<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Financial Statements
For the six months ended June 30, 2000
(Unaudited)
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Table of Contents
For the six months ended June 30, 2000
<TABLE>
<CAPTION>
Page
----
<S> <C>
Financial Statements (Unaudited):
Statements of Assets and Liabilities..................................... F-1
Statements of Operations................................................. F-6
Statements of Changes in Net Assets...................................... F-11
Notes to Financial Statements (Unaudited).................................. F-20
</TABLE>
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Assets and Liabilities
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-------------------------------------------------------------------------------------------------
Real Premier
Money Total Estate Global Mid-Cap U.S. Growth
S&P 500 Market Return International Securities Income Value Equity Income Equity Equity
Fund Fund Fund Equity Fund Fund Fund Fund Fund Fund Fund
---------- --------- ------- ------------- ---------- ------ ------------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in GE
Investments Funds,
Inc., at fair
value: (note 2)
S&P 500 Fund
(173,831 shares,
cost --
$4,770,626)...... $4,855,104 -- -- -- -- -- -- -- -- --
Money Market Fund
(2,952,374 shares,
cost --
$3,137,264)...... -- 2,952,374 -- -- -- -- -- -- -- --
Total Return Fund
(13,639 shares,
cost --
$215,420)........ -- -- 223,135 -- -- -- -- -- -- --
International
Equity Fund (2,595
shares, cost --
$36,629)......... -- -- -- 38,400 -- -- -- -- -- --
Real Estate
Securities Fund
(1,261 shares,
cost -- $13,886).. -- -- -- -- 15,944 -- -- -- -- --
Global Income Fund
(10,516 shares,
cost --
$100,842)........ -- -- -- -- -- 99,689 -- -- -- --
Mid-Cap Value
Equity Fund
(14,202 shares,
cost --
$221,464)........ -- -- -- -- -- -- 214,588 -- -- --
Income Fund (18,525
shares, cost --
$219,583)......... -- -- -- -- -- -- -- 220,445 -- --
U.S. Equity Fund
(11,719 shares,
cost --
$437,671)........ -- -- -- -- -- -- -- -- 445,200 --
Premier Growth
Equity Fund (406
shares, cost --
$34,773)......... -- -- -- -- -- -- -- -- -- 35,825
Receivable from
affiliate (note
3)................. -- 2,936 -- -- -- -- -- -- -- --
Receivable for units
sold............... -- -- 366 -- -- -- -- -- -- --
---------- --------- ------- ------ ------ ------ ------- ------- ------- ------
Total assets....... 4,855,104 2,955,310 223,501 38,400 15,944 99,689 214,588 220,445 445,200 35,825
---------- --------- ------- ------ ------ ------ ------- ------- ------- ------
Liabilities
Accrued expenses
payable to
affiliates (note
3)................. 2,089 871 97 18 8 44 95 102 199 12
Payable for units
withdrawn.......... 21,189 3,041 -- -- -- -- -- -- -- --
---------- --------- ------- ------ ------ ------ ------- ------- ------- ------
Total liabilities.. 23,278 3,912 97 18 8 44 95 102 199 12
---------- --------- ------- ------ ------ ------ ------- ------- ------- ------
Net assets
attributable to
variable deferred
annuity
contractholders.... $4,831,826 2,951,398 223,404 38,382 15,936 99,645 214,493 220,343 445,001 35,813
========== ========= ======= ====== ====== ====== ======= ======= ======= ======
Outstanding units... 384,393 274,549 18,821 3,093 1,561 10,326 20,121 21,434 35,657 3,467
========== ========= ======= ====== ====== ====== ======= ======= ======= ======
Net asset value per
unit............... $ 12.57 10.75 11.87 12.41 10.21 9.65 10.66 10.28 12.48 10.33
========== ========= ======= ====== ====== ====== ======= ======= ======= ======
</TABLE>
F-1
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Series Variable Insurance Variable Insurance
Fund Products Fund II Products Fund III
----------------------------- -------------------- -----------------------
Equity- Asset Growth & Growth
Income Growth Overseas Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in Variable
Insurance Series Fund,
at fair value: (note 2)
Equity-Income Portfolio
(31,700 shares,
cost -- $778,733)..... $726,255 -- -- -- -- -- --
Growth Portfolio
(36,773 shares,
cost -- $1,854,409)... -- 1,895,296 -- -- -- -- --
Overseas Portfolio
(17,559 shares,
cost -- $432,114).... -- -- 411,946 -- -- -- --
Investments in Variable
Insurance Products Fund
II, at fair value:
(note 2)
Asset Manager Portfolio
(15,738 shares,
cost -- $266,835)..... -- -- -- 260,306 -- -- --
Contrafund Portfolio
(97,463 shares,
cost -- $2,559,910).. -- -- -- -- 2,445,355 -- --
Investments in Variable
Insurance Products Fund
III, at fair value:
(note 2)
Growth & Income
Portfolio (38,464
shares, cost --
$635,646)............ -- -- -- -- -- 595,421 --
Growth Opportunities
Portfolio (34,910
shares, cost --
$756,153)............ -- -- -- -- -- -- 719,503
Recievable for units
sold................... -- -- -- 366 608 -- 608
-------- --------- ------- ------- --------- ------- -------
Total assets........... 726,255 1,895,296 411,946 260,672 2,445,963 595,421 720,111
-------- --------- ------- ------- --------- ------- -------
Liabilities
Accrued Expenses payable
to affiliates (note
3)..................... 322 786 174 118 1,080 243 328
Payable for units
withdrawn.............. -- -- -- -- -- 25,611 --
-------- --------- ------- ------- --------- ------- -------
Total liabilities...... 322 786 174 118 1,080 25,854 328
-------- --------- ------- ------- --------- ------- -------
Net assets attributable
to variable deferred
annuity
contractholders........ $725,933 1,894,510 411,772 260,554 2,444,883 569,567 719,783
======== ========= ======= ======= ========= ======= =======
Outstanding units....... 70,892 119,982 32,474 23,202 188,503 50,138 66,708
======== ========= ======= ======= ========= ======= =======
Net asset value per
unit................... $ 10.24 15.79 12.68 11.23 12.97 11.36 10.79
======== ========= ======= ======= ========= ======= =======
</TABLE>
F-2
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds Federated Insurance Series
--------------------------------------------------- ----------------------------
High Agrressive Capital Multiple American High
Income Bond Growth Appreciation Strategies Leaders Income Bond Utility
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA Fund II Fund II Fund II
-------- ------- ---------- ------------ ---------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in
Openheimer Variable
Accounts Fund, at fair
value: (note 2)
High Income Fund/VA
(33,100 shares,
cost -- $341,737)..... $316,766 -- -- -- -- -- -- --
Bond Fund/VA (59,563
shares, cost --
$675,131)............ -- 643,881 -- -- -- -- -- --
Aggressive Growth
Fund/VA (12,133
shares, cost --
$1,128,177)........... -- -- 1,172,576 -- -- -- -- --
