<PAGE> 1
CHAIRMAN'S LETTER 1
TO OUR PARTICIPANTS:
We are pleased to present the June 30, 1997, 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 1, Portfolio Director 2, Independence Plus, Group Unit
Purchase and Impact) appears on page two.
During the first six months of 1997 major U.S. corporations produced equity
returns nearly equal to the returns for all of 1996. The stock market, as
measured by the Standard & Poor's 500 Index (S&P 500(R)), had a total return of
20.1%. The mid-sized and smaller companies lagged considerably, with the
Standard & Poor's MidCap 400 (MidCap 400) earning 13.0% and the Russell 2000(R)
producing 10.2%. This disparity has caused actively managed funds to lag the
large capitalization index fund. The aggressive growth funds and the small cap
funds generally returned less than 10%, while the larger capitalization funds
earned in excess of 10%, over this time frame. The bond market, as measured by
the Merrill Lynch Corporate-Government Index, experienced a return of 5.9%.
Lesser quality bonds outperformed higher quality issuers.
The stock market corrected moderately in March and April as economic conditions
spurred fears of a Federal Reserve Board tightening with an attendant rise in
interest rates. The discount rate was increased by 0.25% in March but
subsequent forecasts of slower growth put investors at ease. Growth in the
Gross Domestic Product was reported at 4.9% in the first quarter and slowed to
2.2% in the second. Those levels were favorable for corporate profits, and the
decline in the second quarter lessened interest rate concerns.
Bond market investors experienced considerable fluctuation as yields on the
long term U.S. Government bond dropped to 6.5% in February, rose to 7.2% in
April and fell to 6.8% in June. The net effect was a total return of 2.8% as
measured by the Merrill Lynch Corporate/Government Master Index.
Major foreign corporations benefitted from a strong dollar and their shares
performed well in the local markets. International bonds were the beneficiary
of remarkably low inflation and yields fell to twenty year lows. The strength
of the dollar against most currencies substantially moderated the indigenous
performance of both stocks and bonds.
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 8, 1997
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.
"S&P 500(R)" and "Standard & Poor's MidCap 400 Index" are trademarks of Standard
& Poor's Corporation (S&P). 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.
<PAGE> 2
2 CHAIRMAN'S LETTER CONTINUED
<TABLE>
<CAPTION>
SIX MONTH ONE YEAR
GROUP PORTFOLIO PORTFOLIO TOTAL RETURN TOTAL RETURN
UNIT INDEPENDENCE DIRECTOR DIRECTOR FOR THE FOR YEAR ENDING
PURCHASE IMPACT PLUS 1 2 PERIOD ENDING DECEMBER 31,
DIVISION DIVISION DIVISION DIVISION DIVISION JUNE 30, 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL GROWTH
AGSPC International Equities Fund...... - - 11 11 - 11.32% 5.75%
Putnam Global Growth Fund............... - - - - 28 14.86 15.37
Templeton Foreign Fund.................. - - - - 32 10.64 16.74
Templeton International Fund............ - - - 20 - 13.70 22.50
AGGRESSIVE GROWTH
AGSPC Science & Technology Fund......... - - - 17 17 2.74 12.68
AGSPC Small Cap Index Fund.............. - - 14 14 - 9.71 15.57
Dreyfus Small Cap Portfolio............. - - - 18 - 7.24 15.14
Putnam New Opportunities Fund........... - - - - 26 8.90 9.70
Putnam OTC & Emerging Growth Fund....... - - - - 27 2.02 3.53
GROWTH
AGSPC Growth Fund....................... - - - 15 15 8.47 18.18
AGSPC MidCap Index Fund................. - 4 4 4 - 12.12 17.61
American Century -
Twentieth Century Ultra Fund......... - - - - 31 15.79 12.43
Founders Growth Fund.................... - - - - 30 17.68 15.35
GROWTH & INCOME
AGSPC Growth & Income Fund.............. - - - 16 - 12.21 22.10
AGSPC Social Awareness Fund............. - - 12 12 12 20.05 22.75
AGSPC Stock Index Fund ................. 10A, 10B 10D 10C 10C 10C 19.85 21.53
Neuberger&Berman Guardian Trust......... - - - - 29 12.55 16.54
Scudder Growth and Income Fund.......... - - - - 21 17.97 20.63
Vanguard/Windsor II..................... - - - - 24 15.81 22.56
BALANCED GROWTH - INTERNATIONAL
Templeton Asset Allocation Fund......... - - - 19 - 14.59 17.40
BALANCED GROWTH - DOMESTIC
AGSPC Timed Opportunity Fund............ - 5 5 5 - 12.46 9.99
Vanguard/Wellington Fund................ - - - - 25 12.02 14.69
CURRENT INCOME
AGSPC Intl Government Bond Fund......... - - 13 13 13 (4.09) 3.36
CURRENT INCOME & CAPITAL PRESERVATION
AGSPC Capital Conservation Fund......... - 1 7 7 - 2.35 0.75
AGSPC Government Securities Fund........ - - 8 8 - 1.93 0.90
Vanguard Fixed Income Securities Fund -
Long-Term Corporate Portfolio........ - - - - 22 2.27 (0.72)
Vanguard Fixed Income Securities Fund -
Long-Term U. S. Treasury Portfolio... - - - - 23 1.34 (3.08)
LIQUIDITY & CAPITAL PRESERVATION
AGSPC Money Market Fund................. - 2 6 6 6 1.98 3.97
</TABLE>
The total returns 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 1 and 2 prospectuses. 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.
