Annuity Investors(Registered) Variable Account B
of
Annuity Investors Logo
for
The Commodore Logo
The Commodore The Commodore The Commodore
Navigator(Service mark) Advantage (Service Mark) Idependence(Service Mark)
December 31, 1999
Annual Report to Contract Owners
<PAGE>
Table of Contents
Page
Letter from the President............................................ 2
Tab
Annuity Investors Variable Account B- Financial Statements........... I
Portfolio Annual Reports
Bankers Trust Company..................................................II
EAFE Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
Janus Aspen Series .................................................. III
Aggressive Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Growth Portfolio
International Growth Portfolio
INVESCO Variable Investment Funds, Inc .............................. III
Equity Income Fund
Total Return Fund
High Yield Fund
Dreyfus Portfolios .................................................. IV
Dreyfus Variable Investment Fund
Money Market Portfolio
Small Cap Portfolio
Capital Appreciation Portfolio
Growth and Income Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Stock Index Fund
PBHG Insurance Series Fund, Inc...................................... VI
PBHG Technology & Communications Portfolio
PBHG Large Cap Growth Portfolio
PBHG Growth II Portfolio
Strong ...............................................................VII
Strong Opportunity Fund II, Inc.
Strong Variable Insurance Funds, Inc.,
Strong Mid Cap Growth Fund II
Morgan Stanley Dean Witter Universal Funds, Inc ....................VIII
U.S. Real Estate Portfolio
Fixed Income Portfolio
Value Portfolio
Emerging Markets Equity Portfolio
Mid Cap Value Portfolio
The Timothy Plan Small-Cap Variable Series........................... IX
-1-
<PAGE>
Dear Commodore Contract Owner:
I am pleased to present you with the December 31, 1999 Financial Statements
of Annuity Investors(R) Variable Account B, and the 1999 Annual Reports for each
of the Portfolios offered through the sub-accounts of Annuity Investors Variable
Account B. The Portfolios are managed by leading investment advisors such as
Janus Capital Corporation, The Dreyfus Corporation, Bankers Trust Company,
Morgan Stanley Dean Witter Investment Management Inc., Pilgrim Baxter &
Associates, Ltd., INVESCO Funds Group, Inc., Strong Capital Management, Inc. and
The Timothy Partners, Ltd. The broad range of investment options offered under
your Contract allows you the flexibility to implement your own personal
investment strategy and to change your mix of investments as your objectives
change over time.
In 1999, the stock market, as measured by the Standard & Poor's Composite
Stock 500 Index, showed a 21.04% increase and the NYSE Composite Index increased
by 9.15%. The bond market, as measured by Lehman Brothers Aggregate Bond Index,
decreased by 0.83% over the same period. The performance of the sub-accounts
offered under your Contract compared favorably to the performance of these
indices, as shown by the average annual total return for the period January 1,
1999 to December 31, 1999, below.*
Janus A.S.-International Growth Portfolio 79.76%
Janus A.S.-Aggressive Growth Portfolio 122.30%
Janus A.S.-Worldwide Growth Portfolio 62.18%
Janus A.S.-Capital Appreciation Portfolio 64.69%
Janus A.S.-Growth Portfolio 42.00%
Janus A.S.-Balanced Portfolio 25.01%
Dreyfus V.I.F.-Small Cap Portfolio 21.45%
Dreyfus V.I.F.-Capital Appreciation Portfolio 9.92%
Dreyfus V.I.F.-Growth and Income Portfolio 15.27%
Dreyfus V.I.F.-Money Market Portfolio 2.56%
The Dreyfus Socially Responsible Growth Fund, Inc. 28.28%
Dreyfus Stock Index Fund 18.94%
BT Insurance Funds Trust-Small Cap Index Fund 18.51%
BT Insurance Funds Trust-EAFE Equity Index Fund 25.84%
BT Insurance Funds Trust-Equity 500 Index Fund 18.72%
Strong Opportunity Fund II, Inc. 33.05%
Strong Variable Insurance Funds, Inc.
Strong Mid Cap Growth Fund II 87.26%
INVESCO VIF-Equity Income Fund 13.26%
INVESCO VIF-Total Return Fund -4.73%
INVESCO VIF-High Yield Fund 7.68%
Morgan Stanley Dean Witter Universal Funds, Inc.
Emerging Markets Equity Portfolio 92.99%
Morgan Stanley Dean Witter Universal Funds, Inc.
Mid Cap Value Portfolio 18.45%
Morgan Stanley Dean Witter Universal Funds, Inc.
Value Portfolio -3.17%
Morgan Stanley Dean Witter Universal Funds, Inc.
U.S. Real Estate Portfolio -2.83%
Morgan Stanley Dean Witter Universal Funds, Inc.
Fixed Income Portfolio -2.99%
PBHG Insurance Series Fund, Inc.
PBHG Technology & Communications Portfolio 229.77%
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio 95.46%
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth Portfolio 62.94%
The Timothy Plan Small-Cap Variable Series 17.64%
*Performance figures are net of all sub-account charges, but do not
reflect contingent deferred sales charges and contract maintenance fees.
I, and my colleagues at Annuity Investors Life Insurance Compay(R),
look forward to serving you in the future.
Sincerely,
/s/--------------------
Charles R. Scheper
President
-2-
<PAGE>
ANNUITY INVESTORS
VARIABLE ACCOUNT B
Financial Statements
Year ended December 31, 1999
With Report of Independent Auditors
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
Financial Statements
Year ended December 31, 1999
Contents
Report of Independent Auditors................................1
Audited Financial Statements
Statements of Assets and Liabilities - Current Year...........3
Statements of Operations - Current Year.......................6
Statements of Changes in Net Assets - Current Year............8
Statements of Changes in Net Assets - Prior Year.............13
Notes to Financial Statements................................14
<PAGE>
Report of Independent Auditors
Contractholders of Annuity Investors Variable Account B
And
Board of Directors of Annuity Investors Life Insurance Company
We have audited the accompanying statement of assets and liabilities of Annuity
Investors Variable Account B (comprising, respectively, the BT Insurance Funds
Trust EAFE Equity Index Fund, BT Insurance Funds Trust Equity 500 Index Fund, BT
Insurance Funds Trust Small Cap Index Fund, Dreyfus Variable Investment Fund
Capital Appreciation Portfolio, Dreyfus Variable Investment Fund Growth and
Income Portfolio, Dreyfus Variable Investment Fund Money Market Portfolio,
Dreyfus Variable Investment Fund Small Cap Portfolio, Dreyfus Funds Socially
Responsible Growth Fund, Inc., Dreyfus Funds Stock Index Fund, Invesco Funds
Group, Inc. High-Yield Fund, Invesco Funds Group, Inc. Equity Income Fund,
Invesco Funds Group, Inc. Total Return Fund , Janus Aspen Series Aggressive
Growth Portfolio, Janus Aspen Series Balanced Portfolio, Janus Aspen Series
Capital Appreciation Portfolio, Janus Aspen Series Growth Portfolio, Janus Aspen
Series International Growth Portfolio, Janus Aspen Series Worldwide Growth
Portfolio, Morgan Stanley Dean Witter Universal Funds, Inc. Emerging Markets
Equity Portfolio, Morgan Stanley Dean Witter Universal Funds, Inc. Fixed Income
Fund Portfolio, Morgan Stanley Dean Witter Universal Funds, Inc. Mid-Cap Value
Portfolio, Morgan Stanley Dean Witter Universal Funds, Inc. U.S. Real Estate
Portfolio, Morgan Stanley Dean Witter Universal Funds, Inc. Value Portfolio,
PBHG Insurance Series Fund, Inc. Growth II Portfolio, PBHG Insurance Series
Fund, Inc. Large Cap Growth Portfolio, PBHG Insurance Series Fund, Inc.