Capital Appreciation
Fund/VA (11,841
shares, cost --
$595,745)............. -- -- -- 605,549 -- -- -- --
Multiple Strategies
Fund/VA (10,763
shares, cost --
$183,626)............. -- -- -- -- 178,565 -- -- --
Investments in Federated
Insurance Series at
fair value: (note 2)
American Leaders Fund
II (24,380 shares,
cost -- $488,629).... -- -- -- -- -- 467,849 -- --
High Income Bond Fund
II (25,812 shares,
cost -- $254,369).... -- -- -- -- -- -- 235,401 --
Utility Fund II (27,363
shares, cost --
$392,899)............ -- -- -- -- -- -- -- 369,124
-------- ------- --------- ------- ------- ------- ------- -------
Total assets........... 316,766 643,881 1,172,576 605,549 178,565 467,849 235,401 369,124
-------- ------- --------- ------- ------- ------- ------- -------
Liabilities
Accrued expenses payable
to affiliates (note
3)..................... 155 310 477 243 83 189 111 162
Payable for units
withdrawn.............. -- -- 132 -- -- -- -- --
-------- ------- --------- ------- ------- ------- ------- -------
Total liabilities...... 155 310 609 243 83 189 111 162
-------- ------- --------- ------- ------- ------- ------- -------
Net assets attributable
to variable deferred
annuity
contractholders........ $316,611 643,571 1,171,967 605,306 178,482 467,660 235,290 368,962
======== ======= ========= ======= ======= ======= ======= =======
Outstanding units....... 33,084 64,229 54,612 38,094 15,386 44,709 24,767 34,354
======== ======= ========= ======= ======= ======= ======= =======
Net asset value per
unit................... $ 9.57 10.02 21.46 15.89 11.60 10.46 9.50 10.74
======== ======= ========= ======= ======= ======= ======= =======
</TABLE>
F-3
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Balanced Growth Growth Growth Income Growth Appreciation
Assets Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- --------- --------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in Janus
Aspen Series, at fair
value: (note 2)
Balanced Portfolio
(166,856 shares,
cost -- $4,482,220)... $4,391,648 -- -- -- -- -- --
Aggressive Growth
Portfolio (131,391
shares, cost --
$7,549,426).......... -- 7,331,618 -- -- -- -- --
Growth Portfolio
(99,860 shares,
cost -- $3,325,556)... -- -- 3,284,388 -- -- -- --
Worldwide Growth
Portfolio (75,940
shares, cost --
$3,529,931).......... -- -- -- 3,647,377 -- -- --
Flexible Income
Portfolio (7,970
shares, cost --
$92,478)............. -- -- -- -- 89,668 -- --
International Growth
Portfolio (44,272
shares, cost --
$1,820,118).......... -- -- -- -- -- 1,757,138 --
Capital Appreciation
Portfolio (187,915
shares, cost --
$5,720,730).......... -- -- -- -- -- -- 5,962,534
Receivable for units
sold................... 252 4,812 608 4,769 -- -- --
---------- --------- --------- --------- ------ --------- ---------
Total assets........... 4,391,900 7,336,430 3,284,996 3,652,146 89,668 1,757,138 5,962,534
---------- --------- --------- --------- ------ --------- ---------
Liabilities
Accrued expenses payable
to affiliates (note
3)..................... 1,959 3,268 1,439 1,605 43 732 2,647
Payable for units
withdrawn.............. -- -- -- -- -- -- 14,786
---------- --------- --------- --------- ------ --------- ---------
Total liabilities...... 1,959 3,268 1,439 1,605 43 732 17,433
---------- --------- --------- --------- ------ --------- ---------
Net assets attributable
to variable deferred
annuity
contractholders........ $4,389,941 7,333,162 3,283,557 3,650,541 89,625 1,756,406 5,945,101
========== ========= ========= ========= ====== ========= =========
Outstanding units....... 313,791 283,572 205,094 223,960 8,701 102,834 330,283
========== ========= ========= ========= ====== ========= =========
Net asset value per
unit................... $ 13.99 25.86 16.01 16.30 10.30 17.08 18.00
========== ========= ========= ========= ====== ========= =========
</TABLE>
F-4
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Salomon Brothers
PBHG Insurance Series Goldman Sachs Variable Variable Series
Alger American Fund Fund, Inc. Insurance Trust Funds Inc.
------------------------ ---------------------- ------------------------- ----------------
PBHG
Small Large Cap PBHG Growth and Mid Cap Total
Capitalization Growth Growth Growth II Income Value Investors Return
Portfolio Portfolio Portfolio Portfolio Portfolio Fund Fund Fund
-------------- --------- ---------- ---------- ------------ ----------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Invesments in Alger
American Fund at fair
value: (note 2)
Small Capitilization
Portfolio (26,280
shares, cost --
$1,028,115).......... $847,800 -- -- -- -- -- -- --
Growth Portfolio
(17,277 shares,
cost -- $1,030,464)... -- 991,723 -- -- -- -- -- --
Investments in PBHG In-
surance Series Fund,
Inc. at fair value:
(note 2)
PBHG Large Cap Portfo-
lio (20,825 shares,
cost -- $573,678)..... -- -- 626,431 -- -- -- -- --
PBHG Growth II Portfo-
lio (34,114 shares,
cost -- $851,672).... -- -- -- 944,279 -- -- -- --
Investments in Goldman
Sachs Variable
Insurance Trust at fair
value: (note 2)
Growth and Income Fund
(24,364 shares,
cost -- $258,016)..... -- -- -- -- 267,274 -- -- --
Mid Cap Value Fund
(57,043 shares,
cost -- $486,164)..... -- -- -- -- -- 499,124 -- --
Investments in Salomon
Brothers Variable Se-
ries Funds Inc. at fair
value: (note 2)
Investors Fund (773
shares, cost --
$9,984).............. -- -- -- -- -- -- 10,317 --
Total Return Fund
(1,759 shares, cost --
$18,470)............. -- -- -- -- -- -- -- 18,558
Receivable for units
sold................... -- -- -- -- 608 -- -- --
-------- ------- ---------- ---------- ----------- ----------- ------ ------
Total assets........... 847,800 991,723 626,431 944,279 267,882 499,124 10,317 18,558
-------- ------- ---------- ---------- ----------- ----------- ------ ------
Liabilities
Accrued expenses payable
to affiliates (note3).. 410 455 239 355 111 223 3 6
-------- ------- ---------- ---------- ----------- ----------- ------ ------
Total liabilities...... 410 455 239 355 111 223 3 6
-------- ------- ---------- ---------- ----------- ----------- ------ ------
Net assets attributable
to variable deferred
annuity
contractholders........ $847,390 991,268 626,192 943,924 267,771 498,901 10,314 18,552
======== ======= ========== ========== =========== =========== ====== ======
Outstanding units....... 58,400 66,085 30,847 39,811 26,993 51,433 910 1,779
======== ======= ========== ========== =========== =========== ====== ======
Net asset value per
unit................... $ 14.51 15.00 20.30 23.71 9.92 9.70 11.34 10.43
======== ======= ========== ========== =========== =========== ====== ======
</TABLE>
See accompanying notes to unaudited financial statements.