<PAGE> 3
FINANCIAL STATEMENTS (Unaudited) 3
STATEMENT OF NET ASSETS
June 30, 1997
<TABLE>
<CAPTION>
ASSETS: ALL DIVISIONS
--------------
<S> <C>
Total investment in shares of mutual funds, at market (cost $6,620,109,867) .. $8,642,236,596
Balance due from VALIC general account ....................................... 1,894,440
--------------
NET ASSETS ................................................................... $8,644,131,036
==============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts
(Net of applicable contract loans - partial
withdrawals with right of reinvestment) .............................. $8,625,678,378
Reserves for annuity contracts on benefit .................................... 18,452,658
--------------
TOTAL CONTRACT OWNER RESERVES ................................................ $8,644,131,036
==============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME: ALL DIVISIONS
-------------
<S> <C>
Dividends from mutual funds .................................................. $ 63,491,687
-------------
EXPENSES:
Mortality and expense risk charge ............................................ 39,920,874
Reimbursement of expenses (Note C) ........................................... (413,265)
-------------
Total expenses ...................................................... 39,507,609
-------------
NET INVESTMENT INCOME ........................................................ 23,984,078
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ............................................. 64,230,932
Capital gains distributions from mutual funds ................................ 18,369,056
Net unrealized appreciation of investments during the period.................. 786,820,332
-------------
Net realized and unrealized gain on investments ..................... 869,420,320
-------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................. $ 893,404,398
=============
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS ALL DIVISIONS
------------------------------------
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
-------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income ............................................................... $ 23,984,078 $ 31,159,663
Net realized gain on investments .................................................... 64,230,932 96,618,063
Capital gains distributions from mutual funds ....................................... 18,369,056 175,625,286
Net unrealized appreciation of investments during the period ........................ 786,820,332 539,282,575
------------------------------------
Increase in net assets resulting from operations ........................... 893,404,398 842,685,587
------------------------------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................................... 865,254,106 1,307,543,093
Surrenders of accumulation units by terminations, withdrawals, and maintenance fees . (144,228,030) (210,060,345)
Annuity benefit payments ............................................................ (1,116,592) (1,897,648)
Amounts transferred from VALIC general account ...................................... 174,256,794 647,659,402
------------------------------------
Increase in net assets resulting from principal transactions ............... 894,166,278 1,743,244,502
------------------------------------
TOTAL INCREASE IN NET ASSETS ........................................................ 1,787,570,676 2,585,930,089
NET ASSETS:
Beginning of period ................................................................. 6,856,560,360 4,270,630,271
------------------------------------
End of period ....................................................................... $ 8,644,131,036 $ 6,856,560,360
====================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 4
4 FINANCIAL STATEMENTS (Unaudited)
<TABLE>
<CAPTION>
AGSPC PUTNAM
STATEMENTS OF NET ASSETS INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
June 30, 1997 EQUITIES GROWTH FOREIGN INTERNATIONAL
FUND FUND FUND FUND
DIVISION 11 DIVISION 28 DIVISION 32 DIVISION 20
ASSETS: ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Investment in shares of mutual funds, at market ............... $188,852,339 $ 36,487,847 $115,162,967 $687,544,971