Technology & Communications Portfolio, Strong Funds Mid Cap Growth Fund II,
Strong Funds Opportunity Fund II, and Timothy Partners, Ltd. the Timothy Plan
Variable Series Sub Accounts) as of December 31, 1999, and the related statement
of operations and changes in net assets for the periods indicated therein. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
from material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
sub-accounts constituting the Annuity Investors Variable Account B at December
31, 1999, and the results of their operations and changes in their net assets
for each of the periods indicated therein, in conformity with accounting
principles generally accepted in the United States.
/s/---------------------
Ernst & Young LLP
Cincinnati, OH
February 7, 2000
-1-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
===================================================================================================================================
Market
Shares Cost Value
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
BT Insurance Funds Trust:
EAFE Equity Index Fund:..................................... 5,998.438 $ 74,997 $ 81,578
Equity 500 Index Fund....................................... 52,529.349 745,703 797,394
Small Cap Index Fund........................................ 15,254.245 159,689 177,102
Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio .............................. 186,049.137 6,930,713 7,417,778
Growth and Income Portfolio ................................. 169,089.174 3,868,913 4,308,393
Money Market Portfolio ...................................... 2,869,109.650 2,869,110 2,869,110
Small Cap Portfolio ......................................... 49,893.630 2,713,736 3,309,943
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. ...................... 176,782.631 5,783,272 6,906,898
Stock Index Fund ............................................ 873,325.926 29,186,372 33,579,383
INVESCO Variable Investment Funds, Inc.:
High-Yield Portfolio ........................................ 221,766.073 2,651,878 2,552,529
Equity Income Portfolio ..................................... 362,851.506 7,117,116 7,623,510
Total Return Portfolio ...................................... 180,966.300 2,975,320 2,819,454
Janus Aspen Series:
Aggressive Growth Portfolio ................................. 174,935.474 6,698,550 10,441,899
Balanced Portfolio .......................................... 990,136.857 23,511,840 27,644,621
Capital Appreciation Portfolio............................... 188,368.634 4,986,868 6,248,188
Growth Portfolio ............................................ 372,888.658 9,511,290 12,547,703
International Growth Portfolio .............................. 75,712.217 1,884,056 2,927,792
Worldwide Growth Portfolio ....................................... 174,687.736 4,616,525 5,081,666
Worldwide Growth Portfolio................................... 441,294.659 13,675,527 21,071,820
Morgan Stanley Dean Witter Universal Funds, Inc.:
Emerging Markets Equity Portfolio ........................... 46,136.031 417,812 641,752
Fixed Income Portfolio ...................................... 300,201.549 3,174,939 3,017,025
Mid Cap Value Portfolio ..................................... 177,493.539 2,573,295 2,772,448
U.S. Real Estate Portfolio .................................. 91,264.643 893,438 831,421
Value Portfolio ............................................. 70,049.485 781,450 753,733
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio ......................................... 58,085.851 887,955 1,338,880
Large Cap Growth Portfolio .................................. 132,944.781 2,149,837 3,391,422
Technology & Communications Portfolio ....................... 367,857.212 8,216,666 16,925,109
Strong Funds:
Mid Cap Growth Fund II ...................................... 101,144.051 1,980,186 3,071,744
Opportunity Fund II ......................................... 85,625.956 1,858,122 2,225,418
Timothy Partners, Ltd.:
The Timothy Plan Small-Cap Variable Series .................. 92,607.694 959,457 1,144,631
Total cost............................................................... $149,238,107
==================================================================================================================================
Total assets............................................................................ 189,438,678
Liabilities:
Amounts due to Annuity Investors Life Insurance Company (Note 4)......................................... 153
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets.............................................................................. $189,438,525
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITIES (continued)
December 31, 1999
<TABLE>
<CAPTION>
===============================================================================================================================
Market
Units Unit Value Value
----------- ----------- -----------
<S> <C> <C> <C>
Net assets attributable to variable annuity contract holders (Note 2):
BT Insurance Funds Trust:
EAFE Equity Index Fund - Basic contract.............................. 6,821.832 $11.958486 $ 81,579
EAFE Equity Index Fund - Enhanced contract........................... 0.000 11.981984 0
EAFE Equity Index Fund - Modified Enhanced contract.................. 0.000 11.993767 0
Equity 500 Index Portfolio - Basic contract.......................... 73,596.514 10.815237 795,963
Equity 500 Index Portfolio - Enhanced contract....................... 0.000 10.836517 0
Equity 500 Index Portfolio - Modified Enhanced contract.............. 131.993 10,847192 1,431
Small Cap Index Portfolio - Basic contract........................... 15,259.149 11,606269 177,102
Small Cap Index Portfolio - Enhanced contract........................ 0.000 11,629080 0
Small Cap Index Portfolio - Modified Enhanced contract............... 0.000 11.640544 0
Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio - Basic contract ..................... 517,772.082 14.262203 7,384,571
Capital Appreciation Portfolio - Enhanced contract .................. 2,156.774 14.366606 30,986
Capital Appreciation Portfolio - Modified Enhanced contract.......... 154.147 14.419045 2,223
Growth and Income Portfolio - Basic contract ........................ 331,756.261 12.961023 4,299,901
Growth and Income Portfolio - Enhanced contract ..................... 650.409 13.055905 8,492
Growth and Income Portfolio - Modified Enhanced contract............. 0.000 13.103601 0
Money Market Portfolio - Basic contract ............................. 2,638,837.162 1.083700 2,859,708
Money Market Portfolio - Enhanced contract .......................... 8,490.939 1.090994 9,264
Money Market Portfolio - Modified Enhanced contract.................. 0.000 1.096462 0
Small Cap Portfolio - Basic contract ................................ 275,503.637 11.984035 3,301,645
Small Cap Portfolio - Enhanced contract ............................. 486.764 12.071820 5,876
Small Cap Portfolio - Modified Enhanced contract..................... 199.908 12.116077 2,422
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. - Basic contract ............. 408,482.196 16.894039 6,900,915
Socially Responsible Growth Fund, Inc. - Enhanced contract .......... 351.586 17.017705 5,983
Socially Responsible Growth Fund, Inc. - Modified Enhanced Contract.. 0.000 17.079770 0
Stock Index Fund - Basic contract ................................... 2,129,772.165 15.760394 33,566,049
Stock Index Fund - Enhanced contract ................................ 616.234 15.875757 9,784
Stock Index Fund - Modified Enhanced contract........................ 222.802 15.933836 3,550
INVESCO Funds Group, Inc.:
High-Yield Fund - Basic contract .................................... 221,636.210 11.510803 2,551,212
High-Yield Fund - Enhanced contract ................................. 113.564 11.595106 1,317
High-Yield Fund - Modified Enhanced contract......................... 0.000 11.637523 0
Equity Income Fund - Basic contract ................................. 553,696.171 13.726769 7,600,459
Equity Income Fund - Enhanced contract .............................. 1,667.041 13.827281 23,051
Equity Income Fund - Modified Enhanced contract...................... 0.000 13.877907 0
Total Return Fund - Basic contract .................................. 258,825.173 10.811807 2,798,367
Total Return Fund - Enhanced contract ............................... 1,936.199 10.890979 21,087
Total Return Fund - Modified Enhanced contract....................... 0.000 10.930872 0
Janus Aspen Series:
Aggressive Growth Portfolio - Basic contract ........................ 329,807.902 31.565210 10,410,456
Aggressive Growth Portfolio - Enhanced contract ..................... 829.264 31.796057 26,368
Aggressive Growth Portfolio - Modified Enhanced contract............. 159.044 31.911561 5,075
Balanced Portfolio - Basic contract ................................. 1,571,579.505 17.556100 27,590,807
Balanced Portfolio - Enhanced contract .............................. 2,931.027 17.684597 51,834
Balanced Portfolio - Modified Enhanced contract ..................... 111.555 17.749154 1,980
Capital Appreciation Portfolio - Basic contract ..................... 471,936.628 13.234548 6,245,868
Capital Appreciation Portfolio - Enhanced contract................... 4.141 13.260556 55
Capital AppreciationPortfolio - Modified Enhanced contract........... 170.622 13.273610 2,265
Growth Portfolio - Basic contract ................................... 643,514.256 19.453513 12,518,613
Growth Portfolio - Enhanced contract ................................ 1,374.992 19.595874 26,944
