payable for Trust shares purchased......................... 680,223 -- 2,139,886 182,458
Due to Equitable Life's General Account
(Note 3)................................................. -- 1,051,042 -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 128,730 410,448 49,828 205,350
----------- ------------ ------------ ------------
Total liabilities................................... 808,953 1,461,490 2,189,714 387,808
----------- ------------ ------------ ------------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $90,202,808 $138,906,682 $177,202,750 $119,863,352
<CAPTION>
ASSET ALLOCATION SERIES (CONTINUED):
---------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Trusts,
at market value (Note 2):
Cost: $ 97,621,394............................
128,288,230............................
141,554,053............................
111,402,771............................
32,776,608............................ $34,787,837
739,431,816............................ $842,909,418
1,207,545,862............................ $1,322,780,470
10,547,792............................ $11,042,248
Receivable for Trust shares sold........................... -- -- 869,867 --
Due from Equitable Life's General Account
(Note 3)................................................. 344,836 1,901,167 -- 83,668
----------- ------------ -------------- -----------
Total assets........................................ 35,132,673 844,810,585 1,323,650,337 11,125,916
----------- ------------ -------------- -----------
LIABILITIES:
Payable for Trust shares purchased......................... 344,836 1,905,292 -- 83,668
Due to Equitable Life's General Account
(Note 3)................................................. -- -- 728,517 --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk
charges and (ii) mortality and other gains and
losses retained by Equitable Life (Note 3)............... 147,171 687,262 186,147 1,772,681
----------- ------------ -------------- -----------
Total liabilities................................... 492,007 2,592,554 914,664 1,856,349
----------- ------------ -------------- -----------
NET ASSETS ATTRIBUTABLE TO CONTRACTOWNERS
(NOTE 5)................................................. $34,640,666 $842,218,031 $1,322,735,673 $ 9,269,567
=========== ============ ============== ===========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
INTER-
ALLIANCE MEDIATE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY HIGH
MARKET SECURITIES BOND YIELD
FUND FUND FUND FUND
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $5,255,399 $2,342,433 $3,395,859 $ 20,512,530
---------- ---------- ---------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,481,147 587,870 794,815 2,600,402
Less: Reduction for expense limitation...................... 48,970 7,750 -- --
---------- ---------- ---------- ------------
Net expenses.......................................... 1,432,177 580,120 794,815 2,600,402
---------- ---------- ---------- ------------
NET INVESTMENT INCOME (LOSS)................................ 3,823,222 1,762,313 2,601,044 17,912,128
---------- ---------- ---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 234,429 470,342 372,734 4,677
Realized gain distribution from
The Trusts.......................................... 3,630 -- 1,620,732 3,909,878
---------- ---------- ---------- ------------
Net realized gain (loss)................................. 238,059 470,342 1,993,466 3,914,555
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 512,287 (486,113) (36,813,923)
---------- ---------- ---------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 359,083 982,629 1,507,353 (32,899,368)
========== ========== ========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $4,182,305 $2,744,942 $4,108,397 $(14,987,240)
========== ========== ========== ============
<CAPTION>
EQUITY SERIES:
---------------------------------------------------------------
EQ/
T. ROWE PUTNAM
PRICE GROWTH & ALLIANCE ALLIANCE
EQUITY INCOME GROWTH & EQUITY
INCOME VALUE INCOME INDEX
FUND FUND FUND FUND
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $2,277,162 $ 643,088 $ 1,653,807 $ 10,632,473
---------- ---------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,304,543 670,969 6,396,117 11,997,835
Less: Reduction for expense limitation...................... -- -- -- --
---------- ---------- ----------- ------------
Net expenses.......................................... 1,304,543 670,969 6,396,117 11,997,835
---------- ---------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 972,619 (27,881) (4,742,310) (1,365,362)
---------- ---------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (974,087) (339,484) 3,660,147 40,077,379
Realized gain distribution from
The Trusts.......................................... 2,932,028 580,684 48,006,831 339,719
---------- ---------- ----------- ------------
Net realized gain (loss)................................. 1,957,941 241,200 51,666,978 40,417,098
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 5,418,025 39,346,894 170,263,193
---------- ---------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 6,129,829 5,659,225 91,013,872 210,680,291
---------- ---------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $7,102,448 $5,631,344 $86,271,562 $209,314,929
========== ========== =========== ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MERRILL
LYNCH
BASIC ALLIANCE
VALUE COMMON MFS ALLIANCE
EQUITY STOCK RESEARCH GLOBAL
FUND FUND FUND FUND
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 550,754 $ 42,754,627 $ 249,000 $ 7,924,674
----------- -------------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 494,290 95,988,818 735,308 8,877,655
Less: Reduction for expense limitation...................... -- 6,717,477 -- --
----------- -------------- ----------- ------------
Net expenses.......................................... 494,290 89,271,341 735,308 8,877,655
----------- -------------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 56,464 (46,516,714) (486,308) (952,981)
----------- -------------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (1,204,767) 190,070,720 (916,443) 13,674,946
Realized gain distribution from
The Trusts.......................................... 1,908,414 932,028,578 -- 46,107,203
----------- -------------- ----------- ------------
Net realized gain (loss)................................. 703,647 1,122,099,298 (916,443) 59,782,149
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 573,857,850 13,393,079 60,932,110
----------- -------------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 1,725,485 1,695,957,148 12,476,636 120,714,259
=========== ============== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $ 1,781,949 $1,649,440,434 $11,990,328 $119,761,278
=========== ============== =========== ============
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------
MORGAN
T. ROWE STANLEY
ALLIANCE PRICE INTER- EMERGING ALLIANCE
INTER- NATIONAL- MARKETS AGGRESSIVE
NATIONAL STOCK EQUITY STOCK
FUND FUND FUND FUND
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 2,332,648 $ 628,616 $ 61,144 $ 14,559,406
----------- ----------- ----------- ------------
Expenses (Note 3):
Asset-based charges................................... 1,702,585 717,829 139,058 43,880,560
Less: Reduction for expense limitation...................... -- -- -- 3,621,990
----------- ----------- ----------- ------------
Net expenses.......................................... 1,702,585 717,829 139,058 40,258,570
----------- ----------- ----------- ------------
NET INVESTMENT INCOME (LOSS)................................ 630,063 (89,213) (77,914) (25,699,164)
----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (6,316,417) (2,187,587) (4,762,302) 76,319,984
Realized gain distribution from
The Trusts.......................................... 24,639 677 -- 153,501,697
----------- ----------- ----------- ------------
Net realized gain (loss)................................. (6,291,778) (2,186,910) (4,762,302) 229,821,681
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 8,173,937 34,335 (233,439,908)
----------- ----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 10,842,932 5,987,027 (4,727,967) (3,618,227)
=========== =========== =========== ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $11,472,995 $ 5,897,814 $(4,805,881) $ (29,317,391)
=========== =========== =========== =============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
----------------------------------------------------------------
MFS
WARBURG PINCUS ALLIANCE EMERGING ALLIANCE
SMALL COMPANY SMALL CAP GROWTH CONSERVATIVE
VALUE GROWTH COMPANIES INVESTORS
FUND FUND FUND FUND
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 420,391 $ 11,795 $ 2,970 $ 4,213,562
------------ ------------ ----------- -----------
Expenses (Note 3):
Asset-based charges................................... 1,049,204 1,437,474 1,125,210 1,406,739
Less: Reduction for expense limitation...................... -- -- -- --
------------ ------------ ----------- -----------
Net expenses.......................................... 1,049,204 1,437,474 1,125,210 1,406,739
------------ ------------ ----------- -----------
NET INVESTMENT INCOME (LOSS)................................ (628,813) (1,425,679) (1,122,240) 2,806,823
------------ ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... (3,319,964) (18,408,722) (4,911,369) 1,336,530
Realized gain distribution from
The Trusts.......................................... -- -- -- 6,357,062
------------ ------------ ----------- -----------
Net realized gain (loss)................................. (3,319,964) (18,408,722) (4,911,369) 7,693,592
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 12,576,541 35,293,322 2,040,567
------------ ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... (10,632,082) (5,832,181) 30,381,953 9,734,159
============ ============ =========== ===========
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $(11,260,895) $ (7,257,860) $29,259,713 $12,540,982
============ ============ =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
MERRILL
EQ/ ALLIANCE LYNCH
PUTNAM GROWTH ALLIANCE WORLD
BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND
----------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from The Trusts............................. $ 634,198 $ 15,542,047 $ 33,629,387 $ 83,000
---------- ------------ ------------ ---------
Expenses (Note 3):
Asset-based charges................................... 287,370 10,042,667 18,391,448 94,329
Less: Reduction for expense limitation...................... -- -- 2,004,680 --
---------- ------------ ------------ ---------
Net expenses.......................................... 287,370 10,042,667 16,386,768 94,329
---------- ------------ ------------ ---------
NET INVESTMENT INCOME (LOSS)................................ 346,828 5,499,380 17,242,619 (11,329)
---------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) on investments................... 307,112 8,822,060 23,244,711 (103,174)
Realized gain distribution from
The Trusts.......................................... 395,016 67,065,259 110,287,707 --
---------- ------------ ------------ ---------
Net realized gain (loss)................................. 702,128 75,887,319 133,532,418 (103,174)
Change in unrealized appreciation
(depreciation) of investments......................... 1,408,394 40,944,576 42,665,225 648,068
---------- ------------ ------------ ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................................... 2,110,522 116,831,895 176,197,643 544,894
---------- ------------ ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (NOTE 2)....................... $2,457,350 $122,331,275 $193,440,262 $ 533,565
========== ============ ============ =========
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME SERIES:
-----------------------------------------------------------------
ALLIANCE
MONEY MARKET ALLIANCE INTERMEDIATE
FUND GOVERNMENT SECURITIES FUND
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 3,823,222 $ 3,606,969 $ 1,762,313 $ 1,421,306
Net realized gain (loss) on investments.................. 238,059 236,951 470,342 63,438
Change in unrealized appreciation
(depreciation) of investments......................... 121,024 (78,466) 512,287 431,540
------------ ------------ ----------- -----------
Net increase in net assets from operations............... 4,182,305 3,765,454 2,744,942 1,916,284
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 59,238,443 86,657,302 10,106,543 7,536,973
Transfers from other Funds and
Guaranteed Interest Account......................... 99,124,881 47,922,157 23,196,411 8,017,226
------------ ------------ ----------- -----------
Total............................................ 158,363,324 134,579,459 33,302,954 15,554,199
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 25,401,484 16,145,603 5,018,282 3,204,151
Transfers to other Funds and
Guaranteed Interest Account......................... 108,901,266 117,776,744 14,425,062 6,576,233
Withdrawal and administrative charges................. 307,072 297,412 75,927 54,007
------------ ------------ ----------- -----------
Total............................................ 134,609,822 134,219,759 19,519,271 9,834,391
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 23,753,502 359,700 13,783,683 5,719,808
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 99,791 (68,437) (40,620) (50,296)
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 28,035,598 4,056,717 16,488,005 7,585,796
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 97,871,518 93,814,801 37,013,989 29,428,193
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $125,907,116 $ 97,871,518 $53,501,994 $37,013,989
============ ============ =========== ===========
<CAPTION>
FIXED INCOME SERIES:
----------------------------------------------------------------
ALLIANCE ALLIANCE
QUALITY BOND HIGH YIELD
FUND FUND
---------------------------- -----------------------------
1998 1997 1998 1997
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,601,044 $ 1,622,820 $ 17,912,128 $ 10,021,713
Net realized gain (loss) on investments.................. 1,993,466 249,479 3,914,555 8,751,281
Change in unrealized appreciation
(depreciation) of investments......................... (486,113) 547,099 (36,813,923) (187,263)
----------- ----------- ------------ ------------
Net increase in net assets from operations............... 4,108,397 2,419,398 (14,987,240) 18,585,731
----------- ----------- ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 20,999,014 8,725,632 52,878,815 39,249,294
Transfers from other Funds and
Guaranteed Interest Account......................... 46,264,543 14,735,972 114,552,746 81,831,743
----------- ----------- ------------ ------------
Total............................................ 67,263,557 23,461,604 167,431,561 121,081,037
----------- ----------- ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,294,846 2,471,399 15,414,754 9,034,492
Transfers to other Funds and
Guaranteed Interest Account......................... 26,129,927 9,009,004 96,757,242 50,004,724
Withdrawal and administrative charges................. 64,190 49,238 269,447 180,111
----------- ----------- ------------ ------------
Total............................................ 30,488,963 11,529,641 112,441,443 59,219,327
----------- ----------- ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 36,774,594 11,931,963 54,990,118 61,861,710
----------- ----------- ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (65,774) (51,466) (32,954) (195,148)
----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,817,217 14,299,895 39,969,924 80,252,293
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,649,160 26,349,265 158,213,532 77,961,239
----------- ----------- ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $81,466,377 $40,649,160 $198,183,456 $158,213,532
=========== =========== ============ ============
</TABLE>
- ---------------------
See Notes to Financial Statements.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
T. ROWE PRICE EQ/PUTNAM
EQUITY INCOME GROWTH & INCOME VALUE
FUND(a) FUND(a)
----------------------------- ----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 972,619 $ 213,607 $ (27,881) $ 27,593
Net realized gain (loss) on investments.................. 1,957,941 84,219 241,200 48,562
Change in unrealized appreciation
(depreciation) of investments......................... 4,171,888 3,419,591 5,418,025 743,804
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 7,102,448 3,717,417 5,631,344 819,959
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 34,984,402 14,253,368 21,041,270 9,287,300
Transfers from other Funds and
Guaranteed Interest Account......................... 70,500,028 49,127,513 31,492,288 21,624,425
------------ ----------- ----------- -----------
Total............................................ 105,484,430 63,380,881 52,533,558 30,911,725
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 4,063,205 461,902 2,208,567 221,732
Transfers to other Funds and
Guaranteed Interest Account......................... 26,010,302 8,775,894 9,702,715 2,466,969
Withdrawal and administrative charges................. 88,752 7,224 53,830 5,138
------------ ----------- ----------- -----------
Total............................................ 30,162,259 9,245,020 11,965,112 2,693,839
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 75,322,171 54,135,861 40,568,446 28,217,886
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (94,421) (368,386) (127,918) (283,117)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 82,330,198 57,484,892 46,071,872 28,754,728
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 57,484,892 -- 28,754,728 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $139,815,090 $57,484,892 $74,826,600 $28,754,728
============ =========== =========== ===========
<CAPTION>
EQUITY SERIES:
--------------------------------------------------------------
ALLIANCE ALLIANCE
GROWTH & INCOME EQUITY INDEX
FUND FUND
------------------------------- ----------------------------
1998 1997 1998 1997
------------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (4,742,310) $ (881,670) $ (1,365,362) $ 785,831
Net realized gain (loss) on investments.................. 51,666,978 22,637,435 40,417,098 15,251,160
Change in unrealized appreciation
(depreciation) of investments......................... 39,346,894 34,617,976 170,263,193 98,430,290
------------- ------------ -------------- -----------
Net increase in net assets from operations............... 86,271,562 56,373,741 209,314,929 114,467,281
------------- ------------ -------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 101,906,524 77,902,559 169,623,980 123,805,230
Transfers from other Funds and
Guaranteed Interest Account......................... 162,800,542 159,040,741 637,861,607 497,060,564
------------- ------------ -------------- -----------
Total............................................ 264,707,066 236,943,300 807,485,587 620,865,794
------------- ------------ -------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 30,427,264 15,991,738 55,265,209 26,845,795
Transfers to other Funds and
Guaranteed Interest Account......................... 89,917,684 70,222,768 455,238,354 332,805,482
Withdrawal and administrative charges................. 678,233 387,138 1,207,740 650,256
------------- ------------ -------------- -----------
Total............................................ 121,023,181 86,601,644 511,711,303 360,301,533
------------- ------------ -------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 143,683,885 150,341,656 295,774,284 260,564,261
------------- ------------ -------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (817,183) (337,427) (1,687,941) (491,351)
------------- ------------ -------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 229,138,264 206,377,970 503,401,272 374,540,191
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 369,884,267 163,506,297 648,886,895 274,346,704
------------- ------------ -------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $599,022,531 $369,884,267 $1,152,288,167 $648,886,895
============= ============ ============== ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
--------------------------------------------------------------------
ALLIANCE
MERRILL LYNCH BASIC VALUE COMMON STOCK
EQUITY FUND(a) FUND
------------------------------ -------------------------------------
1998 1997 1998 1997
----------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 56,464 $ 28,039 $ (46,516,714) $ (40,194,434)
Net realized gain (loss) on investments.................. 703,647 32,936 1,122,099,298 520,414,631
Change in unrealized appreciation
(depreciation) of investments......................... 1,021,838 226,896 573,857,850 776,898,715
----------- ----------- -------------- --------------
Net increase in net assets from
operations............................................ 1,781,949 287,871 1,649,440,434 1,257,118,912
----------- ----------- -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,099,811 5,085,307 526,598,693 485,617,488
Transfers from other Funds and
Guaranteed Interest Account......................... 54,374,032 15,531,026 1,219,987,398 981,404,674
----------- ----------- -------------- --------------
Total............................................ 72,473,843 20,616,333 1,746,586,091 1,467,022,162
----------- ----------- -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 1,998,824 146,225 439,741,977 326,957,672
Transfers to other Funds and
Guaranteed Interest Account......................... 31,529,622 3,680,513 1,134,646,060 793,882,977
Withdrawal and administrative
charges............................................. 37,806 3,018 7,821,832 6,730,878
----------- ----------- -------------- --------------
Total............................................ 33,566,252 3,829,756 1,582,209,869 1,127,571,527
----------- ----------- -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 38,907,591 16,786,577 164,376,222 339,450,635
----------- ----------- -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (112,369) (298,904) (12,019,228) (5,291,673)
----------- ----------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 40,577,171 16,775,544 1,801,797,428 1,591,277,874
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 16,775,544 -- 5,923,975,974 4,332,698,100
----------- ----------- -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $57,352,715 $16,775,544 $7,725,773,402 $5,923,975,974
=========== =========== ============== ==============
<CAPTION>
EQUITY SERIES (CONTINUED):
------------------------------------------------------------------
MFS RESEARCH ALLIANCE GLOBAL
FUND(a) FUND
------------------------------- ---------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (486,308) $ (44,322) $ (952,981) $ 4,053,343
Net realized gain (loss) on investments.................. (916,443) 156,450 59,782,149 44,106,582
Change in unrealized appreciation
(depreciation) of investments......................... 13,393,079 477,876 60,932,110 7,345,361
------------ ------------ ------------ ------------
Net increase in net assets from
operations............................................ 11,990,328 590,004 119,761,278 55,505,286
------------ ------------ ------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 26,220,920 9,395,788 73,052,084 89,835,392
Transfers from other Funds and
Guaranteed Interest Account......................... 79,372,885 21,884,490 97,000,214 100,167,043
------------ ------------ ------------ ------------
Total............................................ 105,593,805 31,280,278 170,052,298 190,002,435
------------ ------------ ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 2,234,932 315,298 45,379,156 38,003,491
Transfers to other Funds and
Guaranteed Interest Account......................... 39,937,639 3,913,603 124,416,716 93,151,966
Withdrawal and administrative
charges............................................. 56,352 4,474 1,061,880 1,013,918
------------ ------------ ------------ ------------
Total............................................ 42,228,923 4,233,375 170,857,752 132,169,375
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 63,364,882 27,046,903 (805,454) 57,833,060
------------ ------------ ------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (280,049) (462,377) (667,287) (280,980)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 75,075,161 27,174,530 118,288,537 113,057,366
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,174,530 -- 608,511,631 495,454,265
------------ ------------ ------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $102,249,691 $27,174,530 $726,800,168 $608,511,631
============ =========== ============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
ALLIANCE T. ROWE PRICE
INTERNATIONAL INTERNATIONAL STOCK
FUND FUND(a)
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 630,063 $ 1,841,231 $ (89,213) $ (167,342)
Net realized gain (loss) on investments.................. (6,291,778) 8,984,846 (2,186,910) (1,454,589)
Change in unrealized appreciation
(depreciation) of investments......................... 17,134,710 (15,797,804) 8,173,937 (917,513)
------------ ------------ ----------- -----------
Net increase in net assets from
operations............................................ 11,472,995 (4,971,727) 5,897,814 (2,539,444)
------------ ------------ ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 18,021,919 27,672,360 17,268,615 11,943,016
Transfers from other Funds and
Guaranteed Interest Account......................... 252,313,930 151,532,780 79,807,973 48,742,022
------------ ------------ ----------- -----------
Total............................................ 270,335,849 179,205,140 97,076,588 60,685,038
------------ ------------ ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 9,618,434 9,154,376 2,262,558 551,644
Transfers to other Funds and
Guaranteed Interest Account......................... 259,822,531 143,958,994 64,643,746 19,727,736
Withdrawal and administrative
charges............................................. 226,908 226,612 65,025 12,207
------------ ------------ ----------- -----------
Total............................................ 269,667,873 153,339,982 66,971,329 20,291,587
------------ ------------ ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 667,976 25,865,158 30,105,259 40,393,451
------------ ------------ ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (208,473) 8,298 (140,255) 74,460
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 11,932,498 20,901,729 35,862,818 37,928,467
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 118,089,289 97,187,560 37,928,467 --
------------ ------------ ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $130,021,787 $118,089,289 $73,791,285 $37,928,467
============ ============ =========== ===========
<CAPTION>
EQUITY SERIES (CONTINUED):
-----------------------------------------------------------------
MORGAN STANLEY ALLIANCE
EMERGING MARKETS EQUITY AGGRESSIVE STOCK
FUND(b) FUND
---------------------------- ---------------------------------
1998 1997 1998 1997
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (77,914) $ 15,148 $ (25,699,164) $ (36,023,732)
Net realized gain (loss) on investments.................. (4,762,302) (875,317) 229,821,681 414,890,550
Change in unrealized appreciation
(depreciation) of investments......................... 34,335 (1,097,984) (233,439,908) (79,262,405)
----------- ------------ --------------- --------------
Net increase in net assets from
operations............................................ (4,805,881) (1,958,153) (29,317,391) 299,604,413
----------- ------------ -------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 4,268,805 2,087,150 292,963,500 378,453,001
Transfers from other Funds and
Guaranteed Interest Account......................... 58,497,186 17,543,713 837,060,745 1,226,614,217
----------- ------------ -------------- --------------
Total............................................ 62,765,991 19,630,863 1,130,024,245 1,605,067,218
----------- ------------ -------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 371,931 38,081 246,890,973 223,777,455
Transfers to other Funds and
Guaranteed Interest Account......................... 55,007,653 10,197,807 1,105,075,546 1,226,219,275
Withdrawal and administrative
charges............................................. 12,342 1,449 5,526,894 5,581,896
----------- ------------ -------------- --------------
Total............................................ 55,391,926 10,237,337 1,357,493,413 1,455,578,626
----------- ------------ -------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 7,374,065 9,393,526 (227,469,168) 149,488,592
----------- ------------ -------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 1,295,969 1,210,394 63,901 (445,491)
----------- ------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 3,864,153 8,645,767 (256,722,658) 448,647,514
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 8,645,767 -- 3,425,221,244 2,976,573,730
----------- ------------ -------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $12,509,920 $ 8,645,767 $3,168,498,586 $3,425,221,244
============ ============ ============== ===============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
(b) Commenced operations on August 20, 1997.
