<PAGE> 1
Semi-Annual Report
To Contract Owners
June 30, 1996
Separate
Account A
---------------------
[VALIC LOGO]
<PAGE> 2
================================================================================
CHAIRMAN'S LETTER SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
TO OUR PARTICIPANTS:
We are pleased to present the June 30, 1996, Semi-Annual Report to Contract
Owners for Separate Account A of The Variable Annuity Life Insurance Company. A
summary of the change in unit value for each fund and each product series
(Portfolio Director, Independence Plus, Group Unit Purchase and Impact) appears
on page two.
During the first six months of 1996 securities markets produced moderate
returns as compared to the exceptional pace of 1995. The stock market, as
measured by the Standard & Poor's(R) 500 Index, had a total return of 10.09%.
The mid-sized and smaller companies had comparable returns with the Standard &
Poor's(R) MidCap 400 earning 9.21% and the Russell 2000(R) Index producing
10.36%. The bond market, as measured by the Merrill Lynch Corporate and
Government Bond Index, experienced a negative return of 1.86%.
Stock market investors were encouraged by the Federal Reserve's conservative
monetary policy but concerned that interest rates might rise. Economic growth
(Gross Domestic Product) was reported at 2.0% in the first quarter and 4.2% in
the second. Those levels were favorable for corporate profits but the advance
in the second quarter raised interest rate concerns.
Bond market investors experienced lower prices as employment statistics seemed
to portend stronger economic growth. International equity markets were mixed
with European shares benefiting from improved earnings growth while Far Eastern
markets reported slower economic growth. International bonds had a negative
return as bond markets in the major industrialized countries retreated. The
dollar was higher against most currencies further moderating performance of
both stocks and bonds.
Lipper Analytical Services, Inc. and Morningstar, Inc. assign variable annuity
fund options to categories reflecting investment objectives and rank each of
the funds performance in its respective category. For the first half of 1996
both Lipper and Morningstar ranked eight of VALIC's funds in the top half of
funds in each category. Both ranking services had five of VALIC's funds in the
top quartile of their categories.
If you have any questions about your contract or this report, we would be happy
to hear from you.
Respectfully,
/s/ STEPHEN D. BICKEL
----------------------------------------
Stephen D. Bickel, Chairman and CEO
The Variable Annuity Life Insurance
Company
August 12, 1996
This report is not authorized for distribution as advertising or sales
literature. This report is published exclusively for the information of the
variable annuity contract owners of the Company in accordance with section
30(d) of the Investment Company Act of 1940.
"Standard & Poor's(R) 500 Index" and "Standard & Poor's(R) MidCap 400 Index"
are trademarks of Standard & Poor's Corporation. The Stock Index Fund and
MidCap Index Fund are not sponsored, endorsed, sold or promoted by S&P and S&P
makes no representation regarding the advisability of investing in the funds.
The Russell 2000(R) Index is a trademark / service mark of the Frank Russell
Company. Russell(TM) is a trademark of the Frank Russell Company.
1
<PAGE> 3
================================================================================
CHAIRMAN'S LETTER - CONTINUED SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
UNIT VALUE RETURNS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTH ONE YEAR TOTAL
TOTAL RETURN RETURNS FOR THE YEAR
PORTFOLIO INDEPENDENCE GROUP UNIT FOR THE PERIOD ENDING DECEMBER 31,
DIRECTOR PLUS IMPACT PURCHASE ENDING --------------------
DIVISION DIVISION DIVISION DIVISION JUNE 30, 1996 1995 1994
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INDEXED FUNDS
Stock Index Fund . . . . . . . . . . . 10C 10C 10D 10A, 10B 9.43% 35.95% (0.30)%
MidCap Index Fund . . . . . . . . . . 4 4 4 N/A 8.53 29.24 (4.70)
Small Cap Index Fund . . . . . . . . . 14 14 N/A N/A 9.73 26.39 (4.30)
International Equities Fund . . . . . 11 11 N/A N/A 5.16 9.67 6.90
MANAGED FUNDS
Growth Fund . . . . . . . . . . . . . 15 N/A N/A N/A 12.94 46.40 0.18 (1)
Growth & Income Fund . . . . . . . . . 16 N/A N/A N/A 12.99 30.55 (0.68)(1)
Science & Technology Fund . . . . . . 17 N/A N/A N/A 5.32 60.07 24.77 (1)
Social Awareness Fund . . . . . . . . 12 12 N/A N/A 9.93 37.57 (2.42)
Timed Opportunity Fund . . . . . . . . 5 5 5 N/A 4.75 23.55 (2.29)
Capital Conservation Fund . . . . . . 7 7 1 N/A (3.65) 19.58 (7.04)
Government Securities Fund . . . . . . 8 8 N/A N/A (2.88) 16.31 (5.44)
International Government Bond Fund . . 13 13 N/A N/A (1.87) 17.63 3.42
Money Market Fund . . . . . . . . . . 6 6 2 N/A 1.95 4.51 2.77
Dreyfus Small Cap Fund . . . . . . . . 18 N/A N/A N/A 9.98 27.78 6.33
Templeton Asset Allocation Fund . . . 19 N/A N/A N/A 7.54 21.02 (4.24)
Templeton International Fund . . . . . 20 N/A N/A N/A 10.21 14.34 (3.49)
</TABLE>
(1) Since April 29, 1994, inception of the Fund.
VARIABLE ACCOUNT PERFORMANCE
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
LIPPER ANALYTICAL
SERVICES, INC. MORNINGSTAR, INC.
----------------------------- -------------------------------
UNIT RANKING RANKING
VALUE ------------------ AVERAGE ----------------------- AVERAGE
RETURN POSITION PERCENTILE RETURN POSITION PERCENTILE RETURN
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Index Fund . . . . . . . . . . . . . . . . . 9.43% 16/64 75% 9.32% 68/328 79% 7.96%
MidCap Index Fund . . . . . . . . . . . . . . . . . 8.53 25/41 39 10.07 290/504 42 9.15
Small Cap Index Fund . . . . . . . . . . . . . . . 9.73 50/94 47 12.67 133/214 38 11.96
International Equities Fund . . . . . . . . . . . . 5.16 167/174 4 8.66 324/336 4 9.65
Growth Fund . . . . . . . . . . . . . . . . . . . . 12.94 41/288 86 9.75 52/504 90 9.15
Growth & Income Fund . . . . . . . . . . . . . . . 12.99 11/168 93 8.90 11/328 97 7.96
Science & Technology Fund . . . . . . . . . . . . . 5.32 14/18 22 7.25 57/108 47 6.78
Social Awareness Fund . . . . . . . . . . . . . . . 9.93 6/18 67 7.25 31/328 91 7.96
Timed Opportunity Fund . . . . . . . . . . . . . . 4.75 123/216 43 4.84 168/377 55 4.43
Capital Conservation Fund . . . . . . . . . . . . . (3.65) 80/87 8 (2.19) 245/271 10 (1.58)
Government Securities Fund . . . . . . . . . . . . (2.88) 53/72 26 (2.19) 95/131 27 (2.32)
International Government Bond Fund . . . . . . . . (1.87) 43/53 19 1.08 62/72 14 0.86
Money Market Fund . . . . . . . . . . . . . . . . . 1.95 69/253 73 1.87 68/248 73 1.85
Dreyfus Small Cap Fund . . . . . . . . . . . . . . 9.98 46/94 51 12.67 126/214 41 11.96
Templeton Asset Allocation Fund . . . . . . . . . . 7.54 3/18 83 6.52 30/377 92 4.43
Templeton International Fund . . . . . . . . . . . 10.21 33/174 81 8.66 97/336 71 9.65
</TABLE>
SOURCES: Morningstar Variable Annuity/Life Performance Report, July 1996
Lipper Analytical Services, Inc.