F-5
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-------------------------------------------------------------
Real Estate
S&P 500 Money Total Return International Securities
Index Fund Market Fund Fund Equity Fund Fund
---------- ----------- ------------ ------------- -----------
Six months ended June 30, 2000
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Div-
idends................ $ -- 64,914 -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative expense
(note 3).............. 23,462 15,552 1,108 234 84
-------- -------- ------ ---- -----
Net investment income
(expense).............. (23,462) 49,362 (1,108) (234) (84)
-------- -------- ------ ---- -----
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 76,487 184,891 (82) 924 4
Unrealized appreciation
(depreciation)........ (46,246) (184,891) 7,316 (11) 2,300
Capital gain distribu-
tion.................. -- -- -- -- --
-------- -------- ------ ---- -----
Net realized and
unrealized gain (loss)
on investments......... 30,241 -- 7,234 913 2,304
-------- -------- ------ ---- -----
Increase (decrease) in
net assets from opera-
tions.................. $ 6,779 49,362 6,126 679 2,220
======== ======== ====== ==== =====
</TABLE>
<TABLE>
<CAPTION>
GE Investments Funds, Inc. (continued)
----------------------------------------------------------------
Mid-Cap
Global Value Equity U.S. Equity Premier Growth
Income Fund Fund Income Fund Fund Equity Fund
----------- ------------ ----------- ----------- ---------------
Period from
May 12, 2000 to
Six months ended June 30, 2000 June 30, 2000
------------------------------------------------ ---------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Div-
idends................ $ -- -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative expense
(note 3).............. 568 1,185 1,309 2,570 49
------- ------ ------ ------ -----
Net investment income
(expense).............. (568) (1,185) (1,309) (2,570) (49)
------- ------ ------ ------ -----
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ (392) 287 (747) 1,482 2
Unrealized appreciation
(depreciation)........ (98) (7,513) 7,294 2,303 1,051
Capital gain distribu-
tion.................. -- -- -- -- --
------- ------ ------ ------ -----
Net realized and
unrealized gain (loss)
on investments......... (490) (7,226) 6,547 3,785 1,053
------- ------ ------ ------ -----
Increase (decrease) in
net assets from opera-
tions.................. $(1,058) (8,411) 5,238 1,215 1,004
======= ====== ====== ====== =====
</TABLE>
F-6
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Products Fund Products Fund II
------------------------------ ------------------------
Equity-
Income Growth Overseas Asset Manager Contrafund
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ------------- ----------
Six months ended Six months ended
June 30, 2000 June 30, 2000
------------------------------ ------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Divi-
dends...................... $ 10,112 895 2,401 4,569 5,316
Expenses -- Mortality and
expense risk charges and
administrative expense (note
3)......................... 4,197 8,425 1,798 1,448 12,934
-------- ------- ------- ------- --------
Net investment income (ex-
pense)...................... 5,915 (7,530) 603 3,121 (7,618)
-------- ------- ------- ------- --------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss).... (14,904) 32,957 18,980 (944) 7,601
Unrealized appreciation (de-
preciation)................ (50,656) (58,753) (49,733) (12,992) (228,609)
Capital gain distribution... 38,096 89,038 15,119 10,764 192,986
-------- ------- ------- ------- --------
Net realized and unrealized
gain (loss) on investments.. (27,464) 63,242 (15,634) (3,172) (28,022)
-------- ------- ------- ------- --------
Increase (decrease) in net
assets from operations...... $(21,549) 55,712 (15,031) (52) (35,640)
======== ======= ======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Variable Insurance
Products Fund III
------------------------
Growth & Growth
Income Opportunities
Portfolio Portfolio
--------- -------------
Six months ended
June 30, 2000
------------------------
<S> <C> <C>
Investment income:
Income -- Ordinary Dividends.......................... $ 2,236 6,515
Expenses -- Mortality and expense risk charges and ad-
ministrative expense (note 3)........................ 2,465 4,096
-------- -------
Net investment income (expense)........................ (229) 2,419
-------- -------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss).............................. 35,825 (3,956)
Unrealized appreciation (depreciation)................ (46,407) (52,457)
Capital gain distribution............................. 14,590 33,039
-------- -------
Net realized and unrealized gain (loss) on invest-
ments................................................. 4,008 (23,374)
-------- -------
Increase (decrease) in net assets from operations...... $ 3,779 (20,956)
======== =======
</TABLE>
F-7
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
-------------------------------------------------------
Aggressive Capital Multiple
High Income Bond Growth Appreciation Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
----------- ------- ---------- ------------ ----------
Six months ended June 30, 2000
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends.................. $ 28,777 36,092 -- 307 5,851
Expenses -- Mortality and
expense risk charges and
administrative expense (note
3)......................... 1,778 3,517 4,149 2,039 870
-------- ------- ------ ------ ------
Net investment income
(expense)................... 26,999 32,575 (4,149) (1,732) 4,981
-------- ------- ------ ------ ------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss).... (3,929) 6,986 42,881 7,157 2,754
Unrealized appreciation
(depreciation)............. (26,187) (32,259) 5,125 (8,467) (7,194)
Capital gain distribution... -- -- 19,100 16,371 8,498
-------- ------- ------ ------ ------
Net realized and unrealized
gain (loss) on investments.. (30,116) (25,273) 67,106 15,061 4,058
-------- ------- ------ ------ ------
Increase (decrease) in net
assets from operations...... $ (3,117) 7,302 62,957 13,329 9,039
======== ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Federated Insurance Series
-----------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
-------- ----------- -------
Six months ended
June 30, 2000
-----------------------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends................... $ 3,878 22,028 9,237
Expenses -- Mortality and expense risk charges
and administrative expense (note 3)........... 2,106 1,526 2,042
-------- ------- -------
Net investment income (expense)................. 1,772 20,502 7,195
-------- ------- -------
Net realized and unrealized gain (loss) on in-
vestments:
Net realized gain (loss)....................... (869) (5,596) 2,938
Unrealized appreciation (depreciation)......... (24,353) (20,219) (24,131)
Capital gain distribution...................... 11,735 -- 6,139
-------- ------- -------
Net realized and unrealized gain (loss) on in-
vestments...................................... (13,487) (25,815) (15,054)
-------- ------- -------
Increase (decrease) in net assets from opera-
tions.......................................... $(11,715) (5,313) (7,859)
======== ======= =======
</TABLE>
F-8
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
---------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Balanced Growth Growth Growth Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- ---------- --------- --------- --------- ------------- ------------
Six months ended June 30, 2000
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ -- -- -- -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative expense
(note 3).............. 24,305 37,837 15,856 18,417 564 7,147 33,612
--------- ---------- -------- -------- ----- -------- --------
Net investment income
(expense).............. (24,305) (37,837) (15,856) (18,417) (564) (7,147) (33,612)
--------- ---------- -------- -------- ----- -------- --------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 48,990 413,198 95,410 104,168 (631) 57,947 136,110
Unrealized appreciation
(depreciation)........ (298,193) (1,099,673) (200,193) (193,165) (665) (145,573) (444,457)
Capital gain
distribution.......... 278,265 569,241 126,255 52,069 2,405 21,218 21,134
--------- ---------- -------- -------- ----- -------- --------
Net realized and
unrealized gain (loss)
on investments......... 29,062 (117,234) 21,472 (36,928) 1,109 (66,408) (287,213)
--------- ---------- -------- -------- ----- -------- --------
Increase (decrease) in
net assets from
operations............. $ 4,757 (155,071) 5,616 (55,345) 545 (73,555) (320,825)
========= ========== ======== ======== ===== ======== ========
</TABLE>
F-9
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
PBHG Insurance
Alger American Fund Series Fund, Inc.