See Notes to Financial Statements.
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED):
-----------------------------------------------------------------
WARBURG PINCUS ALLIANCE
SMALL COMPANY VALUE SMALL CAP GROWTH
FUND(a) FUND(a)
------------------------------- -------------------------------
1998 1997 1998 1997
------------ ----------- ------------- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (628,813) $ (233,472) $ (1,425,679) $ (226,153)
Net realized gain (loss) on investments.................. (3,319,964) (398,282) (18,408,722) 2,928,197
Change in unrealized appreciation
(depreciation) of investments......................... (7,312,118) 22,263 12,576,541 (1,564,649)
------------ ------------ ------------- ------------
Net increase in net assets from operations............... (11,260,895) (609,491) (7,257,860) 1,137,395
------------ ------------ ------------- ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 25,746,572 17,932,084 43,309,112 15,686,202
Transfers from other Funds and
Guaranteed Interest Account......................... 45,701,935 95,994,086 363,094,583 134,506,874
------------ ------------ ------------- ------------
Total............................................ 71,448,507 113,926,170 406,403,695 150,193,076
------------ ------------ ------------- ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,085,017 710,649 3,905,019 644,310
Transfers to other Funds and
Guaranteed Interest Account......................... 34,873,684 44,374,048 319,261,827 87,128,302
Withdrawal and administrative charges................. 105,234 13,343 112,019 7,383
------------ ------------ ------------- ------------
Total............................................ 38,063,935 45,098,040 323,278,865 87,779,995
------------ ------------ ------------- ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 33,384,572 68,828,130 83,124,830 62,413,081
------------ ------------ ------------- ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... 13,573 (153,081) (23,520) (487,244)
------------ ------------ ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 22,137,250 68,065,558 75,843,450 63,063,232
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 68,065,558 -- 63,063,232 --
------------ ------------ ------------- ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $ 90,202,808 $ 68,065,558 $138,906,682 $ 63,063,232
============ ============ ============ ============
<CAPTION>
EQUITY SERIES (CONCLUDED):
---------------------------------
MFS EMERGING
GROWTH COMPANIES
FUND(a)
---------------------------------
1998 1997
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ (1,122,240) $ (59,318)
Net realized gain (loss) on investments.................. (4,911,369) 410,582
Change in unrealized appreciation
(depreciation) of investments......................... 35,293,322 405,203
------------- -----------
Net increase in net assets from operations............... 29,259,713 756,467
------------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 45,965,336 10,348,726
Transfers from other Funds and
Guaranteed Interest Account......................... 245,232,174 41,158,325
------------- -----------
Total............................................ 291,197,510 51,507,051
------------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 3,422,691 272,079
Transfers to other Funds and
Guaranteed Interest Account......................... 170,609,391 20,257,025
Withdrawal and administrative charges................. 94,296 3,323
------------- -----------
Total............................................ 174,126,378 20,532,427
------------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 117,071,132 30,974,624
------------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (199,446) (659,740)
------------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 146,131,399 31,071,351
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 31,071,351 --
------------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $177,202,750 $31,071,351
============ ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES:
-------------------------------------------------------------
ALLIANCE EQ/PUTNAM
CONSERVATIVE INVESTORS BALANCED
FUND FUND(a)
--------------------------- -----------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 2,806,823 $ 2,448,726 $ 346,828 $ 129,710
Net realized gain (loss) on investments.................. 7,693,592 3,730,623 702,128 115,430
Change in unrealized appreciation
(depreciation) of investments......................... 2,040,567 3,477,016 1,408,394 602,835
------------ ----------- ----------- -----------
Net increase in net assets from operations............... 12,540,982 9,656,365 2,457,350 847,975
------------ ----------- ----------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 19,140,568 11,365,584 10,044,027 3,699,337
Transfers from other Funds and
Guaranteed Interest Account......................... 16,914,697 8,530,415 24,576,797 15,752,330
------------ ----------- ----------- -----------
Total............................................ 36,055,265 19,895,999 34,620,824 19,451,667
------------ ----------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 8,188,450 7,295,059 975,331 192,650
Transfers to other Funds and
Guaranteed Interest Account......................... 12,810,163 14,511,104 13,658,260 7,250,221
Withdrawal and administrative charges................. 167,275 162,391 20,744 1,654
------------ ----------- ----------- -----------
Total............................................ 21,165,888 21,968,554 14,654,335 7,444,525
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
Contractowners transactions........................... 14,889,377 (2,072,555) 19,966,489 12,007,142
------------ ----------- ----------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (230,218) (172,151) (204,197) (434,093)
------------ ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 27,200,141 7,411,659 22,219,642 12,421,024
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 92,663,211 85,251,552 12,421,024 --
------------ ----------- ----------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $119,863,352 $92,663,211 $34,640,666 $12,421,024
============ =========== =========== ===========
<CAPTION>
ASSET ALLOCATION SERIES:
----------------------------------
ALLIANCE
GROWTH INVESTORS
FUND
----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............................. $ 5,499,380 $ 7,374,359
Net realized gain (loss) on investments.................. 75,887,319 38,624,261
Change in unrealized appreciation
(depreciation) of investments......................... 40,944,576 40,925,116
------------ ------------
Net increase in net assets from operations............... 122,331,275 86,923,736
------------ ------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions......................................... 90,895,614 96,835,654
Transfers from other Funds and
Guaranteed Interest Account......................... 81,033,459 86,565,969
------------ ------------
Total............................................ 171,929,073 183,401,623
------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits.................................. 50,079,041 39,593,409
Transfers to other Funds and
Guaranteed Interest Account......................... 81,495,051 76,718,000
Withdrawal and administrative charges................. 1,338,300 1,162,210
------------ ------------
Total............................................ 132,912,392 117,473,619
------------ ------------
Net increase (decrease) in net assets from
Contractowners transactions........................... 39,016,681 65,928,004
------------ ------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3)......... (840,403) (551,891)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS........................... 160,507,553 152,299,849
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS........................... 681,710,478 529,410,629
------------ ------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS........................... $842,218,031 $681,710,478
============ ============
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
--------------------------------------
ALLIANCE
BALANCED
FUND
--------------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ 17,242,619 $ 23,301,713
Net realized gain (loss) on investments........................... 133,532,418 79,099,392
Change in unrealized appreciation
(depreciation) of investments.................................. 42,665,225 45,961,244
-------------- --------------
Net increase in net assets from operations........................ 193,440,262 148,362,349
-------------- --------------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 76,987,846 84,629,925
Transfers from other Funds and
Guaranteed Interest Account.................................. 168,586,346 112,630,041
-------------- --------------
Total..................................................... 245,574,192 197,259,966
-------------- --------------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 107,639,830 96,288,584
Transfers to other Funds and
Guaranteed Interest Account.................................. 202,971,507 170,604,239
Withdrawal and administrative charges.......................... 1,699,980 1,889,094
-------------- --------------
Total..................................................... 312,311,317 268,781,917
-------------- --------------
Net increase (decrease) in net assets from
Contractowners transactions.................................... (66,737,125) (71,521,951)
-------------- --------------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (1,923,481) (620,223)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 124,779,656 76,220,175
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 1,197,956,017 1,121,735,842
-------------- --------------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $1,322,735,673 $1,197,956,017
============== ==============
<CAPTION>
ASSET ALLOCATION SERIES (CONCLUDED):
----------------------------------
MERRILL LYNCH WORLD
STRATEGY FUND(a)
------------------------------
1998 1997
---------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)...................................... $ (11,329) $ 16,034
Net realized gain (loss) on investments........................... (103,174) 33,737
Change in unrealized appreciation
(depreciation) of investments.................................. 648,068 (153,612)
---------- -----------
Net increase in net assets from operations........................ 533,565 (103,841)
---------- -----------
FROM CONTRACTOWNERS TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions.................................................. 1,929,793 1,913,915
Transfers from other Funds and
Guaranteed Interest Account.................................. 7,365,231 8,826,145
---------- -----------
Total..................................................... 9,295,024 10,740,060
---------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals
and death benefits........................................... 340,072 156,911
Transfers to other Funds and
Guaranteed Interest Account.................................. 5,454,326 4,913,746
Withdrawal and administrative charges.......................... 10,176 622
---------- -----------
Total..................................................... 5,804,574 5,071,279
---------- -----------
Net increase (decrease) in net assets from
Contractowners transactions.................................... 3,490,450 5,668,781
---------- -----------
Net (increase) decrease in amount retained by
Equitable Life in Separate Account A (Note 3).................. (179,747) (139,641)
---------- -----------
INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 3,844,268 5,425,299
NET ASSETS -- BEGINNING OF PERIOD
ATTRIBUTABLE TO CONTRACTOWNERS.................................... 5,425,299 --
---------- -----------
NET ASSETS -- END OF PERIOD (NOTE 1)
ATTRIBUTABLE TO CONTRACTOWNERS.................................... $9,269,567 $ 5,425,299
========== ===========
</TABLE>
- ---------------------
(a) Commenced operations on May 1, 1997.
See Notes to Financial Statements.
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. General
The Equitable Life Assurance Society of the United States (Equitable Life)
Separate Account A (The Account) is organized as a unit investment trust, a
type of investment company, and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Alliance
Capital Management L.P., an indirect, majority-owned subsidiary of
Equitable Life, manages The Hudson River Trust (HR Trust) and is investment
adviser for all of the investment funds of HR Trust. EQ Financial
Consultants, Inc., an indirect, wholly owned subsidiary of Equitable Life,
manages the EQ Advisors Trust (EQ Trust) and has overall responsibility for
general management and administration of EQ Trust. The Account consists of
twenty-four investment funds (Funds): Alliance Money Market Fund, Alliance
Intermediate Government Securities Fund, Alliance Quality Bond Fund,
Alliance High Yield Fund, T. Rowe Price Equity Income Fund, EQ/Putnam
Growth & Income Value Fund, Alliance Growth & Income Fund, Alliance Equity
Index Fund, Merrill Lynch Basic Value Equity Fund, Alliance Common Stock
Fund, MFS Research Fund, Alliance Global Fund, Alliance International Fund,
T. Rowe Price International Stock Fund, Morgan Stanley Emerging Markets
Equity Fund, Alliance Aggressive Stock Fund, Warburg Pincus Small Company
Value Fund, Alliance Small Cap Growth Fund, MFS Emerging Growth Companies
Fund, Alliance Conservative Investors Fund, EQ/Putnam Balanced Fund,
Alliance Growth Investors Fund, Alliance Balanced Fund and Merrill Lynch
World Strategy Fund. The assets in each fund are invested in shares of a
corresponding portfolio (Portfolio) of a mutual fund, Class 1A or Class 1B
shares of HR Trust or Class 1B shares of EQ Trust (Collectively, the
"Trusts"). Class 1A and 1B shares are offered by the Trust at net asset
value. Both classes of shares are subject to fees for investment management
and advisory services and other Trust expenses. Class 1A shares are not
subject to distribution fees imposed pursuant to a distribution plan. Class
1B shares are subject to distribution fees imposed under a distribution
plan (herein, the "Rule 12b-1 Plans") adopted pursuant to Rule 12b-1 under
the 1940 Act, as amended. The Rule 12b-1 Plans provide that the Trusts, on
behalf of each Fund, may charge annually up to 0.25% of the average daily
net assets of a Fund attributable to its Class 1B shares in respect of
activities primarily intended to result in the sale of the Class 1B shares.
These fees are reflected in the net asset value of the shares. The Trusts
are open-end, diversified investment management companies that invest
separate account assets of insurance companies.
EQFC earns fees from both Trusts under distribution agreements held with
the Trusts. EQFC also earns fees under an investment management agreement
with the EQ Trust. Alliance earns fees under an investment advisory
agreement with the HR Trust.
The Account is used to fund benefits under certain individual tax-favored
variable annuity contracts (Old Contracts), individual non-qualified
variable annuity contracts (EQUIPLAN Contracts), tax-favored and
non-qualified certificates issued under group deferred variable annuity
contracts and certain related individual contracts (EQUI-VEST Contracts),
group deferred variable annuity contracts used to fund tax-qualified
defined contribution plans (Momentum Contracts) and group variable annuity
contracts used as a funding vehicle for employers who sponsor qualified
defined contribution plans (Momentum Plus). All of these contracts and
certificates are collectively referred to as the Contracts.
The net assets of the Account are not chargeable with liabilities arising
out of any other business Equitable Life may conduct. The excess of assets
over reserves and other contract liabilities, if any, in the Account may be
transferred to Equitable Life's General Account. Equitable Life's General
Account is subject to creditor rights. Due to/from Equitable Life's General
Account represents amounts receivable/payable to the General Account is
predominately related to policy-related transactions, premiums, surrenders
and death benefits.
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP 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.
Investments are made in shares of the Trust and are valued at the net asset
values per share of the respective Portfolios. The net asset value is
determined by the Trust using the market or fair value of the underlying
assets of the Portfolio less liabilities.
Investment transactions are recorded by the Account on the trade date.
Dividends are declared by HR Trust at the end of each quarter and by EQ
Trust in the fourth quarter on the ex-dividend date. Dividends and capital
gain distributions are automatically reinvested on the ex-dividend date.
Realized gains and losses include gains and losses on redemptions of the
Trust's shares (determined on the identified cost basis) and Trust
distributions representing the net realized gains on Trust investment
transactions are distributed by the Trusts at the end of each year.
No federal income tax based on net income or realized and unrealized
capital gains is currently applicable to Contracts participating in the
Account by reason of applicable provisions of the Internal Revenue Code and
no federal income tax payable by Equitable Life is expected to affect the
unit value of Contracts participating in the Account. Accordingly, no
provision for income taxes is required. Equitable Life retains the right to
charge for any federal income tax incurred which is attributable to the
Account if the law is changed.
3. Asset Charges
The following charges are made directly against the daily net assets of the
Account and are reflected daily in the computation of the accumulation unit
values of the Contracts:
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST/
MOMENTUM
CONTRACTS
Alliance Money Market Fund,
Alliance Balanced Fund
Alliance Common Stock Fund 0.05% 0.30% 0.60% 0.30% 0.24% 1.49%
All Other Funds 0.05% 0.30% 0.60% 0.15% 0.24% 1.34%
MOMENTUM PLUS CONTRACTS--ALL
FUNDS -- 0.50% 0.25% 0.60% -- 1.35%
OLD CONTRACTS
Common Stock and Money Market
Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUIPLAN CONTRACTS
Common Stock and
Intermediate Government
Securities Funds 0.05% 0.45% 0.16% 0.08% -- .74%
EQUI-VEST SERIES 300 & SERIES 400
CONTRACTS
Alliance Money Market Fund
Alliance Common Stock Fund
Alliance Aggressive Stock Fund
Alliance Balanced Fund -- 0.60% 0.25% 0.50% -- 1.35%
All Other Funds -- 0.60% 0.24%* 0.50% -- 1.34%
</TABLE>
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
3. Asset Charges (Continued)
<TABLE>
<CAPTION>
DEATH MORTALITY EXPENSE FINANCIAL
BENEFITS RISKS EXPENSES RISKS ACCOUNTING TOTAL
------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQUI-VEST SERIES 500 CONTRACTS
All Funds -- 0.70% 0.25% 0.50% -- 1.45%
EQUI-VEST SERIES 600 CONTRACTS
All Funds -- 0.45% 0.25% 0.50% -- 1.20%
</TABLE>
----------
* During 1998, Equitable Life charged EQUI-VEST Series 300 and 400
Contracts 0.24% against the assets of the HR Trust and EQ Trust Funds
for expenses, except as noted. This voluntary expense limitation
discounted from 0.25% to 0.24% may be discontinued by Equitable Life
at its discretion.
The above charges may be retained in the Account by Equitable Life and, to
the extent retained, participate in the net investment results of the Trust
ratably with assets attributable to the Contracts.
Since the Trust shares are valued at their net asset value, investment
advisory fees and direct operating expenses of the Trust are, in effect,
passed on to the Account and are reflected in the computation of the
accumulation unit values of the Contracts.
Under the terms of the Contracts, the aggregate of these asset charges and
the charges of the Trust for advisory fees and for direct operating
expenses may not exceed a total effective annual rate of 1.75% for
EQUI-VEST and Momentum Contracts for the Alliance Money Market Fund, the
Alliance Common Stock Fund, the Alliance Aggressive Stock Fund, the
Alliance Balanced Funds and 1% for the Old Contracts and EQUIPLAN
Contracts.
Under the Contracts, the total charges may be reallocated among the various
expense categories. Equitable Life, however, intends to limit any possible
reallocation to include only the expense risks, mortality risks and death
benefit charges.
4. Contributions, Payments, Transfers and Charges
Contributions represent participant contributions under EQUI-VEST,
Momentum, Momentum Plus and EQUI-VEST Series 300 through 600 Contracts (but
excludes amounts allocated to the Guaranteed Interest Account, which are
reflected in the General Account) and participant contributions under other
Contracts (Old Contracts, EQUIPLAN) reduced by applicable deductions,
charges and state premium taxes. Contributions also include amounts applied
to purchase variable annuities. Transfers are amounts that participants
have directed to be moved among the Funds, including permitted transfers to
and from the Guaranteed Interest Account, which is part of Equitable Life's
General Account.
