<PAGE>
Retirement Income Builder
Variable Annuity Account
Semi-Annual Report June 30, 1997
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
2
<PAGE>
DEAR VALUED POLICYHOLDER:
We are pleased to present the Semi-Annual Report of the Retirement Income
Builder Variable Annuity Account for the period ending June 30, 1997. This
report contains information on the following subaccounts:
Variable Insurance Products Fund:
Money Market
High Income
Equity Income
Growth
Overseas
Variable Insurance Products Fund II:
Investment Grade Bond
Asset Manager
Asset Manager Growth
Contrafund
Index 500
Variable Insurance Products Fund III:
Growth Opportunities
Growth & Income
Balanced
We are pleased that you have chosen the Retirement Income Builder Variable
Annuity to be part of your financial future. We look forward to serving you in
the future.
Sincerely,
LOGO
William L. Busler
President
PFL Life Insurance Company
This report may be distributed only to current policyholders or to persons who
have received current prospectuses of the variable annuity and the underlying
funds.
3
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
BALANCE SHEET
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
MONEY HIGH EQUITY
MARKET INCOME INCOME GROWTH
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash.................... $ 30 25 -- -- --
Investments in mutual
funds, at current
market value (Note 2):
Variable Insurance
Products Fund--Money
Market Portfolio..... 3,125,597 3,125,597 -- -- --
Variable Insurance
Products Fund--High
Income Portfolio..... 434,223 -- 434,223 -- --
Variable Insurance
Products Fund--Equity
Income Portfolio..... 1,239,693 -- -- 1,239,693 --
Variable Insurance
Products Fund--Growth
Portfolio............ 920,665 -- -- -- 920,665
Variable Insurance
Products Fund--
Overseas Portfolio... 419,195 -- -- -- --
Variable Insurance
Products Fund II--
Investment Grade Bond
Portfolio............ 800,974 -- -- -- --
Variable Insurance
Products Fund II--
Asset Manager
Portfolio............ 375,190 -- -- -- --
Variable Insurance
Products Fund II--
Asset Manager Growth
Portfolio............ 417,822 -- -- -- --
Variable Insurance
Products Fund II--
Contrafund
Portfolio............ 1,046,874 -- -- -- --
Variable Insurance
Products Fund II--
Index 500 Portfolio.. 1,260,864 -- -- -- --
Variable Insurance
Products Fund III--
Growth Opportunities
Portfolio............ 75,072 -- -- -- --
Variable Insurance
Products Fund III--
Growth & Income
Portfolio............ 27,013 -- -- -- --
Variable Insurance
Products Fund III--
Balanced Portfolio... 3,390 -- -- -- --
----------- --------- ------- --------- -------
Total Investments in
Mutual Funds......... 10,146,572 3,125,597 434,223 1,239,693 920,665
----------- --------- ------- --------- -------
Total Assets........... $10,146,602 3,125,622 434,223 1,239,693 920,665
=========== ========= ======= ========= =======
LIABILITIES AND CONTRACT
OWNERS' EQUITY
Liabilities:
Contract terminations
payable.............. $ 116 -- 1 25 19
----------- --------- ------- --------- -------
Total Liabilities..... 116 -- 1 25 19
Contract Owners' Equity:
Deferred annuity
contracts terminable by
owners (Note 3)........ 10,146,486 3,125,622 434,222 1,239,668 920,646
----------- --------- ------- --------- -------
Total Liabilities and
Contract Owners'
Equity............... $10,146,602 3,125,622 434,223 1,239,693 920,665
=========== ========= ======= ========= =======
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
INVESTMENT ASSET MANAGER GROWTH GROWTH &
OVERSEAS GRADE BOND MANAGER GROWTH CONTRAFUND INDEX 500 OPPORTUNITIES INCOME BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ---------- ---------- ---------- ---------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- 1 1 3
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
419,195 -- -- -- -- -- -- -- --
-- 800,974 -- -- -- -- -- -- --
-- -- 375,190 -- -- -- -- -- --
-- -- -- 417,822 -- -- -- -- --
-- -- -- -- 1,046,874 -- -- -- --
-- -- -- -- -- 1,260,864 -- -- --
-- -- -- -- -- -- 75,072 -- --
-- -- -- -- -- -- -- 27,013 --
-- -- -- -- -- -- -- -- 3,390
------- ------- ------- ------- --------- --------- ------ ------ -----
419,195 800,974 375,190 417,822 1,046,874 1,260,864 75,072 27,013 3,390
------- ------- ------- ------- --------- --------- ------ ------ -----
419,195 800,974 375,190 417,822 1,046,874 1,260,864 75,073 27,014 3,393
======= ======= ======= ======= ========= ========= ====== ====== =====
6 -- 5 5 29 26 -- -- --
------- ------- ------- ------- --------- --------- ------ ------ -----
6 -- 5 5 29 26 -- -- --
419,189 800,974 375,185 417,817 1,046,845 1,260,838 75,073 27,014 3,393
