<PAGE>
[PHOTO OF WOMAN WITH 3 KIDS] [LOGO]
A N N U A L R E P O R T
THE STRONG
LIFE STAGE
SERIES
- ---------------------------------
The Strong Conservative Portfolio
The Strong Moderate Portfolio
The Strong Aggressive Portfolio
ANNUAL REPORT - DECEMBER 31, 1999
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Strong Investor,
As an apprentice investment analyst in the 1960s, I observed and experienced
powerful economic and stock market growth. The explosive stock market was
very profitable for investors, and I always planned for the time when I'd be
able to position our investors to take advantage of that kind of growth
again. The dramatic market move of the late 1990s reminded me of those days
in the 1960s and provided an excellent opportunity.
In our strategic planning effort, what Strong saw coming in the 1990s was a
powerful wave of innovation and technological change that was going to affect
the way we all lived our daily lives. We knew the successful companies of the
future would be those that moved quickly to embrace this new way of thinking.
It was Strong's responsibility to ensure that our shareholders benefited from
this change and capitalized on the opportunity.
How did Strong position our investors to take advantage of the coming growth?
First, we expanded our fund lineup to offer quality choices in every asset
class. We then put technology to work in a number of ways--all intended to
provide our customers and portfolio managers with state-of-the-art tools for
better decision making, and to enhance the customer experience in every
interaction with Strong. And as we made these improvements, we always stayed
true to our commitment to developing a one-on-one relationship with each of
our investors.
When it comes right down to it, it's our job to make you money. And many of
you benefited in 1999, the most exceptional performance year in Strong's
history. Many major financial publications have also recently recognized
Strong.
What can you expect from Strong in the future? We'll continue working to
improve our investment management expertise to try to deliver market-beating
results year after year. And we'll continue to innovate and develop practical
technology solutions aimed at helping you make better investment decisions.
And you can be assured that we will continue to work to deliver the
"across-the-kitchen-table" customer experience you've come to expect from
STRONG.
/s/ Dick
<PAGE>
THE STRONG
LIFE STAGE SERIES
--------------------
ANNUAL REPORT - DECEMBER 31, 1999
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Life Stage Portfolios . . . . . . . . . . . . . . . 2
FINANCIAL INFORMATION
Schedules of Investments in Securities . . . . . . . . . . . . 4
Statements of Assets and Liabilities . . . . . . . . . . . . . 5
Statements of Operations . . . . . . . . . . . . . . . . . . 6
Statements of Changes in Net Assets . . . . . . . . . . . . . 7
Notes to Financial Statements . . . . . . . . . . . . . . . . 8
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . 10
REPORT OF INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . 11
<PAGE>
THE STRONG LIFE STAGE PORTFOLIOS
--------------------------------
INVESTMENT
PERSPECTIVES
- -------------------------------------------------------------------------------
All three portfolios in the Strong Life Stage Series either outperformed or
kept pace with their benchmark indexes for the year ended December 31, 1999.
In a strong stock market environment, all four of the stock funds in the
portfolios performed better than the benchmark S&P 500 Stock Index for the
year. On the fixed-income side, all but one of the component funds exceeded
the performance of their benchmarks.
The stock market advance of 1999 was extremely narrow. While the
capitalization-weighted S&P 500 Index returned 21.04% for the year, almost
three fourths of that return came from the technology sector alone. More than
half of the 500 stocks in the index actually were down for the year.
The strongest contributor to the Life Stage portfolios' outperformance was
the Strong Growth Fund. This Fund's substantial overweighting in technology
issues, as well as successful selections within the sector, drove its
performance. The Fund also benefited from having virtually no exposure to
out-of-favor consumer staples stocks. The Strong Common Stock Fund was
another particularly strong performer last year.
While technology issues drove the popular stock averages higher, 1999 was one
of the worst years ever for bonds. Fears of deflation, which dominated market
sentiment late in 1998, quickly turned into renewed worries about inflation.