Variable annuity payments and death benefits are payments to participants
and beneficiaries made under the terms of the Contracts. Withdrawals are
amounts that participants have requested to be withdrawn and paid to them
or applied to purchase annuities. Withdrawal charges, if applicable, are
the deferred contingent withdrawal charges that apply to certain
withdrawals under EQUI-VEST, Momentum, Momentum Plus and EQUI-VEST Series
300 through 600 Contracts. Administrative charges, if applicable, are
deducted annually under EQUI-VEST, EQUIPLAN and Old Contracts and quarterly
under Momentum, Momentum Plus and EQUI-VEST Series 300 through 600
Contracts.
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
Accumulation units issued and redeemed during the periods indicated were:
(Acronym BP refers to total Basis Points charged for that product as
described in Footnote 3)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series:
ALLIANCE MONEY MARKET FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 1,229,299 837,383
Momentum Contracts.......................................... 386,247 483,055
Momentum Plus Contracts 135 BP.............................. 503,516 588,908
Momentum Plus Contracts 100 BP.............................. 7,375 10,050
Old Contracts............................................... 42 120,867
EQUI-VEST Contracts Series 300 & 400 135 BP................. 458,194 258,260
EQUI-VEST Contracts Series 500 145 BP....................... 547 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 941,797 877,393
Momentum Contracts.......................................... 326,686 415,858
Momentum Plus Contracts 135 BP.............................. 506,664 564,110
Momentum Plus Contracts 100 BP.............................. 10,102 10,333
Old Contracts............................................... 2,025 1,572
EQUI-VEST Contracts Series 300 & 400 135 BP................. 341,437 277,148
EQUI-VEST Contracts Series 500 145 BP....................... 156 --
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND
- ------------------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,893 5,215
Momentum Plus Contracts 135 BP.............................. 50,402 29,724
Momentum Plus Contracts 100 BP.............................. 1,592 804
EQUIPLAN CONTRACTS.......................................... 4 49,549
EQUI-VEST Contracts Series 300 & 400 134 BP................. 216,535 105,144
EQUI-VEST Contracts Series 500 145 BP....................... 78 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,863 4,851
Momentum Plus Contracts 135 BP.............................. 51,462 31,521
Momentum Plus Contracts 100 BP.............................. 471 813
EQUIPLAN CONTRACTS.......................................... 4,747 2
EQUI-VEST Contracts Series 300 & 400 134 BP................. 103,688 50,075
EQUI-VEST Contracts Series 500 145 BP....................... 45 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Fixed Income Series (Continued):
ALLIANCE QUALITY BOND FUND
- --------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 10,469 7,848
Momentum Plus Contracts 135 BP.............................. 36,968 22,668
Momentum Plus Contracts 100 BP.............................. 444 449
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 483,053 167,788
EQUI-VEST Contracts Series 500 145 BP....................... 146 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,361 5,005
Momentum Plus Contracts 135 BP.............................. 27,523 12,495
Momentum Plus Contracts 100 BP.............................. 182 636
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 209,302 80,367
EQUI-VEST Contracts Series 500 145 BP....................... 19 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE HIGH YIELD FUND
- -----------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,540 17,805
Momentum Plus Contracts 135 BP.............................. 45,063 62,992
Momentum Plus Contracts 100 BP.............................. 1,531 1,622
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 976,709 726,147
EQUI-VEST Contracts Series 500 145 BP....................... 387 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 11,692 6,772
Momentum Plus Contracts 135 BP.............................. 55,069 42,608
Momentum Plus Contracts 100 BP.............................. 1,524 1,327
Old Contracts............................................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 643,692 338,338
EQUI-VEST Contracts Series 500 145 BP....................... 8 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series:
T. ROWE PRICE EQUITY INCOME FUND
- -------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,360 --
Momentum Plus Contracts 135 BP.............................. 3,355 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 838,991 554,196
EQUI-VEST Contracts Series 500 145 BP....................... 418 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 214 --
Momentum Plus Contracts 135 BP.............................. 628 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 244,081 79,255
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
EQ/PUTNAM GROWTH & INCOME VALUE FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 523 --
Momentum Plus Contracts 135 BP.............................. 2,572 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 431,414 273,498
EQUI-VEST Contracts Series 500 145 BP....................... 407 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 328 --
Momentum Plus Contracts 100 BP.............................. 507 --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 99,601 23,834
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE GROWTH & INCOME FUND
- -----------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 52,613 45,474
Momentum Plus Contracts 135 BP.............................. 113,506 116,065
Momentum Plus Contracts 100 BP.............................. 4,425 3,889
Momentum Plus Contracts 90 BP............................... 642 1,441
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,224,228 1,286,205
EQUI-VEST Contracts Series 500 145 BP....................... 1,401 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 25,771 17,193
Momentum Plus Contracts 135 BP.............................. 87,335 46,155
Momentum Plus Contracts 100 BP.............................. 1,838 2,901
Momentum Plus Contracts 90 BP............................... 38 337
EQUI-VEST Contracts Series 300 & 400 134 BP................. 548,572 462,065
EQUI-VEST Contracts Series 500 145 BP....................... 9 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE EQUITY INDEX FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 79,518 --
Momentum Plus Contracts 135 BP.............................. 205,393 --
Momentum Plus Contracts 100 BP.............................. 6,938 --
Momentum Plus Contracts 90 BP............................... 1,097 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,094,562 2,967,392
EQUI-VEST Contracts Series 500 145 BP....................... 2,295 --
EQUI-VEST Contracts Series 600 120 BP....................... 3 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 37,943 --
Momentum Plus Contracts 135 BP.............................. 153,058 --
Momentum Plus Contracts 100 BP.............................. 1,574 --
Momentum Plus Contracts 90 BP............................... 193 --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,974,951 1,768,139
EQUI-VEST Contracts Series 500 145 BP....................... 44 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND
- -------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 3,082 --
Momentum Plus Contracts 135 BP.............................. 2,932 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 563,336 177,242
EQUI-VEST Contracts Series 500 145 BP....................... 352 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 991 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 263,606 32,592
EQUI-VEST Contracts Series 500 145 BP....................... 10 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE COMMON STOCK FUND
- --------------------------
Issued -- EQUI-VEST Contracts......................................... 4,199,955 4,383,156
Momentum Contracts.......................................... 171,967 204,382
Momentum Plus Contracts 135 BP.............................. 479,798 545,202
Momentum Plus Contracts 100 BP.............................. 10,617 41,653
Momentum Plus Contracts 90 BP............................... 2,467 6,431
Old Contracts............................................... 19 301,258
EQUIPLAN Contracts.......................................... 4 86,999
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,035,253 1,968,780
EQUI-VEST Contracts Series 500 145 BP....................... 4,784 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... 4,354,955 3,930,073
Momentum Contracts.......................................... 169,605 134,959
Momentum Plus Contracts 135 BP.............................. 539,175 354,590
Momentum Plus Contracts 100 BP.............................. 8,027 142,434
Momentum Plus Contracts 90 BP............................... 686 1,552
Old Contracts............................................... 42,795 3,085
EQUIPLAN Contracts.......................................... 14,746 1,986
EQUI-VEST Contracts Series 300 & 400 135 BP................. 992,260 660,995
EQUI-VEST Contracts Series 500 145 BP....................... 56 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MFS RESEARCH FUND
- -----------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 4,266 --
Momentum Plus Contracts 135 BP.............................. 3,956 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 811,244 273,002
EQUI-VEST Contracts Series 500 145 BP....................... 897 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 455 --
Momentum Plus Contracts 135 BP.............................. 1,331 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 327,759 36,730
EQUI-VEST Contracts Series 500 145 BP....................... 11 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GLOBAL FUND
- --------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 49,409 67,282
Momentum Plus Contracts 135 BP.............................. 127,169 173,371
Momentum Plus Contracts 100 BP.............................. 2,960 3,421
Momentum Plus Contracts 90 BP............................... 1,062 2,872
EQUI-VEST Contracts Series 300 & 400 134 BP................. 885,709 1,087,193
EQUI-VEST Contracts Series 500 145 BP....................... 509 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 40,074 36,989
Momentum Plus Contracts 135 BP.............................. 182,741 151,688
Momentum Plus Contracts 100 BP.............................. 3,546 3,187
Momentum Plus Contracts 90 BP............................... 266 468
EQUI-VEST Contracts Series 300 & 400 134 BP................. 859,826 712,463
EQUI-VEST Contracts Series 500 145 BP....................... 12 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
ALLIANCE INTERNATIONAL FUND
- ---------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 19,308 23,465
Momentum Plus Contracts 135 BP.............................. 45,097 61,102
Momentum Plus Contracts 100 BP.............................. 1,430 8,513
Momentum Plus Contracts 90 BP............................... 368 1,175
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,265,890 1,473,483
EQUI-VEST Contracts Series 500 145 BP....................... 149 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 14,348 10,479
Momentum Plus Contracts 135 BP.............................. 43,776 25,904
Momentum Plus Contracts 100 BP.............................. 860 25,384
Momentum Plus Contracts 90 BP............................... 162 387
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,262,822 1,268,707
EQUI-VEST Contracts Series 500 145 BP....................... 4 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
T. ROWE PRICE INTERNATIONAL STOCK FUND
- --------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 1,408 --
Momentum Plus Contracts 135 BP.............................. 3,038 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 922,463 590,328
EQUI-VEST Contracts Series 500 145 BP....................... 245 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 904 --
Momentum Plus Contracts 135 BP.............................. 401 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 640,201 201,762
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-25
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND
- -------------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 453 --
Momentum Plus Contracts 135 BP.............................. 1,191 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 971,105 228,577
EQUI-VEST Contracts Series 500 145 BP....................... 86 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 84 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 863,432 119,707
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE AGGRESSIVE STOCK FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... 7,874,975 12,306,387
Momentum Contracts.......................................... 567,249 663,082
Momentum Plus Contracts 135 BP.............................. 444,735 574,827
Momentum Plus Contracts 100 BP.............................. 10,329 36,380
Momentum Plus Contracts 90 BP............................... 2,726 9,299
EQUI-VEST Contracts Series 300 & 400 135 BP................. 2,038,278 2,341,814
EQUI-VEST Contracts Series 500 145 BP....................... 1,374 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 10,271,285 12,221,170
Momentum Contracts.......................................... 604,014 506,394
Momentum Plus Contracts 135 BP.............................. 567,458 369,618
Momentum Plus Contracts 100 BP.............................. 8,422 107,896
Momentum Plus Contracts 90 BP............................... 1,959 2,386
EQUI-VEST Contracts Series 300 & 400 135 BP................. 1,922,386 1,583,469
EQUI-VEST Contracts Series 500 145 BP....................... 2 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-26
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND
- ---------------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 423 --
Momentum Plus Contracts 135 BP.............................. 2,025 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 612,043 944,293
EQUI-VEST Contracts Series 500 145 BP....................... 327 --
EQUI-VEST Contracts Series 600 120 BP....................... 2 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 61 --
Momentum Plus Contracts 135 BP.............................. 482 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 329,886 367,754
EQUI-VEST Contracts Series 500 145 BP....................... 7 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE SMALL CAP GROWTH FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 28,706 6,275
Momentum Plus Contracts 135 BP.............................. 47,698 8,595
Momentum Plus Contracts 100 BP.............................. 305 --
Momentum Plus Contracts 90 BP............................... 977 466
EQUI-VEST Contracts Series 300 & 400 134 BP................. 3,265,688 1,187,782
EQUI-VEST Contracts Series 500 145 BP....................... 603 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,539 139
Momentum Plus Contracts 135 BP.............................. 14,989 743
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... 119 700,040
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,652,769 --
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-27
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Equity Series (Concluded):
MFS EMERGING GROWTH COMPANIES FUND
- ----------------------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 5,123 --
Momentum Plus Contracts 135 BP.............................. 8,576 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 2,078,356 424,497
EQUI-VEST Contracts Series 500 145 BP....................... 1,523 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 1,491 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 1,244,873 168,426
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Asset Allocation Series:
ALLIANCE CONSERVATIVE INVESTORS FUND
- ------------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 8,324 8,745
Momentum Plus Contracts 135 BP.............................. 40,973 45,283
Momentum Plus Contracts 100 BP.............................. 1,546 1,777
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 213,369 114,868
EQUI-VEST Contracts Series 500 145 BP....................... 49 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 7,000 4,397
Momentum Plus Contracts 135 BP.............................. 45,023 52,105
Momentum Plus Contracts 100 BP.............................. 2,688 1,102
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 105,278 128,454
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-28
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Continued):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Continued):
EQ/PUTNAM BALANCED FUND
- -----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 442 --
Momentum Plus Contracts 135 BP.............................. 1,376 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 290,577 175,775
EQUI-VEST Contracts Series 500 145 BP....................... 174 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 116 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 124,887 66,296
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
ALLIANCE GROWTH INVESTORS FUND
- ------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 50,095 70,069
Momentum Plus Contracts 135 BP.............................. 148,895 206,206
Momentum Plus Contracts 100 BP.............................. 4,888 3,369
Momentum Plus Contracts 90 BP............................... 685 2,935
EQUI-VEST Contracts Series 300 & 400 134 BP................. 882,636 1,019,421
EQUI-VEST Contracts Series 500 145 BP....................... 744 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 38,654 33,111
Momentum Plus Contracts 135 BP.............................. 192,540 138,201
Momentum Plus Contracts 100 BP.............................. 3,629 3,482
Momentum Plus Contracts 90 BP............................... 118 1,446
EQUI-VEST Contracts Series 300 & 400 134 BP................. 624,987 640,400
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-29
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
4. Contributions, Payments, Transfers and Charges (Concluded):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------------
1998 1997
----------------- ---------------
Asset Allocation Series (Concluded):
ALLIANCE BALANCED FUND
- ----------------------
<S> <C> <C> <C>
Issued -- EQUI-VEST Contracts......................................... 4,212,025 3,643,409
Momentum Contracts.......................................... 226,716 272,369
Momentum Plus Contracts 135 BP.............................. 155,854 168,722
Momentum Plus Contracts 100 BP.............................. 4,058 15,895
Momentum Plus Contracts 90 BP............................... 487 2,030
EQUI-VEST Contracts Series 300 & 400 135 BP................. 357,343 263,741
EQUI-VEST Contracts Series 500 145 BP....................... 493 --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
Redeemed -- EQUI-VEST Contracts......................................... 5,887,319 5,926,775
Momentum Contracts.......................................... 292,550 277,292
Momentum Plus Contracts 135 BP.............................. 220,244 131,565
Momentum Plus Contracts 100 BP.............................. 3,530 52,839
Momentum Plus Contracts 90 BP............................... 61 1,298
EQUI-VEST Contracts Series 300 & 400 135 BP................. 260,878 156,561
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
MERRILL LYNCH WORLD STRATEGY FUND
- ---------------------------------
Issued -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... 112 --
Momentum Plus Contracts 135 BP.............................. 841 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 85,123 98,231
EQUI-VEST Contracts Series 500 145 BP....................... 25 --
EQUI-VEST Contracts Series 600 120 BP....................... 1 --
Redeemed -- EQUI-VEST Contracts......................................... -- --
Momentum Contracts.......................................... -- --
Momentum Plus Contracts 135 BP.............................. 50 --
Momentum Plus Contracts 100 BP.............................. -- --
Momentum Plus Contracts 90 BP............................... -- --
EQUI-VEST Contracts Series 300 & 400 134 BP................. 53,481 45,952
EQUI-VEST Contracts Series 500 145 BP....................... -- --
EQUI-VEST Contracts Series 600 120 BP....................... -- --
</TABLE>
FSA-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets
Net assets consist of net assets attributable to: (i) Contracts in the
accumulation period, which are represented by Contract accumulation units
outstanding multiplied by net unit values and (ii) actuarial reserves and
other liabilities attributable to Contracts in the payout period which are
not represented by accumulation units or unit values.
Listed below are components of net assets:
<TABLE>
<CAPTION>
FIXED INCOME SERIES: EQUITY SERIES:
------------------------------------------------------------ ----------------------------
ALLIANCE
INTER- EQ/PUTNAM
MEDIATE ALLIANCE ALLIANCE T. ROWE GROWTH &
ALLIANCE GOVERNMENT QUALITY HIGH PRICE EQUITY INCOME
MONEY SECURITIES BOND YIELD INCOME VALUE
MARKET FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ............. 38,523,428 -- -- -- -- --
Net assets attributable
to Old Contracts in
accumulation period ............. 4,312,389 -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ............. -- 2,616,986 -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ............. 11,218,510 1,437,192 1,964,317 5,501,246 149,136 65,510
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ............. 38,847,043 9,240,280 6,425,658 16,040,479 276,389 175,260
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ............. 1,159,113 427,602 179,813 761,000 -- --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ............. -- -- -- -- -- --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ............. 31,535,332 39,758,609 72,429,089 175,147,544 139,347,246 74,544,834
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ............. 39,859 3,410 13,160 33,807 42,218 40,895
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ............. -- -- -- 89 101 101
Net assets attributable
to actuarial reserves,
financial reserves, and
other contract
liabilities
attributable to
Contracts in payout ............. 271,442 17,915 454,340 699,291 -- --
------------ ----------- ----------- ------------ ------------ -----------
$125,907,116 $53,501,994 $81,466,377 $198,183,456 $139,815,090 $74,826,600
============ =========== =========== ============ ============ ===========
</TABLE>
FSA-31
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
MERRILL
ALLIANCE ALLIANCE LYNCH BASIC
GROWTH & EQUITY VALUE ALLIANCE MFS ALLIANCE
INCOME INDEX EQUITY COMMON STOCK RESEARCH GLOBAL
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 5,578,588,050 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- 107,448,483 -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- 30,994,430 -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 20,534,526 36,675,445 393,479 191,376,071 536,562 28,455,218
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 44,797,660 76,744,192 191,344 299,298,111 264,368 75,882,027
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 1,128,819 2,312,294 -- 8,221,702 -- 1,769,643
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 297,636 800,229 -- 1,267,407 -- 471,680
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 529,235,127 1,032,108,886 56,734,346 1,468,792,789 101,361,254 619,628,198
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 143,000 233,384 33,448 486,472 87,507 48,890
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- 311 98 206 -- 98
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 2,885,763 3,413,426 -- 39,299,681 -- 544,414
------------ -------------- ----------- -------------- ------------ ------------
$599,022,531 $1,152,288,167 $57,352,715 $7,725,773,402 $102,249,691 $726,800,168
============ ============== =========== ============== ============ ============
</TABLE>
FSA-32
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Continued):
<TABLE>
<CAPTION>
EQUITY SERIES (CONTINUED):
---------------------------------------------------------------------------------------------------
T. ROWE MORGAN WARBURG
PRICE STANLEY PINCUS ALLIANCE
ALLIANCE INTER- EMERGING ALLIANCE SMALL SMALL
INTER- NATIONAL MARKETS AGGRESSIVE COMPANY CAP
NATIONAL STOCK EQUITY STOCK VALUE GROWTH
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- 2,304,985,451 -- --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 4,377,889 55,292 25,903 125,948,516 38,050 3,237,317
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 10,184,498 261,030 95,457 186,727,114 128,276 4,808,507
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... 450,353 -- -- 5,101,533 -- 36,371
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... 114,042 -- -- 911,462 -- 158,152
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 114,319,069 73,451,923 12,381,723 540,090,983 90,009,744 130,505,375
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 13,485 23,040 6,756 123,823 26,572 52,506
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... -- -- 81 -- 166 87
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... 562,451 -- -- 4,609,704 -- 108,367
------------ ----------- ----------- -------------- ----------- ------------
$130,021,787 $73,791,285 $12,509,920 $3,168,498,586 $90,202,808 $138,906,682
============ =========== =========== ============== =========== ============
</TABLE>
FSA-33
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. Net Assets (Concluded):
<TABLE>
<CAPTION>
EQUITY SERIES (CONCLUDED): ASSET ALLOCATION SERIES:
------------------------------- ------------------------------------------------------------------
MFS ALLIANCE MERRILL
EMERGING CONSER- ALLIANCE LYNCH
GROWTH VATIVE EQ/PUTNAM GROWTH ALLIANCE WORLD
COMPANIES INVESTORS BALANCED INVESTORS BALANCED STRATEGY
FUND FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period ....... -- -- -- -- 1,097,942,924 --
Net assets attributable
to Old Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period ....... -- -- -- -- -- --
Net assets attributable
to Momentum
Contracts in
accumulation period ....... 825,008 3,489,106 55,321 28,639,790 44,449,206 12,249
Net assets attributable
to Momentum Plus
Contracts 135 BP in
accumulation period ....... 763,267 17,445,149 128,104 92,985,008 59,417,722 76,157
Net assets attributable
to Momentum Plus
Contracts 100 BP in
accumulation period ....... -- 576,228 -- 2,373,243 1,662,704 --
Net assets attributable
to Momentum Plus
Contracts 90 BP in
accumulation period ....... -- -- -- 307,598 166,289 --
Net assets attributable
to EQUI-VEST Series 300
& 400 Contracts in
accumulation period ....... 175,456,981 97,305,713 34,439,759 715,666,898 118,465,723 9,178,694
Net assets attributable
to EQUI-VEST Series 500
Contracts 145 BP in
accumulation period ....... 157,390 5,034 17,482 75,836 50,581 2,372
Net assets attributable
to EQUI-VEST Series 600
Contracts 120 BP in
accumulation period ....... 104 103 -- 102 -- 95
Net assets attributable
to actuarial reserves,
financial reserves and
other contract
liabilities
attributable to
Contracts in payout ....... -- 1,042,019 -- 2,169,556 580,524 --
------------ ------------ ----------- ------------ -------------- ----------
$177,202,750 $119,863,352 $34,640,666 $842,218,031 $1,322,735,673 $9,269,567
============ ============ =========== ============ ============== ==========
</TABLE>
FSA-34
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values
Shown below is accumulation unit value information for units outstanding.