Growth Portfolio - Modified Enhanced contract........................ 109.122 19.667608 2,146
International Growth Portfolio - Basic contract ..................... 142,343.325 20.234788 2,880,287
International Growth Portfolio - Enhanced contract .................. 2,330.619 20.382770 47,505
International Growth Portfolio - Modified Enhanced contract.......... 0.000 20.457001 0
Worldwide Growth Portfolio - Basic contract ......................... 1,026,072.851 20.488548 21,022,743
Worldwide Growth Portfolio - Enhanced contract ...................... 2,225.846 20.638429 45,938
Worldwide Growth Portfolio - Modified Enhanced contract.............. 151.550 20.713399 3,139
Morgan Stanley Dean Witter Universal Funds, Inc.:
Emerging Markets Equity Portfolio - Basic contract .................. 56,080.554 11.416896 640,266
Emerging Markets Equity Portfolio - Enhanced contract ............... 128.179 11.500499 1,474
Emgerging Markets Equity Portfolio - Modified Enhanced contract...... 0.000 11.542646 0
Fixed Income Portfolio - Basic contract ............................. 279,193.758 10.749115 3,001,086
Fixed Income Portfolio - Enhanced contract .......................... 1,472.104 10.827853 15,939
Fixed Income Portfolio - Modified Enhanced contract ................. 0.000 10.867507 0
Mid-Cap Value Portfolio - Basic contract ............................ 183,388.647 15.049488 2,759,905
Mid-Cap Value Portfolio - Enhanced contract ......................... 827.448 15.159702 12,543
Mid-Cap Value Portfolio - Modified contract ......................... 0.000 15.215264 0
U.S. Real Estate Portfolio - Basic contract ......................... 86,941.426 9.482378 824,412
U.S. Real Estate Portfolio - Enhanced contract ...................... 733.827 9.551867 7,009
U.S. Real-Estate Portfolio - Modified Enhanced contract.............. 0.000 9.586849 0
Value Portfolio - Basic contract .................................... 78,330.649 9.536137 746,972
Value Portfolio - Enhanced contract ................................. 703.796 9.605992 6,761
Value Portfolio - Modified Enhanced contract......................... 0.000 9.641132 0
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio - Basic contract ................................ 67,359.578 19.835104 1,336,085
Growth II Portfolio - Enhanced contract ............................. 139.873 19.980260 2,795
Growth II Portfolio - Modified Enhanced contract..................... 0.000 20.053445 0
Large Cap Growth Portfolio - Basic contract ......................... 158,614.893 21.307087 3,379,622
Large Cap Growth Portfolio - Enhanced contract ...................... 549.785 21.462991 11,800
Large Cap Growth Portfolio - Modified Enhanced contract ............. 0.000 21.541442 0
Technology & Communications Portfolio - Basic contract .............. 433,441.908 38.941384 16,878,828
Technology & Communications Portfolio - Enhanced contract ........... 904.009 39.226135 35,460
Technology & Communications Portfolio - Modified Enhanced contract... 274.877 39.369150 10,822
Strong Funds:
Growth Fund II - Basic contract ..................................... 120,559.085 25.444156 3,067,524
Growth Fund II - Enhanced contract .................................. 164.682 25.630290 4,220
Growth Fund II - Modified Enhanced contract.......................... 0.000 25.723816 0
Opportunity Fund II - Basic contract ................................ 138,453.066 15.981484 2,212,685
Opportunity Fund II - Enhanced contract ............................. 790.953 16.098506 12,733
Opportunity Fund II - Modified Enhanced contract..................... 0.000 16.157323 0
Timothy Partners Ltd.:
The Timothy Plan Small-Cap Variable Series - Basic contract ......... 94,238.615 12.097693 1,140,070
The Timothy Plan Small-Cap Variable Series - Enhanced contract ...... 374.501 12.157659 4,553
The Timothy Plan Small-Cap Variable Series - Modified Enhanced contract 0.000 12.137973 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable annuity contract holds............................. 189,438,525
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets............................................................................. $ 189,438,525
=================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
BT Insurance Funds Trust
-----------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Funds* Funds*
====================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 3,438 $ 6,609 $ 6,454
Expenses:
Mortality and expense risk fees (Note 4) .......................... 284 2,437 698
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 3,154 4,172 5,756
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 37 214 2
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 6,582 51,692 17,413
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 6,619 51,906 17,415
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 9,773 $ 56,078 $ 23,171
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Dreyfus Variable Investment Fund
-------------------------------------------------------
Growth
Capital and Money Small
Appreciation Income Market Cap
Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 67,948 $ 147,614 $ 96,066 $ 1,462
Expenses:
Mortality and expense risk fees (Note 4) .......................... 74,555 42,244 32,780 33,949
----------------------------------------------------
Net investment income (loss) ................................. (6,607) 105,370 63,286 (32,487)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 238,043 19,012 0 (21,349)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 259,369 342,538 0 595,527
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 497,412 361,550 0 574,178
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 490,805 $ 466,920 $ 63,286 $ 541,691
====================================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Dreyfus Funds
------------------------
Socially
Responsible Stock
Growth Index
Fund, Inc. Fund
===========================================================================================================
<S> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 231,100 $ 469,755
Expenses:
Mortality and expense risk fees (Note 4) .......................... 55,968 301,566
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 175,132 168,189
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 41,381 529,386
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 927,407 3,280,156
- -----------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 968,788 3,809,542
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 1,143,920 $ 3,977,731
===========================================================================================================
<CAPTION>
=====================================================================================================================
INVESCO Funds Group, Inc.
--------------------------- ------------
High Equity Total
Yield Income Return
Fund Fund Fund
=====================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 157,291 $ 125,224 $ 74,416
Expenses:
Mortality and expense risk fees (Note 4) .......................... 20,348 72,959 34,257
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 136,943 52,265 40,159
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares (29,520) 86,162 (11,234)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ........................... (17,860) 437,941 (165,855)
- ---------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... (47,380) 524,103 (177,089)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 89,563 $ 576,368 $ (136,930)
=====================================================================================================================
<CAPTION>
====================================================================================================================================
Janus Aspen Series
---------------------------------------------
Aggressive Capital
Growth Balanced Appreciation
Portfolio Portfolio Portfolo*
====================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 94,859 $ 439,435 $ 11,901
Expenses:
Mortality and expense risk fees (Note 4) .......................... 52,637 209,733 21,529
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. 42,222 229,702 (9,628)
Net realized gain (loss) and unrealized appreciation(depreciation)on investments:
Net realized gain (loss) on sale of investments in portfolio shares 60,355 104,795 74,558
Net change in unrealized appreciation (depreciation) 3,600,903 3,431,852 1,261,320
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 3,661,258 3,536,647 1,335,878
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 3,703,480 $ 3,766,349 $ 1,326,250
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Series
-------------------------------------------
International Worldwide
Growth Growth Growth
Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 51,556 $ 2,401 $ 19,416
Expenses:
Mortality and expense risk fees (Note 4) .......................... 94,822 18,274 171,124
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. (43,266) (15,873) (151,708)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 63,610 51,427 306,342
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ........................... 2,661,896 1,017,938 6,931,151
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 2,725,506 1,069,365 7,237,493
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 2,682,240 $ 1,053,492 $ 7,085,785
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Morgan Stanley Dean Witter Universal Funds, Inc.