------------------------ -------------------
PBHG
Small Large Cap PBHG
Capitalization Growth Growth Growth II
Portfolio Portfolio Portfolio Portfolio
-------------- --------- --------- ---------
Six months ended Six months ended
June 30, 2000 June 30, 2000
------------------------ -------------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends..... $ -- -- -- --
Expenses--Mortality and expense
risk charges and administrative
expense (note 3)................ 4,131 5,750 1,894 2,970
-------- -------- ------ -------
Net investment income (expense)... (4,131) (5,750) (1,894) (2,970)
-------- -------- ------ -------
Net realized and unrealized gain
(loss) on investments:
Net realized gain (loss)......... 4,626 40,511 16,011 57,831
Unrealized appreciation (depreci-
ation).......................... (256,309) (141,704) 37,529 46,741
Capital gain distribution........ 242,875 123,698 -- --
-------- -------- ------ -------
Net realized and unrealized gain
(loss) on investments............ (8,808) 22,505 53,540 104,572
-------- -------- ------ -------
Increase (decrease) in net assets
from operations.................. $(12,939) 16,755 51,646 101,602
======== ======== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Goldman Sachs Variable Salomon Brothers Variable
Insurance Trust Series Funds Inc.
---------------------- ---------------------------------
Growth and Mid Cap
Income Fund Value Fund Investors Fund Total Return Fund
----------- ---------- --------------- -----------------
Period from Period from
Six months ended May 15, 2000 to April 28, 2000 to
June 30, 2000 June 30, 2000 June 30, 2000
---------------------- --------------- -----------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Div-
idends................ $ -- -- -- --
Expenses--Mortality and
expense risk charges
and administrative ex-
pense (note 3)........ 1,051 2,601 19 46
------ ------ --- ---
Net investment income
(expense).............. (1,051) (2,601) (19) (46)
------ ------ --- ---
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ (369) (7,377) 1 2
Unrealized appreciation
(depreciation)........ 6,934 26,026 332 88
Capital gain distribu-
tion.................. -- -- -- --
------ ------ --- ---
Net realized and
unrealized gain (loss)
on investments......... 6,565 18,649 333 90
------ ------ --- ---
Increase (decrease) in
net assets from opera-
tions.................. $5,514 16,048 314 44
====== ====== === ===
</TABLE>
See accompanying notes to unaudited financial statements.
F-10
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
---------------------------------------------------------------
Real Estate
S&P 500 Money Total Return International Securities
Index Fund Market Fund Fund Equity Fund Fund
---------- ----------- ------------ ------------- -----------
Six months ended June 30, 2000
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............. $ (23,462) 49,362 (1,108) (234) (84)
Net realized gain
(loss)................ 76,487 184,891 (82) 924 4
Unrealized appreciation
(depreciation) on
investments........... (46,246) (184,891) 7,316 (11) 2,300
Capital gain
distribution.......... -- -- -- -- --
---------- ---------- ------- ------ ------
Increase (decrease) in
net assets from
operations............. 6,779 49,362 6,126 679 2,220
---------- ---------- ------- ------ ------
From capital
transactions:
Net premiums........... 2,321,395 2,554,906 82,791 10,654 11,814
Transfers (to) from the
general account of GE
Capital Life:
Surrenders........... (105,107) (65,835) (824) -- --
Administrative
expenses (note 3)... (65) (11) (23) -- --
Transfer gain (loss)
and transfer fees
(note 3)............ 443 1,400 (15) 71 51
Transfers (to) from the
Guarantee Account..... 351,175 -- 18,231 -- --
Interfund transfers.... 61,419 (1,292,561) 28,664 -- --
---------- ---------- ------- ------ ------
Increase (decrease) in
net assets from capital
transactions........... 2,629,260 1,197,899 128,824 10,725 11,865
---------- ---------- ------- ------ ------
Increase (decrease) in
net assets............. 2,636,039 1,247,261 134,950 11,404 14,085
Net assets at beginning
of year................ 2,195,787 1,704,137 88,454 26,978 1,851
---------- ---------- ------- ------ ------
Net assets at end of
period................. $4,831,826 2,951,398 223,404 38,382 15,936
========== ========== ======= ====== ======
</TABLE>
F-11
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
(continued)
----------------------------------
Mid-Cap
Global Value U.S.