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59 $22.66
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $36.76 $35.12 $33.52 $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of units outstanding,
end of period (000's)........ 117 119 129 140 147 168 204 246 289 310
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89 $20.32
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Unit value, end of period....... $30.55 $29.41 $28.28 $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of EQUI-VEST units
outstanding, end of period
(000's)...................... 1,261 973 1,013 1,021 1,000 1,065 1,201 1,325 1,307 1,045
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Number of Momentum units
outstanding, end of
period (000's)............... 367 308 240 188 166 56
======= ======= ======= ======= ======= =======
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $116.21 $111.75 $107.55 $103.10 $100.47 $100.00
======== ======== ======== ======== ======== ========
Unit value, end of period........................ $120.76 $116.21 $111.75 $107.55 $103.10 $100.47
======== ======== ======== ======== ======== ========
Number of units outstanding, end of period (000's) 322 325 307 299 474 62
======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE MONEY MARKET FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $110.26 $105.65 $100.00
======== ======== ========
Unit value, end of period........................ $114.98 $110.26 $105.65
======== ======== ========
Number of units outstanding, end of period (000's) 10 13 13
======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-35
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $115.66 $111.21 $107.04 $102.61 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $120.19 $115.66 $111.21 $107.04 $102.61
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 262 146 165 81 63
======== ========= ========= ======== ========
</TABLE>
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE MONEY MARKET FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.68
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- ------- -------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12 $28.89
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Unit value, end of period....... $58.81 $54.83 $51.34 $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 45 50 55 50 54 58 66 74 82 91
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 11 10 10 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-36
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $114.78 $108.45 $105.94 $ 94.76 $100.44 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $122.00 $114.78 $108.45 $105.94 $ 94.76 $100.44
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 76 77 81 88 64 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $112.32 $105.75 $100.00
======== ======== =========
Unit value, end of period........................ $119.81 $112.32 $105.75
======== ======== =========
Number of units outstanding, end of period (000's) 4 2 2
======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND -- EQUI-VEST
SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $118.98 $112.40 $109.80 $ 98.19 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $126.48 $118.98 $112.40 $109.80 $ 98.19
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 314 202 146 89 32
======== ========= ========= ======== ========
</TABLE>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-37
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.32
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 15 10 7 4 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $127.99 $118.87 $114.38 $ 99.07 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $137.23 $127.99 $118.87 $114.38 $ 99.07
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 47 37 28 17 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-38
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE QUALITY BOND FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $117.60 $108.84 $100.00
======== ======== =========
Unit value, end of period........................ $126.54 $117.60 $108.84
======== ======== =========
Number of units outstanding, end of period (000's) 1 1 1
======== ======== =========
<CAPTION>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $121.30 $112.65 $108.38 $ 93.87 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $130.07 $121.30 $112.65 $108.38 $ 93.87
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 557 283 196 135 53
======== ========= ========= ======== ========
</TABLE>
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE QUALITY BOND FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.62
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994* TO
1998 1997 1996 1995 DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 37 29 18 7 1
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-39
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.56 $146.80 $121.10 $102.37 $106.74 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $160.53 $171.56 $146.80 $121.10 $102.37 $106.74
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 100 110 94 70 38 1
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996
1998 1997 TO DECEMBER 31, 1996*
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $149.49 $127.46 $100.00
======== ======== =========
Unit value, end of period........................ $140.38 $149.49 $127.46
======== ======== =========
Number of units outstanding, end of period (000's) 5 5 5
======== ======== =========
<CAPTION>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $160.74 $137.53 $113.44 $ 95.88 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $150.42 $160.74 $137.53 $113.44 $ 95.88
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 1,164 831 444 209 99
======== ========= ========= ======== ========
</TABLE>
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-40
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE HIGH YIELD FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 89.20
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $130.25
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.39
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.56
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-41
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE EQUITY INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.61
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.04 $100.00
========= =========
Unit value, end of period........................ $130.25 $121.04
========= =========
Number of units outstanding, end of period (000's) 1,070 475
========= =========
</TABLE>
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.00
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE EQUITY INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.12
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-42
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $128.20
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.60
=========
Number of units outstanding, end of period (000's) 2
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.77
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.82
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-43
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.17 $100.00
========= ========
Unit value, end of period........................ $128.20 $115.17
========= ========
Number of units outstanding, end of period (000's) 581 250
========= ========
</TABLE>
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.48
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM GROWTH & INCOME VALUE FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.60
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 96 69 41 17 4
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-44
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- -------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.60 $143.63 $121.25 $ 99.06 $100.00
======== ======== ========= ======== ========
Unit value, end of period........................ $214.14 $179.60 $143.63 $121.25 $ 99.06
======== ======== ========= ======== ========
Number of units outstanding, end of period (000's) 209 183 121 67 9
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $155.11 $123.61 $100.00
======== ======== =========
Unit value, end of period........................ $185.60 $155.11 $123.61
======== ======== =========
Number of units outstanding, end of period (000's) 6 3 3
======== ======== =========
</TABLE>
ALLIANCE GROWTH & INCOME FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $145.48 $115.81
======== ========
Unit value, end of period........................ $174.26 $145.48
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $179.30 $143.37 $121.02 $ 98.86 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $213.81 $179.30 $143.37 $121.02 $ 98.86
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 2,475 1,800 975 498 210
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-45
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE GROWTH & INCOME FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.73
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 135 94 51 12 1
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.58 $164.08 $135.92 $100.94 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.11 $214.58 $164.08 $135.92 $100.94
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 283 231 128 44 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-46
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $170.23 $139.70 $100.00
======== ======== =========
Unit value, end of period........................ $215.84 $170.23 $139.70
======== ======== =========
Number of units outstanding, end of period (000's) 11 5 4
======== ======== =========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $150.05 $114.21
======== ========
Unit value, end of period........................ $190.44 $150.05
======== ========
Number of units outstanding, end of period (000's) 4 3
======== ========
<TABLE>
<CAPTION>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $214.66 $164.12 $135.94 $100.95 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $271.24 $214.66 $164.12 $135.94 $100.95
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,805 2,686 1,486 592 47
======== ========= ========= ======== ========
</TABLE>
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.68
=========
Number of units outstanding, end of period (000's) 2
=========
- ------------------
*Date on which units were made available for sale.
FSA-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE EQUITY INDEX FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.69
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $127.67
=========
Number of units outstanding, end of period (000's) 3
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.58
=========
Number of units outstanding, end of period (000's) 2
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.75
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH BASIC VALUE EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.80
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MERRILL LYNCH BASIC VALUE EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.97 $100.00
========= ========
Unit value, end of period........................ $127.67 $115.97
========= ========
Number of units outstanding, end of period (000's) 444 145
========= ========
</TABLE>
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.80
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH BASIC VALUE EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 97.91
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- OLD CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $ 89.56 $97.97 $78.37
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $407.19 $316.64 $246.57 $199.66 $151.67 $155.96 $125.72 $122.56 $89.56 $97.97
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of units outstanding,
end of period (000's)........ 264 307 345 387 438 467 525 598 694 780
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 100 AND 200/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $ 75.67 $83.40 $67.22
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Unit value, end of period....... $323.75 $253.68 $199.05 $162.42 $124.32 $128.81 $104.63 $102.76 $75.67 $83.40
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 17,231 17,386 16,933 16,292 15,749 13,917 11,841 10,292 9,670 8,645
======== ======== ========= ======== ======== ========= ======== ======== ======== ========
Number of Momentum units
outstanding, end of
period (000's)............... 591 519 403 270 120
======== ======== ========= ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUIPLAN CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05 $ 84.83
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Unit value, end of period....... $441.07 $342.99 $267.08 $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
Number of units outstanding,
end of period (000's)........ 70 85 96 108 119 124 135 144 157 177
======== ======== ========= ======== ======== ======== ========= ======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $207.00 $162.39 $132.47 $101.38 $105.01 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $264.22 $207.00 $162.39 $132.47 $101.38 $105.01
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,133 1,192 1,039 706 330 12
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $161.04 $125.89 $100.00
======== ======== =========
Unit value, end of period........................ $206.28 $161.04 $125.89
======== ======== =========
Number of units outstanding, end of period (000's) 40 37 140
======== ======== =========
</TABLE>
ALLIANCE COMMON STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $148.44 $115.92
======== ========
Unit value, end of period........................ $190.33 $148.44
======== ========
Number of units outstanding, end of period (000's) 7 5
======== ========
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $198.12 $155.42 $126.78 $ 97.03 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $252.88 $198.12 $155.42 $126.78 $ 97.03
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 5,808 4,765 3,457 1,989 948
======== ========= ========= ======== ========
</TABLE>
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) 5
=========
- ------------------
*Date on which units were made available for sale.
FSA-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE COMMON STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.87
=========
Number of units outstanding, end of period (000's) --
=========
MFS RESEARCH FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $140.83
=========
Number of units outstanding, end of period (000's) 4
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.75
=========
Number of units outstanding, end of period (000's) 3
=========
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.92
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-52
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MFS RESEARCH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $100.97
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MFS RESEARCH FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $115.01 $100.00
========= ========
Unit value, end of period........................ $140.83 $115.01
========= ========
Number of units outstanding, end of period (000's) 720 236
========= ========
</TABLE>
MFS RESEARCH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 134 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.99
=========
Number of units outstanding, end of period (000's) 1
=========
MFS RESEARCH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.10
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-53
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 156 147 116 62 16
======== ========= ========= ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $154.12 $140.51 $124.30 $106.04 $102.14 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $185.78 $154.12 $140.51 $124.30 $106.04 $102.14
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 408 464 459 391 223 8
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $128.51 $116.37 $100.00
======== ======== =========
Unit value, end of period........................ $154.96 $128.51 $116.37
======== ======== =========
Number of units outstanding, end of period (000's) 11 12 13
======== ======== =========
</TABLE>
ALLIANCE GLOBAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.12 $110.47
======== ========
Unit value, end of period........................ $147.40 $122.12
======== ========
Number of units outstanding, end of period (000's) 3 2
======== ========
<TABLE>
<CAPTION>
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
--------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $151.87 $138.00 $122.06 $104.12 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $182.50 $151.87 $138.00 $122.06 $104.12
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,395 3,369 2,995 2,121 1,305
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-54
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE GLOBAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.37
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.82 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.82 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 37 32 19 0
======== ========= ========= ========
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.89 $112.81 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.68 $107.89 $112.81 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 87 85 54 3
======== ========= ========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-55
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $108.42 $112.96 $100.00
======== ======== =========
Unit value, end of period........................ $118.67 $108.42 $112.96
======== ======== =========
Number of units outstanding, end of period (000's) 4 3 21
======== ======== =========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $104.70 $108.98
======== ========
Unit value, end of period........................ $114.73 $104.70
======== ========
Number of units outstanding, end of period (000's) 1 788
======== ========
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
----------------------------- SEPTEMBER 1, 1994*
1998 1997 1996 TO DECEMBER 31, 1995
-------- --------- --------- -----------------------
<S> <C> <C> <C> <C>
Unit value, beginning of period.................. $107.92 $112.83 $104.15 $100.00
======== ========= ========= ========
Unit value, end of period........................ $117.72 $107.92 $112.83 $104.15
======== ========= ========= ========
Number of units outstanding, end of period (000's) 971 968 763 141
======== ========= ========= ========
</TABLE>
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE INTERNATIONAL FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 93.00
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-56
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.49
=========
Number of units outstanding, end of period (000's) 1
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 98.95
=========
Number of units outstanding, end of period (000's) 3
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.11
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 99.16
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-57
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 97.61 $100.00
========= ========
Unit value, end of period........................ $109.49 $ 97.61
========= ========
Number of units outstanding, end of period (000's) 671 387
========= ========
</TABLE>
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.04
=========
Number of units outstanding, end of period (000's) --
=========
T. ROWE PRICE INTERNATIONAL STOCK FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.15
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 57.18
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.23
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-58
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.38
=========
Number of units outstanding, end of period (000's) --
=========
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.42
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED AUGUST 20, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- -----------------------
<S> <C> <C>
Unit value, beginning of period.................. $ 79.41 $100.00
========= ========
Unit value, end of period........................ $ 57.18 $ 79.41
========= ========
Number of units outstanding, end of period (000's) 217 109
========= ========
</TABLE>
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.40
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MORGAN STANLEY EMERGING MARKETS EQUITY FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 81.49
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- --------- -------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86 $18.09
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Unit value, end of period....... $89.92 $90.75 $82.91 $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 25,634 28,030 27,945 25,821 24,787 21,496 17,986 12,962 9,545 8,134
======== ======== ========= ======== ======== ========= ======== ======== ======== =========
Number of Momentum units
outstanding, end of
period (000's)............... 1,401 1,437 1,281 969 620 258
======== ======== ========= ======== ======== =========
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $171.96 $157.31 $130.50 $100.49 $105.90 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $170.12 $171.96 $157.31 $130.50 $100.49 $105.90
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 1,098 1,220 1,070 718 350 12
======== ========= ========= ======== ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-60
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $137.72 $125.54 $100.00
======== ======== =========
Unit value, end of period........................ $136.73 $137.72 $125.54
======== ======== =========
Number of units outstanding, end of period (000's) 37 35 109
======== ======== =========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $119.41 $108.74
======== ========
Unit value, end of period........................ $118.68 $119.41
======== ========
Number of units outstanding, end of period (000's) 8 7
======== ========
<TABLE>
<CAPTION>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $163.33 $149.41 $123.95 $ 95.45 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $161.59 $163.33 $149.41 $123.95 $ 95.45
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,342 3,226 2,468 1,310 664
======== ========= ========= ======== ========
</TABLE>
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) 1
=========
ALLIANCE AGGRESSIVE STOCK FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 90.25
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-61
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $104.82
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.08
=========
Number of units outstanding, end of period (000's) 2
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.22
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 83.26
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-62
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
WARBURG PINCUS SMALL COMPANY VALUE FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $118.06 $100.00
========= ========
Unit value, end of period........................ $104.82 $118.06
========= ========
Number of units outstanding, end of period (000's) 859 577
========= ========
</TABLE>
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.78
=========
Number of units outstanding, end of period (000's) --
=========
WARBURG PINCUS SMALL COMPANY VALUE FUND --
EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 82.88
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 27 6
========= ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-63
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.54 $100.00
========= ========
Unit value, end of period........................ $118.55 $125.54
========= ========
Number of units outstanding, end of period (000's) 41 8
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.25
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE SMALL CAP GROWTH FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $119.45
=========
Number of units outstanding, end of period (000's) 1
=========
<TABLE>
<CAPTION>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $125.55 $100.00
========= ========
Unit value, end of period........................ $118.57 $125.55
========= ========
Number of units outstanding, end of period (000's) 1,101 488
========= ========
</TABLE>
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-64
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE SMALL CAP GROWTH FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 86.94
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $161.04
=========
Number of units outstanding, end of period (000's) 5
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.73
=========
Number of units outstanding, end of period (000's) 7
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.91
=========
Number of units outstanding, end of period (000's) --
=========
MFS EMERGING GROWTH COMPANIES FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $107.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-65
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $121.34 $100.00
========= ========
Unit value, end of period........................ $161.04 $121.34
========= ========
Number of units outstanding, end of period (000's) 1,090 256
========= ========
</TABLE>
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.41
=========
Number of units outstanding, end of period (000's) 1
=========
MFS EMERGING GROWTH COMPANIES FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $103.53
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 24 22 18 11 3
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-66
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $128.45 $114.99 $110.81 $ 93.29 $ 98.60 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $144.30 $128.45 $114.99 $110.81 $ 93.29 $ 98.60
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 121 125 136 129 92 10
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $122.71 $109.47 $100.00
======== ======== =========
Unit value, end of period........................ $138.35 $122.71 $109.47
======== ======== =========
Number of units outstanding, end of period (000's) 4 5 5
======== ======== =========
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------------------
1998 1997 1996 1995 1994
-------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $130.98 $117.25 $112.97 $ 95.10 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $147.17 $130.98 $117.25 $112.97 $ 95.10
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 661 553 567 491 325
======== ========= ========= ======== ========
</TABLE>
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE CONSERVATIVE INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.74
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-67
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
EQ/PUTNAM BALANCED FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $125.16
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.67
=========
Number of units outstanding, end of period (000's) 1
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.84
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.89
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-68
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $113.46 $100.00
========= ========
Unit value, end of period........................ $125.16 $113.46
========= ========
Number of units outstanding, end of period (000's) 275 109
========= ========
</TABLE>
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.05
=========
Number of units outstanding, end of period (000's) --
=========
EQ/PUTNAM BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.17
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM CONTRACTS
YEARS ENDED DECEMBER 31,
-------------------------------------- JUNE 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 159 147 110 57 10
======== ========= ========= ======== ========
</TABLE>
- ------------------
*Date on which units were made available for sale.
FSA-69
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $155.46 $134.95 $121.49 $ 97.45 $101.99 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $182.69 155.46 $134.95 $121.49 $ 97.45 $101.99
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 509 553 508 375 188 13
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $135.20 $116.95 $100.00
======== ======== =========
Unit value, end of period........................ $159.46 $135.20 $116.95
======== ======== =========
Number of units outstanding, end of period (000's) 15 14 15
======== ======== =========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $126.72 $109.51
======== ========
Unit value, end of period........................ $149.61 $126.72
======== ========
Number of units outstanding, end of period (000's) 2 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 134 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 1, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $153.69 $133.40 $120.08 $ 96.31 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $180.63 $153.69 $133.40 $120.08 $ 96.31
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 3,962 3,704 3,325 2,113 1,023
======== ========= ========= ======== ========
</TABLE>
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) 1
=========
- ------------------
*Date on which units were made available for sale.