-----------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 63 $ 132,926 $ 317,551 $ 40,924 $ 8,877
Expenses:
Mortality and expense risk fees (Note 4) .......................... 4,770 27,694 28,429 8,867 7,892
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. (4,707) 105,232 289,122 32,057 985
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares (1,692) (9,201) 28,294 (17,801) (11,045)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 246,465 (149,045) 95,581 (35,769) (1,062)
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 244,773 (158,246) 123,875 (53,570) (12,107)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 240,066 $ (53,014) $ 412,997 $ (21,513) $(11,122)
====================================================================================================================================
<CAPTION>
====================================================================================================================================
PBHG Insurance Series Fund, Inc.
-----------------------------------------------------------
Technology
Large Cap and
Growth II Growth Communications
Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 0 $ 0 $ 0
Expenses:
Mortality and expense risk fees (Note 4) .......................... 8,087 24,711 84,616
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. (8,087) (24,711) (84,616)
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 40,307 59,889 172,517
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 432,229 1,167,374 8,559,584
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 472,536 1,227,263 8,732,101
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 464,449 $1,202,552 $ 8,647,485
===================================================================================================================================
<PAGE>
<CAPTION>
===================================================================================================================================
Strong Funds Timothy Partners
----------------------------------------------------------
Mid Cap
Growth Opportunity The Timothy
Fund Fund Plan Variable
II II Small Cap Series Total
===================================================================================================================================
<S> <C> <C> <C> <C>
Investment income:
Dividends from investments in portfolio shares .................... $ 1,120 $ 129,340 $ 1,972 $ 2,639,718
Expenses:
Mortality and expense risk fees (Note 4) .......................... 9,893 20,906 9,802 1,485,831
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................. (18,773) 108,434 (7,830) 1,153,887
Net realized gain (loss) and unrealized appreciation (depreciation)
on investments:
Net realized gain (loss) on sale of investments in portfolio shares 24,467 (3,523) 6,613 1,802,046
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 1,024,601 333,962 176,337 36,490,227
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... 1,049,068 330,439 182,950 38,292,273
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $1,030,295 $ 438,873 $ 175,120 $ 39,446,160
===================================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement of operations) to December 31, 1999
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
==================================================================================================================================
BT Insurance Funds Trust
--------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 3,154 $ 4,172 $ 5,756
Net realized gain (loss) on sale of investments in portfolio shares 37 214 2
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 6,582 51,692 17,413
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 9,773 56,078 23,171
Changes from principal transactions:
Contract purchase payments ........................................ 37,818 515,478 113,079
Contract redemptions .............................................. (123) (3,245) 0
Net transfers (to) from fixed account ............................. 34,110 229,083 40,852
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 71,805 741,316 153,931
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 81,578 797,394 177,102
Net assets, beginning of period ........................................ 0 0 0
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 81,578 $797,394 $ 177,102
==================================================================================================================================
<CAPTION>
==================================================================================================================================
Dreyfus Variable Investment Fund
-----------------------------------------
Growth
Capital and Money
Appreciation Income Market
Portfolio Portfolio Portfolio
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ......................................... $ (6,607) $ 105,370 $ 63,286
Net realized gain (loss) on sale of investments in portfolio shares .. 238,043 19,012 0
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares ................................. 259,369 342,538 0
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........... 490,805 466,920 63,286
Changes from principal transactions:
Contract purchase payments ........................................... 5,084,456 1,865,486 4,017,759
Contract redemptions ................................................. (134,245) (75,414) (26,507)
Net transfers (to) from fixed account ................................ (237,158) 258,973 (1,878,656)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions .......... 4,713,053 2,049,045 2,112,596
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ................................. 5,203,858 2,515,965 2,175,882
Net assets, beginning of period ........................................... 2,213,920 1,792,428 693,094
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ................................................. $7,417,778 $ 4,308,393 $ 2,868,976
==================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Dreyfus Funds
----------------------------------------------------
Socially
Small Responsible Stock
Cap Growth Index
Portfolio Fund, Inc. Fund
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ......................................... $ (32,487) $ 175,132 168,189
Net change in unrealized appreciation (depreciation) of (21,349) 41,381 529,386
investments in portfolio shares .................................. 595,527 927,407 3,280,156
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ............ 541,691 1,143,920 3,977,731
Changes from principal transactions:
Contract purchase payments ............................................ 1,237,855 3,437,034 19,622,971
Contract redemptions .................................................. (67,011) (81,945) (568,106)
Net transfers (to) from fixed account ................................. (99,634) 555,059 217,350
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ........... 1,071,210 3,910,148 19,272,215
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .................................. 1,612,901 5,054,068 23,249,946
Net assets, beginning of period ............................................ 1,697,042 1,852,830 10,329,437
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ................................................. $ 3,309,943 $ 6,906,898 $ 33,579,383
=================================================================================================================================
<CAPTION>
===================================================================================================================================
Invesco Funds Group, Inc.
------------------------------------------
High Equity Total
Yield Income Return
Fund Fund Fund
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 136,943 $ 52,265 $ 40,159
Net realized gain (loss) on sale of investments in portfolio shares (29,520) 86,162 (11,234)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (17,860) 437,941 (165,855)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 89,563 576,368 (136,930)
Changes from principal transactions:
Contract purchase payments ........................................ 1,241,157 4,179,217 1,394,116
Contract redemptions .............................................. (65,263) (136,289) (64,428)
Net transfers (to) from fixed account ............................. 538,217 571,629 (130,922)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 1,714,111 4,614,557 1,198,766
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,803,674 5,190,925 1,061,836
Net assets, beginning of period ........................................ 748,855 2,432,585 1,757,618
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 2,552,529 $ 7,623,510 $ 2,819,454
==================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Janus Aspen Series
----------------------------------------------
Aggressive Capital
Growth Balanced Appreciation
Portfolio Portfolio Portfolio
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 42,222 $ 229,702 $ (9,628)
Net realized gain (loss) on sale of investments in portfolio shares 60,355 104,795 74,558
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 3,600,903 3,431,852 1,261,320
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 3,703,480 3,766,349 1,326,250
Changes from principal transactions:
Contract purchase payments ........................................ 4,534,253 15,693,612 3,105,966
Contract redemptions .............................................. (50,438) (409,983) (20,685)
Net transfers (to) from fixed account ............................. 1,488,790 3,349,214 1,836,657
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 5,972,605 18,632,843 4,921,938
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 9,676,085 22,399,192 6,248,188
Net assets, beginning of period ........................................ 765,814 5,245,429 0
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 10,441,899 $ 27,644,621 $ 6,248,188
==================================================================================================================================
<CAPTION>
====================================================================================================================================
Janus Aspen Series
---------------------------------------
International Worldwide
Growth Growth Growth
Portfolio Portfolio Portfolio
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (43,266) $ (15,873) $ (151,708)
Net realized gain (loss) on sale of investments in portfolio shares 63,610 51,427 306,342
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 2,661,896 1,017,938 6,931,151
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 2,682,240 1,053,492 7,085,785
Changes from principal transactions:
Contract purchase payments ........................................ 6,675,682 1,171,333 9,061,058
Contract redemptions .............................................. (141,914) (39,980) (293,429)
Net transfers (to) from fixed account ............................. 971,572 231,436 136,740
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 7,505,340 1,362,789 8,904,369
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 10,187,580 2,416,281 15,990,154
Net assets, beginning of period ........................................ 2,360,123 511,511 5,081,666
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 12,547,703 $ 2,927,792 $ 21,071,820
==================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Morgan Stanley Dean Witter Universal Funds, Inc.