Income Equity Income Equity Premier Growth
Fund Fund Fund Fund Equity Fund
------- ------- ------- ------- ---------------
Period from
May 12, 2000 to
Six months ended June 30, 2000 June 30, 2000
---------------------------------- ---------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income
(expense)............... $ (568) (1,185) (1,309) (2,570) (49)
Net realized gain
(loss).................. (392) 287 (747) 1,482 2
Unrealized appreciation
(depreciation) on in-
vestments............... (98) (7,513) 7,294 2,303 1,051
Capital gain distribu-
tion.................... -- -- -- -- --
------- ------- ------- ------- ------
Increase (decrease) in net
assets from operations... (1,058) (8,411) 5,238 1,215 1,004
------- ------- ------- ------- ------
From capital transactions:
Net premiums............. 37,865 113,496 43,069 52,760 22,500
Transfers (to) from the
general account of GE
Capital Life:
Surrenders.............. (197) (4,490) (339) (8,307) --
Administrative expenses
(note 3)............... (5) (9) (3) (7) --
Transfer gain (loss) and
transfer fees (note
3)..................... 26 546 (47) (672) --
Transfers (to) from the
Guarantee Account....... -- 9,284 11,526 32,363 12,309
Interfund transfers...... (186) (15,141) (205) 38,768 --
------- ------- ------- ------- ------
Increase (decrease) in net
assets from capital
transactions............. 37,503 103,686 54,001 114,905 34,809
------- ------- ------- ------- ------
Increase (decrease) in net
assets................... 36,445 95,275 59,239 116,120 35,813
Net assets at beginning of
year..................... 63,200 119,218 161,104 328,881 --
------- ------- ------- ------- ------
Net assets at end of peri-
od....................... $99,645 214,493 220,343 445,001 35,813
======= ======= ======= ======= ======
</TABLE>
F-12
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products
Fund
-------------------------------
Equity-
Income Growth Overseas
Portfolio Portfolio Portfolio
--------- --------- ---------
Six months ended June 30,
2000
-------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense).............. $ 5,915 (7,530) 603
Net realized gain (loss)..................... (14,904) 32,957 18,980
Unrealized appreciation (depreciation) on in-
vestments................................... (50,656) (58,753) (49,733)
Capital gain distribution.................... 38,096 89,038 15,119
-------- --------- -------
Increase (decrease) in net assets from opera-
tions........................................ (21,549) 55,712 (15,031)
-------- --------- -------
From capital transactions:
Net premiums................................. 233,717 1,050,325 279,713
Transfers (to) from the general account of GE
Capital Life:
Surrenders.................................. (6,989) (22,325) (384)
Administrative expenses (note 3)............ (33) (13) (3)
Transfer gains (loss) and transfer fees
(note 3)................................... 2,973 894 (1,053)
Transfers (to) from the Guarantee Account.... 23,688 105,298 4,041
Interfund transfers.......................... (15,598) (1,778) 8,853
-------- --------- -------
Increase (decrease) in net assets from capital
transactions................................. 237,758 1,132,401 291,167
-------- --------- -------
Increase (decrease) in net assets............. 216,209 1,188,113 276,136
Net assets at beginning of year............... 509,724 706,397 135,636
-------- --------- -------
Net assets at end of period................... $725,933 1,894,510 411,772
======== ========= =======
</TABLE>
F-13
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Products Fund II Products Fund III
--------------------- -----------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
--------- ---------- --------- -------------
Six months ended Six months ended
June 30, 2000 June 30, 2000
--------------------- -----------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net as-
sets
From operations:
Net investment income (ex-
pense)....................... $ 3,121 (7,618) (229) 2,419
Net realized gain (loss)...... (944) 7,601 35,825 (3,956)
Unrealized appreciation (de-
preciation) on investments... (12,992) (228,609) (46,407) (52,457)
Capital gain distribution..... 10,764 192,986 14,590 33,039
-------- --------- ------- -------
Increase (decrease) in net as-
sets from operations.......... (52) (35,640) 3,779 (20,956)
-------- --------- ------- -------
From capital transactions:
Net premiums.................. 131,325 1,012,622 342,468 229,693
Transfers (to) from the gen-
eral account of GE Capital
Life:
Surrenders................... (56) (24,182) (9,919) (3,997)
Administrative expenses (note
3).......................... (17) (68) (19) (10)
Transfer gains (loss) and
transfer fees (note 3)...... (185) (181) 470 (634)
Transfers (to) from the Guar-
antee Account................ 8,984 149,369 48,044 32,480
Interfund transfers........... -- 50,244 32,523 11,133
-------- --------- ------- -------
Increase (decrease) in net as-
sets from capital transac-
tions......................... 140,051 1,187,804 413,567 268,665
-------- --------- ------- -------
Increase (decrease) in net as-
sets.......................... 139,999 1,152,164 417,346 247,709
Net assets at beginning of
year.......................... 120,555 1,292,719 152,221 472,074
-------- --------- ------- -------
Net assets at end of period.... $260,554 2,444,883 569,567 719,783
======== ========= ======= =======
</TABLE>
F-14
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
------------------------------------------------------
High Aggressive Capital Multiple
Income Bond Growth Appreciation Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
-------- ------- ---------- ------------ ----------
Six months ended June 30, 2000
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............. $ 26,999 32,575 (4,149) (1,732) 4,981
Net realized gain
(loss)................ (3,929) 6,986 42,881 7,157 2,754
Unrealized appreciation
(depreciation) on
investments........... (26,187) (32,259) 5,125 (8,467) (7,194)
Capital gain
distribution.......... -- -- 19,100 16,371 8,498
-------- ------- --------- ------- -------
Increase (decrease) in
net assets from
operations............. (3,117) 7,302 62,957 13,329 9,039
-------- ------- --------- ------- -------
From capital
transactions:
Net premiums........... 202,082 158,822 736,534 435,968 98,623
Transfers (to) from the
general account of GE
Capital Life:
Death Benefits........ -- -- -- -- --
Surrenders............ (32,436) (34,592) (4,579) (7,763) (570)
Administrative
expenses (note 3).... (13) (15) (23) (17) (13)
Transfer gain (loss)
and transfer fees
(note 3)............. 92 (4) (2,092) 621 (175)
Transfers (to) from the
Guarantee Account..... 10,404 44,243 91,446 28,726 11,832
Interfund transfers.... (37,335) 39,545 138,733 34,197 8,773
-------- ------- --------- ------- -------
Increase (decrease) in
net assets from capital
transactions........... 142,794 207,999 960,019 491,732 118,470
-------- ------- --------- ------- -------
Increase (decrease) in
net assets............. 139,677 215,301 1,022,976 505,061 127,509
Net assets at beginning
of year................ 176,934 428,270 148,991 100,245 50,973
-------- ------- --------- ------- -------
Net assets at end of
period................. $316,611 643,571 1,171,967 605,306 178,482
======== ======= ========= ======= =======
</TABLE>
F-15
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Federated Insurance Series
-----------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
-------- ----------- -------
Six months ended June 30,
2000
-----------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)............... $ 1,772 20,502 7,195
Net realized gain (loss)...................... (869) (5,596) 2,938
Unrealized appreciation (depreciation) on in-
vestments.................................... (24,353) (20,219) (24,131)
Capital gain distribution..................... 11,735 -- 6,139
-------- ------- -------
Increase (decrease) in net assets from opera-
tions......................................... (11,715) (5,313) (7,859)
-------- ------- -------
From capital transactions:
Net premiums.................................. 251,567 68,629 164,642
Transfers (to) from the general account of GE
Capital Life:
Death Benefits............................... -- -- (3,769)
Surrenders................................... (4,472) (74) (19,885)