The Portfolio Director rankings shown in this publication indicate the total
return rankings of Separate Account A's divisions compared to Morningstar and
Lipper categories for the six month period ending 6/30/96. The total returns
and rankings displayed show value after all management, administration fees and
fund expenses and do not include potential sales charges or maintenance fees,
if applicable. For total return information over a longer period, see the
Portfolio Director prospectus. The performance shown represents past
performance. The principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Past performance does not guarantee future returns.
2
<PAGE> 4
================================================================================
FINANCIAL STATEMENTS (Unaudited) SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
June 30, 1996
<TABLE>
<CAPTION>
ASSETS: ALL DIVISIONS
----------------
<S> <C>
Total investment in shares of mutual funds, at market (cost $4,491,920,776) . . . . . . . $ 5,505,499,317
Balance due from VALIC general account . . . . . . . . . . . . . . . . . . . . . . . . . 5,278,918
----------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,510,778,235
================
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts
(Net of applicable contract loans - partial withdrawals with right of reinvestment) . $ 5,497,651,347
Reserves for annuity contracts on benefits . . . . . . . . . . . . . . . . . . . . . . . 13,126,888
----------------
TOTAL CONTRACT OWNER RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,510,778,235
================
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
INVESTMENT INCOME: ALL DIVISIONS
----------------
Dividends from mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,394,059
----------------
EXPENSES:
Mortality and expense risk charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,356,213
Reimbursement of expenses - Note C . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,417)
----------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,319,796
----------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,074,263
----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,838,935
Capital gains distributions from mutual funds . . . . . . . . . . . . . . . . . . . . . . 3,890,326
Net unrealized appreciation of investments during the period . . . . . . . . . . . . . . 317,554,719
----------------
Net realized and unrealized gain on investments . . . . . . . . . . . . . . . . . . . 351,283,980
----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . . . . $ 370,358,243
================
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS ALL DIVISIONS
----------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
OPERATIONS: JUNE 30, 1996 1995
-------------- --------------
<S> <C> <C>
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,074,263 $ 34,191,940
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . 29,838,935 54,777,042
Capital gains distributions from mutual funds . . . . . . . . . . . . . . . . . 3,890,326 110,007,833
Net unrealized appreciation of investments during the period . . . . . . . . . 317,554,719 640,017,922
-------------- --------------
Increase in net assets resulting from operations . . . . . . . . . . . . . 370,358,243 838,994,737
-------------- --------------
PRINCIPAL TRANSACTIONS:
Purchase payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,735,268 820,355,349
Surrenders of accumulation units by terminations, withdrawals, and
maintenance fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94,691,084) (114,759,722)
Annuity benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . (886,870) (1,588,610)
Amounts transferred from VALIC general account . . . . . . . . . . . . . . . . 373,632,407 220,818,448
-------------- --------------
Increase in net assets resulting from principal transactions . . . . . . . 869,789,721 924,825,465
-------------- --------------
TOTAL INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 1,240,147,964 1,763,820,202
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,270,630,271 2,506,810,069
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,510,778,235 $4,270,630,271
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 5
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF NET ASSETS
June 30, 1996
<TABLE>
<CAPTION>
STOCK INDEX FUND
--------------------------------------------------------------
DIVISION 10A DIVISION 10B DIVISION 10C DIVISION 10D
-------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market . . . . . . . . . $ 361,079,570 $ 29,947,258 $ 1,292,717,713 $ 40,850,792
Balance due (to) from VALIC general account . . . . . . . . . . . (372,792) 17,798 756,984 77,408
-------------- ------------- --------------- ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 360,706,778 $ 29,965,056 $ 1,293,474,697 $ 40,928,200
============== ============= =============== ============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of
reinvestment) . . . . . . . . . . . . . . . . . . . . . . . . $ 350,645,435 $ 28,518,791 $ 1,292,892,308 $ 40,792,386
Reserves for annuity contracts on benefit . . . . . . . . . . . . 10,061,343 1,446,265 582,389 135,814
-------------- ------------- --------------- ------------
TOTAL CONTRACT OWNER RESERVES . . . . . . . . . . . . . . . . . . $ 360,706,778 $ 29,965,056 $ 1,293,474,697 $ 40,928,200
============== ============= =============== ============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
June 30, 1996
SOCIAL TIMED
AWARENESS OPPORTUNITY CAPITAL CONSERVATION FUND
FUND FUND -----------------------------
DIVISION 12 DIVISION 5 DIVISION 1 DIVISION 7
-------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market . . . . . . . . . $ 78,522,966 $ 181,034,885 $ 6,760,080 $ 54,518,979
Balance due (to) from VALIC general account . . . . . . . . . . . 220,982 (202,674) 12,192 (61,016)
-------------- ------------- --------------- ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78,743,948 $ 180,832,211 $ 6,772,272 $ 54,457,963
============== ============= =============== ============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of
reinvestment) . . . . . . . . . . . . . . . . . . . . . . . . $ 78,743,948 $ 180,757,689 $ 6,768,007 $ 54,457,963
Reserves for annuity contracts on benefit . . . . . . . . . . . - 74,522 4,265 -
-------------- ------------- --------------- ------------
TOTAL CONTRACT OWNER RESERVES . . . . . . . . . . . . . . . . . . $ 78,743,948 $ 180,832,211 $ 6,772,272 $ 54,457,963
============== ============= =============== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 6
================================================================================
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MIDCAP SMALL CAP INTERNATIONAL GROWTH & SCIENCE &
INDEX INDEX EQUITIES GROWTH INCOME TECHNOLOGY
FUND FUND FUND FUND FUND FUND
DIVISION 4 DIVISION 14 DIVISION 11 DIVISION 15 DIVISION 16 DIVISION 17
------------ ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
$535,481,885 $ 176,210,106 $207,088,879 $ 454,774,091 $120,595,221 $ 552,498,033