------- ------- ------- ------- --------- --------- ------ ------ -----
419,195 800,974 375,190 417,822 1,046,874 1,260,864 75,073 27,014 3,393
======= ======= ======= ======= ========= ========= ====== ====== =====
</TABLE>
5
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997, Except Where Noted (Unaudited)
<TABLE>
<CAPTION>
MONEY HIGH EQUITY
MARKET INCOME INCOME GROWTH
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
--------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends.............. $ 18,558 17,167 240 207 75
Expenses (Note 5):
Mortality and expense
risk charge........... 16,148 4,068 484 2,423 2,188
--------- --------- ----- ------ ------
Net Investment income
(loss).............. 2,410 13,099 (244) (2,216) (2,113)
--------- --------- ----- ------ ------
NET REALIZED &
UNREALIZED CAPITAL GAIN
FROM INVESTMENTS
Net realized capital
gain (loss) from sales
of investments:
Proceeds from sales.... 3,312,483 3,286,581 654 4,919 4,122
Cost of investments
sold.................. 3,310,718 3,286,581 659 4,621 3,821
--------- --------- ----- ------ ------
Net realized capital
gain (loss) from sales
of investments......... 1,765 -- (5) 298 301
--------- --------- ----- ------ ------
Net change in unrealized
appreciation of
investments:
Beginning of the
period................ -- -- -- -- --
End of the period...... 341,525 -- 6,960 71,412 55,364
--------- --------- ----- ------ ------
Net change in unrealized
appreciation of
investments............ 341,525 -- 6,960 71,412 55,364
--------- --------- ----- ------ ------
Net realized and
unrealized capital gain
from investments....... 343,290 -- 6,955 71,710 55,665
--------- --------- ----- ------ ------
INCREASE FROM
OPERATIONS............. $ 345,700 13,099 6,711 69,494 53,552
========= ========= ===== ====== ======
</TABLE>
/1/ Period from May 3, 1997 (commencement of operations) to June 30, 1997.
See accompanying Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
INVESTMENT ASSET MANAGER GROWTH GROWTH &
OVERSEAS GRADE BOND MANAGER GROWTH CONTRAFUND INDEX 500 OPPORTUNITIES INCOME BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT/1/ SUBACCOUNT/1/ SUBACCOUNT/1/
- ---------- ---------- ---------- ---------- ---------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
388 119 1 220 66 70 1 1 3
503 728 581 554 1,819 2,717 69 9 5
------ ----- ------ ------ ------ ------ ----- --- ---
(115) (609) (580) (334) (1,753) (2,647) (68) (8) (2)
------ ----- ------ ------ ------ ------ ----- --- ---
247 88 9,373 2,819 528 3,141 7 2 2
253 92 8,841 2,509 523 2,807 7 2 2
------ ----- ------ ------ ------ ------ ----- --- ---
(6) (4) 532 310 5 334 -- -- --
------ ----- ------ ------ ------ ------ ----- --- ---
-- -- -- -- -- -- -- -- --
19,657 4,860 14,378 16,303 72,058 78,001 1,965 409 158
------ ----- ------ ------ ------ ------ ----- --- ---
19,657 4,860 14,378 16,303 72,058 78,001 1,965 409 158
------ ----- ------ ------ ------ ------ ----- --- ---
19,651 4,856 14,910 16,613 72,063 78,335 1,965 409 158
------ ----- ------ ------ ------ ------ ----- --- ---
19,536 4,247 14,330 16,279 70,310 75,688 1,897 401 156
====== ===== ====== ====== ====== ====== ===== === ===
</TABLE>
7
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
Six Months Ended June 30, 1997, Except Where Noted (Unaudited)
<TABLE>
<CAPTION>
MONEY HIGH EQUITY
MARKET INCOME INCOME
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss).. $ 2,410 13,099 (244) (2,216)
Net realized capital gain
(loss)....................... 1,765 -- (5) 298
Net change in unrealized
appreciation................. 341,525 -- 6,960 71,412
----------- ---------- ------- ---------
Increase from operations...... 345,700 13,099 6,711 69,494
----------- ---------- ------- ---------
CONTRACT TRANSACTIONS
Net contract purchase
payments..................... 6,436,644 5,867,758 46,208 60,743
Transfers between funds....... 3,366,736 (2,755,235) 381,346 1,110,067
Contract terminations,
withdrawals, and other
deductions................... (2,594) -- (43) (636)
----------- ---------- ------- ---------
Increase from contract
transactions................. 9,800,786 3,112,523 427,511 1,170,174
----------- ---------- ------- ---------
Net increase in contract
owners' equity............... 10,146,486 3,125,622 434,222 1,239,668
CONTRACT OWNERS' EQUITY
Beginning of period........... -- -- -- --
----------- ---------- ------- ---------
End of period................. $10,146,486 3,125,622 434,222 1,239,668
=========== ========== ======= =========
</TABLE>
/1/ Period from May 3, 1997 (commencement of operations) to June 30, 1997.