Administrative expenses (note 3)............. (18) (6) --
Transfer gain (loss) and transfer fees (note
3).......................................... (1,727) (35) (374)
Transfers (to) from the Guarantee Account..... 29,512 10,583 22,368
Interfund transfers........................... (21,604) (33,645) (27,330)
-------- ------- -------
Increase (decrease) in net assets from capital
transactions.................................. 253,258 45,452 135,652
-------- ------- -------
Increase (decrease) in net assets.............. 241,543 40,139 127,793
Net assets at beginning of year................ 226,117 195,151 241,169
-------- ------- -------
Net assets at end of period.................... $467,660 235,290 368,962
======== ======= =======
</TABLE>
F-16
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
----------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Balanced Growth Growth Growth Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- --------- --------- --------- ------------- ------------
Six months ended June 30, 2000
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............. $ (24,305) (37,837) (15,856) (18,417) (564) (7,147) (33,612)
Net realized gain
(loss)................ 48,990 413,198 95,410 104,168 (631) 57,947 136,110
Unrealized appreciation
(depreciation) on
investments........... (298,193) (1,099,673) (200,193) (193,165) (665) (145,573) (444,457)
Capital gain
distribution.......... 278,265 569,241 126,255 52,069 2,405 21,218 21,134
---------- ---------- --------- --------- ------ --------- ---------
Increase (decrease) in
net assets from
operations............. 4,757 (155,071) 5,616 (55,345) 545 (73,555) (320,825)
---------- ---------- --------- --------- ------ --------- ---------
From capital
transactions:
Net premiums........... 1,544,891 3,869,423 1,942,644 2,117,358 12,079 1,116,681 2,753,404
Transfers (to) from the
general account of GE
Capital Life:
Death Benefits......... -- (1,668) (4,276) (1,586) (2,564) -- --
Surrenders............. (99,813) (326,785) (20,444) (32,138) (172) (16,251) (97,897)
Administrative expenses
(note 3).............. (152) (40) (63) (36) (7) (15) (118)
Transfer gain (loss)
and transfer fees
(note 3).............. 774 25,910 (3,060) 6,226 (22) 2,962 14,671
Transfers (to) from the
Guarantee Account..... 318,722 229,189 158,604 91,085 9,546 96,130 177,901
Interfund transfers.... 15,836 583,924 (88,943) (98,439) -- 306,833 29,238
---------- ---------- --------- --------- ------ --------- ---------
Increase (decrease) in
net assets from capital
transactions........... 1,780,258 4,379,953 1,984,462 2,082,470 18,860 1,506,340 2,877,199
---------- ---------- --------- --------- ------ --------- ---------
Increase (decrease) in
net assets............. 1,785,015 4,224,882 1,990,078 2,027,125 19,405 1,432,785 2,556,374
Net assets at beginning
of year................ 2,604,926 3,108,280 1,293,479 1,623,416 70,220 323,621 3,388,727
---------- ---------- --------- --------- ------ --------- ---------
Net assets at end of
period................. $4,389,941 7,333,162 3,283,557 3,650,541 89,625 1,756,406 5,945,101
========== ========== ========= ========= ====== ========= =========
</TABLE>
F-17
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
PBHG Insurance Series
Alger American Fund Fund, Inc.
------------------------ -----------------------
PBHG
Small Large Cap PBHG
Capitalization Growth Growth Growth II
Portfolio Portfolio Portfolio Portfolio
-------------- --------- ---------- ----------
Six months ended Six months ended
June 30, 2000 June 30, 2000
------------------------ -----------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income
(expense)............... $ (4,131) (5,750) (1,894) (2,970)
Net realized gain
(loss).................. 4,626 40,511 16,011 57,831
Unrealized appreciation
(depreciation) on in-
vestments............... (256,309) (141,704) 37,529 46,741
Capital gain distribu-
tion.................... 242,875 123,698 -- --
-------- -------- ---------- ----------
Increase (decrease) in net
assets from operations... (12,939) 16,755 51,646 101,602
-------- -------- ---------- ----------
From capital transactions:
Net premiums............. 428,369 288,648 369,350 536,028
Transfers (to) from the
general account of GE
Capital Life:
Death Benefits.......... -- -- -- --
Surrenders.............. (6,715) (14,275) (181) (93)
Administrative expenses
(note 3)............... (11) (25) (1) (3)
Transfer gain (loss) and
transfer fees (note
3)..................... (1,092) (2,699) (445) (3,428)
Transfers (to) from the
Guarantee Account........ 33,577 22,956 73,617 49,646
Interfund transfers....... 22,078 (12,323) 70,187 119,905
-------- -------- ---------- ----------
Increase (decrease) in net
assets from capital
transactions............. 476,206 282,282 512,527 702,055
-------- -------- ---------- ----------
Increase (decrease) in net
assets................... 463,267 299,037 564,173 803,657
Net assets at beginning of
year..................... 384,123 692,231 62,019 140,267
-------- -------- ---------- ----------
Net assets at end of peri-
od....................... $847,390 991,268 626,192 943,924
======== ======== ========== ==========
</TABLE>
F-18
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Statement of Change in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Goldman Sachs Variable Salomon Brothers Variable Series
Insurance Trust Funds Inc.
------------------------ ---------------------------------
Mid Cap
Growth and Value
Income Fund Fund Investors Fund Total Return Fund
------------ ---------- --------------- -----------------
Period from Period from
Six months ended May 15, 2000 to April 28, 2000 to
June 30, 2000 June 30, 2000 June 30, 2000
------------------------ --------------- -----------------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............. $ (1,051) (2,601) (19) (46)
Net realized gain
(loss)................ (369) (7,377) 1 2
Unrealized appreciation
(depreciation) on in-
vestments............. 6,934 26,026 332 88
Capital gain distribu-
tion.................. -- -- -- --
----------- ---------- ------ ------
Increase (decrease) in
net assets from opera-
tions.................. 5,514 16,048 314 44
----------- ---------- ------ ------
From capital transac-
tions:
Net premiums........... 176,478 179,626 10,000 18,750
Transfers (to) from the
general account of GE
Capital Life:
Death Benefits........ -- -- -- --
Surrenders............ (13,985) (7,506) -- (242)
Administrative ex-
penses (note 3)...... (9) (1) -- --
Transfer gain (loss)
and transfer fees
(note 3)............. (210) 285 -- --
Transfers (to) from the
Guarantee Account...... 5,652 35,439 -- --
Interfund transfers..... 34,210 10,025 -- --
----------- ---------- ------ ------
Increase (decrease) in
net assets from capital
transactions........... 202,136 217,868 10,000 18,508
----------- ---------- ------ ------
Increase (decrease) in
net assets............. 207,650 233,916 10,314 18,552
Net assets at beginning
of year................ 60,121 264,985 -- --
----------- ---------- ------ ------
Net assets at end of pe-
riod................... $ 267,771 498,901 10,314 18,552
=========== ========== ====== ======
</TABLE>
See accompanying notes to unaudited financial statements.
F-19
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 2000
(Unaudited)
(1) Description of Entity
GE Capital Life Separate Account II (the Account) is a separate investment
account established in 1996 by GE Life Assurance Company of New York (GE
Capital Life) and is incorporated in New York. The Account operates as a unit
investment trust under the Investment Company Act of 1940. The Account began
selling flexible premium variable deferred annuities in 1999 and is used to
fund certain benefits for flexible premium variable deferred annuity life
insurance policies issued by GE Capital Life. GE Capital Life is a stock life
insurance company incorporated in New York on February 23, 1988. GE Capital
Life is a wholly-owned subsidiary of General Electric Capital Assurance
Company. General Electric Capital Assurance Company is an indirect, wholly-
owned subsidiary of General Electric Capital Corporation (GE Capital). GE
Capital, a diversified financial services company, is a wholly-owned
subsidiary of General Electric Company (GE), a New York corporation.