912,222 3,895 96,653 1,142,439 442,215 2,485,584
------------ ------------- ------------- ------------- ------------ -------------
$536,394,107 $ 176,214,001 $207,185,532 $ 455,916,530 $121,037,436 $ 554,983,617
============ ============= ============ ============= ============ =============
$536,309,254 $ 176,214,001 $207,060,097 $ 455,766,280 $121,021,611 $ 554,817,123
84,853 - 125,435 150,250 15,825 166,494
------------ ------------- ------------- ------------- ------------ -------------
$536,394,107 $ 176,214,001 $207,185,532 $ 455,916,530 $121,037,436 $ 554,983,617
============ ============= ============ ============= ============ =============
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT INTERNATIONAL DREYFUS TEMPLETON TEMPLETON
SECURITIES GOVERNMENT MONEY MARKET FUND SMALL CAP ASSET ALLOCATION INTERNATIONAL
FUND BOND FUND ----------------------------- FUND FUND FUND
DIVISION 8 DIVISION 13 DIVISION 2 DIVISION 6 DIVISION 18 DIVISION 19 DIVISION 20
------------ ------------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 81,040,032 $ 147,919,206 $ 5,540,037 $ 79,323,694 $546,461,190 $ 147,058,922 $406,075,778
(450,347) (855,054) 23,362 (552,395) 1,026,289 236,502 318,671
------------ ------------- ----------- ------------ ------------ ------------- ------------
$ 80,589,685 $ 147,064,152 $ 5,563,399 $ 78,771,299 $547,487,479 $ 147,295,424 $406,394,449
============ ============= =========== ============ ============ ============= ============
$ 80,589,685 $ 147,052,780 $ 5,563,399 $ 78,753,405 $547,384,386 $ 147,220,222 $406,322,577
- 11,372 - 17,894 103,093 75,202 71,872
------------ ------------- ----------- ------------ ------------ ------------- ------------
$ 80,589,685 $ 147,064,152 $ 5,563,399 $ 78,771,299 $547,487,479 $ 147,295,424 $406,394,449
============ ============= =========== ============ ============ ============= ============
</TABLE>
5
<PAGE> 7
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1996
<TABLE>
<CAPTION>
STOCK INDEX FUND
--------------------------------------------------------
DIVISON 10A DIVISION 10B DIVISION 10C DIVISION 10D
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds . . . . . . . . . . . . . . . $ 3,393,648 $ 282,070 $ 11,516,972 $ 393,592
=========== ============ ============ ============
EXPENSES:
Mortality and expense risk charge . . . . . . . . . . . . 1,760,573 84,447 5,888,143 205,509
Reimbursement of expenses - Note C . . . . . . . . . . . - (36,417) - -
----------- ------------ ------------ ------------
Total expenses . . . . . . . . . . . . . . . . . . . . 1,760,573 48,030 5,888,143 205,509
----------- ------------ ------------ ------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . 1,633,075 234,040 5,628,829 188,083
=========== ============ ============ ============
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments . . . . . . . . . . . . 4,947,117 867,854 1,818,240 1,312,104
Capital gains distributions from mutual funds . . . . . . - - - -
Net unrealized appreciation
of investments during the period . . . . . . . . . . . 25,237,042 1,628,383 97,749,003 2,229,018
----------- ------------ ------------ ------------
Net realized and unrealized gain on investments . . . . . 30,184,159 2,496,237 99,567,243 3,541,122
----------- ------------ ------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $31,817,234 $ 2,730,277 $105,196,072 $ 3,729,205
=========== ============ ============ ============
</TABLE>
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1996
<TABLE>
<CAPTION>
SOCIAL TIMED
AWARENESS OPPORTUNITY CAPITAL CONSERVATION FUND
FUND FUND --------------------------
DIVISION 12 DIVISION 5 DIVISION 1 DIVISION 7
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds . . . . . . . . . . . . . . $ 433,095 $ 2,998,281 $ 231,102 $ 1,748,977
=========== ============ ============ ============
EXPENSES:
Mortality and expense risk charge . . . . . . . . . . . 342,141 907,813 36,041 269,096
Reimbursement of expenses - Note C . . . . . . . . . . - - - -
----------- ------------ ------------ ------------
Total expenses . . . . . . . . . . . . . . . . . . . 342,141 907,813 36,041 269,096
----------- ------------ ------------ ------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . 90,954 2,090,468 195,061 1,479,881
=========== ============ ============ ============
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments . . . . . . . . 250,780 3,408,646 34,344 (98,698)
Capital gains distributions from mutual funds . . . . . - - - -
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . . . . . 6,017,750 3,012,929 (511,996) (3,393,785)
----------- ------------ ------------ ------------
Net realized and unrealized gain (loss) on investments . 6,268,530 6,421,575 (477,652) (3,492,483)
----------- ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ 6,359,484 $ 8,512,043 $ (282,591) $ (2,012,602)
=========== ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 8
================================================================================
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MIDCAP SMALL CAP INTERNATIONAL GROWTH SCIENCE
INDEX INDEX EQUITIES GROWTH INCOME TECHNOLOGY
FUND FUND FUND FUND FUND FUND
DIVISION 4 DIVISION 14 DIVISION 11 DIVISION 15 DIVISION 16 DIVISION 17
- ------------- ------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
$ 3,326,533 $ 1,075,354 $ 1,793,788 $ 1,625,693 $ 200,581 $ -
- ------------- ------------- ------------ ------------ ------------- ------------
2,546,403 810,480 1,012,399 1,699,834 458,251 2,324,328
- - - - - -
- ------------- ------------- ------------ ------------ ------------- ------------
2,546,403 810,480 1,012,399 1,699,834 458,251 2,324,328
- ------------- ------------- ------------ ------------ ------------- ------------
780,130 264,874 781,389 (74,141) (257,670) (2,324,328)
- ------------- ------------- ------------ ------------ ------------- ------------
3,985,567 1,760,100 5,524,829 2,869 8,408 5,242,335
- - - - - -
36,480,375 12,695,535 3,980,415 40,171,987 10,821,368 16,367,541
- ------------- ------------- ------------ ------------ ------------- ------------
40,465,942 14,455,635 9,505,244 40,174,856 10,829,776 21,609,876
- ------------- ------------- ------------ ------------ ------------- ------------
$ 41,246,072 $ 14,720,509 $ 10,286,633 $ 40,100,715 $ 10,572,106 $ 19,285,548
============= ============= ============ ============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT INTERNATIONAL DREYFUS TEMPLETON TEMPLETON
SECURITIES GOVERNMENT MONEY MARKET FUND SMALL CAP ASSET ALLOCATION INTERNATIONAL
FUND BOND FUND ----------------------------- FUND FUND FUND
DIVISION 8 DIVISION 13 DIVISION 2 DIVISION 6 DIVISION 18 DIVISION 19 DIVISION 20
- ------------- ------------- ------------ ------------ ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,295,024 $ 3,179,472 $ 142,717 $ 1,945,825 $ - $ 3,271,039 $ 4,540,296
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
376,363 649,610 29,267 398,509 2,777,553 743,132 2,036,321
- - - - - - -
