? Operating earnings increased 17% to $1.1 billion in 2006, from$934 million in 2005.

? Operating revenue grew more than $1.2 billion, or 11%, to$12.3 billion in 2006.

? Surplus and Asset Valuation Reserve grew $1 billion to $13.9billion.

? Total insurance sales exceeded $2.8 billion in 2006, anincrease of 28%.

? Total investment sales increased more than $6.6 billion, ornearly 24%, to $34.9 billion.

? Assets Under Management increased by more than $39 billion tonearly $265 billion in 2006.

Sy Sternberg, chairman and chief executive officer, said, "Thecompany's operations had a year for the record books in 2006. Ourbroad array of products, including traditional life insuranceproducts, lifetime income products, long term care insurance, andinstitutional and retail investment products and services, areclearly meeting the varied needs of our policyholders and clients.The robust growth achieved in 2006 reflects outstanding executionof our strategy, including our focus on life insurance, on careeragents, on remaining a mutual company, and of course, maintainingfinancial strength, a hallmark of our company. Surplus reached anew high of $13.9 billion, providing a superb cushion of safety andsecurity for our policyholders."

Strong Earnings

Operating earnings, the company's measure to track profitabilityfrom ongoing operations, increased 17% to a record $1.1 billion in2006, compared with 2005 operating earnings of $934 million.Significantly, earnings from International and New York LifeInvestment Management, both of which represent future earningsgrowth engines, exceeded expectations in 2006. The company's GAAPnet income (including realized capital gains and losses) totaled$2.3 billion in 2006, compared with $855 million in 2005. Theseresults included net realized capital gains of $1,205 million in2006, compared with net realized capital losses of $180 million in2005.

Record Sales and Record Operating Revenue

Insurance sales increased 28% in 2006, to $2.85 billion,propelled by strong sales in the United States of life insurance(up 24%) and lifetime income annuities (up 45%) and by a 26%increase in sales of life insurance in the company's Internationaloperations. New York Life is the largest seller of life insuranceand lifetime income annuities in the United States, according to anindustry source. In addition, sales of life insurance through AARPincreased 22% in 2006.

Investment sales increased nearly 24%, to $34.9 billion in 2006,driven by a 27% increase in sales at New York Life InvestmentManagement, which saw particularly strong sales in itsInstitutional, retirement services, and retail mutual fundbusinesses.

New York Life's operating revenue of $12.3 billion was up 11%, anew company milestone, led by a 24% increase in operating revenuefrom International operations.

Review ofBusinesses

U.S. Insurance Operations

The company's U.S. Insurance Operations include its Life andAnnuity and Special Markets business units. Life and Annuity is thecompany's largest revenue generator, selling a full array ofproducts in the United States including individual, bank- andcorporate-owned life insurance, lifetime income annuities and avariety of variable and fixed investment annuities. Key highlightsof 2006 were:

? Operating revenue in Life and Annuity increased 10% to $7.8billion, compared with $7.1 billion in 2005.

? New York Life continued its leadership in the Million DollarRound Table, the industry's most prestigious professionalorganization for agents, for the 52^nd consecutive year.The company had 2,331 agents achieve this recognition in 2006,nearly a third of New York Life's active field force in theU.S.

? Special Markets increased operating revenue by 8% to $1.4billion, compared with $1.3 billion in 2005.

? Through the AARP programs, New York Life is America's leadingdirect marketer of life insurance, and in 2006 launched a newprogram offering lifetime income annuities to AARP members.

? New York Life is also the largest underwriter of professionalassociation insurance programs in the United States, coveringmembers of more than 500 associations across the country.

? The company's long term care insurance operation ranks as theseventh largest provider in this field, according to an industrysource, with sales up 15% in 2006, versus industry sales thatdeclined by 8%.

New York Life Investment Management

New York Life Investment Management ranks among the largestasset management firms in the United States. Through its multipleboutique investment structure, New York Life Investment Managementdelivers superior investment performance through an array ofproducts designed for both institutional and retail clients. Withits MainStay Investments brand, New York Life Investment Managementdistributes some of the most highly regarded mutual funds and wrapaccounts in the industry. And its Guaranteed Products area providesguaranteed investment contracts, funding agreements and otherproducts that leverage New York Life's triple-A credit rating. NewYork Life Investment Management achieved strong performance in 2006through strategic expansion of its product shelf and distributionchannels. Highlights from 2006 included:

? The acquisition of Institutional Capital Corporation (ICAP), apremier value equity institutional investment firm based inChicago, Illinois.

? An 18% increase in assets under management over 2005,exceeding $235 billion by year-end.

? Total sales climbed to a record $28.2 billion, up 27% over2005.

New York Life International

New York Life International has operations in nine marketsincluding China, Hong Kong, India, the Philippines, South Korea,Taiwan, Thailand, Argentina, and Mexico. New York LifeInternational operations remain in growth mode, expanding rapidlyin a number of the world's most attractive emerging markets,including India and China. Key highlights of 2006 were:

? Operating revenue grew to $2.3 billion in 2006, up 24% overthe prior year.

? Insurance sales increased 26% to $729 million, drivenprimarily by exceptional growth in the company's operations inIndia, Mexico and Hong Kong.

? Max New York Life, the company's joint venture in India,virtually doubled insurance sales over the prior year. It grew thenumber of licensed agents in India to nearly 18,000 and expandedits network of offices to 90 in 55 Indian cities.

? Insurance sales in China grew 70% as we entered four newcities, including the provincial capital of Nanjing.

? Overall, International's career agent sales force continues togrow, with more than 29,000 agents registered in the ninemarkets.