See accompanying Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
INVESTMENT ASSET MANAGER GROWTH GROWTH &
GROWTH OVERSEAS GRADE BOND MANAGER GROWTH CONTRAFUND INDEX 500 OPPORTUNITIES INCOME BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT/1/ SUBACCOUNT/1/ SUBACCOUNT/1/
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(2,113) (115) (609) (580) (334) (1,753) (2,647) (68) (8) (2)
301 (6) (4) 532 310 5 334 -- -- --
55,364 19,657 4,860 14,378 16,303 72,058 78,001 1,965 409 158
------- ------- ------- ------- ------- --------- --------- ------ ------ -----
53,552 19,536 4,247 14,330 16,279 70,310 75,688 1,897 401 156
------- ------- ------- ------- ------- --------- --------- ------ ------ -----
55,466 48,267 181,602 7,310 65,135 24,249 73,906 2,000 2,000 2,000
811,847 351,617 615,233 353,545 336,622 952,788 1,111,880 71,176 24,613 1,237
(219) (231) (108) -- (219) (502) (636) -- -- --
------- ------- ------- ------- ------- --------- --------- ------ ------ -----
867,094 399,653 796,727 360,855 401,538 976,535 1,185,150 73,176 26,613 3,237
------- ------- ------- ------- ------- --------- --------- ------ ------ -----
920,646 419,189 800,974 375,185 417,817 1,046,845 1,260,838 75,073 27,014 3,393
-- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- --------- --------- ------ ------ -----
920,646 419,189 800,974 375,185 417,817 1,046,845 1,260,838 75,073 27,014 3,393
======= ======= ======= ======= ======= ========= ========= ====== ====== =====
</TABLE>
9
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization--The Retirement Income Builder Variable Annuity Account ("Mutual
Fund Account") is a segregated investment account of PFL Life Insurance Company
("PFL Life"), an indirect, wholly owned subsidiary of AEGON USA, Inc. ("AUSA"),
a holding company. AUSA is an indirect, wholly owned subsidiary of AEGON nv, a
holding company organized under the laws of The Netherlands.
The Money Market, High Income, Equity Income, Growth, Overseas, Investment
Grade Bond, Asset Manager, Asset Manager Growth, Contrafund and Index 500
commenced operations January 2, 1997. The Growth Opportunities, Growth & Income
and Balanced subaccounts commenced operations May 3, 1997.
The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940.
Investments--Net purchase payments received by the Mutual Fund Account are
invested in the portfolio of the Variable Insurance Products Fund, Variable
Insurance Products Fund II and Variable Insurance Products Fund III, as
selected by the contract owner. Investments are stated at the closing net asset
values per share as of June 30, 1997. Realized capital gains and losses from
sale of shares in the mutual funds are determined on the first-in, first-out
basis. Investment transactions are accounted for on the trade date (date the
order to buy or sell is executed) and dividend income is recorded on the ex-
dividend date. Unrealized gains or losses from investments in the mutual funds
are credited or charged to contract owners' equity.
Dividend Income--Dividends received from the mutual fund investments are
reinvested to purchase additional mutual fund shares.