---------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (4,707) $ 105,232 $ 289,122 $ 32,057 $ 985
Net realized gain (loss) on sale of investments in portfolio shares (1,692) (9,201) 28,294 (17,801) (11,045)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 246,465 (149,045) 98,581 (35,769) (1,062)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 240,066 (53,014) 412,997 (21,513) (11,122)
Changes from principal transactions:
Contract purchase payments ........................................ 261,307 1,252,573 870,326 339,310 391,649
Contract redemptions .............................................. (8,163) (55,730) (43,262) (17,610) (28,873)
Net transfers (to) from fixed account ............................. (30,458) 1,359,317 120,956 103,827 64,914
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 222,686 2,556,160 948,020 425,527 427,690
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 462,752 2,503,146 1,361,017 404,014 416,568
Net assets, beginning of period ........................................ 178,988 513,879 1,411,431 427,407 337,165
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 641,740 $3,017,025 $2,772,448 $ 831,421 $ 753,733
===================================================================================================================================
<CAPTION>
==================================================================================================================================
PBHG Insurance Series Fund, Inc.
--------------------------------------------
Technology
Large Cap and
Growth II Growth Communications
Portfolio Portfolio Portfolio
==================================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (8,087) $ (24,711) $ (84,616)
Net realized gain (loss) on sale of investments in portfolio shares 40,307 59,889 172,517
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 432,229 1,167,374 8,559,584
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 464,449 1,202,552 8,647,485
Changes from principal transactions:
Contract purchase payments ........................................ 546,169 1,708,934 5,304,053
Contract redemptions .............................................. (8,514) (29,829) (122,730)
Net transfers (to) from fixed account ............................. 86,887 98,187 2,319,044
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 624,542 1,777,292 7,500,367
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 1,088,991 2,979,844 16,147,852
Net assets, beginning of period ........................................ 249,889 411,578 777,257
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $1,338,880 $ 3,391,422 $ 16,925,109
==================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Strong Funds Timothy Partners
-------------------------------------------------
Mid Cap Opportunity The Timothy Plan
Fund Fund Small Cap
II II Variable Series Total
====================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (18,773) $ 108,434 $ (7,830) $ 1,153,887
Net realized gain (loss) on sale of investments in portfolio shares 24,467 (3,523) 6,613 1,802,046
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 1,024,601 333,962 176,337 36,490,227
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 1,030,295 438,873 175,120 39,446,160
Changes from principal transactions:
Contract purchase payments ........................................ 1,346,916 964,598 503,451 96,477,616
Contract redemptions .............................................. (63,446) (44,752) (31,051) (2,632,965
Net transfers (to) from fixed account ............................. 306,781 (6,091) 195,671 12,732,347
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 1,590,251 913,755 668,071 106,576,998
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 2,620,546 1,352,628 843,191 146,023,158
Net assets, beginning of period ........................................ 451,198 872,790 301,433 43,415,367
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 3,071,744 $ 2,225,418 $1,144,624 $ 189,438,525
====================================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement date of operations)
to December 31, 1999
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED DECEMBER 31, 1999
Basic Contracts
<TABLE>
<CAPTION>
====================================================================================================================================
BT Insurance Funds Trust
-------------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
=====================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 6,832.096 73,908.864 15,259.832
Units redeemed (10.264) (312.350) (0.683)
----------- ----------- ------------
Units outstanding December 31, 1999 6,821.832 73,596.514 15,259.149
=========== =========== ============
====================================================================================================================================
Dreyfus Variable Investment Fund Dreyfus Funds
---------------------------------------------------------------------------------------
Growth Socially
Capital and Money Small Responsible Stock
Appreciation Income Market Cap Growth Index
Portfolio Portfolio Portfolio Portfolio Fund, Inc. Fund
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 170,523.015 159,409.837 658,981.650 171,968.905 140,614.024 779,485.606
Units purchased 372,946.146 178,753.260 3,758,398.024 119,600.564 273.663.600 1,389,766.200
Units redeemed (25,697.079) (6,406.836) (1,778,542.512) (16,065.832) (5,795.428) (39,479.641)
------------- ------------ --------------- ------------- ------------- --------------
Units outstanding December 31, 1999 517,772.082 331,756.261 2,638,837.162 275,503.637 408,482.196 2,129,772.165
============ ============ =============== ============= ============ =============
====================================================================================================================================
Invesco Funds Group, Inc.
------------------------------------------
High Equity Total
Yield Income Return
Fund Fund Fund
====================================================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 70,047.913 200,541.938 154,762.526
Units purchased 157,413.43 363,563.92 120,990.59
Units redeemed (5,825.13) (10,409.69) (16,927.94)
---------- ------------ -------------
Units outstanding December 31, 1999 221,636.210 553,696.171 258,825.173
============= ============= ==============
====================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------------------------------
Aggressive Capital International Worldwide
Growth Balanced Appreciation Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 53,896.345 373,285.807 0.000 172,190.630 45,382.775 402,131.168
Units purchased 278,080.656 1,224,730.099 473,953.960 480,342.283 100,167.009 643,927.060
Units redeemed (2,169.099) (26,436.401) (2,017.332) (9,018.657) (3,206.459) (19,985.377)
------------ ------------ -------- ------------ ------------ ------------
Units outstanding December 31, 1999 329,807.902 1,571,579.505 471,936.628 643,514.256 142,343.325 1,026,072.851
============ ============== =========== ============ ============ ==============
====================================================================================================================================
<PAGE>
<CAPTION>
Morgan Stanley Dean Witter Universal Funds, Inc.
--------------------------------------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 30,255.642 46,348.096 111,076.120 43,786.457 34,212.111
Units purchased 34,003.778 237,990.514 75,629.717 44,901.681 47,456.893
Units redeemed (8,178.866) (5,144.852) (3,317.190) (1,746.712) (3,338.355)
---------- ------------ ----------- ----------- -----------
Units outstanding December 31, 1999 56,080.554 279,193.758 183,388.647 86,941.426 78,330.649
=========== ============ ============ ============ ===========
====================================================================================================================================
<CAPTION>
PBHG Insurance Series Fund, Inc. Strong Funds Timothy Partners
---------------------------------------------- ---------------------- ----------------
Technology Mid Cap
Large Cap and Growth Opportunity The Timothy
Growth II Growth Communications Fund Fund Plan Variable
Portfolio Portfolio Portfolio II II Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 24,618.770 31,474.961 65,820.143 33,197.715 72,644.387 29,293.327
Units purchased 43,279.210 129,400.234 374,005.518 91,173.444 70,112.940 68,160.700
Units redeemed (538.402) (2,260.302) (6,383.753) (3,812.074) (4,304.261) (3,215.412)
---------- ------------ ----------- ------------ ----------- ----------
Units outstanding December 31, 1999 67,359.578 158,614.893 433,441.908 120,559.085 138,453.066 94,238.615
=========== ============ ============ =========== ============ ===========
==================================================================================================================================
*For the period May 1, 1999 (commencement date of operations) to December 31, 1999
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED DECEMBER 31, 1999
Enhanced Contracts
<TABLE>
<CAPTION>
====================================================================================================================================
BT Insurance Funds Trust
-------------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
=====================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 0.000 0.000 0.000
Units redeemed 0.000 0.000 0.000
----------- ----------- ------------
Units outstanding December 31, 1999 0.000 0.000 0.000
=========== =========== ============
====================================================================================================================================
Dreyfus Variable Investment Fund Dreyfus Funds
---------------------------------------------------------------------------------------
Growth Socially
Capital and Money Small Responsible Stock
Appreciation Income Market Cap Growth Index
Portfolio Portfolio Portfolio Portfolio Fund, Inc. Fund
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 100.415 5.049 555.360 14.492 80.398 56.321
Units purchased 2,140.239 681.763 7,935.579 475.924 271.188 664.191
Units redeemed (83.880) (36.403) 0.000 (3.652) 0.000 (104.278)
----------- ---------- ------------- ---------- --------- ----------
Units outstanding December 31, 1999 2,156.774 650.409 8,490.939 486.764 351.586 616.234
=========== ========== ============ ========== ========= ==========
====================================================================================================================================
Invesco Funds Group, Inc.