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
376,363 649,610 29,267 398,509 2,777,553 743,132 2,036,321
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
1,918,661 2,529,862 113,450 1,547,316 (2,777,553) 2,527,907 2,503,975
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
(112,800) 563,585 - - - 23,356 300,299
- - - - - 2,566,073 1,324,253
(3,957,264) (5,132,292) - - 44,112,678 3,224,774 26,821,258
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
(4,070,064) (4,568,707) - - 44,112,678 5,814,203 28,445,810
- ------------- ------------- ------------ ------------ ------------- ------------ ------------
$ (2,151,403) $ (2,038,845) $ 113,450 $ 1,547,316 $ 41,335,125 $ 8,342,110 $ 30,949,785
============= ============= ============ ============ ============= ============ ============
</TABLE>
7
<PAGE> 9
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
STOCK INDEX FUND
-------------------------------------------------------------
DIVISION 10A DIVISION 10B
------------------------------ ----------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995
------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . . . $ 1,633,075 $ 3,760,733 $ 234,040 $ 493,423
Net realized gain on investments . . . . . . . . . . . . . . . . 4,947,117 5,349,737 867,854 631,222
Capital gains distributions from mutual funds . . . . . . . . . . - 6,875,040 - 570,166
Net unrealized appreciation
of investments during the period . . . . . . . . . . . . . . . 25,237,042 78,996,842 1,628,383 6,528,773
------------ ------------ ----------- -----------
Increase in net assets resulting from operations . . . . . 31,817,234 94,982,352 2,730,277 8,223,584
============ ============ =========== ===========
PRINCIPAL TRANSACTIONS:
Purchase payments . . . . . . . . . . . . . . . . . . . . . . . . 1,921,664 5,033,111 309,745 574,384
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees . . . . . . . . . . . . . . (10,298,206) (16,541,542) (828,253) (1,698,590)
Annuity benefit payments . . . . . . . . . . . . . . . . . . . . (696,434) (1,296,973) (124,243) (218,489)
Amounts transferred (to) from VALIC general account . . . . . . . (3,206,657) (23,599,151) (416,163) (2,885,564)
------------ ------------ ----------- -----------
Increase (decrease) in net assets
resulting from principal transactions . . . . . . . . . (12,279,633) (36,404,555) (1,058,914) (4,228,259)
------------ ------------ ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS . . . . . . . . . . . . . 19,537,601 58,577,797 1,671,363 3,995,325
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . 341,169,177 282,591,380 28,293,693 24,298,368
------------ ------------ ----------- -----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . $360,706,778 $341,169,177 $29,965,056 $28,293,693
============ ============ =========== ===========
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period . . . . . . . . . . . . . 29,995,363 33,814,520 1,560,525 1,836,094
Purchase payments . . . . . . . . . . . . . . . . . . . . . . . . 166,638 497,922 18,224 39,513
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . . (885,694) (1,718,657) (46,438) (110,735)
Transfers - interdivision and (to) from VALIC general account . . (245,457) (2,598,422) (24,153) (204,347)
------------ ------------ ----------- -----------
Accumulation units end of period . . . . . . . . . . . . . . . . 29,030,850 29,995,363 1,508,158 1,560,525
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31 1995
------------- - ------------ ------------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value . . . . . . . . . . . . . . . . . . . . . $ 12.078373 $ 11.036946 $ 18.909684 $ 17.221812
============ ============ =========== ===========
Annuity unit value assuming a 3.5% discount factor . . . . . . . $ 3.548364 $ 3.298369 $ 4.724054 $ 4.376632
============ ============ =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 10
================================================================================
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK INDEX FUND MIDCAP INDEX FUND SMALL CAP FUND
- ----------------------------------------------------------- ---------------------------- ----------------------------
DIVISION 10C DIVISION 10D DIVISION 4 DIVISION 14
- ------------------------------ --------------------------- ---------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995 1996 1995
- -------------- -------------- ------------- ------------ -------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 5,628,829 $ 10,698,331 $ 188,083 $ 472,763 $ 780,130 $ 2,391,702 $ 264,874 $ 563,294
1,818,240 10,775,457 1,312,104 1,335,894 3,985,567 10,603,188 1,760,100 2,963,270
- 21,483,819 - 831,333 - 17,377,938 - 2,945,819
97,749,003 221,238,425 2,229,018 9,456,579 36,480,375 76,322,743 12,695,535 24,766,420
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
105,196,072 264,196,032 3,729,205 12,096,569 41,246,072 106,695,571 14,720,509 31,238,803
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
102,339,148 155,833,642 480,642 1,280,197 40,322,712 87,946,264 16,848,837 40,608,391
(21,507,205) (30,060,583) (1,107,406) (2,417,823) (10,384,998) (15,264,152) (3,640,840) (4,632,557)
(25,226) (29,665) (5,472) (5,520) (9,605) (16,844) (435) (3,022)
40,088,197 (42,300,802) (3,373,975) (7,115,532) (15,187,350) (69,269,652) (3,705,142) (38,506,364)
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
120,894,914 83,442,592 (4,006,211) (8,258,678) 14,740,759 3,395,616 9,502,420 (2,533,552)
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
226,090,986 347,638,624 (277,006) 3,837,891 55,986,831 110,091,187 24,222,929 28,705,251
1,067,383,711 719,745,087 41,205,206 37,367,315 480,407,276 370,316,089 151,991,072 123,285,821
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
$1,293,474,697 $1,067,383,711 $ 40,928,200 $41,205,206 $536,394,107 $480,407,276 $ 176,214,001 $151,991,072
============== ============== ============ =========== ============ ============ ============= ============
455,255,243 416,234,288 9,885,873 12,207,684 172,613,690 171,442,018 98,335,995 100,383,839
40,703,407 76,950,994 117,910 341,405 13,556,210 35,874,094 10,416,951 30,141,511
(8,339,156) (14,254,441) (252,599) (663,263) (3,530,347) (5,995,776) (2,122,119) (3,356,851)
16,445,648 (23,675,598) (779,343) (1,999,953) (5,063,174) 28,706,646) (2,682,827) (28,832,504)
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
504,065,142 455,255,243 8,971,841 9,885,873 177,576,379 172,613,690 103,948,000 98,335,995
============== ============== ============ =========== ============ ============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31 1995 JUNE 30, 1996 DEC. 31, 1995
- -------------- -------------- ------------- ------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2.564931 $ 2.343900 $ 4.546713 $ 4.155057 $ 3.020161 $ 2.782677 $ 1.695213 $ 1.544896
- -------------- -------------- ------------ ----------- ------------ ------------ ------------- ------------
$ 1.910566 $ 1.776053 $ 2.778278 $ 2.582770 $ 1.919892 $ 1.799452 $ 1.469125 $ 1.361960