Balance due (to) from VALIC general account.................... (1,459,204) 64,229 283,691 (1,031,150)
------------ ------------ ------------ ------------
NET ASSETS..................................................... $187,393,135 $ 36,552,076 $115,446,658 $686,513,821
============ ============ ============ ============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of
reinvestment)................................................ $187,204,725 $ 36,519,086 $115,413,414 $686,389,945
Reserves for annuity contracts on benefit ..................... 188,410 32,990 33,244 123,876
------------ ------------ ------------ ------------
TOTAL CONTRACT OWNER RESERVES ................................. $187,393,135 $ 36,552,076 $115,446,658 $686,513,821
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AMERICAN
June 30, 1997 CENTURY- AGSPC AGSPC
TWENTIETH FOUNDERS GROWTH & SOCIAL
CENTURY GROWTH INCOME AWARENESS
ULTRA FUND FUND FUND FUND
DIVISION 31 DIVISION 30 DIVISION 16 DIVISION 12
ASSETS: ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment in shares of mutual funds, at market ............... $ 57,808,050 $ 82,204,956 $219,598,359 $169,245,767
Balance due (to) from VALIC general account.................... 335,258 685,499 (20,272) 270,862
------------ ------------ ------------ ------------
NET ASSETS..................................................... $ 58,143,308 $ 82,890,455 $219,578,087 $169,516,629
============ ============ ============ ============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of
reinvestment)................................................ $ 58,119,101 $ 82,857,583 $219,559,406 $169,489,455
Reserves for annuity contracts on benefit ..................... 24,207 32,872 18,681 27,174
------------ ------------ ------------ ------------
TOTAL CONTRACT OWNER RESERVES ................................. $ 58,143,308 $ 82,890,455 $219,578,087 $169,516,629
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS TEMPLETON AGSPC AGSPC
ASSET TIMED VANGUARD/ INTERNATIONAL
ALLOCATION OPPORTUNITY WELLINGTON GOVERNMENT
FUND FUND FUND BOND FUND
DIVISION 19 DIVISION 5 DIVISION 25 DIVISION 13
ASSETS: ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment in shares of mutual funds, at market ............... $269,059,414 $181,381,989 $ 78,344,716 $180,202,344
Balance due (to) from VALIC general account.................... 93,210 (34,365) 58,089 (115,128)
------------ ------------ ------------ ------------
NET ASSETS..................................................... $269,152,624 $181,347,624 $ 78,402,805 $180,087,216
============ ============ ============ ============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of
reinvestment)................................................ $268,914,422 $181,261,211 $ 78,402,805 $180,077,554
Reserves for annuity contracts on benefit ..................... 238,202 86,413 -- 9,662
------------ ------------ ------------ ------------
TOTAL CONTRACT OWNER RESERVES ................................. $269,152,624 $181,347,624 $ 78,402,805 $180,087,216
============ ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 5
SEPARATE ACCOUNT A 5
<TABLE>
<CAPTION>
AGSPC AGSPC PUTNAM PUTNAM OTC & AGSPC
SCIENCE & SMALL CAP DREYFUS NEW EMERGING AGSPC MIDCAP
TECHNOLOGY INDEX SMALL CAP OPPORTUNITIES GROWTH GROWTH INDEX
FUND FUND PORTFOLIO FUND FUND FUND FUND
DIVISION 17 DIVISION 14 DIVISION 18 DIVISION 26 DIVISION 27 DIVISION 15 DIVISION 4
- ------------ ------------ ------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$819,674,615 $199,501,192 $749,172,561 $102,338,246 $73,523,553 $793,632,305 $622,870,194
(13,692) (124,880) (659,701) 208,550 76,583 106,970 (256,719)
- ------------ ------------ ------------ ------------ ----------- ------------ ------------
$819,660,923 $199,376,312 $748,512,860 $102,546,796 $73,600,136 $793,739,275 $622,613,475
============ ============ ============ ============ =========== ============ ============
$819,317,429 $199,260,843 $748,309,627 $102,542,871 $73,561,758 $793,402,326 $622,339,169
343,494 115,469 203,233 3,925 38,378 336,949 274,306
- ------------ ------------ ------------ ------------ ----------- ------------ ------------
$819,660,923 $199,376,312 $748,512,860 $102,546,796 $73,600,136 $793,739,275 $622,613,475