------------------------------------------
High Equity Total
Yield Income Return
Fund Fund Fund
====================================================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 7.556 163.123 111.314
Units purchased 106.052 1,503.918 1,830.682
Units redeemed (0.044) 0.000 (5.797)
-------- ---------- ------------
Units outstanding December 31, 1999 113.564 1,667.041 1,936.199
========= =========== ============
====================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------------------------------
Aggressive Capital International Worldwide
Growth Balanced Appreciation Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 36.621 214.770 0.000 84.318 58.950 123.659
Units purchased 792.817 2,812.213 4.141 1,290.674 2,321.121 2,207.180
Units redeemed (0.174) (95.956) 0.000 0.000 (49.452) (104.993)
---------- ---------- ------- ---------- ---------- -----------
Units outstanding December 31, 1999 829.264 2,931.027 4.141 1,374.992 2,330.619 2.225.846
========= ========== ======= =========== ========== ===========
====================================================================================================================================
<PAGE>
<CAPTION>
Morgan Stanley Dean Witter Universal Funds, Inc.
--------------------------------------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 30.906 15.684 10.564 23.284
Units purchased 128.179 1,441.432 811.880 758.015 682.745
Units redeemed 0.000 (0.234) (0.116) (34.752) (2.233)
-------- ----------- --------- --------- ---------
Units outstanding December 31, 1999 128.179 1,472.104 827.448 733.827 703.796
========= =========== ========== ========= =========
====================================================================================================================================
<CAPTION>
PBHG Insurance Series Fund, Inc. Strong Funds Timothy Partners
---------------------------------------------- ---------------------- ----------------
Technology Mid Cap
Large Cap and Growth Opportunity The Timothy
Growth II Growth Communications Fund Fund Plan Variable
Portfolio Portfolio Portfolio II II Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 6.572 0.000 2.516 9.046 15.156 17.653
Units purchased 133.301 565.456 920.935 155.911 781.126 357.270
Units redeemed 0.000 (15.671) (19.442) (0.275) (5.329) (0.422)
--------- --------- --------- --------- --------- --------
Units outstanding December 31, 1999 139.873 549.785 904.009 164.682 790.953 374.501
========= ========= ========= ========= ========= ========
==================================================================================================================================
</TABLE>
*For the period May 1, 1999 (commencement date of operations)
to December 31, 199
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEAR ENDED DECEMBER 31, 1999
Modified Enhanced Contracts
<TABLE>
<CAPTION>
====================================================================================================================================
BT Insurance Funds Trust
-------------------------------------------------------
EAFE Equity Small
Equity 500 Cap
Index Index Index
Fund* Fund* Fund*
=====================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 0.000 132.541 0.000
Units redeemed 0.000 (312.350) 0.000
------- --------- --------
Units outstanding December 31, 1999 0.000 131.993 0.000
======= ========= ========
====================================================================================================================================
Dreyfus Variable Investment Fund Dreyfus Funds
---------------------------------------------------------------------------------------
Growth Socially
Capital and Money Small Responsible Stock
Appreciation Income Market Cap Growth Index
Portfolio Portfolio Portfolio Portfolio Fund, Inc. Fund
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000 0.000 0.000 0.000
Units purchased 179.381 0.000 0.000 202.376 0.000 246.175
Units redeemed (25.234) 0.000 0.000 (2.468) 0.000 (23.373)
--------- --------- --------- --------- -------- ----------
Units outstanding December 31, 1999 154.147 0.000 0.000 199.908 0.000 222.802
========= ========== ========= ========= ======== =========
====================================================================================================================================
Invesco Funds Group, Inc.
------------------------------------------
High Equity Total
Yield Income Return
Fund Fund Fund
====================================================================================================================================
<S> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000
Units purchased 0.000 0.000 0.000
Units redeemed 0.000 0.000 0.000
------- ------- -------
Units outstanding December 31, 1999 0.000 0.000 0.000
======== ======== ========
====================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------------------------------
Aggressive Capital International Worldwide
Growth Balanced Appreciation Growth Growth Growth
Portfolio Portfolio Portfolio* Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000 0.000 0.000 0.000
Units purchased 159.044 111.697 172.055 109.122 0.000 176.308
Units redeemed 0.000 (0.142) (1.433) 0.000 0.000 (24.758)
-------- --------- -------- -------- -------- --------
Units outstanding December 31, 1999 159.044 111.555 170.622 109.122 0.000 151.550
======== ========== ========= ========= ======== =========
====================================================================================================================================
<PAGE>
<CAPTION>
Morgan Stanley Dean Witter Universal Funds, Inc.
--------------------------------------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000 0.000 0.000
Units purchased 0.000 0.000 0.000 0.000 0.000
Units redeemed 0.000 0.000 0.000 0.000 0.000
------ ------- ------- ------- -------
Units outstanding December 31, 1999 0.000 0.000 0.000 0.000 0.000
======== ======== ======== ======= =======
====================================================================================================================================
<CAPTION>
PBHG Insurance Series Fund, Inc. Strong Funds Timothy Partners
---------------------------------------------- ---------------------- ----------------
Technology Mid Cap
Large Cap and Growth Opportunity The Timothy
Growth II Growth Communications Fund Fund Plan Variable
Portfolio Portfolio Portfolio II II Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1998 0.000 0.000 0.000 0.000 0.000 0.000
Units purchased 0.000 0.000 295.741 0.000 0.000 0.000
Units redeemed 0.000 0.000 (20.864) 0.000 0.000 0.000
------- -------- --------- ------- ------- -------
Units outstanding December 31, 1999 0.000 0.000 274.877 0.000 0.000 0.000
======== ======== ========= ======= ======== =======
==================================================================================================================================
*For the period May 1, 1999 (commencement date of operations) to December 31, 1999
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
Dreyfus Variable Investment Fund
-------------------------------------------------------
Growth
Capital and Money Small
Appreciation Income Market Cap
Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ......................................... $ (1,543) $ 6,892 $ 13,138 $ 10,853
Net realized gain (loss) on sale of investments in portfolio shares .. 16,652 (1,836) 0 (82,430)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares ................................. 226,268 115,821 0 25,412
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........... 241,377 120,877 13,138 (46,165)
Changes from principal transactions:
Contract purchase payments ........................................... 1,508,433 1,155,499 1,405,487 1,210,765
Contract redemptions ................................................. (36,808) (21,639) (72,744) (25,868)
Net transfers (to) from fixed account ................................ 315,535 209,039 (652,787) 129,730
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions .......... 1,787,160 1,342,899 679,956 1,314,627
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ................................. 2,028,537 1,463,776 693,094 1,268,462
Net assets, beginning of period ........................................... 185,383 328,652 0 428,580
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ................................................. $2,213,920 $1,792,428 $ 693,094 $1,697,042
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Dreyfus Funds Strong Funds
------------------------ -------------------------
Socially
Responsible Stock Growth Opportunity
Growth Index Fund Fund
Fund, Inc. Fund II II
====================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) .......................................... $ 55,768 $ 22,396 $ (2,299) $ 21,580
Net realized gain (loss) on sale of investments in portfolio shares ... 5,292 108,435 1,666 (6,713)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .................................. 201,887 1,115,334 67,633 32,683
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ............ 262,947 1,246,165 67,000 47,550
Changes from principal transactions:
Contract purchase payments ............................................ 1,348,395 7,674,437 306,962 763,304
Contract redemptions .................................................. (9,281) (58,961) (461) (1,505)
Net transfers (to) from fixed account ................................. (21,006) 739,354 54,703 (5,388)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ........... 1,318,108 8,354,830 361,204 756,411
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .................................. 1,581,055 9,600,995 428,204 803,961
Net assets, beginning of period ............................................ 271,775 728,442 22,994 68,829
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .................................................. $1,852,830 $10,329,437 $ 451,198 $ 872,790
====================================================================================================================================
<PAGE>
<CAPTION>
==================================================================================================================================
Timothy Partners
----------------
The Timothy
Plan Variable
Series
==================================================================================================================================
<S> <C>
Changes from operations:
Net investment income (loss) .......................................... $ (1,244)
Net realized gain (loss) on sale of investments in portfolio shares ... 273
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .................................. 8,837
- ------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ............ 7,866
Changes from principal transactions:
Contract purchase payments ............................................ 298,657
Contract redemptions .................................................. (559)
Net transfers (to) from fixed account ................................. (4,531)
- ------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ........... 293,567
- ------------------------------------------------------------------------------------------------
Net increase in net assets .................................. 301,433
Net assets, beginning of period ............................................ 0
- ------------------------------------------------------------------------------------------------
Net assets, end of period .................................................. $ 301,433
==================================================================================================================================
<CAPTION>
=====================================================================================================================
Invesco Funds Group, Inc.