During the second quarter of 2000, four new investment subdivisions were
added to the Account. The Premier Growth Equity Fund invests solely in a
designated portfolio of the GE Investments Funds, Inc. The Strategic Bond
Fund, the Investors Fund, and the Total Return Fund each invest solely in a
designated portfolio of the Salomon Brothers Variable Series Funds, Inc. All
designated portfolios described above are series type mutual funds.
(2) Summary of Significant Accounting Policies
(a) Investments
Investments are stated at fair value, which is based on the underlying net
asset value per share of the respective portfolios or funds. Purchases and
sales of investments are recorded on the trade date and income distributions
are recorded on the ex-dividend date. Realized gains and losses on investments
are determined on the average cost basis. The units and unit values are
disclosed as of the last business day in the applicable year or period.
The aggregate cost of the investments acquired and the aggregate proceeds of
investments sold, for the six months or lesser period ended June 30, 2000
were:
<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
-------------- --------- -----------
<S> <C> <C>
GE Investment Funds, Inc.:
S&P 500 Index Fund....................................... 3,342,886 714,922
Money Market Fund........................................ 4,663,629 3,414,415
Total Return Fund........................................ 159,383 31,983
International Equity Fund................................ 21,093 10,599
Real Estate Securities Fund.............................. 11,898 111
Global Income Fund....................................... 65,817 28,912
Mid-Cap Value Equity Fund................................ 176,739 74,208
Income Fund.............................................. 73,010 20,302
U.S. Equity Fund......................................... 156,418 44,057
Premier Growth Equity Fund............................... 34,809 37
Variable Insurance Products Fund:
Equity-Income Portfolio.................................. 370,673 88,839
Growth Portfolio......................................... 1,475,977 261,647
Overseas Portfolio....................................... 404,919 97,928
Variable Insurance Products Fund II:
Asset Manager Portfolio.................................. 182,338 28,708
Contrafund Portfolio..................................... 1,583,750 210,758
Variable Insurance Products Fund III:
Growth & Income Portfolio................................ 713,845 260,145
Growth Opportunities Portfolio........................... 422,156 118,582
</TABLE>
F-20
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2) Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
-------------- --------- -----------
<S> <C> <C>
Oppenheimer Variable Account Funds:
High Income Fund......................................... 322,976 153,123
Bond Fund................................................ 372,411 131,734
Aggressive Growth Fund................................... 1,136,268 160,765
Capital Appreciation Fund................................ 533,334 26,770
Multiple Strategies Fund................................. 177,580 45,576
Federated Insurance Series:
American Leaders Fund II................................. 398,765 131,931
High Income Bond Fund II................................. 124,580 58,619
Utility Fund II.......................................... 220,887 71,870
Janus Aspen Series:
Balanced Portfolio....................................... 2,447,861 415,861
Aggressive Growth Portfolio.............................. 6,543,696 1,638,341
Growth Portfolio......................................... 2,601,788 506,753
Worldwide Growth Portfolio............................... 2,589,833 480,357
Flexible Income Portfolio................................ 75,048 54,343
International Growth Portfolio........................... 1,806,195 285,208
Capital Appreciation Portfolio........................... 3,598,663 720,959
Alger American Fund:
Small Capitalization Portfolio........................... 778,954 63,794
Growth Portfolio......................................... 700,263 299,949
PBHG Insurance Series Fund, Inc.:
PBHG Large Cap Growth Portfolio.......................... 592,443 81,602
PBHG Growth II Portfolio................................. 920,567 221,201
Goldman Sachs Variable Insurance Trust:
Growth and Income Fund................................... 226,658 26,104
Mid Cap Value Fund....................................... 297,308 81,965
Salomon Brothers Variable Series Funds, Inc:
Investors Fund........................................... 10,000 17
Total Return............................................. 18,750 282
</TABLE>
F-21
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2) Summary of Significant Accounting Policies -- Continued
(b) Capital Transactions
The increase (decrease) in outstanding units from capital transactions for
the six months or lesser period ended June 30, 2000 is as follows:
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-------------------------------------------------------------------------------------------------------
S&P 500 Money Total International Real Estate Global Mid-Cap U.S. Premier
Index Market Return Equity Securities Income Value Equity Income Equity Growth Equity
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
------- -------- ------ ------------- ----------- ------ ------------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units outstanding
at December 31,
1999.............. 172,354 161,990 7,632 2,208 209 6,423 10,625 16,078 26,227 --
------- -------- ------ ----- ----- ------ ------ ------ ------ -----
From capital
transactions:
Net premiums...... 187,242 240,349 7,191 885 1,352 3,943 10,449 4,268 4,305 2,241
Transfers (to)
from the general
account of GE
Capital Life:
Death benefits... -- -- -- -- -- -- -- -- -- --
Surrenders....... (8,478) (6,193) (72) -- -- (20) (413) (34) (678) --
Cost of insurance
and
administrative
expense......... (5) (1) (2) -- -- (1) (1) -- (1) --
Transfers (to)
from the
Guarantee
Account.......... 28,326 -- 1,583 -- -- -- 855 1,142 2,641 1,226
Interfund
transfers........ 4,954 (121,596) 2,489 -- -- (19) (1,394) (20) 3,163 --
------- -------- ------ ----- ----- ------ ------ ------ ------ -----
Net increase
(decrease) in
units from capital
transactions...... 212,039 112,559 11,189 885 1,352 3,903 9,496 5,356 9,430 3,467
------- -------- ------ ----- ----- ------ ------ ------ ------ -----
Units outstanding
at June 30, 2000.. 384,393 274,549 18,821 3,093 1,561 10,326 20,121 21,434 35,657 3,467
======= ======== ====== ===== ===== ====== ====== ====== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance Variable Insurance
Products Fund Products Fund II Products Fund III
----------------------------- -------------------- -----------------------
Equity- Asset Growth & Growth
Income Growth Overseas Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999...... 48,133 46,688 10,084 10,584 97,637 13,010 41,888
From capital
transactions:
Net premiums........... 22,656 68,035 21,431 11,817 77,453 30,780 21,169
Transfers (to) from the
general account of GE
Capital Life:
Death benefits........ -- -- -- -- -- -- --
Surrenders............ (678) (1,446) (29) (5) (1,850) (891) (368)
Cost of insurance and
administrative
expense.............. (3) (1) -- (2) (5) (2) (1)
Transfers (to) from the
Guarantee Account..... 2,296 6,821 310 808 11,425 4,318 2,994
Interfund transfers.... (1,512) (115) 678 -- 3,843 2,923 1,026
------ ------- ------ ------ ------- ------ ------
Net increase (decrease)
in units from capital
transactions........... 22,759 73,294 22,390 12,618 90,866 37,128 24,820
------ ------- ------ ------ ------- ------ ------
Units outstanding at
June 30, 2000.......... 70,892 119,982 32,474 23,202 188,503 50,138 66,708