FSA-70
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE GROWTH INVESTORS FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $101.93
=========
Number of units outstanding, end of period (000's) --
=========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST/MOMENTUM** CONTRACTS
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------- -------- -------- -------- -------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69 $15.80
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Unit value, end of period....... $45.07 $38.66 $34.06 $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of EQUI-VEST units
outstanding, end of
period (000's)............... 24,361 26,036 28,319 30,212 32,664 31,259 25,975 21,100 19,423 16,810
======= ======== ======== ======== ======== ======== ======= ======= ======== =======
Number of Momentum units
outstanding, end of
period (000's)............... 986 1,052 1,057 957 776 348
======= ======== ======== ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
------------------------------------------------- SEPTEMBER 9, 1993*
1998 1997 1996 1995 1994 TO DECEMBER 31, 1993
-------- --------- -------- -------- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $136.14 $120.01 $108.95 $ 92.22 $101.63 $100.00
======== ========= ========= ======== ======== ========
Unit value, end of period........................ $158.63 $136.14 $120.01 $108.95 $ 92.22 $101.63
======== ========= ========= ======== ======== ========
Number of units outstanding, end of period (000's) 375 439 417 336 188 9
======== ========= ========= ======== ======== ========
<CAPTION>
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
YEARS ENDED
DECEMBER 31,
-------------------- SEPTEMBER 1, 1996*
1998 1997 TO DECEMBER 31, 1996
-------- -------- ------------------------
<S> <C> <C> <C>
Unit value, beginning of period.................. $129.97 $114.16 $100.00
======== ======== =========
Unit value, end of period........................ $151.97 $129.97 $114.16
======== ======== =========
Number of units outstanding, end of period (000's) 11 10 48
======== ======== =========
</TABLE>
- ------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
FSA-71
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
ALLIANCE BALANCED FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
YEARS ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
Unit value, beginning of period.................. $122.68 $100.00
======== ========
Unit value, end of period........................ $143.60 $122.68
======== ========
Number of units outstanding, end of period (000's) 1 1
======== ========
<TABLE>
<CAPTION>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 300 AND 400 CONTRACTS: 135 B.P.
YEARS ENDED DECEMBER 31,
-------------------------------------- JANUARY 3, 1994*
1998 1997 1996 1995 TO DECEMBER 31, 1994
-------- --------- --------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period.................. $135.29 $119.26 $108.26 $ 91.64 $100.00
======== ========= ========= ======== ========
Unit value, end of period........................ $157.63 $135.29 $119.26 $108.26 $ 91.64
======== ========= ========= ======== ========
Number of units outstanding, end of period (000's) 752 655 548 386 289
======== ========= ========= ======== ========
</TABLE>
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
ALLIANCE BALANCED FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $102.39
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-72
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Continued):
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM CONTRACTS
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $109.37
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 135 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.28
=========
Number of units outstanding, end of period (000's) 1
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 100 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.44
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- MOMENTUM PLUS CONTRACTS: 90 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 96.49
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-73
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1998
6. Accumulation Unit Values (Concluded):
<TABLE>
<CAPTION>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 100 THROUGH 400 CONTRACTS
YEAR ENDED MAY 1, 1997* TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period.................. $103.77 $100.00
========= ========
Unit value, end of period........................ $109.37 $103.77
========= ========
Number of units outstanding, end of period (000's) 84 52
========= ========
</TABLE>
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 500 CONTRACTS: 145 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.86
=========
Number of units outstanding, end of period (000's) --
=========
MERRILL LYNCH WORLD STRATEGY FUND -- EQUI-VEST SERIES 600 CONTRACTS: 120 B.P.
JULY 13, 1998*
TO DECEMBER 31, 1998
-----------------------
Unit value, beginning of period.................. $100.00
=========
Unit value, end of period........................ $ 94.96
=========
Number of units outstanding, end of period (000's) --
=========
- ------------------
*Date on which units were made available for sale.
FSA-74
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and comprehensive
income and of cash flows present fairly, in all material respects, the financial
position of The Equitable Life Assurance Society of the United States and its
subsidiaries ("Equitable Life") at December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Equitable
Life's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its method of accounting for long-lived assets in 1996.
/s/PricewaterhouseCoopers LLP
- -----------------------------
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,993.7 $ 19,630.9
Held to maturity, at amortized cost..................................... 125.0 -
Mortgage loans on real estate............................................. 2,809.9 2,611.4
Equity real estate........................................................ 1,676.9 2,495.1
Policy loans.............................................................. 2,086.7 2,422.9
Other equity investments.................................................. 713.3 951.5
Investment in and loans to affiliates..................................... 928.5 731.1
Other invested assets..................................................... 808.2 612.2
----------------- -----------------
Total investments..................................................... 28,142.2 29,455.1
Cash and cash equivalents................................................... 1,245.5 300.5
Deferred policy acquisition costs........................................... 3,563.8 3,236.6
Amounts due from discontinued operations.................................... 2.7 572.8
Other assets................................................................ 3,051.9 2,687.4
Closed Block assets......................................................... 8,632.4 8,566.6
Separate Accounts assets.................................................... 43,302.3 36,538.7
----------------- -----------------
Total Assets................................................................ $ 87,940.8 $ 81,357.7
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 20,889.7 $ 21,579.5
Future policy benefits and other policyholders' liabilities................. 4,694.2 4,553.8
Short-term and long-term debt............................................... 1,181.7 1,716.7
Other liabilities........................................................... 3,474.3 3,267.2
Closed Block liabilities.................................................... 9,077.0 9,073.7
Separate Accounts liabilities............................................... 43,211.3 36,306.3
----------------- -----------------
Total liabilities..................................................... 82,528.2 76,497.2
----------------- -----------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 3,110.2 3,105.8
Retained earnings........................................................... 1,944.1 1,235.9
Accumulated other comprehensive income...................................... 355.8 516.3
----------------- -----------------
Total shareholder's equity............................................ 5,412.6 4,860.5
----------------- -----------------
Total Liabilities and Shareholder's Equity.................................. $ 87,940.8 $ 81,357.7
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,056.2 $ 950.6 $ 874.0
Premiums...................................................... 588.1 601.5 597.6
Net investment income......................................... 2,228.1 2,282.8 2,203.6
Investment gains (losses), net................................ 100.2 (45.2) (9.8)
Commissions, fees and other income............................ 1,503.0 1,227.2 1,081.8
Contribution from the Closed Block............................ 87.1 102.5 125.0
----------------- ----------------- -----------------
Total revenues.......................................... 5,562.7 5,119.4 4,872.2
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,153.0 1,266.2 1,270.2
Policyholders' benefits....................................... 1,024.7 978.6 1,317.7
Other operating costs and expenses............................ 2,201.2 2,203.9 2,075.7
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,378.9 4,448.7 4,663.6
----------------- ----------------- -----------------
Earnings from continuing operations before Federal
income taxes, minority interest and cumulative
effect of accounting change................................. 1,183.8 670.7 208.6
Federal income taxes.......................................... 353.1 91.5 9.7
Minority interest in net income of consolidated subsidiaries.. 125.2 54.8 81.7
----------------- ----------------- -----------------
Earnings from continuing operations before cumulative
effect of accounting change................................. 705.5 524.4 117.2
Discontinued operations, net of Federal income taxes.......... 2.7 (87.2) (83.8)
Cumulative effect of accounting change, net of Federal
income taxes................................................ - - (23.1)
----------------- ----------------- -----------------
Net Earnings.................................................. $ 708.2 $ 437.2 $ 10.3
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 3,105.8 3,105.8 3,105.8
Additional capital in excess of par value..................... 4.4 - -
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 3,110.2 3,105.8 3,105.8
Retained earnings, beginning of year.......................... 1,235.9 798.7 788.4
Net earnings.................................................. 708.2 437.2 10.3
----------------- ----------------- -----------------
Retained earnings, end of year................................ 1,944.1 1,235.9 798.7
----------------- ----------------- -----------------
Accumulated other comprehensive income,
beginning of year........................................... 516.3 177.0 361.4
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Accumulated other comprehensive income, end of year........... 355.8 516.3 177.0
----------------- ----------------- -----------------
Total Shareholder's Equity, End of Year....................... $ 5,412.6 $ 4,860.5 $ 4,084.0
================= ================= =================
COMPREHENSIVE INCOME
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
----------------- ----------------- -----------------
Change in unrealized gains (losses), net of reclassification
adjustment.................................................. (149.5) 343.7 (206.6)
Minimum pension liability adjustment.......................... (11.0) (4.4) 22.2
----------------- ----------------- -----------------
Other comprehensive income.................................... (160.5) 339.3 (184.4)
----------------- ----------------- -----------------
Comprehensive Income.......................................... $ 547.7 $ 776.5 $ (174.1)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net earnings.................................................. $ 708.2 $ 437.2 $ 10.3
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,153.0 1,266.2 1,270.2
Universal life and investment-type product
policy fee income......................................... (1,056.2) (950.6) (874.0)
Investment (gains) losses................................... (100.2) 45.2 9.8
Change in Federal income tax payable........................ 123.1 (74.4) (197.1)
Other, net.................................................. (324.9) 169.4 330.2
----------------- ----------------- -----------------
Net cash provided by operating activities..................... 503.0 893.0 549.4
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 2,289.0 2,702.9 2,275.1
Sales....................................................... 16,972.1 10,385.9 8,964.3
Purchases................................................... (18,578.5) (13,205.4) (12,559.6)
Decrease (increase) in short-term investments............... 102.4 (555.0) 450.3
Decrease in loans to discontinued operations................ 660.0 420.1 1,017.0
Sale of subsidiaries........................................ - 261.0 -
Other, net.................................................. (341.8) (612.6) (281.0)
----------------- ----------------- -----------------
Net cash provided (used) by investing activities.............. 1,103.2 (603.1) (133.9)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 1,508.1 1,281.7 1,925.4
Withdrawals............................................... (1,724.6) (1,886.8) (2,385.2)
Net (decrease) increase in short-term financings............ (243.5) 419.9 (.3)
Repayments of long-term debt................................ (24.5) (196.4) (124.8)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... (87.2) (83.9) -
Other, net.................................................. (89.5) (62.7) (66.5)
----------------- ----------------- -----------------
Net cash used by financing activities......................... (661.2) (528.2) (651.4)
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 945.0 (238.3) (235.9)
Cash and cash equivalents, beginning of year.................. 300.5 538.8 774.7
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 1,245.5 $ 300.5 $ 538.8
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 130.7 $ 217.1 $ 109.9
================= ================= =================
Income Taxes Paid (Refunded)................................ $ 254.3 $ 170.0 $ (10.0)
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is a wholly owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). Equitable Life's insurance
business is conducted principally by Equitable Life and its wholly owned
life insurance subsidiaries, Equitable of Colorado ("EOC"), and, prior
to December 31, 1996, Equitable Variable Life Insurance Company
("EVLICO"). Effective January 1, 1997, EVLICO was merged into Equitable
Life, which continues to conduct the Company's insurance business.
Equitable Life's investment management business, which comprises the
Investment Services segment, is conducted principally by Alliance
Capital Management L.P. ("Alliance"), in which Equitable Life has a
57.7% ownership interest, and Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an investment banking and brokerage affiliate in which
Equitable Life has a 32.5% ownership interest. AXA ("AXA"), a French
holding company for an international group of insurance and related
financial services companies, is the Holding Company's largest
shareholder, owning approximately 58.5% at December 31, 1998 (53.4% if
all securities convertible into, and options on, common stock were to be
converted or exercised).
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and
small groups. It also administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with professional
and trade associations. This segment includes Separate Accounts for
individual insurance and annuity products.
The Investment Services segment includes Alliance, the results of DLJ
which are accounted for on an equity basis, and, through June 10, 1997,
Equitable Real Estate Investment Management, Inc. ("EREIM"), a real
estate investment management subsidiary which was sold. Alliance
provides diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes
institutional Separate Accounts which provide various investment options
for large group pension clients, primarily deferred benefit contribution
plans, through pooled or single group accounts. DLJ's businesses include
securities underwriting, sales and trading, merchant banking, financial
advisory services, investment research, venture capital, correspondent
brokerage services, online interactive brokerage services and asset
management. DLJ serves institutional, corporate, governmental and
individual clients both domestically and internationally. EREIM provided
real estate investment management services, property management
services, mortgage servicing and loan asset management, and agricultural
investment management.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which
require 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.
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiary
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance and EREIM (see Note 5); and those partnerships and
joint ventures in which Equitable Life or its subsidiaries has control
F-6
<PAGE>
and a majority economic interest (collectively, including its
consolidated subsidiaries, the "Company"). The Company's investment in
DLJ is reported on the equity basis of accounting. Closed Block assets,
liabilities and results of operations are presented in the consolidated
financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1998," "1997" and "1996" refer
to the years ended December 31, 1998, 1997 and 1996, respectively.
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1998 presentation.
Closed Block
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force
on that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
reasonably expected to be sufficient to support such business, including
provision for payment of claims, certain expenses and taxes, and for
continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of
assets can be made between the Closed Block and other portions of
Equitable Life's General Account, any of its Separate Accounts or any
affiliate of Equitable Life without the approval of the New York
Superintendent of Insurance (the "Superintendent"). Closed Block assets
and liabilities are carried on the same basis as similar assets and
liabilities held in the General Account. The excess of Closed Block
liabilities over Closed Block assets represents the expected future
post-tax contribution from the Closed Block which would be recognized in
income over the period the policies and contracts in the Closed Block
remain in force.
Discontinued Operations
Discontinued operations include the Group Non-Participating Wind-Up
Annuities ("Wind-Up Annuities") and the Guaranteed Interest Contract
("GIC") lines of business. An allowance was established for the premium
deficiency reserve for Wind-Up Annuities and estimated future losses of
the GIC line of business. Management reviews the adequacy of the
allowance each quarter and believes the allowance for future losses at
December 31, 1998 is adequate to provide for all future losses; however,
the quarterly allowance review continues to involve numerous estimates
and subjective judgments regarding the expected performance of
Discontinued Operations Investment Assets. There can be no assurance the
losses provided for will not differ from the losses ultimately realized.
To the extent actual results or future projections of the discontinued
operations differ from management's current best estimates and
assumptions underlying the allowance for future losses, the difference
would be reflected in the consolidated statements of earnings in
discontinued operations. In particular, to the extent income, sales
proceeds and holding periods for equity real estate differ from
management's previous assumptions, periodic adjustments to the allowance
are likely to result (see Note 8).
Accounting Changes
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosures about Segments of an Enterprise and Related Information".
SFAS No. 131 establishes standards for public companies to report
information about operating segments in annual and interim financial
statements issued to shareholders. It also specifies related disclosure
requirements for products and services, geographic areas and major
customers. Generally, financial information must be reported using the
basis management uses to make operating decisions and to evaluate
business performance. The Company implemented SFAS No. 131 effective
December 31, 1998 and continues to identify two operating segments to
reflect its major businesses: Insurance and Investment Services. While
the segment descriptions are the same as those previously reported,
certain amounts have been reattributed between the two reportable
segments. Prior period comparative segment information has been
restated.
F-7
<PAGE>
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use,"
which requires capitalization of external and certain internal costs
incurred to obtain or develop internal-use computer software during the
application development stage. The Company applied the provisions of SOP
98-1 prospectively effective January 1, 1998. The adoption of SOP 98-1
did not have a material impact on the Company's consolidated financial
statements. Capitalized internal-use software is amortized on a
straight-line basis over the estimated useful life of the software.
The Company implemented SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," as of
January 1, 1996. SFAS No. 121 requires long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate the carrying value of such assets may
not be recoverable. Effective with SFAS No. 121's adoption, impaired
real estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Before implementing SFAS No.
121, valuation allowances on real estate held for the production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Adoption of the statement resulted in the release of valuation
allowances of $152.4 million and recognition of impairment losses of
$144.0 million on real estate held for production of income. Real estate
which management intends to sell or abandon is classified as real estate
held for sale. Valuation allowances on real estate held for sale
continue to be computed using the lower of depreciated cost or estimated
fair value, net of disposition costs. Initial adoption of the impairment
requirements of SFAS No. 121 to other assets to be disposed of resulted
in a charge for the cumulative effect of an accounting change of $23.1
million, net of a Federal income tax benefit of $12.4 million, due to
the writedown to fair value of building improvements relating to
facilities vacated in 1996.
New Accounting Pronouncements
In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage
Loans Held for Sale by a Mortgage Banking Enterprise," which amends
existing accounting and reporting standards for certain activities of
mortgage banking enterprises and other enterprises that conduct
operations that are substantially similar to the primary operations of a
mortgage banking enterprise. This statement is effective for the first
fiscal quarter beginning after December 15, 1998. This statement is not
expected to have a material impact on the Company's consolidated
financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain
derivatives embedded in other contracts, and for hedging activities. It
requires all derivatives to be recognized on the balance sheet at fair
value. The accounting for changes in the fair value of a derivative
depends on its intended use. Derivatives not used in hedging activities
must be adjusted to fair value through earnings. Changes in the fair
value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings.
SFAS No. 133 requires adoption in fiscal years beginning after June 15,
1999 and permits early adoption as of the beginning of any fiscal
quarter following issuance of the statement. Retroactive application to
financial statements of prior periods is prohibited. The Company expects
to adopt SFAS No. 133 effective January 1, 2000. Adjustments resulting
from initial adoption of the new requirements will be reported in a
manner similar to the cumulative effect of a change in accounting
principle and will be reflected in net income or accumulated other
comprehensive income based upon existing hedging relationships, if any.
Management currently is assessing the impact of adoption. However,
Alliance's adoption is not expected to have a significant impact on the
Company's consolidated balance sheet or statement of earnings. Also,
since most of DLJ's derivatives are carried at fair values, the
Company's consolidated earnings and financial position are not expected
to be significantly affected by DLJ's adoption of the new requirements.
F-8
<PAGE>
In late 1998, the AICPA issued SOP 98-7, "Deposit Accounting: Accounting
for Insurance and Reinsurance Contracts that Do Not Transfer Insurance
Risk". This SOP, effective for fiscal years beginning after June 15,
1999, provides guidance to both the insured and insurer on how to apply
the deposit method of accounting when it is required for insurance and
reinsurance contracts that do not transfer insurance risk. The SOP does
not address or change the requirements as to when deposit accounting
should be applied. SOP 98-7 applies to all entities and all insurance
and reinsurance contracts that do not transfer insurance risk except for
long-duration life and health insurance contracts. This SOP is not
expected to have a material impact on the Company's consolidated
financial statements.
In December 1997, the AICPA issued SOP 97-3, "Accounting by Insurance
and Other Enterprises for Insurance-Related Assessments". SOP 97-3
provides guidance for assessments related to insurance activities and
requirements for disclosure of certain information. SOP 97-3 is
effective for financial statements issued for periods beginning after
December 31, 1998. Restatement of previously issued financial statements
is not required. SOP 97-3 is not expected to have a material impact on
the Company's consolidated financial statements.
Valuation of Investments
Fixed maturities identified as available for sale are reported at
estimated fair value. Fixed maturities, which the Company has both the
ability and the intent to hold to maturity, are stated principally at
amortized cost. The amortized cost of fixed maturities is adjusted for
impairments in value deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which
they apply.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Impaired real
estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Valuation allowances on real
estate held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale. Prior to the adoption of SFAS
No. 121, valuation allowances on real estate held for production of
income were computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control or a majority economic interest are reported on the equity
basis of accounting and are included either with equity real estate or
other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
F-9
<PAGE>
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment
Gains (Losses)
Net investment income and realized investment gains (losses)
(collectively, "investment results") related to certain participating
group annuity contracts which are passed through to the contractholders
are reflected as interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized investment gains and losses on equity securities and fixed
maturities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("DAC") related to universal life and investment-type
products and participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the
period in excess of related policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as
income when due. Benefits and expenses are matched with such income so
as to result in the recognition of profits over the life of the
contracts. This match is accomplished by means of the provision for
liabilities for future policy benefits and the deferral and subsequent
amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. DAC is subject to recoverability testing at the time of policy
issue and loss recognition testing at the end of each accounting period.
For universal life products and investment-type products, DAC is
amortized over the expected total life of the contract group (periods
ranging from 25 to 35 years and 5 to 17 years, respectively) as a
constant percentage of estimated gross profits arising principally from
investment results, mortality and expense margins and surrender charges
based on historical and anticipated future experience, updated at the
end of each accounting period. The effect on the amortization of DAC of
revisions to estimated gross profits is reflected in earnings in the
period such estimated gross profits are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated other comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
F-10
<PAGE>
For participating traditional life policies (substantially all of which
are in the Closed Block), DAC is amortized over the expected total life
of the contract group (40 years) as a constant percentage based on the
present value of the estimated gross margin amounts expected to be
realized over the life of the contracts using the expected investment
yield. At December 31, 1998, the expected investment yield, excluding
policy loans, generally ranged from 7.29% grading to 6.5% over a 20 year
period. Estimated gross margin includes anticipated premiums and
investment results less claims and administrative expenses, changes in
the net level premium reserve and expected annual policyholder
dividends. The effect on the amortization of DAC of revisions to
estimated gross margins is reflected in earnings in the period such
estimated gross margins are revised. The effect on the DAC asset that
would result from realization of unrealized gains (losses) is recognized
with an offset to accumulated comprehensive income in consolidated
shareholder's equity as of the balance sheet date.