============== ============== ============ =========== ============ ============ ============= ============
</TABLE>
9
<PAGE> 11
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITIES FUND GROWTH FUND
------------------------------ ----------------------------
DIVISION 11 DIVISION 15
------------------------------ ----------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995
------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 781,389 $ 1,304,847 $ (74,141) $ (869,578)
Net realized gain on investments . . . . . . . . . . . . . . . 5,524,829 13,215,875 2,869 8,587
Capital gains distributions from mutual funds . . . . . . . . . - 4,363,325 - 3,650,399
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . . . . . . . . . 3,980,415 (725,229) 40,171,987 39,103,633
------------ ------------ ------------ ------------
Increase in net assets resulting from operations . . . . . . 10,286,633 18,158,818 40,100,715 41,893,041
============ ============ ============ ============
PRINCIPAL TRANSACTIONS:
Purchase payments . . . . . . . . . . . . . . . . . . . . . . . 19,142,449 52,726,233 71,866,538 58,223,803
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees . . . . . . . . . . . . . (4,332,491) (6,722,321) (3,997,585) (1,776,523)
Annuity benefit payments . . . . . . . . . . . . . . . . . . . (9,191) (5,870) (1,263) -
Amounts transferred (to) from VALIC general account . . . . . . (17,589,308) (63,364,477) 106,804,360 109,893,422
------------ ------------ ------------ ------------
Increase (decrease) in net assets
resulting from principal transactions . . . . . . . . . (2,788,541) (17,366,435) 174,672,050 166,340,702
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . 7,498,092 792,383 214,772,765 208,233,743
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . 199,687,440 198,895,057 241,143,765 32,910,022
------------ ------------ ------------ ------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . $207,185,532 $199,687,440 $455,916,530 $241,143,765
============ ============ ============ ============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period . . . . . . . . . . . . 172,564,018 187,749,916 164,417,848 32,633,370
Purchase payments . . . . . . . . . . . . . . . . . . . . . . . 16,180,613 49,402,081 45,018,167 45,984,606
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . (3,800,776) (6,214,230) (2,310,565) (1,266,891)
Transfers - interdivision and (to) from VALIC general account . (14,689,792) (58,373,749) 68,018,142 87,066,763
------------ ------------ ------------ ------------
Accumulation units end of period . . . . . . . . . . . . . . . 170,254,063 172,564,018 275,143,592 164,417,848
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31 1995
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value . . . . . . . . . . . . . . . . . . . . $ 1.216183 $ 1.156454 $ 1.656467 $ 1.466652
=========== =========== ========== ==========
Annuity unit value assuming a 3.5% discount factor . . . . . . $ 0.964546 $ 0.933003 $ 1.537192 $ 1.384532
=========== =========== ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 12
================================================================================
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & INCOME FUND SCIENCE & TECHNOLOGY FUND SOCIAL AWARENESS FUND
- ------------------------------ ------------------------------- ---------------------------
DIVISION 16 DIVISION 17 DIVISION 12
- ------------------------------ ------------------------------- ---------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995
- -------------- ------------ ------------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
$ (257,670) $ (75,425) $ (2,324,328) $ (1,432,122) $ 90,954 $ 599,922
8,408 19,953 5,242,335 6,545,968 250,780 371,169
- 472,785 - 37,380,606 - 3,609,468
10,821,368 8,794,032 16,367,541 41,310,631 6,017,750 10,227,915
- -------------- ------------ ------------- -------------- ------------ -----------
10,572,106 9,211,345 19,285,548 83,805,083 6,359,484 14,808,474
============== ============ ============= ============== ============ ===========
18,047,371 17,507,504 84,709,174 93,027,877 8,085,398 10,849,944
(1,094,221) (641,935) (5,986,611) (3,055,711) (1,462,770) (1,516,923)
(777) - (3,363) (824) - -
26,377,381 28,680,150 81,765,513 147,758,969 5,662,026 (2,864,774)
- -------------- ------------ ------------- -------------- ------------ -----------
43,329,754 45,545,719 160,484,713 237,730,311 12,284,654 6,468,247
- -------------- ------------ ------------- -------------- ------------ -----------
53,901,860 54,757,064 179,770,261 321,535,394 18,644,138 21,276,721
67,135,576 12,378,512 375,213,356 53,677,962 60,099,810 38,823,089
- -------------- ------------ ------------- -------------- ------------ -----------
$ 121,037,436 $ 67,135,576 $ 554,983,617 $ 375,213,356 $ 78,743,948 $60,099,810
============== ============ ============= ============== ============ ===========
51,779,089 12,386,602 187,862,232 42,726,137 32,750,120 29,015,764
12,820,090 14,980,745 40,096,549 54,428,033 4,134,346 6,860,477
(806,567) (455,265) (2,910,499) (1,584,330) (756,365) (929,671)
18,817,519 24,867,007 38,730,437 92,292,392 2,906,710 (2,196,450)
- -------------- ------------ ------------- -------------- ------------ -----------
82,610,131 51,779,089 263,778,719 187,862,232 39,034,811 32,750,120
============== ============ ============= ============== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC.31, 1995
- -------------- ------------- ------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
$ 1.464973 $ 1.296577 $ 2.103343 $ 1.997175 $ 2.017275 $ 1.835102
============== ============ ============= ============== ============ ===========
$ 1.359487 $ 1.223980 $ 1.951892 $ 1.885352 $ 1.599887 $ 1.480522
============== ============ ============= ============== ============ ===========
</TABLE>
11
<PAGE> 13
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TIMED OPPORTUNITY CAPITAL CONSERVATION
FUND FUND
------------------------------- ------------------------------
DIVISION 5 DIVISION 1
------------------------------- ------------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . $ 2,090,468 $ 5,452,120 $ 195,061 $ 449,111
Net realized gain (loss) on investments . . . . . . . . . . 3,408,646 2,006,917 34,344 65,122
Capital gains distributions from mutual funds . . . . . . . . - 3,186,462 - -
Net unrealized appreciation (depreciation)
of investments during the period . . . . . . . . . . . . . 3,012,929 26,710,438 (511,996) 906,759
------------- --------------- ------------ -------------
Increase (decrease) in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . 8,512,043 37,355,937 (282,591) 1,420,992
============= =============== ============ =============
PRINCIPAL TRANSACTIONS:
Purchase payments . . . . . . . . . . . . . . . . . . . . . . 8,451,575 20,940,181 130,701 286,600
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees . . . . . . . . . . . . (5,502,261) (7,824,702) (284,924) (623,792)
Annuity benefit payments . . . . . . . . . . . . . . . . . . (3,645) (6,591) (256) (499)