Treasury yields rose 1.5 to 2 percentage points during the year, and bond
prices on average fell 7%.
In this environment, the Strong Advantage Fund was a clear winner, easily
outpacing the total return of its benchmark thanks to its focus on very
short-maturity bonds. The Short-Term Bond Fund also exceeded the benchmark's
- -------------------------------------------------------------------------------
ALL THREE PORTFOLIOS IN THE STRONG LIFE STAGE SERIES EITHER OUTPERFORMED OR
KEPT PACE WITH THEIR BENCHMARK INDEXES FOR THE YEAR ENDED DECEMBER 31, 1999.
- -------------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
HIGHLIGHTS
- - The Conservative Portfolio returned 20.27%, the Moderate Portfolio
returned 26.65%, and the Aggressive Portfolio returned 37.77% for the
year ended December 31, 1999.
- - The Strong Growth Fund and the Strong Common Stock Fund were the
strongest contributors to the portfolios' outperformance in 1999.
- - In a strong market environment, all four of the stock funds held in the
Life Stage portfolios outperformed their benchmark, the S&P 500 Stock
Index.*
- - A significant stake in the technology sector and good stock-picking
within that sector were the primary drivers of performance.
- -------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
CONSERVATIVE PORTFOLIO
Since Inception 20.27%
(on 12-31-98)
MODERATE PORTFOLIO
Since Inception 26.65%
(on 12-31-98)
AGGRESSIVE PORTFOLIO
Since Inception 37.77%
(on 12-31-98)
2
<PAGE>
return. The Government Securities Fund has greater sensitivity to interest
rates than the benchmark index, so the Fund's considerable yield was not
sufficient to offset bond-price declines.
The U.S. economy is strong and appears to be reaccelerating, repeating a
seasonal pattern that has been in place for several years. The Federal
Reserve wants to slow economic growth to a more sustainable pace to head off
inflation. To do so, it may need to raise interest rates until the stock
market cools off. These tight monetary conditions warrant a degree of
caution, especially at a time of stretched company valuations and increasing
pressure on corporate profit margins.
In the bond market, today's yields offer a substantial premium over
inflation, which remains low. We expect market conditions to improve when it
becomes clear that the Federal Reserve's rate increases are having their
desired slowing effect on the economy.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-98 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG THE STRONG THE STRONG S&P 500
CONSERVATIVE MODERATE AGGRESSIVE Stock
PORTFOLIO PORTFOLIO PORTFOLIO Index*
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
12-98 $10,000.00 $10,000.00 $10,000.00 $10,000.00
2-99 $10,120.00 $10,120.00 $10,180.00 $10,094.40
4-99 $10,570.60 $10,610.00 $10,960.00 $10,904.90
6-99 $10,773.60 $10,890.00 $11,340.00 $11,238.40
8-99 $10,632.60 $10,670.00 $11,050.00 $10,833.60
10-99 $11,005.40 $11,160.00 $11,710.00 $11,203.40
12-99 $12,027.50 $12,665.00 $13,777.10 $12,104.50
</TABLE>
This graph, prepared in accordance with SEC regulations, compares a $10,000
Investment in each portfolio, made at its inception, with the performance of
the Standard & Poor's 500 Stock Index ("S&P 500"). Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
- -------------------------------------------------------------------------------
[SIDENOTE]
YOUR PORTFOLIOS'
APPROACH
THE STRONG LIFE STAGE SERIES CONSISTS OF THREE DIVERSIFIED INVESTMENT
PORTFOLIOS DESIGNED TO PURSUE EITHER CONSERVATIVE, MODERATE, OR AGGRESSIVE
INVESTMENT OBJECTIVES BY INVESTING IN A COMBINATION OF STOCK, BOND, AND CASH
INVESTMENTS. EACH PORTFOLIO IS COMMONLY REFERRED TO AS A "FUND OF FUNDS"
BECAUSE ITS ASSETS ARE INVESTED IN A NUMBER OF OTHER STRONG MUTUAL FUNDS. THE
FUNDS OFFER A "ONE-STOP" SOLUTION OF ASSET ALLOCATION, DIVERSIFICATION, AND
SIMPLICITY, AND MAY APPEAL TO INVESTORS LOOKING TO SIMPLIFY THE INVESTMENT
SELECTION PROCESS FOR THEIR RETIREMENT ACCOUNTS.