============ ============ ============ ============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
NEUBERGER& SCUDDER
BERMAN GROWTH AND
AGSPC STOCK INDEX FUND GUARDIAN INCOME VANGUARD/
- -------------------------------------------------------------- TRUST FUND WINDSOR II
DIVISION 10A DIVISION 10B DIVISION 10C DIVISION 10D DIVISION 29 DIVISION 21 DIVISION 24
- ------------ ------------ -------------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$437,715,707 $35,169,689 $1,967,496,355 $48,447,479 $23,754,159 $61,945,551 $145,385,541
(379,438) (17,250) 854,594 767 11,068 243,570 645,418
- ------------ ----------- -------------- ----------- ----------- ----------- ------------
$437,336,269 $35,152,439 $1,968,350,949 $48,448,246 $23,765,227 $62,189,121 $146,030,959
============ =========== ============== =========== =========== =========== ============
$424,692,029 $33,386,386 $1,966,762,317 $48,273,195 $23,750,563 $62,133,841 $145,976,298
12,644,240 1,766,053 1,588,632 175,051 14,664 55,280 54,661
- ------------ ----------- -------------- ----------- ----------- ----------- ------------
$437,336,269 $35,152,439 $1,968,350,949 $48,448,246 $23,765,227 $62,189,121 $146,030,959
============ =========== ============== =========== =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
VANGUARD VANGUARD
AGSPC FIXED INCOME FIXED INCOME
GOVERNMENT SECURITIES FUND - SECURITIES FUND -
AGSPC CAPITAL CONSERVATION FUND SECURITIES L/T CORPORATE L/T U.S. TREASURY AGSPC MONEY MARKET FUND
- -------------------------------- FUND PORTFOLIO PORTFOLIO --------------------------
DIVISION 1 DIVISION 7 DIVISION 8 DIVISION 22 DIVISION 23 DIVISION 2 DIVISION 6
---------- ----------- ----------- ----------------- ----------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
$6,367,359 $53,052,413 $84,082,871 $7,679,497 $9,509,391 $4,810,975 $130,213,224
(26,872) (3,198) (47,322) 30,853 (10,444) 9,932 2,114,932
---------- ----------- ----------- ---------- ---------- ---------- ------------
$6,340,487 $53,049,215 $84,035,549 $7,710,350 $9,498,947 $4,820,907 $132,328,156
========== =========== =========== ========== ========== ========== ============
$6,335,809 $53,049,215 $84,035,549 $7,710,350 $9,498,947 $4,820,907 $132,310,242
4,678 - - - - - 17,914
---------- ----------- ----------- ---------- ---------- ---------- ------------
$6,340,487 $53,049,215 $84,035,549 $7,710,350 $9,498,947 $4,820,907 $132,328,156
========== =========== =========== ========== ========== ========== ============
</TABLE>
_______________________________________________________________________________
<PAGE> 6
6 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
AGSPC PUTNAM
INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
EQUITIES GROWTH FOREIGN INTERNATIONAL
FUND FUND FUND FUND
DIVISION 11 DIVISION 28 DIVISION 32 DIVISION 20
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds ........................ $ 1,497,842 $ -- $ -- $15,319,152
----------- ---------- ---------- -----------
EXPENSES:
Mortality and expense risk charge .................. 891,864 170,307 468,876 3,684,911
Reimbursement of expenses (Note C) ................. -- (34,079) (97,748) --
----------- ---------- ---------- -----------
Total expenses .................................. 891,864 136,228 374,128 3,684,911
----------- ---------- ---------- -----------
NET INVESTMENT INCOME (LOSS) ....................... 605,978 (136,228) (374,128) 11,634,241
----------- ---------- ---------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ............ 4,208,438 55,739 51,659 6,905,025
Capital gains distributions from mutual funds ...... -- -- -- 6,157,699
Net unrealized appreciation
of investments during the period ................ 14,386,419 4,262,699 8,818,306 55,254,044
----------- ---------- ---------- -----------
Net realized and unrealized gain on investments..... 18,594,857 4,318,438 8,869,965 68,316,768
----------- ---------- ---------- -----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ....................... $19,200,835 $4,182,210 $8,495,837 $79,951,009
=========== ========== ========== ===========
</TABLE>
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
AMERICAN CENTURY - AGSPC AGSPC
TWENTIETH FOUNDERS GROWTH & SOCIAL
CENTURY ULTRA GROWTH INCOME AWARENESS
FUND FUND FUND FUND
DIVISION 31 DIVISION 30 DIVISION 16 DIVISION 12