For non-participating traditional life and annuity policies with life
contingencies, DAC is amortized in proportion to anticipated premiums.
Assumptions as to anticipated premiums are estimated at the date of
policy issue and are consistently applied during the life of the
contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
For individual health benefit insurance, DAC is amortized over the
expected average life of the contracts (10 years for major medical
policies and 20 years for disability income ("DI") products) in
proportion to anticipated premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represents an accumulation of gross premium payments plus
credited interest less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis
of actuarial assumptions equal to guaranteed mortality and dividend fund
interest rates. The liability for annual dividends represents the
accrual of annual dividends earned. Terminal dividends are accrued in
proportion to gross margins over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at policy
issue as to mortality and persistency are based on the Insurance Group's
experience which, together with interest and expense assumptions,
includes a margin for adverse deviation. When the liabilities for future
policy benefits plus the present value of expected future gross premiums
for a product are insufficient to provide for expected future policy
benefits and expenses for that product, DAC is written off and
thereafter, if required, a premium deficiency reserve is established by
a charge to earnings. Benefit liabilities for traditional annuities
during the accumulation period are equal to accumulated contractholders'
fund balances and after annuitization are equal to the present value of
expected future payments. Interest rates used in establishing such
liabilities range from 2.25% to 11.5% for life insurance liabilities and
from 2.25% to 13.5% for annuity liabilities.
During the fourth quarter of 1996 a loss recognition study of
participating group annuity contracts and conversion annuities ("Pension
Par") was completed which included management's revised estimate of
assumptions, such as expected mortality and future investment returns.
The study's results prompted management to establish a premium
deficiency reserve which decreased earnings from continuing operations
and net earnings by $47.5 million ($73.0 million pre-tax).
Individual health benefit liabilities for active lives are estimated
using the net level premium method and assumptions as to future
morbidity, withdrawals and interest. Benefit liabilities for disabled
lives are estimated using the present value of benefits method and
experience assumptions as to claim terminations, expenses and interest.
F-11
<PAGE>
During the fourth quarter of 1996, the Company completed a loss
recognition study of the DI business which incorporated management's
revised estimates of future experience with regard to morbidity,
investment returns, claims and administration expenses and other
factors. The study indicated DAC was not recoverable and the reserves
were not sufficient. Earnings from continuing operations and net
earnings decreased by $208.0 million ($320.0 million pre-tax) as a
result of strengthening DI reserves by $175.0 million and writing off
unamortized DAC of $145.0 million related to DI products issued prior to
July 1993. The determination of DI reserves requires making assumptions
and estimates relating to a variety of factors, including morbidity and
interest rates, claims experience and lapse rates based on then known
facts and circumstances. Such factors as claim incidence and termination
rates can be affected by changes in the economic, legal and regulatory
environments and work ethic. While management believes its Pension Par
and DI reserves have been calculated on a reasonable basis and are
adequate, there can be no assurance reserves will be sufficient to
provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $938.6 million and $886.7 million at December 31,
1998 and 1997, respectively. Incurred benefits (benefits paid plus
changes in claim reserves) and benefits paid for individual DI and major
medical policies (excluding reserve strengthening in 1996) are
summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 202.1 $ 190.2 $ 189.0
Incurred benefits related to prior years........... 22.2 2.1 69.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 224.3 $ 192.3 $ 258.1
================= ================ =================
Benefits paid related to current year.............. $ 17.0 $ 28.8 $ 32.6
Benefits paid related to prior years............... 155.4 146.2 153.3
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 172.4 $ 175.0 $ 185.9
================= ================ =================
</TABLE>
Policyholders' Dividends
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's board of directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable Life.
At December 31, 1998, participating policies, including those in the
Closed Block, represent approximately 19.9% ($49.3 billion) of directly
written life insurance in force, net of amounts ceded.
Federal Income Taxes
The Company files a consolidated Federal income tax return with the
Holding Company and its consolidated subsidiaries. Current Federal
income taxes are charged or credited to operations based upon amounts
estimated to be payable or recoverable as a result of taxable operations
for the current year. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using enacted
income tax rates and laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds Separate Accounts liabilities.
F-12
<PAGE>
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as separate
captions in the consolidated balance sheets. The Insurance Group bears
the investment risk on assets held in one Separate Account; therefore,
such assets are carried on the same basis as similar assets held in the
General Account portfolio. Assets held in the other Separate Accounts
are carried at quoted market values or, where quoted values are not
available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For 1998, 1997 and 1996, investment results of
such Separate Accounts were $4,591.0 million, $3,411.1 million and
$2,970.6 million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are
included in revenues.
Employee Stock Option Plan
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. In accordance
with the Statement, compensation expense is recorded on the date of
grant only if the current market price of the underlying stock exceeds
the option price. See Note 22 for the pro forma disclosures for the
Holding Company, DLJ and Alliance required by SFAS No. 123, "Accounting
for Stock-Based Compensation".
F-13
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
----------------- ----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C> <C>
December 31, 1998
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury securities and
U.S. government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
================= ================= ================ =================
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 58.3 $ 114.9 $ 22.5 $ 150.7
================= ================= ================ =================
December 31, 1997
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,850.5 $ 785.0 $ 74.5 $ 15,561.0
Mortgage-backed.................... 1,702.8 23.5 1.3 1,725.0
U.S. Treasury securities and
U.S. government and
agency securities................ 1,583.2 83.9 .6 1,666.5
States and political subdivisions.. 52.8 6.8 .1 59.5
Foreign governments................ 442.4 44.8 2.0 485.2
Redeemable preferred stock......... 128.0 6.7 1.0 133.7
----------------- ----------------- ---------------- -----------------
Total Available for Sale............... $ 18,759.7 $ 950.7 $ 79.5 $ 19,630.9
================= ================= ================ =================
Equity Securities:
Common stock......................... $ 408.4 $ 48.7 $ 15.0 $ 442.1
================= ================= ================ =================
</TABLE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company
determines an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based on the
assumption such securities will be held to maturity. Estimated fair
values for equity securities, substantially all of which do not have a
readily ascertainable market value, have been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1998 and 1997, securities
without a readily ascertainable market value having an amortized cost of
$3,539.9 million and $3,759.2 million, respectively, had estimated fair
values of $3,748.5 million and $3,903.9 million, respectively.
F-14
<PAGE>
The contractual maturity of bonds at December 31, 1998 is shown below:
<TABLE>
<CAPTION>
Available for Sale
------------------------------------
Amortized Estimated
Cost Fair Value
---------------- -----------------
(In Millions)
<S> <C> <C>
Due in one year or less................................................ $ 324.8 $ 323.4
Due in years two through five.......................................... 3,778.2 3,787.9
Due in years six through ten........................................... 6,543.4 6,594.1
Due after ten years.................................................... 5,756.8 6,219.5
Mortgage-backed securities............................................. 1,807.9 1,830.3
---------------- -----------------
Total.................................................................. $ 18,211.1 $ 18,755.2
================ =================
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated
fair value of $125.0 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
concentrations in any single issuer or a particular industry group.
Certain of these corporate high yield securities are classified as other
than investment grade by the various rating agencies, i.e., a rating
below Baa or National Association of Insurance Commissioners ("NAIC")
designation of 3 (medium grade), 4 or 5 (below investment grade) or 6
(in or near default). At December 31, 1998, approximately 15.1% of the
$18,336.1 million aggregate amortized cost of bonds held by the Company
was considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to
be other than investment grade.
Fixed maturity investments with restructured or modified terms are not
material.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 384.5 $ 137.1 $ 325.3
SFAS No. 121 release............................... - - (152.4)
Additions charged to income........................ 86.2 334.6 125.0
Deductions for writedowns and
asset dispositions............................... (240.1) (87.2) (160.8)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 34.3 $ 55.8 $ 50.4
Equity real estate............................... 196.3 328.7 86.7
----------------- ---------------- -----------------
Total.............................................. $ 230.6 $ 384.5 $ 137.1
================= ================ =================
</TABLE>
F-15
<PAGE>
At December 31, 1998, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $60.8 million.
At December 31, 1998 and 1997, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $7.0 million (0.2% of total
mortgage loans on real estate) and $23.4 million (0.9% of total mortgage
loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage
loans on real estate, based on amortized cost, amounted to $115.1
million and $183.4 million at December 31, 1998 and 1997, respectively.
Gross interest income on restructured mortgage loans on real estate that
would have been recorded in accordance with the original terms of such
loans amounted to $10.3 million, $17.2 million and $35.5 million in
1998, 1997 and 1996, respectively. Gross interest income on these loans
included in net investment income aggregated $8.3 million, $12.7 million
and $28.2 million in 1998, 1997 and 1996, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------
1998 1997
------------------- -------------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 125.4 $ 196.7
Impaired mortgage loans without provision for losses............... 8.6 3.6
------------------- -------------------
Recorded investment in impaired mortgage loans..................... 134.0 200.3
Provision for losses............................................... (29.0) (51.8)
------------------- -------------------
Net Impaired Mortgage Loans........................................ $ 105.0 $ 148.5
=================== ===================
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected
future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on loans where the collateral value
is used to measure impairment is recorded on a cash basis. Interest
income on loans where the present value method is used to measure
impairment is accrued on the net carrying value amount of the loan at
the interest rate used to discount the cash flows. Changes in the
present value attributable to changes in the amount or timing of
expected cash flows are reported as investment gains or losses.
During 1998, 1997 and 1996, respectively, the Company's average recorded
investment in impaired mortgage loans was $161.3 million, $246.9 million
and $552.1 million. Interest income recognized on these impaired
mortgage loans totaled $12.3 million, $15.2 million and $38.8 million
($.9 million, $2.3 million and $17.9 million recognized on a cash basis)
for 1998, 1997 and 1996, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1998 and 1997, the carrying value of equity real estate
held for sale amounted to $836.2 million and $1,023.5 million,
respectively. For 1998, 1997 and 1996, respectively, real estate of $7.1
million, $152.0 million and $58.7 million was acquired in satisfaction
of debt. At December 31, 1998 and 1997, the Company owned $552.3 million
and $693.3 million, respectively, of real estate acquired in
satisfaction of debt.
Depreciation of real estate held for production of income is computed
using the straight-line method over the estimated useful lives of the
properties, which generally range from 40 to 50 years. Accumulated
depreciation on real estate was $374.8 million and $541.1 million at
December 31, 1998 and 1997, respectively. Depreciation expense on real
estate totaled $30.5 million, $74.9 million and $91.8 million for 1998,
1997 and 1996, respectively.
F-16
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 and 29 individual ventures as of December 31, 1998 and 1997,
respectively) and for limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater, is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 913.7 $ 1,700.9
Investments in securities, generally at estimated fair value........... 636.9 1,374.8
Cash and cash equivalents.............................................. 85.9 105.4
Other assets........................................................... 279.8 584.9
---------------- -----------------
Total Assets........................................................... $ 1,916.3 $ 3,766.0
================ =================
Borrowed funds - third party........................................... $ 367.1 $ 493.4
Borrowed funds - the Company........................................... 30.1 31.2
Other liabilities...................................................... 197.2 284.0
---------------- -----------------
Total liabilities...................................................... 594.4 808.6
---------------- -----------------
Partners' capital...................................................... 1,321.9 2,957.4
---------------- -----------------
Total Liabilities and Partners' Capital................................ $ 1,916.3 $ 3,766.0
================ =================
Equity in partners' capital included above............................. $ 312.9 $ 568.5
Equity in limited partnership interests not included above............. 442.1 331.8
Other.................................................................. .7 4.3
---------------- -----------------
Carrying Value......................................................... $ 755.7 $ 904.6
================ =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 246.1 $ 310.5 $ 348.9
Revenues of other limited partnership interests.... 128.9 506.3 386.1
Interest expense - third party..................... (33.3) (91.8) (111.0)
Interest expense - the Company..................... (2.6) (7.2) (30.0)
Other expenses..................................... (197.0) (263.6) (282.5)
----------------- ---------------- -----------------
Net Earnings....................................... $ 142.1 $ 454.2 $ 311.5
================= ================ =================
Equity in net earnings included above.............. $ 59.6 $ 76.7 $ 73.9
Equity in net earnings of limited partnership
interests not included above..................... 22.7 69.5 35.8
Other.............................................. - (.9) .9
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 82.3 $ 145.3 $ 110.6
================= ================ =================
</TABLE>
F-17
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,489.0 $ 1,459.4 $ 1,307.4
Mortgage loans on real estate...................... 235.4 260.8 303.0
Equity real estate................................. 356.1 390.4 442.4
Other equity investments........................... 83.8 156.9 122.0
Policy loans....................................... 144.9 177.0 160.3
Other investment income............................ 185.7 181.7 217.4
----------------- ---------------- -----------------
Gross investment income.......................... 2,494.9 2,626.2 2,552.5
Investment expenses.............................. (266.8) (343.4) (348.9)
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,228.1 $ 2,282.8 $ 2,203.6
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Fixed maturities................................... $ (24.3) $ 88.1 $ 60.5
Mortgage loans on real estate...................... (10.9) (11.2) (27.3)
Equity real estate................................. 74.5 (391.3) (79.7)
Other equity investments........................... 29.9 14.1 18.9
Sale of subsidiaries............................... (2.6) 252.1 -
Issuance and sales of Alliance Units............... 19.8 - 20.6
Issuance and sale of DLJ common stock.............. 18.2 3.0 -
Other.............................................. (4.4) - (2.8)
----------------- ---------------- -----------------
Investment Gains (Losses), Net..................... $ 100.2 $ (45.2) $ (9.8)
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $101.6 million, $11.7 million
and $29.9 million for 1998, 1997 and 1996, respectively, and writedowns
of equity real estate subsequent to the adoption of SFAS No. 121
amounted to $136.4 million for 1997. In the fourth quarter of 1997, the
Company reclassified $1,095.4 million depreciated cost of equity real
estate from real estate held for the production of income to real estate
held for sale. Additions to valuation allowances of $227.6 million were
recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of
income were recorded.
For 1998, 1997 and 1996, respectively, proceeds received on sales of
fixed maturities classified as available for sale amounted to $15,961.0
million, $9,789.7 million and $8,353.5 million. Gross gains of $149.3
million, $166.0 million and $154.2 million and gross losses of $95.1
million, $108.8 million and $92.7 million, respectively, were realized
on these sales. The change in unrealized investment gains (losses)
related to fixed maturities classified as available for sale for 1998,
1997 and 1996 amounted to $(331.7) million, $513.4 million and $(258.0)
million, respectively.
For 1998, 1997 and 1996, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $136.9 million, $137.5
million and $136.7 million, respectively.
F-18
<PAGE>
On June 10, 1997, Equitable Life sold EREIM (other than its interest in
Column Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend
Lease"), a publicly traded, international property and financial
services company based in Sydney, Australia. The total purchase price
was $400.0 million and consisted of $300.0 million in cash and a $100.0
million note which was paid in 1998. The Company recognized an
investment gain of $162.4 million, net of Federal income tax of $87.4
million as a result of this transaction. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale.
Through June 10, 1997 and for the year ended December 31, 1996,
respectively, the businesses sold reported combined revenues of $91.6
million and $226.1 million and combined net earnings of $10.7 million
and $30.7 million.
In 1996, Alliance acquired the business of Cursitor Holdings L.P. and
Cursitor Holdings Limited (collectively, "Cursitor") for approximately
$159.0 million. The purchase price consisted of $94.3 million in cash,
1.8 million of Alliance's publicly traded units ("Alliance Units"), 6%
notes aggregating $21.5 million payable ratably over four years, and
additional consideration to be determined at a later date but currently
estimated to not exceed $10.0 million. The excess of the purchase price,
including acquisition costs and minority interest, over the fair value
of Cursitor's net assets acquired resulted in the recognition of
intangible assets consisting of costs assigned to contracts acquired and
goodwill of approximately $122.8 million and $38.3 million,
respectively. The Company recognized an investment gain of $20.6 million
as a result of the issuance of Alliance Units in this transaction. On
June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's acquisition of Cursitor by $120.9
million. This charge reflected Alliance's view that Cursitor's
continuing decline in assets under management and its reduced
profitability, resulting from relative investment underperformance, no
longer supported the carrying value of its investment. As a result, the
Company's earnings from continuing operations before cumulative effect
of accounting change for 1997 included a charge of $59.5 million, net of
a Federal income tax benefit of $10.0 million and minority interest of
$51.4 million. The remaining balance of intangible assets is being
amortized over its estimated useful life of 20 years. At December 31,
1998, the Company's ownership of Alliance Units was approximately 56.7%.
F-19
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and
the changes for the corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 533.6 $ 189.9 $ 396.5
Changes in unrealized investment gains (losses).... (242.4) 543.3 (297.6)
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... (5.7) 53.2 -
DAC............................................ 13.2 (89.0) 42.3
Deferred Federal income taxes.................. 85.4 (163.8) 48.7
----------------- ---------------- -----------------
Balance, End of Year............................... $ 384.1 $ 533.6 $ 189.9
================= ================ =================
Balance, end of year comprises:
Unrealized investment gains on:
Fixed maturities............................... $ 539.9 $ 871.2 $ 357.8
Other equity investments....................... 92.4 33.7 31.6
Other, principally Closed Block................ 111.1 80.9 53.1
----------------- ---------------- -----------------
Total........................................ 743.4 985.8 442.5
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ (24.7) (19.0) (72.2)
DAC.......................................... (127.8) (141.0) (52.0)
Deferred Federal income taxes................ (206.8) (292.2) (128.4)
----------------- ---------------- -----------------
Total.............................................. $ 384.1 $ 533.6 $ 189.9
================= ================ =================
</TABLE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income represents cumulative gains and
losses on items that are not reflected in earnings. The balances for the
years 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Unrealized gains on investments.................... $ 384.1 $ 533.6 $ 189.9
Minimum pension liability.......................... (28.3) (17.3) (12.9)
----------------- ---------------- -----------------
Total Accumulated Other
Comprehensive Income............................. $ 355.8 $ 516.3 $ 177.0
================= ================ =================
</TABLE>
F-20
<PAGE>
The components of other comprehensive income for the years 1998, 1997
and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Net unrealized gains (losses) on investment
securities:
Net unrealized gains (losses) arising during
the period..................................... $ (186.1) $ 564.0 $ (249.8)
Reclassification adjustment for (gains) losses
included in net earnings....................... (56.3) (20.7) (47.8)
----------------- ---------------- -----------------
Net unrealized gains (losses) on investment
securities....................................... (242.4) 543.3 (297.6)
Adjustments for policyholder liabilities,
DAC and deferred
Federal income taxes............................. 92.9 (199.6) 91.0
----------------- ---------------- -----------------
Change in unrealized gains (losses), net of
reclassification and adjustments................. (149.5) 343.7 (206.6)
Change in minimum pension liability................ (11.0) (4.4) 22.2
----------------- ---------------- -----------------
Total Other Comprehensive Income................... $ (160.5) $ 339.3 $ (184.4)
================= ================ =================
</TABLE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,149.0 and $4,059.4)........................................... $ 4,373.2 $ 4,231.0
Mortgage loans on real estate........................................ 1,633.4 1,341.6
Policy loans......................................................... 1,641.2 1,700.2
Cash and other invested assets....................................... 86.5 282.0
DAC.................................................................. 676.5 775.2
Other assets......................................................... 221.6 236.6
----------------- -----------------
Total Assets......................................................... $ 8,632.4 $ 8,566.6
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,013.1 $ 8,993.2
Other liabilities.................................................... 63.9 80.5
----------------- -----------------
Total Liabilities.................................................... $ 9,077.0 $ 9,073.7
================= =================
</TABLE>
F-21
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 661.7 $ 687.1 $ 724.8
Investment income (net of investment
expenses of $15.5, $27.0 and $27.3).............. 569.7 574.9 546.6
Investment losses, net............................. .5 (42.4) (5.5)
----------------- ---------------- -----------------
Total revenues............................... 1,231.9 1,219.6 1,265.9
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,082.0 1,066.7 1,106.3
Other operating costs and expenses................. 62.8 50.4 34.6
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,144.8 1,117.1 1,140.9
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 87.1 $ 102.5 $ 125.0
================= ================ =================
</TABLE>
At December 31, 1998 and 1997, problem mortgage loans on real estate had
an amortized cost of $5.1 million and $8.1 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $26.0 million and $70.5 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 55.5 $ 109.1
Impaired mortgage loans without provision for losses................... 7.6 .6
---------------- -----------------
Recorded investment in impaired mortgages.............................. 63.1 109.7
Provision for losses................................................... (10.1) (17.4)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 53.0 $ 92.3
================ =================
</TABLE>
During 1998, 1997 and 1996, the Closed Block's average recorded
investment in impaired mortgage loans was $85.5 million, $110.2 million
and $153.8 million, respectively. Interest income recognized on these
impaired mortgage loans totaled $4.7 million, $9.4 million and $10.9
million ($1.5 million, $4.1 million and $4.7 million recognized on a
cash basis) for 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $11.1 million and $18.5 million on
mortgage loans on real estate and $15.4 million and $16.8 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in the
recognition of impairment losses of $5.6 million on real estate held for
production of income. Writedowns of fixed maturities amounted to $3.5
million and $12.8 million for 1997 and 1996, respectively. Writedowns of
equity real estate subsequent to the adoption of SFAS No. 121 amounted
to $28.8 million for 1997.