- -------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - 1999 was one of the most difficult years of the last quarter century for
bonds as fears of deflation, which dominated the market in late 1998,
quickly turned into renewed worries about inflation.
- - The Federal Reserve is taking steps to slow the growth of the U.S.
economy to keep inflation in check. To do so, it may continue to raise
interest rates in the first quarter of 2000.
- - The strong performance of the stock market continued to be driven by a
narrow band of technology stocks.
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market. Source of the S&P index data is Standard & Poor's Micropal.
3
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES December 31, 1999
- -------------------------------------------------------------------------------
STRONG CONSERVATIVE PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT COMPANY SECURITIES 92.5%
Strong Advantage Fund, Inc. 258,892 $ 2,557,857
Strong Blue Chip 100 Fund 64,173 1,382,279
Strong Common Stock Fund, Inc. 48,232 1,215,932
Strong Government Securities Fund, Inc. 62,892 633,951
Strong Growth Fund 38,510 1,373,267
Strong Growth and Income Fund 47,420 1,357,648
Strong Short-Term Bond Fund, Inc. 407,802 3,825,187
- -------------------------------------------------------------------------------
Total Investment Company Securities (Cost $11,374,031) 12,346,121
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 4.9%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $644,900 644,900
Warner Lambert Company, 6.08% 12,100 12,100
- -------------------------------------------------------------------------------
Total Short-Term Investments (Cost $657,000) 657,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Investments in Securities (Cost $12,031,031) 97.4% 13,003,121
Other Assets and Liabilities, Net 2.6% 344,144
- -------------------------------------------------------------------------------
NET ASSETS 100.0% $13,347,265
===============================================================================
<CAPTION>
- -------------------------------------------------------------------------------
STRONG MODERATE PORTFOLIO
- -------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT COMPANY SECURITIES 91.6%
Strong Advantage Fund, Inc. 253,225 $ 2,501,860
Strong Blue Chip 100 Fund 188,493 4,060,136
Strong Common Stock Fund, Inc. 141,456 3,566,108
Strong Government Securities Fund, Inc. 246,034 2,480,027
Strong Growth Fund 113,160 4,035,277
Strong Growth and Income Fund 139,244 3,986,548
Strong Short-Term Bond Fund, Inc. 398,865 3,741,353
- -------------------------------------------------------------------------------
Total Investment Company Securities (Cost $21,464,003) 24,371,309
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 4.9%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $1,230,300 1,230,300
Warner Lambert Company, 6.08% 67,600 67,600
- -------------------------------------------------------------------------------
Total Short-Term Investments (Cost $1,297,900) 1,297,900
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Investments in Securities (Cost $22,761,903) 96.5% 25,669,209
Other Assets and Liabilities, Net 3.5% 936,318
- -------------------------------------------------------------------------------
NET ASSETS 100.0% $26,605,527
===============================================================================
<CAPTION>
- -------------------------------------------------------------------------------
STRONG AGGRESSIVE PORTFOLIO
- -------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES 90.2%
Strong Blue Chip 100 Fund 83,272 $1,793,684
Strong Common Stock Fund, Inc. 62,506 1,575,774
Strong Government Securities Fund, Inc. 81,560 822,121
Strong Growth Fund 49,989 1,782,618
Strong Growth and Income Fund 61,515 1,761,188
Strong Short-Term Bond Fund, Inc. 44,072 413,392
- -------------------------------------------------------------------------------
Total Investment Company Securities (Cost $6,889,076) 8,148,777
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 5.4%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $380,900 380,900
Warner Lambert Company, 6.08% 112,100 112,100
- -------------------------------------------------------------------------------
Total Short-Term Investments (Cost $493,000) 493,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Investments in Securities (Cost $7,382,076) 95.6% 8,641,777
Other Assets and Liabilities, Net 4.4% 396,395
- -------------------------------------------------------------------------------
NET ASSETS 100.0% $9,038,172
===============================================================================
</TABLE>
LEGEND
- -------------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of less
than one year.