Amounts transferred (to) from VALIC general account . . . . . (13,579,206) (42,300,580) (574,107) (1,306,120)
------------- --------------- ------------ -------------
Increase (decrease) in net assets
resulting from principal transactions . . . . . . . (10,633,537) (29,191,692) (728,586) (1,643,811)
------------- --------------- ------------ -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS . . . . . . . . . . . (2,121,494) 8,164,245 (1,011,177) (222,819)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 182,953,705 174,789,460 7,783,449 8,006,268
------------- --------------- ------------ -------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . $ 180,832,211 $ 182,953,705 $ 6,772,272 $ 7,783,449
============= =============== ============ =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period . . . . . . . . . . . 75,851,431 89,377,860 2,402,085 2,953,861
Purchase payments . . . . . . . . . . . . . . . . . . . . . . 3,390,391 9,806,864 42,772 96,297
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . (2,249,524) (3,569,040) (92,370) (207,008)
Transfers - interdivision and (to) from VALIC
general account . . . . . . . . . . . . . . . . . . . . . (5,418,530) (19,764,253) (183,417) (441,065)
------------- --------------- ------------ -------------
Accumulation units end of period . . . . . . . . . . . . . . 71,573,768 75,851,431 2,169,070 2,402,085
============= =============== ============ =============
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value . . . . . . . . . . . . . . . . . . . $ 2.525474 $ 2.411022 $ 3.120235 $ 3.238370
============= =============== ============ =============
Annuity unit value assuming a 3.5% discount factor . . . . . $ 1.628376 $ 1.581407 $ 1.746297 $ 1.843690
============= =============== ============ =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 14
================================================================================
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL CONSERVATION GOVERNMENT SECURITIES INTERNATIONAL GOVERNMENT
FUND FUND BOND FUND
----------------------------------------- ------------------------------------- --------------------------------
DIVISION 7 DIVISION 8 DIVISION 13
----------------------------------------- ------------------------------------- --------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995
--------------- ---------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ 1,479,881 $ 2,607,547 $ 1,918,661 $ 2,982,495 $ 2,529,862 $ 3,459,290
(98,698) (138,616) (112,800) (28,711) 563,585 911,852
- - - - - 114,019
(3,393,785) 5,643,853 (3,957,264) 5,103,399 (5,132,292) 3,111,995
--------------- ---------------- --------------- -------------- -------------- --------------
(2,012,602) 8,112,784 (2,151,403) 8,057,183 (2,038,845) 7,597,156
=============== ================ =============== ============== ============== ==============
5,886,681 10,464,260 10,286,665 15,047,915 25,491,600 31,073,737
(1,164,282) (1,972,220) (1,579,974) (1,987,445) (2,036,990) (1,946,252)
- - - - (13) -
(1,839,900) (3,821,311) 2,330,622 9,219,172 13,336,220 42,026,449
--------------- ---------------- --------------- -------------- -------------- --------------
2,882,499 4,670,729 11,037,313 22,279,642 36,790,817 71,153,934
--------------- ---------------- --------------- -------------- -------------- --------------
869,897 12,783,513 8,885,910 30,336,825 34,751,972 78,751,090
53,588,066 40,804,553 71,703,775 41,366,950 112,312,180 33,561,090
--------------- ---------------- --------------- -------------- -------------- --------------
$ 54,457,963 $ 53,588,066 $ 80,589,685 $ 71,703,775 $ 147,064,152 $ 112,312,180
=============== ================ =============== ============== ============== ==============
29,573,808 26,859,219 39,847,053 26,667,073 73,369,250 25,691,713
3,314,397 6,253,935 5,851,521 9,058,310 16,995,171 21,413,110
(681,144) (1,058,493) (953,384) (1,149,951) (1,419,858) (1,286,336)
(1,013,253) (2,480,853) 1,366,979 5,271,621 8,949,656 27,550,763
--------------- ---------------- --------------- -------------- -------------- --------------
31,193,808 29,573,808 46,112,169 39,847,053 97,894,219 73,369,250
=============== ================ =============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995
--------------- ---------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ 1.745794 $ 1.812011 $ 1.747688 $ 1.799475 $ 1.502160 $ 1.530780
=============== ================ =============== ============== ============== ==============
$ 1.221357 $ 1.289558 $ 1.222679 $ 1.280634 $ 1.276717 $ 1.323493
=============== ================ =============== ============== ============== ==============
</TABLE>
13
<PAGE> 15
================================================================================
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET FUND
------------------------------------------------------------------
DIVISION 2 DIVISION 6
------------------------------- ------------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss). . . . . . . . . . . . . . . . . . $ 113,450 $ 306,524 $ 1,547,316 $ 3,277,326
Net realized gain on investments . . . . . . . . . . . . . . - - - -
Capital gains distributions from mutual funds . . . . . . . . - - - -
Net unrealized appreciation
of investments during the period . . . . . . . . . . . . . - - - -
------------- --------------- ------------- -------------
Increase in net assets resulting from operations . . . 113,450 306,524 1,547,316 3,277,326
------------- --------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments . . . . . . . . . . . . . . . . . . . . . . 78,703 355,756 15,564,270 26,840,702
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees . . . . . . . . . . . . (253,496) (681,366) (7,912,484) (7,793,169)
Annuity benefit payments . . . . . . . . . . . . . . . . . . - - (791) (1,574)
Amounts transferred (to) from VALIC general account . . . . . (766,280) (806,250) (10,684,407) (54,484,648)
------------- --------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions . . . . . . . (941,073) (1,131,860) (3,033,412) (35,438,689)
------------- --------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS . . . . . . . . . . . (827,623) (825,336) (1,486,096) (32,161,363)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 6,391,022 7,216,358 80,257,395 112,418,758
------------- --------------- ------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . $ 5,563,399 $ 6,391,022 $ 78,771,299 $ 80,257,395
============= =============== ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period . . . . . . . . . . . 2,917,361 3,442,237 51,907,757 75,765,781
Purchase payments . . . . . . . . . . . . . . . . . . . . . . 36,320 165,743 9,585,856 18,072,687
Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . (115,421) (316,475) (5,253,520) (5,090,822)
Transfers - interdivision and (to) from VALIC
general account . . . . . . . . . . . . . . . . . . . . . (347,093) (374,144) (6,267,217) (36,839,889)
------------- --------------- ------------- -------------