----------------------------------------
High Industrial Total
Yield Income Return
Fund Fund Fund
=====================================================================================================================
<S> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ 66,061 $ 94,784 $ 58,820
Net realized gain (loss) on sale of investments in portfolio shares (7,511) 3,746 15,273
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (74,743) 82,412 10,551
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ (16,193) 180,942 84,644
Changes from principal transactions:
Contract purchase payments ........................................ 546,771 1,705,341 1,533,836
Contract redemptions .............................................. (18,798) (13,427) (21,158)
Net transfers (to) from fixed account ............................. 127,417 205,099 6,510
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 655,390 1,897,013 1,519,188
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 639,197 2,077,955 1,603,832
Net assets, beginning of period ........................................ 109,658 354,630 153,786
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 748,855 $2,432,585 $1,757,618
=====================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
Janus Aspen Series
-----------------------------------------------------------
Aggressive International Worldwide
Growth Balanced Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (3,848) $ 77,629 $ 45,244 $ 881 $ 50,441
Net realized gain (loss) on sale of investments in portfolio shares 4,948 20,467 2,481 4,688 13,836
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 140,760 696,632 374,448 26,364 465,843
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 141,860 794,728 422,173 31,933 530,120
Changes from principal transactions:
Contract purchase payments ........................................ 526,231 3,636,681 1,536,593 333,700 3,571,970
Contract redemptions .............................................. (1,769) (29,318) (12,570) (13,844) (51,084)
Net transfers (to) from fixed account ............................. 69,142 519,688 78,695 37,625 467,637
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 593,604 4,127,051 1,602,718 357,481 3,988,523
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 735,464 4,921,779 2,024,891 389,414 4,518,643
Net assets, beginning of period ........................................ 30,350 323,650 335,232 122,097 563,023
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 765,814 $5,245,429 $2,360,123 $ 511,511 $5,081,666
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Morgan Stanley Universal Funds, Inc.
-----------------------------------------------------------
Emerging
Markets Fixed Mid-Cap U.S.
Equity Income Value Real Estate Value
Portfolio Portfolio Portfolio Portfolio Portfolio
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (841) $ 16,978 $ 26,301 $ 9,903 $ 8,984
Net realized gain (loss) on sale of investments in portfolio shares (28,159) 987 (12,000) (11,717) (3,838)
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. (8,506) (8,866) 111,030 (29,207) (22,344)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ (37,506) 9,099 125,331 (31,021) (17,198)
Changes from principal transactions:
Contract purchase payments ........................................ 99,696 399,377 1,042,503 428,467 254,152
Contract redemptions .............................................. (15) (29,179) (33,448) (11,751) (5,163)
Net transfers (to) from fixed account ............................. 45,269 134,534 91,732 (38,218) 3,901
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 144,950 504,732 1,100,787 378,498 252,890
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 107,444 513,831 1,226,118 347,477 235,692
Net assets, beginning of period ........................................ 71,544 48 185,313 79,930 101,473
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 178,988 $ 513,879 $1,411,431 $ 427,407 $ 337,165
====================================================================================================================================
<PAGE>
<CAPTION>
====================================================================================================================================
PBHG Insurance Series Fund, Inc.
-----------------------------------------------------------
Technology
Large Cap and
Growth II Growth Communications
Portfolio Portfolio Portfolio Total
====================================================================================================================================
<S> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ...................................... $ (2,021) $ (3,194) $ (5,880) $ 565,783
Net realized gain (loss) on sale of investments in portfolio shares (437) 1,576 (2,660) 43,019
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares .............................. 19,329 72,732 163,166 3,813,476
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ 16,871 71,114 154,626 4,422,278
Changes from principal transactions:
Contract purchase payments ........................................ 174,105 216,405 463,808 32,141,575
Contract redemptions .............................................. (347) (1,537) (30,665) (501,899)
Net transfers (to) from fixed account ............................. 330 9,726 (474) 2,523,262
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from principal transactions ....... 174,088 224,594 432,669 34,162,938
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................. 190,959 295,708 587,295 38,585,216
Net assets, beginning of period ........................................ 58,930 115,870 189,962 4,830,151
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period .............................................. $ 249,889 $ 411,578 $ 777,257 $43,415,367
====================================================================================================================================
</TABLE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(1) GENERAL Annuity Investors Variable Account B (the "Account")is registered
under the Investment Company Act of 1940, as amended, as a unit investment
trust. The Account was established on December 19, 1996 and commenced
operations on July 15, 1997 as a segregated investment account for
individual and group variable annuity contracts which are registered under
the Securities Act of 1933. The operations of the Account are included in
the operations of Annuity Investors Life Insurance Company (the"Company")
pursuant to the provisions of the Ohio Insurance Code. The Company is an
indirect wholly owned subsidiary of American Annuity Group, Inc., ("AAG"),
a publicly traded insurance holding company listed on the New York Stock
Exchange. The Company is licensed in 47 states. At December 31, 1999, the
following investment options were available:
BT Insurance Funds Trust:
o EAFE Equity Index Portfolio
o Equity 500 Index Portfolio
o Small Cap Index Portfolio
The Dreyfus Variable Investment Fund:
o Capital Appreciation Portfolio
o Growth and Income Portfolio
o Money Market Portfolio
o Small-Cap Portfolio
Dreyfus Funds:
o Socially Responsible Growth Fund, Inc.
o Stock Index Fund
Invesco Funds:
o High-Yield Fund
o Equity Income Fund
o Total Return Fund
Janus Aspen Series:
o Aggressive Growth Portfolio
o Balanced Portfolio
o Capital Appreciation Portfolio
o Growth Portfolio
o International Growth Portfolio
o Worldwide Growth Portfolio
Morgan Stanley Dean Witter Universal Funds, Inc.:
o Emerging Markets Equity Portfolio
o Fixed Income Portfolio
o Mid-Cap Value Portfolio
o U.S. Real Estate Portfolio
o Value Portfolio
PBHG Insurance Series Fund, Inc.:
o Growth II Portfolio
o Large Cap Growth Portfolio
o Technology & Communications Portfolio
Strong Funds:
o Mid Cap Growth Fund II
o Opportunity Fund II
Timothy Partners, Ltd.:
o The Timothy Plan Variable Series
-14-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
The following variable sub-accounts were added to the account on May 1, 1999: BT
Insurance Funds Trust EAFE Equity Index Fund, Equity 500 Index Fund, Small Cap
Index Fund; Janus Aspen Series Capital Appreciation Portfolio. No variable
sub-accounts were deleted from the account in 1999.