====== ======= ====== ====== ======= ====== ======
</TABLE>
F-22
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2) Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds Federated Insurance Series
---------------------------------------------------- ----------------------------
High Aggressive Capital Multiple American High
Income Bond Growth Appreciation Strategies Leaders Income Bond Utility
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA Fund II Fund II Fund II
------- ------- ---------- ------------ ---------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999...... 18,241 43,620 8,356 6,857 4,655 20,556 19,995 22,004
------ ------ ------ ------ ------ ------ ------ ------
From capital transac-
tions:
Net premiums........... 21,019 15,736 35,411 27,730 8,920 23,830 7,201 14,947
Transfers (to) from the
general account of GE
Capital Life:
Death benefits........ -- -- -- -- -- -- -- (342)
Surrenders............ (3,374) (3,427) (220) (494) (52) (424) (8) (1,805)
Cost of insurance and
administrative ex-
pense................ (1) (2) (1) (1) (1) (2) (1) --
Transfers (to) from the
Guarantee Account..... 1,082 4,384 4,396 1,827 1,070 2,795 1,110 2,031
Interfund transfers.... (3,883) 3,918 6,670 2,175 794 (2,046) (3,530) (2,481)
------ ------ ------ ------ ------ ------ ------ ------
Net increase (decrease)
in units from capital
transactions........... 14,843 20,609 46,256 31,237 10,731 24,153 4,772 12,350
------ ------ ------ ------ ------ ------ ------ ------
Units outstanding at
June 30, 2000.......... 33,084 64,229 54,612 38,094 15,386 44,709 24,767 34,354
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Janus Aspen Series Alger American Fund
----------------------------------------------------------------------------- ------------------------
Aggressive Worldwide Flexible International Capital Small
Balanced Growth Growth Growth Income Growth Appreciation Capitalization Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- ---------- --------- --------- --------- ------------- ------------ -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units outstanding
at December 31,
1999............. 186,199 121,228 81,608 100,959 6,851 19,367 179,393 26,274 47,413
------- ------- ------- ------- ----- ------- ------- ------ ------
From capital
transactions:
Net premiums..... 110,772 144,274 120,698 125,437 1,184 61,998 145,137 28,833 18,912
Transfers (to)
from the general
account of
GE Capital Life:
Death benefits.. -- (62) (266) (94) (251) -- -- -- --
Surrenders...... (7,157) (12,184) (1,270) (1,904) (17) (902) (5,160) (452) (935)
Cost of
insurance and
administrative
expense........ (11) (1) (4) (2) (1) (1) (6) (1) (2)
Transfers (to)
from the
Guarantee
Account......... 22,853 8,545 9,854 5,396 935 5,337 9,378 2,260 1,504
Interfund
transfers....... 1,135 21,772 (5,526) (5,832) -- 17,035 1,541 1,486 (807)
------- ------- ------- ------- ----- ------- ------- ------ ------
Net increase
(decrease) in
units from
capital
transactions..... 127,592 162,344 123,486 123,001 1,850 83,467 150,890 32,126 18,672
------- ------- ------- ------- ----- ------- ------- ------ ------
Units outstanding
at June 30,
2000............. 313,791 283,572 205,094 223,960 8,701 102,834 330,283 58,400 66,085
======= ======= ======= ======= ===== ======= ======= ====== ======
</TABLE>
F-23
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2) Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Salomon Brothers
PBHG Insurance Goldman Sachs Variable Variable Series
Series Fund, Inc. Insurance Trust Funds Inc.
-------------------- -------------------------- ----------------
PBHG Large PBHG Mid Cap Total
Cap Growth Growth II Growth and Value Investors Return
Portfolio Portfolio Income Fund Fund Fund Fund
---------- --------- ------------ ----------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding at De-
cember 31, 1999........ 3,577 7,052 6,067 28,190 -- --
------ ------ ----------- ----------- --- -----
From capital transac-
tions:
Net premiums........... 19,635 24,890 18,250 19,188 910 1,802
Transfers (to) from the
general account of GE
Capital Life:
Death benefits......... -- -- -- -- -- --
Surrenders............. (10) (4) (1,446) (802) -- (23)
Cost of insurance and
administrative ex-
pense................. -- -- (1) -- -- --
Transfers (to) from the
Guarantee Account..... 3,914 2,305 585 3,786 -- --
Interfund transfers.... 3,731 5,568 3,538 1,071 -- --
------ ------ ----------- ----------- --- -----
Net increase (decrease)
in units from capital
transactions........... 27,270 32,759 20,926 23,243 910 1,779
------ ------ ----------- ----------- --- -----
Units outstanding at
June 30, 2000.......... 30,847 39,811 26,993 51,433 910 1,779
====== ====== =========== =========== === =====
</TABLE>
(c) Federal Income Taxes
The Account is not taxed separately because the operations of the Account
are part of the total operations of GE Capital Life. GE Capital Life is taxed
as a life insurance company under the Internal Revenue Code (the Code). GE
Capital Life is included in the General Electric Capital Assurance Company
consolidated federal income tax return. Under existing federal income tax law,
no taxes are payable on the investment income or on the capital gains of the
Account.
(d) Use of Estimates
Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and assumptions
that affect amounts and disclosures reported therein. Actual results could
differ from those estimates.
(3) Related Party Transactions
The premiums transferred from GE Capital Life to the Account represent gross
premiums recorded by GE Capital Life on its flexible variable deferred annuity
products. If a policy is surrendered or lapses during the first six years, a
charge is made by GE Capital Life to cover the expenses of issuing the policy.
In addition, surrender charges are assessed against payments made upon the
maturity date if the maturity date occurs before all of the premium payments
have been in the policy for seven years. Subject to certain limitations, the
charge generally equals 6% of the premium withdrawn in the first four years,
and this charge decreases 2% per year for every year thereafter.
GE Capital Life will deduct a charge of $25 plus .15% per year from the
Account for certain administrative charges. In addition, GE Capital Life
charges the Account 1.25% for the mortality and expense (M&E) risk that GE
Capital Life assumes. The administrative expenses as well as the M&E charges
are deducted daily and reflect the effective annual rates.
GE Investments Funds, Inc. (the Fund) is an open-end diversified management
investment company.
Capital Brokerage Corporation, an affiliate of GE Capital Life, is a
Washington Corporation registered with the Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Capital Brokerage Corporation serves
as principal underwriter for variable life insurance policies and variable
annuities issued by GE Capital Life.
F-24
<PAGE>
GE CAPITAL LIFE SEPARATE ACCOUNT II
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(3) Related Party Transactions -- Continued
GE Investment Management Incorporated (Investment Advisor), a wholly-owned
subsidiary of GE, currently serves as investment advisor to GE Investments
Funds, Inc. As compensation for its services, the Investment Advisor is paid
an investment advisory fee by the Fund based on the average daily net assets
at an effective annual rate of .35% for the S&P 500 Index Fund, .50% for the
Money Market, Income, and Total Return Funds, 1.00% for the International
Equity Fund, .85% for the Real Estate Securities Fund, .60% for the Global
Income Fund, .55% for the U.S. Equity Fund and .65% for the Value Equity and
Premier Growth Equity Funds.
Certain officers and directors of GE Capital Life are also officers and
directors of Capital Brokerage Corporation.
F-25