Accumulation units end of period . . . . . . . . . . . . . . 2,491,167 2,917,361 49,972,876 51,907,757
============= =============== ============= =============
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995
------------- --------------- ------------- -------------
Accumulation unit value . . . . . . . . . . . . . . . . . . . $ 2.233250 $ 2.190686 $ 1.575923 $ 1.545802
============= =============== ============= =============
Annuity unit value assuming a 3.5% discount factor . . . . . $ 1.395967 $ 1.392992 $ 1.090461 $ 1.088077
============= =============== ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 16
<TABLE>
<CAPTION>
TEMPLETON ASSET
DREYFUS SMALL CAP FUND ALLOCATION FUND TEMPLETON INTERNATIONAL FUND
----------------------------------------- ------------------------------------- --------------------------------
DIVISION 18 DIVISION 19 DIVISION 20
----------------------------------------- ------------------------------------- --------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995
--------------- ---------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ (2,777,553) $ (1,441,343) $ 2,527,907 $ 360,608 $ 2,503,975 $ (1,169,628)
- 26,776 23,356 87,754 300,299 25,628
- 6,796,184 2,566,073 - 1,324,253 350,470
44,112,678 47,179,100 3,224,774 11,935,576 26,821,258 23,406,038
--------------- ---------------- --------------- -------------- -------------- --------------
41,335,125 52,560,717 8,342,110 12,383,938 30,949,785 22,612,508
--------------- ---------------- --------------- -------------- -------------- --------------
81,419,268 96,201,687 20,754,057 26,412,918 59,598,070 69,120,243
(5,879,814) (3,867,838) (1,545,087) (1,156,891) (3,891,186) (2,577,387)
(3,683) (915) (1,173) (1,361) (1,300) (463)
73,712,689 122,606,635 25,120,165 24,133,475 69,357,729 89,125,401
--------------- ---------------- --------------- -------------- -------------- --------------
149,248,460 214,939,569 44,327,962 49,388,141 125,063,313 155,667,794
--------------- ---------------- --------------- -------------- -------------- --------------
190,583,585 267,500,286 52,670,072 61,772,079 156,013,098 178,280,302
356,903,894 89,403,608 94,625,352 32,853,273 250,381,351 72,101,049
--------------- ---------------- --------------- -------------- -------------- --------------
$ 547,487,479 $ 356,903,894 $ 147,295,424 $ 94,625,352 $ 406,394,449 $ 250,381,351
=============== ================ =============== ============== ============== ==============
267,735,219 85,169,871 78,494,505 32,807,602 219,124,926 71,716,511
57,548,180 80,950,706 16,355,989 24,212,805 49,006,388 65,697,216
(4,295,524) (2,954,777) (1,251,350) (964,768) (3,230,358) (2,198,909)
52,416,048 104,569,419 19,992,850 22,438,866 57,768,320 83,910,108
--------------- ---------------- --------------- -------------- -------------- --------------
373,403,923 267,735,219 113,591,994 78,494,505 322,669,276 219,124,926
=============== ================ =============== ============== ============== ==============
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995
--------------- ---------------- --------------- -------------- -------------- --------------
$ 1.465931 $ 1.332904 $ 1.296044 $ 1.205181 $ 1.259254 $ 1.142586
=============== ================ =============== ============== ============== ==============
$ 1.369887 $ 1.267071 $ 1.211131 $ 1.145656 $ 1.176751 $ 1.086152
=============== ================ =============== ============== ============== ==============
</TABLE>
15
<PAGE> 17
================================================================================
NOTES TO FINANCIAL STATEMENTS SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
NOTE A -- ORGANIZATION
Separate Account A (the "Separate Account"), established by The Variable
Annuity Life Insurance Company ("VALIC") on April 18, 1979, is registered under
the Investment Company Act of 1940 as a unit investment trust. The Separate
Account is comprised of twenty-one subaccounts or "divisions." Each division,
which represents a variable investment vehicle available only through a VALIC
annuity contract, invests in one of the following mutual funds:
AMERICAN GENERAL SERIES PORTFOLIO COMPANY ("AGSPC"):
Stock Index Fund (Divisions 10A, B, C, and D),
MidCap Index Fund (Division 4),
Small Cap Index Fund (Division 14),
International Equities Fund (Division 11),
Growth Fund (Division 15),
Growth & Income Fund (Division 16),
Science & Technology Fund (Division 17),
Social Awareness Fund (Division 12),
Timed Opportunity Fund (Division 5),
Capital Conservation Fund (Divisions 1 and 7),
Government Securities Fund (Division 8),
International Government Bond Fund (Division 13), and
Money Market Fund (Divisions 2 and 6).
DREYFUS VARIABLE INVESTMENT FUND:
Dreyfus Small Cap Portfolio (Division 18)
TEMPLETON VARIABLE PRODUCTS SERIES FUND:
Templeton Asset Allocation Fund (Division 19)
Templeton International Fund (Division 20)
NOTE B -- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The assets of the Separate Account are segregated from VALIC's other
assets. The operations of the Separate Account are part of VALIC. The following
is a summary of significant accounting policies consistently followed by the
Separate Account in the preparation of its financial statements.
INVESTMENT VALUATION. Investments in mutual funds (the "Funds") are valued
at the net asset (market) value per share at the close of each business day.
INVESTMENT TRANSACTIONS. Investment transactions are accounted for on the
trade date. Realized gains and losses on investments are determined on the
basis of identified cost. Capital gain distributions from mutual funds are
recorded on the ex-dividend date and reinvested upon receipt.
INVESTMENT INCOME. Dividend income from mutual funds is recorded on the
ex-dividend date and reinvested upon receipt.
ANNUITY RESERVES. Net payments made by variable annuity contract owners are
accumulated based on the performance of the investments of the Separate Account
until the date the contract owners select to commence annuity payments.
Reserves for annuities on which benefits are currently payable are provided for
based upon estimated mortality and other assumptions, including provisions for
the risk of adverse deviation from assumptions, which were appropriate at the
time the contracts were issued. The 1949 Progressive Annuity Table has been
used in the computation of annuity reserves for currently payable contracts.
Participants are able to elect investment rates between 3.0% and 6.0%, as
regulated by the applicable state laws.
NOTE C -- TRANSACTIONS WITH AFFILIATES
VALIC acts as investment adviser and transfer agent to AGSPC.
The Separate Account is charged for mortality and expense risks assumed by
VALIC. The charge, based on the daily net assets of each division, is assessed
daily based on the following annual rates: for Division 10B, .85% on the first
$10,000,000, .425% on the next $90,000,000, and .21% on the excess over
$100,000,000; for Divisions 1, 2, 4, 5, 6, 7, 8, 10A, 10C, 10D, 11, 12, 13, 14,
15, 16, and 17, 1.00%; and for Divisions 18, 19, and 20, 1.25%.