In 1999, the Invesco Industrial Income Fund changed its name to the Invesco
Equity Income Fund, and the Strong Growth Fund II changed its name to the Strong
Mid Cap Growth Fund II.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amount
reported in the financial statements and accompanying notes. Changes in
circumstances could cause actual results to differ materially from those
estimates.
Investments
Investments are valued using the net asset value of the respective
portfolios at the end of each business day of the New York Stock Exchange,
with the exception of business holidays. Investment transactions are
accounted for on the trade date (the date the order to buy or sell is
executed). The cost of investments sold is determined on a first-in,
first-out basis. The Account does not hold any investments which are
restricted as to resale.
Net investment income (loss), net realized gain (loss) and unrealized
appreciation(depreciation)on investments are allocated to the contracts on
each valuation date based on each contrac's pro rata share of the assets of
the Account as of the beginning of the valuation date.
Federal Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of the Account are included
in the total operations of the
Company, which is treated as a life insurance company for federal income
tax purposes under Subchapter L of the Internal Revenue Code. Net
investment income (loss) and realized gains (losses) will be retained in
the Account and will not be taxable until received by the contract owner or
beneficiary in the form of annuity payments or other distributions.
Net Assets Attributable to Variable Annuity Contract Holders
The variable annuity contract reserves are comprised of net contract
purchase payments less redemptions and benefits. These reserves are
adjusted daily for the net investment income (loss), net realized gain
(loss) and unrealized appreciation (depreciation) on investments.
-15-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES The aggregate cost
of purchases and proceeds from sales of investments in all portfolio shares
for the year ended December 31, 1999 is as follows:
1999
-------------------------
Proceeds
Cost of from
Purchaes Sales
BT Insurance Funds Trust:
EAFE Equity Index Portfolio $ 75,924 $ 964
Equity 500 Index Portfolio 756,411 10,922
Small Cap Index Portfolio 162,532 2,845
Dreyfus Variable Investment Fund:
Capital Appreciation Portfolio 5,994,536 1,288,089
Growth and Income Portfolio 2,418,517 264,102
Money Market Portfolio 4,932,966 2,756,951
Small Cap Portfolio 1,463,685 424,962
Dreyfus Funds:
Socially Responsible Growth Fund, Inc. 4,236,425 151,145
Stock Index Fund 22,558,560 3,118,158
Invesco Funds:
High-Yield Fund 2,131,822 280,769
Industrial Income Fund 5,288,028 621,205
Total Return Fund 1,847,611 608,686
Janus Aspen Series:
Aggressive Growth Portfolio 6,187,083 172,257
Balanced Portfolio 19,205,526 342,980
Capital Appreciation Portfolio 5,397,253 484,943
Growth Portfolio 7,660,504 198,430
International Growth Portfolio 1,562,618 215,702
Worldwide Growth Portfolio 9,573,649 820,989
Morgan Stanley Dean Witter Universal Funds, Inc.:
Emerging Markets Equity Portfolio 345,980 127,989
Fixed Income Portfolio 2,993,137 331,744
Mid-Cap Value Portfolio 1,575,444 338,301
U.S. Real Estate Portfolio 593,357 135,773
Value Portfolio 613,170 184,496
PBHG Insurance Series Fund, Inc.:
Growth II Portfolio 741,214 124,759
Large Cap Growth Portfolio 1,929,951 177,371
Technology & Communications Portfolio 7,705,231 289,479
Strong Funds:
Growth Fund II 1,638,049 66,570
Opportunity Fund II 1,212,944 190,754
The Timothy Plan Variable Series:
The Timothy Plan Variable Series 867,375 207,127
------------- ----------
Total $121,669,502 $13,938,462
-16-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(4) DEDUCTIONS AND EXPENSES
Although periodic annuitization payments to contract owners vary according
to the investment performance of the sub-accounts, affected by mortality or
expense experience because the Company assumes the mortality and expense
risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts,in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee
lives. The annuity payments are determined in accordance with annuity
purchase rate provisions established at the time the contracts are issued.
Based on the actuarial determination of expected mortality, the Company is
required to fund any deficiency in the annuity payment reserves from its
general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the
actual sales and administrative expenses. Under the Basic Contract, the
Company deducts a fee from the Account each day for assuming the mortality
and expense risks. This fee is equal on an annual basis to 1.40% of the
daily value of the total investments of the Account. These fees aggregated
$1,483,303 for the year ended December 31, 1999.
In connection with certain contracts in which the Company incurs reduced
sales and servicing expenses, such as contracts offered to active employees
of the Company or any of its subsidiaries and/or affiliates, the Company
may offer an Enhanced Contract, or a Modified Enhanced contract. Under the
Enhanced Contract, the Company deducts a fee from the Account each day for
assuming the mortality and expense risks. This fee is equal on an annual
basis to 1.10% of the daily value of the total investments of the Account.
These fees aggregated $2,361 for the year ended December 31, 1999. Under
the Modified Enhanced contract, the Company deducts a fee from the account
each day for assuming the mortality and expense risks. This fee is equal on
an annual basis to 0.95% of the daily value of the total investments of the
account. These fees aggregated $167 for the year ended December 31, 1999.
Pursuant to an administrative agreement between AAG and the Company, AAG
subsidiaries provide sales and administrative services to the Company and
the Account. The Company may deduct a percentage of purchase payments
surrendered to cover sales expenses. The percentage decreases to 0% from a
maximum of 8.0% depending on the product and based upon the number of years
the purchase payment has been held. In addition, the Company may deduct
units from contracts annually and upon full surrender to cover an
administrative fee ranging from $30 to $40. These expenses totaled $114,366
for the year ended December 31, 1999.
(5) OTHER TRANSACTIONS WITH AFFILIATES
AAG Securities, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of
the Company.
-17-
<PAGE>
ANNUITY INVESTORS VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
(6) NET ASSETS
The following is a reconciliation of net assets at December 31, 1999:
1999
-------------
Proceeds from the sales of units since organization,
less cost of units redeemed $145,559,825
Undistributed net investment income 1,832,888
Undistributed net realized gains on sale of investments 1,845,239
Net unrealized appreciation (depreciation) of investments 40,200,573
-------------
Net assets, end of period $189,438,525
==============
2
<PAGE>
The Financial Statements of the following investment companies ("Registran")
are made a part hereof and incorporated herein:
Registrant 1940 Act Number
Bankers Trust Company 811-07507
EAFE (R) Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
Janus Aspen Series 811-07736
Growth
Aggressive Growth Portfolio
Capital Appreciation Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
INVESCO Variable Investment Funds, Inc. 811- 8038
High Yield Portfolio
Equity Income Portfolio
Total Return Portfolio
Dreyfus Corporation 811-05125
Dreyfus Variable Investment Fund
Capital Appreciation Portfolio
Growth and Income Portfolio
Small Cap Portfolio
Money Market Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc. 811-07044
Dreyfus Stock Index Fund 811-05179
PBHG Insurance Series Fund, Inc 811-08009
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
PBHG Technology & Communications Portfolio
Strong Capital Management, Inc. 811-06552
Strong Opportunity Fund II, Inc.
Strong Variable Insurance Funds, Inc. 811-06553
Strong Mid Cap Growth Fund II
Morgan Stanley Dean Witter Universal Funds, Inc. 811-07607
U.S. Real Estate Portfolio
Fixed Income Portfolio
Emerging Markets Equity Portfolio
Mid Cap Value Portfolio
The Timothy Plan Small Cap Variable Series 811-08228
<PAGE>
2/2000)
Annuity Investors Life Insurance Compay(R)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
1-800-789-6771
Annuity Investors (R)
Life Insurance Company
For
(Logo)
This report is for the information of the contract owners and participants of
the Annuity Investors Life Insurance Company and the Annuity Investors Variable
Account B. It is authorized for distribution to other persons only when preceded
or accompanied by a current prospectus which contains complete information,
including charges and expenses.
3245 (2/00)