Percentages are stated as a percent of net assets.
4
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
STRONG STRONG STRONG
CONSERVATIVE MODERATE AGGRESSIVE
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, at Value
(Cost of $12,031,031, $22,761,903 and
$7,382,076, respectively) $13,003,121 $25,669,209 $8,641,777
Dividends and Interest Receivable 344,088 936,117 396,358
Other Assets 56 201 37
------------- ----------- ------------
Total Assets 13,347,265 26,605,527 9,038,172
LIABILITIES -- -- --
------------- ----------- ------------
NET ASSETS $13,347,265 $26,605,527 $9,038,172
============= =========== ============
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $12,337,134 $23,645,498 $7,793,201
Accumulated Net Investment Income 3,001 3,363 1,157
Accumulated Net Realized Gain (Loss) 35,040 49,360 (15,887
Net Unrealized Appreciation 972,090 2,907,306 1,259,701
------------- ----------- ------------
Net Assets $13,347,265 $26,605,527 $9,038,172
============= =========== ============
Capital Shares Outstanding (Unlimited Number Authorized) 1,164,528 2,201,608 690,786
NET ASSET VALUE PER SHARE $11.46 $12.08 $13.08
============= =========== ============
</TABLE>
5
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
STRONG STRONG STRONG
CONSERVATIVE MODERATE AGGRESSIVE
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- --------------
<S> <C> <C> <C>
INCOME:
Net Investment Income Received from Underlying Funds $ 158,937 $ 303,949 $ 34,642
Interest 12,574 35,302 10,699
------------- ----------- ------------
Total Income 171,511 339,251 45,341
EXPENSES:
Administrative Fees (Note 3) 11,494 35,857 9,888
Custodian Fees 321 728 750
Professional Fees 6,981 6,939 6,935
Reports to Shareholders 2,398 3,953 5,913
Federal and State Registration Fees 46,126 40,232 35,978
Other 3,055 3,250 3,266
------------- ----------- ------------
Total Expenses Before Waivers and Absorptions 70,375 90,959 62,730
Voluntary Expense Waivers and Absorptions by Advisor (70,375) (90,959) (62,730)
------------- ----------- ------------
Expenses, Net -- -- --
------------- ----------- ------------
NET INVESTMENT INCOME 171,511 339,251 45,341
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Sales of Underlying Funds 37,193 54,044 (15,529)
Distributions of Capital Gains from Underlying Funds 300,903 881,839 407,164
------------- ----------- ------------
Net Realized Gain 338,096 935,883 391,635
Net Change in Unrealized Appreciation/Depreciation on Investments 972,090 2,907,306 1,259,701
------------- ----------- ------------
NET GAIN ON INVESTMENTS 1,310,186 3,843,189 1,651,336
------------- ----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,481,697 $4,182,440 $1,696,677
============= =========== ============
</TABLE>
6
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRONG CONSERVATIVE STRONG MODERATE STRONG AGGRESSIVE
PORTFOLIO PORTFOLIO PORTFOLIO
------------------- --------------- -----------------
Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1999 Dec. 31, 1999
------------------- --------------- -----------------
<S> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 171,511 $ 339,251 $ 45,341
Net Realized Gain 338,096 935,883 391,635
Net Change in Unrealized Appreciation/Depreciation 972,090 2,907,306 1,259,701
------------------- --------------- -----------------
Net Increase in Net Assets Resulting from Operations 1,481,697 4,182,440 1,696,677
DISTRIBUTIONS:
From Net Investment Income (168,510) (335,888) (44,184)
From Net Realized Gains (303,056) (886,523) (407,522)
------------------- --------------- -----------------
Total Distributions (471,566) (1,222,411) (451,706)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 14,668,417 27,888,163 9,597,123
Proceeds from Reinvestment of Distributions 468,737 1,218,962 448,740