2. INVESTMENTS
A summary of the mutual fund investment at June 30, 1997 follows:
<TABLE>
<CAPTION>
NUMBER NET ASSET
OF SHARES VALUE MARKET
HELD PER SHARE VALUE COST
--------- --------- ----------- ----------
<S> <C> <C> <C> <C>
VARIABLE INSURANCE PRODUCTS FUND
Money Market Portfolio............. 3,125,597 $ 1.00 $ 3,125,597 $3,125,597
High Income Portfolio.............. 34,933 12.43 434,223 427,263
Equity Income Portfolio............ 56,196 22.06 1,239,693 1,168,281
Growth Portfolio................... 26,920 34.20 920,665 865,301
Overseas Portfolio................. 20,918 20.04 419,195 399,538
VARIABLE INSURANCE PRODUCTS FUND II
Investment Grade Bond Portfolio.... 67,650 11.84 800,974 796,114
Asset Manager Portfolio............ 22,602 16.60 375,190 360,812
Asset Manager Growth Portfolio..... 27,985 14.93 417,822 401,519
Contrafund Portfolio............... 58,387 17.93 1,046,874 974,816
Index 500 Portfolio................ 12,168 103.62 1,260,864 1,182,863
VARIABLE INSURANCE PRODUCTS FUND
III
Growth Opportunities Portfolio..... 4,385 17.12 75,072 73,107
Growth & Income Portfolio.......... 2,351 11.49 27,013 26,604
Balanced Portfolio................. 249 13.61 3,390 3,232
----------- ----------
$10,146,572 $9,805,047
=========== ==========
</TABLE>
10
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
3. CONTRACT OWNERS' EQUITY
A summary of deferred annuity contracts terminable by owners at June 30, 1997
follows:
RETURN OF PREMIUM DEATH BENEFIT
<TABLE>
<CAPTION>
ACCUMULATION
ACCUMULATION UNIT TOTAL
SUBACCOUNT UNITS OWNED VALUE CONTRACT VALUE
---------- ------------ ------------ --------------
<S> <C> <C> <C>
Money Market........................... 1,928,635 $1.019296 $1,965,850
High Income............................ 267,952 1.072274 287,318
Equity Income.......................... 654,562 1.164343 762,135
Growth................................. 526,678 1.141922 601,425
Overseas............................... 247,363 1.168231 288,978
Investment Grade Bond.................. 684,754 1.025295 702,074
Asset Manager.......................... 218,942 1.107771 242,538
Asset Manager Growth................... 304,554 1.137084 346,303
Contrafund............................. 642,918 1.120191 720,191
Index 500.............................. 772,011 1.200206 926,572
Growth Opportunities................... 7,913 1.098455 8,693
Growth & Income........................ 4,258 1.110836 4,730
Balanced............................... 1,635 1.076840 1,762
----------
$6,858,569
==========
STEP-UP DEATH BENEFIT
5% ANNUAL COMPOUNDING DEATH BENEFIT
<CAPTION>
ACCUMULATION UNIT TOTAL
SUBACCOUNT UNITS OWNED VALUE CONTRACT VALUE
---------- ------------ ------------ --------------
<S> <C> <C> <C>
Money Market........................... 1,136,993 $1.020034 $1,159,772
High Income............................ 136,903 1.073051 146,904
Equity Income.......................... 409,830 1.165197 477,533
Growth................................. 279,344 1.142753 319,221
Overseas............................... 111,379 1.169078 130,211
Investment Grade Bond.................. 96,390 1.026038 98,900
Asset Manager.......................... 119,655 1.108573 132,647
Asset Manager Growth................... 62,847 1.137908 71,514
Contrafund............................. 291,393 1.121008 326,654
Index 500.............................. 278,305 1.201078 334,266
Growth Opportunities................... 60,415 1.098725 66,380
Growth & Income........................ 20,054 1.111108 22,284
Balanced............................... 1,513 1.077102 1,631
----------
$3,287,917
==========
</TABLE>
A summary of changes in contract owners' account units follows:
<TABLE>
<CAPTION>
MONEY HIGH EQUITY INVESTMENT ASSET
MARKET INCOME INCOME GROWTH OVERSEAS GRADE BOND MANAGER
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
1/1/97................. -- -- -- -- -- -- --
Units purchased......... 5,783,031 43,084 53,643 48,497 42,211 176,376 6,802
Units redeemed and
transferred............ (2,717,403) 361,771 1,010,749 757,525 316,531 604,768 331,795
---------- ------- --------- ------- ------- ------- -------
Units outstanding at
6/30/97................ 3,065,628 404,855 1,064,392 806,022 358,742 781,144 338,597
========== ======= ========= ======= ======= ======= =======
</TABLE>
11
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
3. CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
ASSET
MANAGER GROWTH GROWTH &
GROWTH CONTRAFUND INDEX 500 OPPORTUNITIES INCOME BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding at
1/1/97................. -- -- -- -- -- --
Units purchased......... 58,455 23,244 62,908 2,000 2,000 2,000
Units redeemed and
transferred............ 308,946 911,067 987,408 66,328 22,312 1,148