In the fourth quarter of 1997, $72.9 million depreciated cost of equity
real estate held for production of income was reclassified to equity
real estate held for sale. Additions to valuation allowances of $15.4
million were recorded upon these transfers. Additionally, in fourth
quarter 1997, $28.8 million of writedowns on real estate held for
production of income were recorded.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the
Closed Block are, therefore, disproportionate to the business outside of
the Closed Block.
F-22
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 553.9 $ 635.2
Equity real estate................................................... 611.0 874.5
Other equity investments............................................. 115.1 209.3
Other invested assets................................................ 24.9 152.4
----------------- -----------------
Total investments.................................................. 1,304.9 1,871.4
Cash and cash equivalents............................................ 34.7 106.8
Other assets......................................................... 219.0 243.8
----------------- -----------------
Total Assets......................................................... $ 1,558.6 $ 2,222.0
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,021.7 $ 1,048.3
Allowance for future losses.......................................... 305.1 259.2
Amounts due to continuing operations................................. 2.7 572.8
Other liabilities.................................................... 229.1 341.7
----------------- -----------------
Total Liabilities.................................................... $ 1,558.6 $ 2,222.0
================= =================
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Revenues
Investment income (net of investment
expenses of $63.3, $97.3 and $127.5)............. $ 160.4 $ 188.6 $ 245.4
Investment gains (losses), net..................... 35.7 (173.7) (18.9)
Policy fees, premiums and other income............. (4.3) .2 .2
----------------- ---------------- -----------------
Total revenues..................................... 191.8 15.1 226.7
Benefits and other deductions...................... 141.5 169.5 250.4
Earnings added (losses charged) to allowance
for future losses................................ 50.3 (154.4) (23.7)
----------------- ---------------- -----------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) of the allowance for future
losses........................................... 4.2 (134.1) (129.0)
Federal income tax (expense) benefit............... (1.5) 46.9 45.2
----------------- ---------------- -----------------
Earnings (Loss) from Discontinued Operations....... $ 2.7 $ (87.2) $ (83.8)
================= ================ =================
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued
operations against the allowance, re-estimates future losses and adjusts
the allowance, if appropriate. Additionally, as part of the Company's
annual planning process which takes place in the fourth quarter of each
year, investment and benefit cash flow projections are prepared. These
updated assumptions and estimates resulted in a release of allowance in
1998 and strengthening of allowance in 1997 and 1996.
F-23
<PAGE>
In the fourth quarter of 1997, $329.9 million depreciated cost of equity
real estate was reclassified from equity real estate held for production
of income to real estate held for sale. Additions to valuation
allowances of $79.8 million were recognized upon these transfers.
Additionally, in fourth quarter 1997, $92.5 million of writedowns on
real estate held for production of income were recognized.
Benefits and other deductions includes $26.6 million, $53.3 million and
$114.3 million of interest expense related to amounts borrowed from
continuing operations in 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $3.0 million and $28.4 million on
mortgage loans on real estate and $34.8 million and $88.4 million on
equity real estate at December 31, 1998 and 1997, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in a release of
existing valuation allowances of $71.9 million on equity real estate and
recognition of impairment losses of $69.8 million on real estate held
for production of income. Writedowns of equity real estate subsequent to
the adoption of SFAS No. 121 amounted to $95.7 million and $12.3 million
for 1997 and 1996, respectively.
At December 31, 1998 and 1997, problem mortgage loans on real estate had
amortized costs of $1.1 million and $11.0 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $3.5 million and $109.4 million,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 6.7 $ 101.8
Impaired mortgage loans without provision for losses................... 8.5 .2
---------------- -----------------
Recorded investment in impaired mortgages.............................. 15.2 102.0
Provision for losses................................................... (2.1) (27.3)
---------------- -----------------
Net Impaired Mortgage Loans............................................ $ 13.1 $ 74.7
================ =================
</TABLE>
During 1998, 1997 and 1996, the discontinued operations' average
recorded investment in impaired mortgage loans was $73.3 million, $89.2
million and $134.8 million, respectively. Interest income recognized on
these impaired mortgage loans totaled $4.7 million, $6.6 million and
$10.1 million ($3.4 million, $5.3 million and $7.5 million recognized on
a cash basis) for 1998, 1997 and 1996, respectively.
At December 31, 1998 and 1997, discontinued operations had carrying
values of $50.0 million and $156.2 million, respectively, of real estate
acquired in satisfaction of debt.
F-24
<PAGE>
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1997
----------------- -----------------
(In Millions)
<S> <C> <C>
Short-term debt...................................................... $ 179.3 $ 422.2
----------------- -----------------
Long-term debt:
Equitable Life:
6.95% surplus notes scheduled to mature 2005....................... 399.4 399.4
7.70% surplus notes scheduled to mature 2015....................... 199.7 199.7
Other.............................................................. .3 .3
----------------- -----------------
Total Equitable Life........................................... 599.4 599.4
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.91% - 12.00%, due through 2017................... 392.2 676.6
----------------- -----------------
Alliance:
Other.............................................................. 10.8 18.5
----------------- -----------------
Total long-term debt................................................. 1,002.4 1,294.5
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,181.7 $ 1,716.7
================= =================
</TABLE>
Short-term Debt
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates and expires in September
2000. The interest rates are based on external indices dependent on the
type of borrowing and at December 31, 1998 range from 5.23% to 7.75%.
There were no borrowings outstanding under this bank credit facility at
December 31, 1998.
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes
used to support Equitable Life's liquidity needs and is supported by
Equitable Life's existing $350.0 million bank credit facility. At
December 31, 1998, there were no borrowings outstanding under this
program.
During July 1998, Alliance entered into a $425.0 million five-year
revolving credit facility with a group of commercial banks which
replaced a $250.0 million revolving credit facility. Under the facility,
the interest rate, at the option of Alliance, is a floating rate
generally based upon a defined prime rate, a rate related to the London
Interbank Offered Rate ("LIBOR") or the Federal Funds Rate. A facility
fee is payable on the total facility. During September 1998, Alliance
increased the size of its commercial paper program from $250.0 million
to $425.0 million. Borrowings from these two sources may not exceed
$425.0 million in the aggregate. The revolving credit facility provides
backup liquidity for commercial paper issued under Alliance's commercial
paper program and can be used as a direct source of borrowing. The
revolving credit facility contains covenants which require Alliance to,
among other things, meet certain financial ratios. As of December 31,
1998, Alliance had commercial paper outstanding totaling $179.5 million
at an effective interest rate of 5.5% and there were no borrowings
outstanding under Alliance's revolving credit facility.
Long-term Debt
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
F-25
<PAGE>
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $640.2 million and $1,164.0 million at December 31, 1998
and 1997, respectively, as collateral for certain short-term and
long-term debt.
At December 31, 1998, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1999 and the succeeding
four years are $322.8 million, $6.9 million, $1.7 million, $1.8 million
and $2.0 million, respectively, and $668.0 million thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated
statements of earnings is shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 283.3 $ 186.5 $ 97.9
Deferred......................................... 69.8 (95.0) (88.2)
----------------- ---------------- -----------------
Total.............................................. $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal
income tax rate of 35%. The sources of the difference and the tax
effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 414.3 $ 234.7 $ 73.0
Non-taxable minority interest...................... (33.2) (38.0) (28.6)
Adjustment of tax audit reserves................... 16.0 (81.7) 6.9
Equity in unconsolidated subsidiaries.............. (39.3) (45.1) (32.3)
Other.............................................. (4.7) 21.6 (9.3)
----------------- ---------------- -----------------
Federal Income Tax Expense......................... $ 353.1 $ 91.5 $ 9.7
================= ================ =================
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
--------------------------------- ---------------------------------
Assets Liabilities Assets Liabilities
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ 235.3 $ - $ 257.9 $ -
Other.................................. 27.8 - 30.7 -
DAC, reserves and reinsurance.......... - 231.4 - 222.8
Investments............................ - 364.4 - 405.7
--------------- ---------------- --------------- ---------------
Total.................................. $ 263.1 $ 595.8 $ 288.6 $ 628.5
=============== ================ =============== ===============
</TABLE>
F-26
<PAGE>
The deferred Federal income taxes impacting operations reflect the net
tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The sources of these temporary differences
and the tax effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ (7.7) $ 46.2 $ (156.2)
Investments........................................ 46.8 (113.8) 78.6
Compensation and related benefits.................. 28.6 3.7 22.3
Other.............................................. 2.1 (31.1) (32.9)
----------------- ---------------- -----------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 69.8 $ (95.0) $ (88.2)
================= ================ =================
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining
the Holding Company's consolidated Federal income tax returns for the
years 1992 through 1996. Management believes these audits will have no
material adverse effect on the Company's results of operations.
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer
of liability. The effect of reinsurance (excluding group life and
health) is summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Direct premiums.................................... $ 438.8 $ 448.6 $ 461.4
Reinsurance assumed................................ 203.6 198.3 177.5
Reinsurance ceded.................................. (54.3) (45.4) (41.3)
----------------- ---------------- -----------------
Premiums........................................... $ 588.1 $ 601.5 $ 597.6
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 75.7 $ 61.0 $ 48.2
================= ================ =================
Policyholders' Benefits Ceded...................... $ 85.9 $ 70.6 $ 54.1
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 39.5 $ 36.4 $ 32.3
================= ================ =================
</TABLE>
Beginning in May 1997, the Company began reinsuring on a yearly renewal
term basis 90% of the mortality risk on new issues of certain term,
universal and variable life products. During 1996, the Company's
retention limit on joint survivorship policies was increased to $15.0
million. Effective January 1, 1994, all in force business above $5.0
million was reinsured. The Insurance Group also reinsures the entire
risk on certain substandard underwriting risks as well as in certain
other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $1.3 million,
$1.6 million and $2.4 million for 1998, 1997 and 1996, respectively.
Ceded death and disability benefits totaled $15.6 million, $4.3 million
and $21.2 million for 1998, 1997 and 1996, respectively. Insurance
liabilities ceded totaled $560.3 million and $593.8 million at December
31, 1998 and 1997, respectively.
F-27
<PAGE>
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance
formula or years of service and final average earnings, if greater,
under certain grandfathering rules in the plans. Alliance's benefits are
based on years of credited service, average final base salary and
primary social security benefits. The Company's funding policy is to
make the minimum contribution required by the Employee Retirement Income
Security Act of 1974 ("ERISA").
Components of net periodic pension cost (credit) for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 33.2 $ 32.5 $ 33.8
Interest cost on projected benefit obligations..... 129.2 128.2 120.8
Actual return on assets............................ (175.6) (307.6) (181.4)
Net amortization and deferrals..................... 6.1 166.6 43.4
----------------- ---------------- -----------------
Net Periodic Pension Cost (Credit)................. $ (7.1) $ 19.7 $ 16.6
================= ================ =================
</TABLE>
The plan's projected benefit obligation under the qualified and
non-qualified plans was comprised of:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Benefit obligation, beginning of year.................................. $ 1,801.3 $ 1,765.5
Service cost........................................................... 33.2 32.5
Interest cost.......................................................... 129.2 128.2
Actuarial (gains) losses............................................... 108.4 (15.5)
Benefits paid.......................................................... (138.7) (109.4)
---------------- -----------------
Benefit Obligation, End of Year........................................ $ 1,933.4 $ 1,801.3
================ =================
</TABLE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 1,867.4 $ 1,626.0
Actual return on plan assets........................................... 338.9 307.5
Contributions.......................................................... - 30.0
Benefits paid and fees................................................. (123.2) (96.1)
---------------- -----------------
Plan assets at fair value, end of year................................. 2,083.1 1,867.4
Projected benefit obligations.......................................... 1,933.4 1,801.3
---------------- -----------------
Projected benefit obligations less than plan assets.................... 149.7 66.1
Unrecognized prior service cost........................................ (7.5) (9.9)
Unrecognized net loss from past experience different
from that assumed.................................................... 38.7 95.0
Unrecognized net asset at transition................................... 1.5 3.1
---------------- -----------------
Prepaid Pension Cost.................................................. $ 182.4 $ 154.3
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.0% and 3.83%, respectively, at December 31, 1998 and
7.25% and 4.07%, respectively, at December 31, 1997. As of January 1,
1998 and 1997, the expected long-term rate of return on assets for the
retirement plan was 10.25%.
F-28
<PAGE>
The Company recorded, as a reduction of shareholders' equity an
additional minimum pension liability of $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1998 and 1997,
respectively, primarily representing the excess of the accumulated
benefit obligation of the qualified pension plan over the accrued
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of group
trusts managed by Alliance.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $31.8 million,
$33.2 million and $34.7 million for 1998, 1997 and 1996, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining
age 55 who have at least 10 years of service or (ii) on or after
attaining age 65 or (iii) whose jobs have been abolished and who have
attained age 50 with 20 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of postretirement
benefits are recognized in accordance with the provisions of SFAS No.
106. The Company continues to fund postretirement benefits costs on a
pay-as-you-go basis and, for 1998, 1997 and 1996, the Company made
estimated postretirement benefits payments of $28.4 million, $18.7
million and $18.9 million, respectively.
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Service cost....................................... $ 4.6 $ 4.5 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 33.6 34.7 34.6
Net amortization and deferrals..................... .5 1.9 2.4
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 38.7 $ 41.1 $ 42.3
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.8 $ 388.5
Service cost........................................................... 4.6 4.5
Interest cost.......................................................... 33.6 34.7
Contributions and benefits paid........................................ (28.4) 72.1
Actuarial (gains) losses............................................... (10.2) (9.0)
---------------- -----------------
Accumulated postretirement benefits obligation, end of year............ 490.4 490.8
Unrecognized prior service cost........................................ 31.8 40.3
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (121.2) (140.6)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 401.0 $ 390.5
================ =================
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those
offered to active employees and medical benefits will be limited to 200%
of 1993 costs for all participants.
F-29
<PAGE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 8.0% in 1998,
gradually declining to 2.5% in the year 2009, and in 1997 was 8.75%,
gradually declining to 2.75% in the year 2009. The discount rate used in
determining the accumulated postretirement benefits obligation was 7.0%
and 7.25% at December 31, 1998 and 1997, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1998
would be increased 4.83%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 4.57%. If the
health care cost trend rate assumptions were decreased by 1% the
accumulated postretirement benefits obligation as of December 31, 1998
would be decreased by 5.6%. The effect of this change on the sum of the
service cost and interest cost would be a decrease of 5.4%.
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income.
The notional amount of matched interest rate swaps outstanding at
December 31, 1998 and 1997, respectively, was $880.9 million and
$1,353.4 million. The average unexpired terms at December 31, 1998
ranged from 1 month to 4.3 years. At December 31, 1998, the cost of
terminating swaps in a loss position was $8.0 million. Equitable Life
has implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1998 of contracts purchased
and sold were $8,450.0 million and $875.0 million, respectively. The net
premium paid by Equitable Life on these contracts was $54.8 million and
is being amortized ratably over the contract periods ranging from 1 to 5
years. Income and expense resulting from this program are reflected as
an adjustment to interest credited to policyholders' account balances.
Substantially all of DLJ's activities related to derivatives are, by
their nature trading activities which are primarily for the purpose of
customer accommodations. DLJ enters into certain contractual agreements
referred to as derivatives or off-balance-sheet financial instruments
involving futures, forwards and options. DLJ's derivative activities
consist of writing over-the-counter ("OTC") options to accommodate its
customer needs, trading in forward contracts in U.S. government and
agency issued or guaranteed securities and in futures contracts on
equity-based indices, interest rate instruments and currencies and
issuing structured products based on emerging market financial
instruments and indices. DLJ's involvement in swap contracts and
commodity derivative instruments is not significant.
Fair Value of Financial Instruments
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of the timing and amount of expected future cash
flows and the credit standing of counterparties. Such estimates do not
reflect any premium or discount that could result from offering for sale
at one time the Company's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
unrealized gains or losses. In many cases, the fair value estimates
cannot be substantiated by comparison to independent markets, nor can
the disclosed value be realized in immediate settlement of the
instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1998 and 1997.
F-30
<PAGE>
Fair values for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans are
limited to the estimated fair value of the underlying collateral if
lower.
Fair values of policy loans are estimated by discounting the face value
of the loans from the time of the next interest rate review to the
present, at a rate equal to the excess of the current estimated market
rates over the current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account
balances, and guaranteed interest contracts are estimated using
projected cash flows discounted at rates reflecting expected current
offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in
policyholders' account balances, are estimated by discounting the
account value back from the time of the next crediting rate review to
the present, at a rate equal to the excess of current estimated market
rates offered on new policies over the current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which
takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's carrying value of short-term
borrowings approximates their estimated fair value.
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------
1998 1997
--------------------------------- ---------------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
--------------- ---------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
Mortgage loans on real estate.......... $ 2,809.9 $ 2,961.8 $ 2,611.4 $ 2,822.8
Other limited partnership interests.... 562.6 562.6 509.4 509.4
Policy loans........................... 2,086.7 2,370.7 2,422.9 2,493.9
Policyholders' account balances -
investment contracts................. 12,892.0 13,396.0 12,611.0 12,714.0
Long-term debt......................... 1,002.4 1,025.2 1,294.5 1,257.0
Closed Block Financial Instruments:
Mortgage loans on real estate.......... 1,633.4 1,703.5 1,341.6 1,420.7
Other equity investments............... 56.4 56.4 86.3 86.3
Policy loans........................... 1,641.2 1,929.7 1,700.2 1,784.2
SCNILC liability....................... 25.0 25.0 27.6 30.3
Discontinued Operations Financial
Instruments:
Mortgage loans on real estate.......... 553.9 599.9 655.5 779.9
Fixed maturities....................... 24.9 24.9 38.7 38.7
Other equity investments............... 115.1 115.1 209.3 209.3
Guaranteed interest contracts.......... 37.0 34.0 37.0 34.0
Long-term debt......................... 147.1 139.8 296.4 297.6
</TABLE>
F-31
<PAGE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
capital contributions of up to $142.9 million to affiliated real estate
joint ventures; and to provide equity financing to certain limited
partnerships of $287.3 million at December 31, 1998, under existing loan
or loan commitment agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
The Insurance Group had $24.7 million of letters of credit outstanding
at December 31, 1998.