Payment for Shares Redeemed (2,834,020) (5,494,627) (2,285,662)
------------------- --------------- -----------------
Net Increase in Net Assets from Capital Share Transactions 12,303,134 23,612,498 7,760,201
------------------- --------------- -----------------
TOTAL INCREASE IN NET ASSETS 13,313,265 26,572,527 9,005,172
NET ASSETS:
Beginning of Year 34,000 33,000 33,000
------------------- --------------- -----------------
End of Year $13,347,265 $26,605,527 $9,038,172
=================== =============== =================
TRANSACTIONS IN SHARES OF THE PORTFOLIO:
Sold 1,380,800 2,599,260 854,547
Issued in Reinvestment of Distributions 41,463 101,327 34,492
Redeemed (261,135) (502,279) (201,553)
------------------- --------------- -----------------
Net Increase in Shares of the Portfolio 1,161,128 2,198,308 687,486
=================== =============== =================
</TABLE>
7
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 31, 1999
1. ORGANIZATION
The accompanying financial statements represent Strong Life Stage
Series, Inc., an open-end series management company registered under the
Investment Company Act of 1940, as amended. Strong Life Stage Series,
Inc. includes the following diversified investment portfolios (the
"Portfolios"), each with its own investment objectives and policies:
Strong Conservative Portfolio, Strong Moderate Portfolio, and Strong
Aggressive Portfolio. Each Portfolio commenced operations on January 4,
1999. At December 31, 1999, approximately 66% and 79% of the shares of
the Strong Conservative Portfolio and Strong Moderate Portfolio,
respectively, were owned by one investor.
Each Portfolio invests substantially all its assets in a combination of
the following underlying funds: Strong Growth Fund, Strong Common Stock
Fund, Strong Growth and Income Fund, Strong Blue Chip 100 Fund, Strong
Heritage Money Fund, Strong Advantage Fund, Strong Short-Term Bond Fund,
and Strong Government Securities Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Portfolios in the preparation of their financial statements.
(A) SECURITY VALUATION -- Each Portfolio's investment in the underlying
funds is valued at the closing net asset value per share of each
fund determined at the close of the New York Stock Exchange on the
day of valuation.
(B) FEDERAL INCOME AND EXCISE TAXES AND DISTRIBUTIONS TO SHAREHOLDERS --
The Portfolios intend to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of their taxable income to
their shareholders in a manner which results in no tax cost to the
Portfolios. Therefore, no federal income or excise tax provision is
required.
The Conservative Portfolio generally pays dividends from net
investment income quarterly. The Moderate and Aggressive Portfolios
generally pay dividends from net investment income annually. All
Portfolios distribute substantially all net realized capital gains
annually.
(C) REALIZED GAINS AND LOSSES ON INVESTMENT TRANSACTIONS -- Investment
security transactions are recorded as of the trade date. Gains or
losses realized on investment transactions are determined by
comparing the identified cost of the security lot sold with the net
sales proceeds.
(D) USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts in these financial statements. Actual results
could differ from those estimates.
(E) OTHER -- Income and capital gain distributions from the underlying
funds and distributions to Portfolio shareholders are recorded on
the ex-dividend date. Distributions received from the underlying
funds retain their tax characterization determined at the
underlying fund level.
3. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. ("Strong"), with whom certain officers
and directors of the Funds are affiliated, is the Portfolios'
shareholder servicing agent and transfer and dividend-disbursing agent.