------- ------- --------- ------ ------ -----
Units outstanding at
6/30/97................ 367,401 934,311 1,050,316 68,328 24,312 3,148
======= ======= ========= ====== ====== =====
</TABLE>
At June 30, 1997 contract owners' equity was comprised of:
<TABLE>
<CAPTION>
MONEY HIGH EQUITY INVESTMENT ASSET
MARKET INCOME INCOME GROWTH OVERSEAS GRADE BOND MANAGER
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unit transactions,
accumulated net
investment income and
realized capital
gains.................. $ 9,804,961 3,125,622 427,262 1,168,256 865,282 399,532 796,114 360,807
Adjustment for
appreciation to market
value.................. 341,525 -- 6,960 71,412 55,364 19,657 4,860 14,378
----------- --------- ------- --------- ------- ------- ------- -------
Total Contract Owners'
Equity................. $10,146,486 3,125,622 434,222 1,239,668 920,646 419,189 800,974 375,185
=========== ========= ======= ========= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
ASSET
MANAGER GROWTH GROWTH &
GROWTH CONTRAFUND INDEX 500 OPPORTUNITIE INCOME BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Unit transactions,
accumulated net
investment income and
realized capital
gains.................. 401,514 974,787 1,182,837 73,108 26,605 3,235
Adjustment for
appreciation to market
value.................. 16,303 72,058 78,001 1,965 409 158
------- --------- --------- ------ ------ -----
Total Contract Owners'
Equity................. 417,817 1,046,845 1,260,838 75,073 27,014 3,393
======= ========= ========= ====== ====== =====
</TABLE>
4. TAXES
Operations of the Mutual Fund Account form a part of PFL Life, which is taxed
as a life insurance company under Subchapter L of the Internal Revenue Code of
1986, as amended (the "Code"). The operations of the Mutual Fund Account are
accounted for separately from other operations of PFL Life for purposes of
federal income taxation. The Mutual Fund Account is not separately taxable as a
regulated investment company under Subchapter M of the Code and is not
otherwise taxable as an entity separate from PFL Life. Under existing federal
income tax laws, the income of the Mutual Fund Account, to the extent applied
to increase reserves under the variable annuity contracts, is not taxable to
PFL Life.
5. ADMINISTRATIVE AND MORTALITY RISK CHARGE
Administrative charges include an annual charge of $30 per contract. Charges
for administrative fees to the variable annuity contracts are an expense of the
Mutual Fund Account.
PFL Life deducts a daily charge for assuming certain mortality and expense
risks. For the 5% Annually Compounding Death Benefit and the Annual Step-up
Death Benefit, this charge is equal to an effective annual rate of 1.25% of the
value of the contract owners' individual account. For the Return of Premium
Death Benefit, the corresponding charge is equal to an effective annual rate of
1.10% of the value of the contract owners' individual account. PFL LIfe also
deducts a daily charge equal to an annual rate of .15% of the contract owners'
account for administrative expenses.
12
<PAGE>
THE RETIREMENT INCOME BUILDER VARIABLE ANNUITY ACCOUNT
- --------------------------------------------------------------------------------
6. PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were as
follows:
<TABLE>
<CAPTION>
COMMENCEMENT OF OPERATIONS
TO JUNE 30, 1997
--------------------------
PURCHASES SALES
--------------------------
<S> <C> <C>
VARIABLE INSURANCE PRODUCTS FUND
Money Market Portfolio.............................. $ 6,412,178 $ 3,286,581
High Income Portfolio............................... 427,922 654
Equity Income Portfolio............................. 1,172,902 4,919
Growth Portfolio.................................... 869,122 4,122
Overseas Portfolio.................................. 399,791 247
VARIABLE INSURANCE PRODUCTS FUND II
Investment Grade Bond Portfolio..................... 796,206 88
Asset Manager Portfolio............................. 369,653 9,373
Asset Manager Growth Portfolio...................... 404,028 2,819
Contrafund Portfolio................................ 975,339 528
Index 500 Portfolio................................. 1,185,670 3,141
VARIABLE INSURANCE PRODUCTS FUND III
Growth Opportunities Portfolio...................... 73,114 7
Growth & Income Portfolio........................... 26,606 2
Balanced Portfolio.................................. 3,234 2
------------- ------------
$ 13,115,765 $ 3,312,483
============= ============
</TABLE>
13
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
14
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
15
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
N.INC/897 SA