Pursuant to the reorganization agreement entered into on April 17, 1987,
which transferred VALIC Separate Accounts One and Two into the Separate
Account, expenses of Division 10A (formerly Separate Account One) are limited
to 1.4157% of average daily net assets, and expenses of Division 10B (formerly
Separate Account Two) are limited to the following rates based on average daily
net assets: 0.6966% on the first $25,434,267 and 0.5% on the next $74,565,733.
Accordingly, during the six months ended June 30, 1996, VALIC reduced expenses
Division 10B by $36,417.
A portion of the annual contract maintenance charge is assessed each
contract (except those relating to Divisions 10A and 10B) by VALIC on the last
day of the calendar quarter in which VALIC receives the first purchase payment,
and in quarterly installments thereafter during the accumulation period.
Maintenance charges assessed totaled $1,637,357 for the six months ended June
30, 1996, and $2,494,903 for the year ended December 31, 1995.
VALIC received surrender charges of $956,966 for the six months ended June
30, 1996, and $1,299,069 for the year ended December 31, 1995. In addition,
VALIC received $43,385 and $6,874 for the six months ended June 30, 1996, in
sales load on variable annuity purchase payments for Division 10A and 10B,
respectively. VALIC received $100,290 and $18,404 for the year ended December
31, 1995, in sales load on variable annuity purchase payments for Divisions 10A
and 10B, respectively.
16
<PAGE> 18
================================================================================
NOTES TO FINANCIAL STATEMENTS - CONTINUED SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
NOTE D -- INVESTMENTS
The cost of fund shares is the same for financial reporting and federal
income tax purposes. The following is a summary of fund shares owned as of June
30, 1996:
<TABLE>
<CAPTION>
MARKET UNREALIZED
UNDERLYING FUND DIVISION SHARES PRICE MARKET COST APPRECIATION
(DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stock Index Fund . . . . . . . . . . . . . 10A,B,C,D 83,193,215 $ 20.73 $1,724,595,333 $1,225,992,682 $ 498,602,651
MidCap Index Fund . . . . . . . . . . . . . 4 28,543,811 18.76 535,481,885 415,922,635 119,559,250
Small Cap Index Fund . . . . . . . . . . . 14 11,302,765 15.59 176,210,106 140,629,748 35,580,358
International Equities Fund . . . . . . . . 11 18,490,078 11.20 207,088,879 191,857,804 15,231,075
Growth Fund . . . . . . . . . . . . . . . . 15 27,595,515 16.48 454,774,091 375,168,068 79,606,023
Growth & Income Fund . . . . . . . . . . . 16 8,248,647 14.62 120,595,221 100,894,188 19,701,033
Science & Technology Fund . . . . . . . . . 17 29,033,002 19.03 552,498,033 492,126,988 60,371,045
Social Awareness Fund . . . . . . . . . . . 12 5,052,958 15.54 78,522,966 64,736,189 13,786,777
Timed Opportunity Fund . . . . . . . . . . 5 14,436,594 12.54 181,034,885 155,980,261 25,054,624
Capital Conservation Fund . . . . . . . . . 1 & 7 6,596,239 9.29 61,279,059 63,477,084 (2,198,025)
Government Securities Fund . . . . . . . . 8 8,380,562 9.67 81,040,032 83,849,774 (2,809,742)
International Government Bond Fund . . . . 13 12,503,737 11.83 147,919,206 150,438,063 (2,518,857)
Money Market Fund. . . . . . . . . . . . . 2 & 6 84,863,731 1.00 84,863,731 84,863,731 -
Dreyfus Small Cap Fund . . . . . . . . . . 18 10,704,431 51.05 546,461,190 455,271,431 91,189,759
Templeton Asset Allocation Fund . . . . . . 19 7,663,310 19.19 147,058,922 132,627,666 14,431,256
Templeton International Fund . . . . . . . 20 24,685,458 16.45 406,075,778 358,084,464 47,991,314
------------------------------------------------
$5,505,499,317 $4,491,920,776 $1,013,578,541
================================================
</TABLE>
NOTE E -- FEDERAL INCOME TAXES
VALIC is taxed as a life insurance company under the Internal Revenue Code
and includes the operations of the Separate Account in determining its federal
income tax liability. Under current federal income tax law the investment
income and capital gains from sale of investments realized by the Separate
Account are not taxable. Therefore, no federal income tax provision has been
made.
NOTE F -- SECURITY PURCHASES AND SALES
For the six months ended June 30, 1996, the aggregate cost of purchases and
proceeds from sales of investments were:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------------
<S> <C> <C>
Stock Index Fund:
Division 10A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,963,875 $ 18,273,763
Division 10B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,824,554 2,674,755
Division 10C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,255,954 5,666,348
Division 10D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827,888 4,718,495
MidCap Index Fund Division 4 . . . . . . . . . . . . . . . . . . . . . . . 26,739,346 11,813,938
Small Cap Index Fund Division 14 . . . . . . . . . . . . . . . . . . . . . 16,909,890 7,562,664
International Equities Fund Division 11 . . . . . . . . . . . . . . . . . . 42,271,157 43,826,626
Growth Fund Division 15 . . . . . . . . . . . . . . . . . . . . . . . . . . 174,041,992 9,158
Growth & Income Fund Division 16 . . . . . . . . . . . . . . . . . . . . . 42,921,433 37,945
Science & Technology Fund Division 17 . . . . . . . . . . . . . . . . . . . 170,868,652 14,129,480
Social Awareness Fund Division 12 . . . . . . . . . . . . . . . . . . . . . 13,613,645 1,325,360
Timed Opportunity Fund Division 5 . . . . . . . . . . . . . . . . . . . . . 5,848,484 14,104,584
Capital Conservation Fund:
Division 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364,379 897,505
Division 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,118,384 4,475,900
Government Securities Fund Division 8 . . . . . . . . . . . . . . . . . . . 16,211,558 2,716,980
International Government Bond Fund Division 13 . . . . . . . . . . . . . . 49,481,954 9,173,225
Money Market Fund:
Division 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929,291 1,768,817
Division 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,700,481 83,933,185
Dreyfus Small Cap Fund Division 18 . . . . . . . . . . . . . . . . . . . . 146,273,269 -
Templeton Asset Allocation Fund Division 19 . . . . . . . . . . . . . . . . 49,615,933 153,618
Templeton International Fund Division 20 . . . . . . . . . . . . . . . . . 131,411,062 2,351,224
-------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,122,193,181 $ 229,613,570
=====================================
</TABLE>
17
<PAGE> 19
*******************
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY * Bulk Rate *
SEPARATE ACCOUNT A * U.S. Postage *
P.O. Box 3206 * PAID *
Houston, Texas 77253-3206 * Permit No. 6748 *
* Houston, Texas *
*******************
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