Strong also serves as the underlying funds' investment advisor. The
Portfolios do not pay management fees; however, Strong receives
management fees from managing the underlying funds. Administrative Fees,
which are established by the prospectus, are based on an annualized rate
of .25% of the average daily net assets of the Portfolios. Certain
expenses will be waived or absorbed by Strong if the Portfolio's
operating expenses exceed 2% of the average daily net assets of the
Portfolio. Strong may also voluntarily waive or absorb certain expenses
for a Portfolio. Shareholder recordkeeping and related service fees are
based on contractually established rates for each open and closed
shareholder account. The Advisor also allocates to each Portfolio
certain charges or credits resulting from transfer agency banking
activities based on each Portfolio's level of subscription and
redemption activity. Charges allocated to the Portfolio by the Advisor
are included in Other Expenses in the Portfolio's Statement of
Operations. Strong is also compensated for certain other services
related to costs incurred for reports to shareholders.
Certain information regarding related party transactions, excluding the
effects of waivers and absorptions, for the year ended December 31,
1999, is as follows:
<TABLE>
<CAPTION>
Shareholder
Receivable from Servicing and Other Unaffiliated
Advisor at Expenses Transfer Agency Directors'
December 31, 1999 Paid to Strong Banking Charges Fees
------------------ ------------------- --------------- -----------
<S> <C> <C> <C> <C>
Strong Conservative Portfolio $ -- $11,503 $1,008 $1,500
Strong Moderate Portfolio 123 35,885 1,204 1,500
Strong Aggressive Portfolio 3 9,938 1,209 1,500
</TABLE>
8
<PAGE>
- -------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of the underlying funds during the year
ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------------- --------------
<S> <C> <C>
Strong Conservative Portfolio $13,810,441 $2,473,604
Strong Moderate Portfolio 26,272,559 4,862,600
Strong Aggressive Portfolio 7,640,974 736,368
</TABLE>
5. INCOME TAX INFORMATION
At December 31, 1999, the investment cost, gross unrealized appreciation
and depreciation on investments for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
Federal Tax Unrealized Unrealized Net
Cost Appreciation Depreciation Appreciation
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Strong Conservative Portfolio $12,050,997 $ 994,878 $ 42,754 $ 952,124
Strong Moderate Portfolio 22,844,574 2,963,125 138,490 2,824,635
Strong Aggressive Portfolio 7,403,642 1,274,590 38,455 1,238,135
</TABLE>
During the year ended December 31, 1999, the Portfolios paid capital
gains distributions (taxable as long-term gains at 20%) to shareholders
as follows (unaudited): Strong Conservative Portfolio $156,603, Strong
Moderate Portfolio $454,386, and Strong Aggressive Portfolio $218,038.
For corporate shareholders in the Portfolios, the percentages of
dividend income distributed for the year ended December 31, 1999 which
are designated as qualifying for the dividends-received deduction are as
follows (unaudited): Strong Conservative Portfolio 4.1%, Strong Moderate
Portfolio 3.4%, and Strong Aggressive Portfolio 2.2%.
9
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
STRONG CONSERVATIVE PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
----------
Dec. 31,
Selected Per-Share Data(a) 1999
- --------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Income 0.28
Net Realized and Unrealized Gains on Investments 1.72
- --------------------------------------------------------------------------------------------
Total from Investment Operations 2.00
Less Distributions:
From Net Investment Income (0.19)
From Net Realized Gains (0.35)
- --------------------------------------------------------------------------------------------
Total Distributions (0.54)
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.46
============================================================================================
Ratios and Supplemental Data
- --------------------------------------------------------------------------------------------
Total Return +20.3%
Net Assets, End of Period (In Thousands) $13,347
Ratio of Expenses to Average Net Assets without Waivers and Absorptions 1.5%
Ratio of Expenses to Average Net Assets 0.0%
Ratio of Net Investment Income to Average Net Assets 3.7%
Portfolio Turnover Rate 53.7%
</TABLE>
STRONG MODERATE PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
----------
Dec. 31,
Selected Per-Share Data(a) 1999
- --------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Income 0.17
Net Realized and Unrealized Gains on Investments 2.49
- --------------------------------------------------------------------------------------------
Total from Investment Operations 2.66
Less Distributions:
From Net Investment Income (0.16)
From Net Realized Gains (0.42)
- --------------------------------------------------------------------------------------------
Total Distributions (0.58)
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.08
============================================================================================
Ratios and Supplemental Data
- --------------------------------------------------------------------------------------------
Total Return +26.7%
Net Assets, End of Period (In Thousands) $26,606
Ratio of Expenses to Average Net Assets without Waivers and Absorptions 0.6%
Ratio of Expenses to Average Net Assets 0.0%
Ratio of Net Investment Income to Average Net Assets 2.3%
Portfolio Turnover Rate 35.0%
</TABLE>
(a) Information presented relates to a share of capital stock of the Portfolio
outstanding for the entire period.