15) LITIGATION
Major Medical Insurance Cases
Equitable Life agreed to settle, subject to court approval, previously
disclosed cases involving lifetime guaranteed renewable major medical
insurance policies issued by Equitable Life in five states. Plaintiffs
in these cases claimed that Equitable Life's method for determining
premium increases breached the terms of certain forms of the policies
and was misrepresented. In certain cases plaintiffs also claimed that
Equitable Life misrepresented to policyholders that premium increases
had been approved by insurance departments, and that it determined
annual rate increases in a manner that discriminated against the
policyholders.
In December 1997, Equitable Life entered into a settlement agreement,
subject to court approval, which would result in creation of a
nationwide class consisting of all persons holding, and paying premiums
on, the policies at any time since January 1, 1988 and the dismissal
with prejudice of the pending actions and the resolution of all similar
claims on a nationwide basis. Under the terms of the settlement, which
involves approximately 127,000 former and current policyholders,
Equitable Life would pay $14.2 million in exchange for release of all
claims and will provide future relief to certain current policyholders
by restricting future premium increases, estimated to have a present
value of $23.3 million. This estimate is based upon assumptions about
future events that cannot be predicted with certainty and accordingly
the actual value of the future relief may vary. In October 1998, the
court entered a judgment approving the settlement agreement and, in
November, a member of the national class filed a notice of appeal of the
judgment. In January 1999, the Court of Appeals granted Equitable Life's
motion to dismiss the appeal.
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported
class actions against Equitable Life and its subsidiary insurance
companies Equitable Variable Life Insurance Company ("EVLICO," which was
merged into Equitable Life effective January 1, 1997) and The Equitable
of Colorado, Inc. ("EOC"). These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice
misrepresentation primarily involving: the number of premium payments
required; the propriety of a product as an investment vehicle; the
propriety of a product as a replacement of an existing policy; and
failure to disclose a product as life insurance. Some actions are in
state courts and others are in U.S. District Courts in varying
jurisdictions, and are in varying stages of discovery and motions for
class certification.
F-32
<PAGE>
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in
the award of substantial judgments, including material amounts of
punitive damages, or in substantial settlements. Although the outcome of
litigation cannot be predicted with certainty, particularly in the early
stages of an action, The Equitable's management believes that the
ultimate resolution of these cases should not have a material adverse
effect on the financial position of The Equitable. The Equitable's
management cannot make an estimate of loss, if any, or predict whether
or not any such litigation will have a material adverse effect on The
Equitable's results of operations in any particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action
in September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination
on the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation.
Although the outcome of litigation cannot be predicted with certainty,
The Equitable's management believes that the ultimate resolution of this
matter should not have a material adverse effect on the financial
position of The Equitable. The Equitable's management cannot make an
estimate of loss, if any, or predict whether or not such matter will
have a material adverse effect on The Equitable's results of operations
in any particular period.
Alliance Capital
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance and
certain other defendants affiliated with Alliance, including the Holding
Company, alleging violations of Federal securities laws, fraud and
breach of fiduciary duty in connection with the Fund's investments in
Mexican and Argentine securities. The original complaint was dismissed
in 1996; on appeal, the dismissal was affirmed. In October 1996,
plaintiffs filed a motion for leave to file an amended complaint,
alleging the Fund failed to hedge against currency risk despite
representations that it would do so, the Fund did not properly disclose
that it planned to invest in mortgage-backed derivative securities and
two Fund advertisements misrepresented the risks of investing in the
Fund. In October 1998, the U.S. Court of Appeals for the Second Circuit
issued an order granting plaintiffs' motion to file an amended complaint
alleging that the Fund misrepresented its ability to hedge against
currency risk and denying plaintiffs' motion to file an amended
complaint containing the other allegations. Alliance believes that the
allegations in the amended complaint, which was filed in February 1999,
are without merit and intends to defend itself vigorously against these
claims. While the ultimate outcome of this matter cannot be determined
at this time, Alliance's management does not expect that it will have a
material adverse effect on Alliance's results of operations or financial
condition.
DLJSC
DLJSC is a defendant along with certain other parties in a class action
complaint involving the underwriting of units, consisting of notes and
warrants to purchase common shares, of Rickel Home Centers, Inc.
("Rickel"), which filed a voluntary petition for reorganization pursuant
to Chapter 11 of the Bankruptcy Code. The complaint seeks unspecified
compensatory and punitive damages from DLJSC, as an underwriter and as
an owner of 7.3% of the common stock, for alleged violation of Federal
securities laws and common law fraud for alleged misstatements and
omissions contained in the prospectus and registration statement used in
the offering of the units. DLJSC is defending itself vigorously against
all the allegations contained in the complaint. Although there can be no
assurance, DLJ's management does not believe that the ultimate outcome
of this litigation will have a material adverse effect on DLJ's
consolidated financial condition. Due to the early stage of this
litigation, based on the information currently available to it, DLJ's
management cannot predict whether or not such litigation will have a
material adverse effect on DLJ's results of operations in any particular
period.
F-33
<PAGE>
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum
Corporation ("NGC"). The debentures were canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
litigation seeks compensatory and punitive damages for DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter 11
proceedings. Trial is expected in early May 1999. DLJSC intends to
defend itself vigorously against all the allegations contained in the
complaint. Although there can be no assurance, DLJ's management does not
believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant in a complaint which alleges that DLJSC and a
number of other financial institutions and several individual defendants
violated civil provisions of RICO by inducing plaintiffs to invest over
$40 million in The Securities Groups, a number of tax shelter limited
partnerships, during the years 1978 through 1982. The plaintiffs seek
recovery of the loss of their entire investment and an approximately
equivalent amount of tax-related damages. Judgment for damages under
RICO are subject to trebling. Discovery is complete. Trial has been
scheduled for May 17, 1999. DLJSC believes that it has meritorious
defenses to the complaints and will continue to contest the suits
vigorously. Although there can be no assurance, DLJ's management does
not believe that the ultimate outcome of this litigation will have a
material adverse effect on DLJ's consolidated financial condition. Based
upon the information currently available to it, DLJ's management cannot
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
DLJSC is a defendant along with certain other parties in four actions
involving Mid-American Waste Systems, Inc. ("Mid-American"), which filed
a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code in January 1997. Three actions seek rescission,
compensatory and punitive damages for DLJSC's role in underwriting notes
of Mid-American. The other action, filed by the Plan Administrator for
the bankruptcy estate of Mid-American, alleges that DLJSC is liable as
an underwriter for alleged misrepresentations and omissions in the
prospectus for the notes, and liable as financial advisor to
Mid-American for allegedly failing to advise Mid-American about its
financial condition. DLJSC believes that it has meritorious defenses to
the complaints and will continue to contest the suits vigorously.
Although there can be no assurance, DLJ's management does not believe
that the ultimate outcome of this litigation will have a material
adverse effect on DLJ's consolidated financial condition. Based upon
information currently available to it, DLJ's management cannot predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings
have been brought on behalf of various alleged classes of claimants and
certain of these claimants seek damages of unspecified amounts. While
the ultimate outcome of such matters cannot be predicted with certainty,
in the opinion of management no such matter is likely to have a material
adverse effect on the Company's consolidated financial position or
results of operations.
16) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1999 and the succeeding four years are $98.7 million, $92.7
million, $73.4 million, $59.9 million, $55.8 million and $550.1 million
thereafter. Minimum future sublease rental income on these noncancelable
leases for 1999 and the succeeding four years is $7.6 million, $5.6
million, $4.6 million, $2.3 million, $2.3 million and $25.4 million
thereafter.
F-34
<PAGE>
At December 31, 1998, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1999
and the succeeding four years is $189.2 million, $177.0 million, $165.5
million, $145.4 million, $122.8 million and $644.7 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(In Millions)
<S> <C> <C> <C>
Compensation costs................................. $ 772.0 $ 721.5 $ 704.8
Commissions........................................ 478.1 409.6 329.5
Short-term debt interest expense................... 26.1 31.7 8.0
Long-term debt interest expense.................... 84.6 121.2 137.3
Amortization of policy acquisition costs........... 292.7 287.3 405.2
Capitalization of policy acquisition costs......... (609.1) (508.0) (391.9)
Rent expense, net of sublease income............... 100.0 101.8 113.7
Cursitor intangible assets writedown............... - 120.9 -
Other.............................................. 1,056.8 917.9 769.1
----------------- ---------------- -----------------
Total.............................................. $ 2,201.2 $ 2,203.9 $ 2,075.7
================= ================ =================
</TABLE>
During 1997 and 1996, the Company restructured certain operations in
connection with cost reduction programs and recorded pre-tax provisions
of $42.4 million and $24.4 million, respectively. The amounts paid
during 1998, associated with cost reduction programs, totaled $22.6
million. At December 31, 1998, the liabilities associated with cost
reduction programs amounted to $39.4 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
The 1996 cost reduction program included restructuring costs related to
the consolidation of insurance operations' service centers. Amortization
of DAC in 1996 included a $145.0 million writeoff of DAC related to DI
contracts.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the
Superintendent has broad discretion to determine whether the financial
condition of a stock life insurance company would support the payment of
dividends to its shareholders. For 1998, 1997 and 1996, statutory net
income (loss) totaled $384.4 million, $(351.7) million and $(351.1)
million, respectively. Statutory surplus, capital stock and Asset
Valuation Reserve ("AVR") totaled $4,728.0 million and $3,907.1 million
at December 31, 1998 and 1997, respectively. No dividends have been paid
by Equitable Life to the Holding Company to date.
At December 31, 1998, the Insurance Group, in accordance with various
government and state regulations, had $25.6 million of securities
deposited with such government or state agencies.
The differences between statutory surplus and capital stock determined
in accordance with Statutory Accounting Principles ("SAP") and total
shareholders' equity on a GAAP basis are primarily attributable to: (a)
inclusion in SAP of an AVR intended to stabilize surplus from
fluctuations in the value of the investment portfolio; (b) future policy
benefits and policyholders' account balances under SAP differ from GAAP
due to differences between actuarial assumptions and reserving
methodologies; (c) certain policy acquisition costs are expensed under
SAP but deferred under GAAP and amortized over future periods to achieve
a matching of revenues and expenses; (d) Federal income taxes are
generally accrued under SAP based upon revenues and expenses in the
Federal income tax return while under GAAP deferred taxes are provided
for timing differences between recognition of revenues and expenses for
financial reporting and income tax purposes; (e) valuation of assets
under SAP and GAAP differ due to different investment valuation and
depreciation methodologies, as well as the deferral of interest-related
realized capital gains and losses on fixed income investments; and (f)
differences in the accrual methodologies for post-employment and
retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services.
The Company's management evaluates the performance of each of these
segments independently and allocates resources based on current and
future requirements of each segment. Management evaluates the
performance of each segment based upon operating results adjusted to
exclude the effect of unusual or non-recurring events and transactions
and certain revenue and expense categories not related to the base
operations of the particular business net of minority interest.
Information for all periods is presented on a comparable basis.
Intersegment investment advisory and other fees of approximately $61.8
million, $84.1 million and $129.2 million for 1998, 1997 and 1996,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued
operations of $.5 million, $4.2 million and $13.3 million for 1998, 1997
and 1996, respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations
before Federal income taxes and cumulative effect of accounting change
as reported on the consolidated statements of earnings and the segments'
assets to total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
=============== ================= =============== ================
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains , net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 730.3 $ 453.5 $ - $ 1,183.8
=============== ================= =============== ================
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
=============== ================= =============== ================
1997
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment gains (losses)............ (318.8) 255.1 - (63.7)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
=============== ================= =============== ================
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment gains (losses), net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
--------------- ----------------- --------------- ----------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
=============== ================= =============== ================
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
=============== ================= =============== ================
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
Investment
Insurance Services Elimination Total
--------------- ----------------- --------------- ----------------
(In Millions)
<S> <C> <C> <C> <C>
1996
Segment revenues..................... $ 3,789.1 $ 1,105.5 $ (12.6) $ 4,882.0
Investment gains (losses)............ (30.3) 20.5 - (9.8)
--------------- ----------------- --------------- ----------------
Total Revenues....................... $ 3,758.8 $ 1,126.0 $ (12.6) $ 4,872.2
=============== ================= =============== ================
Pre-tax operating earnings........... $ 337.1 $ 224.6 $ - $ 561.7
Investment gains (losses), net of
DAC and other charges.............. (37.2) 16.9 - (20.3)
Reserve strengthening and DAC
writeoff........................... (393.0) - - (393.0)
Non-recurring costs and
expenses........................... (22.3) (1.1) - (23.4)
Pre-tax minority interest............ - 83.6 - 83.6
--------------- ----------------- --------------- ----------------
Earnings (Loss) from
Continuing Operations.............. $ (115.4) $ 324.0 $ - $ 208.6
=============== ================= =============== ================
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1998 and 1997 are summarized
below:
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
March 31 June 30 September 30 December 31
----------------- ----------------- ------------------ ------------------
(In Millions)
<S> <C> <C> <C> <C>
1998
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 212.8 $ 197.0 $ 136.8 $ 158.9
================= ================= ================== ==================
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
================= ================= ================== ==================
1997
Total Revenues................ $ 1,266.0 $ 1,552.8 $ 1,279.0 $ 1,021.6
================= ================= ================== ==================
Earnings from Continuing
Operations before
Cumulative Effect
of Accounting Change........ $ 117.4 $ 222.5 $ 145.1 $ 39.4
================= ================= ================== ==================
Net Earnings (Loss)........... $ 114.1 $ 223.1 $ 144.9 $ (44.9)
================= ================= ================== ==================
</TABLE>
Net earnings for the three months ended December 31, 1997 includes a
charge of $212.0 million related to additions to valuation allowances on
and writeoffs of real estate of $225.2 million, and reserve
strengthening on discontinued operations of $84.3 million offset by a
reversal of prior years tax reserves of $97.5 million.
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1998, the Company's ownership of DLJ interest was
approximately 32.5%. The Company's ownership interest will be further
reduced upon the issuance of common stock after the vesting of
forfeitable restricted stock units acquired by and/or the exercise of
options granted to certain DLJ employees. DLJ restricted stock units
represents forfeitable rights to receive approximately 5.2 million
shares of DLJ common stock through February 2000.
The results of operations of DLJ are accounted for on the equity basis
and are included in commissions, fees and other income in the
consolidated statements of earnings. The Company's carrying value of DLJ
is included in investment in and loans to affiliates in the consolidated
balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 13,195.1 $ 16,535.7
Securities purchased under resale agreements........................... 20,063.3 22,628.8
Broker-dealer related receivables...................................... 34,264.5 28,159.3
Other assets........................................................... 4,759.3 3,182.0
---------------- -----------------
Total Assets........................................................... $ 72,282.2 $ 70,505.8
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 35,775.6 $ 36,006.7
Broker-dealer related payables......................................... 26,161.5 26,127.2
Short-term and long-term debt.......................................... 3,997.6 3,249.5
Other liabilities...................................................... 3,219.8 2,860.9
---------------- -----------------
Total liabilities...................................................... 69,154.5 68,244.3
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 2,927.7 2,061.5
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 72,282.2 $ 70,505.8
================ =================
DLJ's equity as reported............................................... $ 2,927.7 $ 2,061.5
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 23.7 23.5
The Holding Company's equity ownership in DLJ.......................... (1,002.4) (740.2)
Minority interest in DLJ............................................... (1,118.2) (729.3)
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 830.8 $ 615.5
================ =================
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1998 1997
---------------- -----------------
(In Millions)
<S> <C> <C>
Commission, fees and other income...................................... $ 3,184.7 $ 2,430.7
Net investment income.................................................. 2,189.1 1,652.1
Dealer, trading and investment gains, net.............................. 33.2 557.7
---------------- -----------------
Total revenues......................................................... 5,407.0 4,640.5
Total expenses including income taxes.................................. 5,036.2 4,232.2
---------------- -----------------
Net earnings........................................................... 370.8 408.3
Dividends on preferred stock........................................... 21.3 12.2
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 349.5 $ 396.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 349.5 $ 396.1
Amortization of cost in excess of net assets acquired in 1985.......... (.8) (1.3)
The Holding Company's equity in DLJ's earnings......................... (136.8) (156.8)
Minority interest in DLJ............................................... (99.5) (109.1)
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 112.4 $ 128.9
================ =================
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock option plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option
plans for certain employees. The Company has elected to continue to
account for stock-based compensation using the intrinsic value method
prescribed in APB No. 25. Had compensation expense for the Holding
Company, DLJ and Alliance Stock Option Incentive Plan options been
determined based on SFAS No. 123's fair value based method, the
Company's pro forma net earnings for 1998, 1997 and 1996 would have
been:
<TABLE>
<CAPTION>
1998 1997 1996
--------------- --------------- ---------------
(In Millions)
<S> <C> <C> <C>
Net Earnings:
As reported............................................. $ 708.2 $ 437.2 $ 10.3
Pro forma............................................... 678.4 426.3 3.3
</TABLE>
The fair values of options granted after December 31, 1994, used as a
basis for the above pro forma disclosures, were estimated as of the
dates of grant using the Black-Scholes option pricing model. The option
pricing assumptions for 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
------------------------------ ------------------------------- ----------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
--------- ---------- --------- ---------- -------------------- ---------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.32% 0.48% 0.80% 0.69% 0.86% 1.54% 6.50% 8.00% 8.00%
Expected volatility. 28% 20% 20% 40% 33% 25% 29% 26% 23%
Risk-free interest
rate.............. 5.48% 5.99% 5.92% 5.53% 5.96% 6.07% 4.40% 5.70% 5.80%
Expected life
in years.......... 5 5 5 5 5 5 7.2 7.2 7.4
Weighted average
fair value per
option at
grant-date........ $22.64 $12.25 $6.94 $16.27 $10.81 $4.03 $3.86 $2.18 $1.35
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans is as
follows:
<TABLE>
<CAPTION>
Holding Company DLJ Alliance
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1996........ 6.7 $20.27 18.4 $13.50 9.6 $ 8.86
Granted................ .7 $24.94 4.2 $16.27 1.4 $12.56
Exercised.............. (.1) $19.91 - (.8) $ 6.82
Expired................ - - -
Forfeited.............. (.6) $20.21 (.4) $13.50 (.2) $ 9.66
--------------- ------------- ---------------
Balance as of
December 31, 1996...... 6.7 $20.79 22.2 $14.03 10.0 $ 9.54
Granted................ 3.2 $41.85 6.4 $30.54 2.2 $18.28
Exercised.............. (1.6) $20.26 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.4) $23.43 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 7.9 $29.05 28.2 $17.78 10.6 $11.41
Granted................ 4.3 $66.26 1.5 $38.59 2.8 $26.28
Exercised.............. (1.1) $21.18 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.4) $47.01 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 10.7 $44.00 28.2 $19.04 12.3 $14.94
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31,
1998 is as follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------------------------- -----------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
--------------------------------------- ----------------- ---------------- ------------------- ---------------
Holding
Company
----------------------
<S> <C> <C> <C> <C> <C>
$18.125 -$27.75 3.7 5.19 $20.97 3.0 $20.33
$28.50 -$45.25 3.0 8.68 $41.79 -
$50.63 -$66.75 2.1 9.21 $52.73 -
$81.94 -$82.56 1.9 9.62 $82.56 -
----------------- -------------------
$18.125 -$82.56 10.7 7.75 $44.00 3.0 $20.33
================= ================= ================ ==================== ==============
DLJ
----------------------
$13.50 -$25.99 22.3 7.1 $14.59 21.4 $15.05
$26.00 -$38.99 5.0 8.8 $33.94 -
$39.00 -$52.875 .9 9.4 $44.65 -
----------------- -------------------
$13.50 -$52.875 28.2 7.5 $19.04 21.4 $15.05
================= ================== ============== ===================== =============
Alliance
----------------------
$ 3.03 -$ 9.69 3.1 4.5 $ 8.03 2.4 $ 7.57
$ 9.81 -$10.69 2.0 5.3 $10.05 1.6 $10.07
$11.13 -$13.75 2.4 7.5 $11.92 1.0 $11.77
$18.47 -$18.78 2.0 9.0 $18.48 .4 $18.48
$22.50 -$26.31 2.8 9.9 $26.28 - -
----------------- -------------------
$ 3.03 -$26.31 12.3 7.2 $14.94 5.4 $ 9.88
================= =================== ============= ===================== =============
</TABLE>
F-41