10
See Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------
STRONG AGGRESSIVE PORTFOLIO
<TABLE>
<CAPTION>
Year Ended
----------
Dec. 31,
Selected Per-Share Data(a) 1999
- --------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Income 0.09
Net Realized and Unrealized Gains on Investments 3.69
- --------------------------------------------------------------------------------------------
Total from Investment Operations 3.78
Less Distributions:
From Net Investment Income (0.07)
From Net Realized Gains (0.63)
- --------------------------------------------------------------------------------------------
Total Distributions (0.70)
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.08
============================================================================================
Ratios and Supplemental Data
- --------------------------------------------------------------------------------------------
Total Return +37.8%
Net Assets, End of Period (In Thousands) $9,038
Ratio of Expenses to Average Net Assets without Waivers and Absorptions 1.6%
Ratio of Expenses to Average Net Assets 0.0%
Ratio of Net Investment Income to Average Net Assets 1.1%
Portfolio Turnover Rate 18.5%
</TABLE>
(a) Information presented relates to a share of capital stock of the Portfolio
outstanding for the entire period.
See Notes to Financial Statements
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Board of Directors of Strong Life Stage Series, Inc.
and the Shareholders of Strong Life Stage Series Portfolios
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments in securities, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position
of Strong Aggressive Portfolio, Strong Conservative Portfolio and Strong
Moderate Portfolio (all three of the portfolios constituting the Strong Life
Stage Series, Inc.), (herein referred to as the "Strong Life Stage Series
Portfolios") at December 31, 1999, the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
year then ended, in conformity with accounting principles generally accepted
in the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Strong Life Stage Series Portfolios' management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
auditing standards generally accepted in the United States which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1999 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 2, 2000
11
<PAGE>
DIRECTORS
Richard S. Strong
Marvin E. Nevins
William F. Vogt
Willie D. Davis
Stanley Kritzik
Neal Malicky
OFFICERS
Richard S. Strong, CHAIRMAN OF THE BOARD
Thomas M. Zoeller, VICE PRESIDENT
Dennis A. Wallestad, VICE PRESIDENT
Stephen J. Shenkenberg, VICE PRESIDENT AND SECRETARY
John S. Weitzer, VICE PRESIDENT
John W. Widmer, TREASURER
Rhonda K. Haight, ASSISTANT TREASURER
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully
before investing or sending money. This report does not constitute an offer
for the sale of securities. Strong Funds are offered for sale by prospectus
only. To reduce the volume of mail you receive, only one copy of financial
reports, prospectuses, and other regulatory materials is mailed to your
household. You can call us at 1-800-368-1030, or write to us at the address
listed below, to request (1) additional copies free of charge, or (2) that we
discontinue our practice of householding regulatory materials. Strong
Investments, Inc. RT0956-0200
To order a free prospectus kit, call
1-800-368-1030
To learn more about our funds, discuss an existing
account, or conduct a transaction, call
1-800-368-3863
If you are a Financial Professional, call
1-800-368-1683
Visit our web site at
WWW.ESTRONG.COM
[LOGO] STRONG FUNDS-Registered Trademark-
P.O. Box 2936
Milwaukee, Wisconsin 53201