------------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds ..................... $ -- $ -- $ 480,114 $ 747,918
---------- ----------- ----------- -----------
EXPENSES:
Mortality and expense risk charge ............... 222,199 337,660 954,119 662,784
Reimbursement of expenses (Note C) .............. (34,643) (67,307) -- --
---------- ----------- ----------- -----------
Total expenses ............................... 187,556 270,353 954,119 662,784
---------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) .................... (187,556) (270,353) (474,005) 85,134
---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ................ 15,154 11,773 731,475 347,163
Capital gains distributions from mutual funds ... -- -- -- --
Net unrealized appreciation
of investments during the period ............. 5,926,139 10,093,142 22,804,179 24,239,759
---------- ----------- ----------- -----------
Net realized and unrealized gain on investments.. 5,941,293 10,104,915 23,535,654 24,586,922
---------- ----------- ----------- -----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................... $5,753,737 $9,834,562 $23,061,649 $24,672,056
========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 7
SEPARATE ACCOUNT A 7
<TABLE>
<CAPTION>
AGSPC AGSPC PUTNAM PUTNAM OTC & AGSPC
SCIENCE & SMALL CAP DREYFUS NEW EMERGING AGSPC MIDCAP
TECHNOLOGY INDEX SMALL CAP OPPORTUNITIES GROWTH GROWTH INDEX
FUND FUND PORTFOLIO FUND FUND FUND FUND
DIVISION 17 DIVISION 14 DIVISION 18 DIVISION 26 DIVISION 27 DIVISION 15 DIVISION 4
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ 1,157,968 $ -- $ -- $ -- $ -- $ 3,529,501
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
3,643,377 913,208 4,192,045 466,219 342,574 3,445,121 2,882,931
-- -- -- (93,427) (68,799) -- --
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
3,643,377 913,208 4,192,045 372,792 273,775 3,445,121 2,882,931
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
(3,643,377) 244,760 (4,192,045) (372,792) (273,775) (3,445,121) 646,570
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
13,580,307 2,901,332 4,348,517 (21,375) (171,499) 1,978,208 8,914,043
-- -- -- -- -- -- --
15,439,941 14,494,359 50,664,060 8,516,190 3,668,173 62,769,702 58,010,108
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
29,020,248 17,395,691 55,012,577 8,494,815 3,496,674 64,747,910 66,924,151
- ----------- ----------- ----------- ------------- ------------ ----------- -----------
$25,376,871 $17,640,451 $50,820,532 $ 8,122,023 $ 3,222,899 $61,302,789 $67,570,721
=========== =========== =========== ============= ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NEUBERGER& SCUDDER
BERMAN GROWTH AND
AGSPC STOCK INDEX FUND GUARDIAN INCOME VANGUARD/
- ---------------------------------------------------------------------- TRUST FUND WINDSOR II
DIVISION 10A DIVISION 10B DIVISION 10C DIVISION 10D DIVISION 29 DIVISION 21 DIVISION 24
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 3,184,558 $ 256,178 $ 13,704,899 $ 353,348 $ 22,662 $ 245,547 $ 1,030,983
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
2,020,911 91,789 8,544,790 222,836 101,479 240,159 561,352
-- (40,075) -- -- (20,262) -- --
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
2,020,911 51,714 8,544,790 222,836 81,217 240,159 561,352
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
1,163,647 204,464 5,160,109 130,512 (58,555) 5,388 469,631
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
10,289,020 945,570 6,346,107 1,271,632 101,066 65,935 97,858
-- -- -- -- -- 543,650 --
62,244,080 4,910,350 304,093,493 6,794,600 1,807,561 6,340,489 13,764,266
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
72,533,100 5,855,920 310,439,600 8,066,232 1,908,627 6,950,074 13,862,124
- ------------ ------------ ------------ ------------ ----------- ----------- -----------
$ 73,696,747 $ 6,060,384 $315,599,709 $ 8,196,744 $ 1,850,072 $ 6,955,462 $14,331,755
============ ============ ============ ============ =========== =========== ===========
</TABLE>
_______________________________________________________________________________
<PAGE> 8
8 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
AGSPC AGSPC
TEMPLETON TIMED VANGUARD/ INTERNATIONAL
ASSET ALLOCATION OPPORTUNITY WELLINGTON GOVERNMENT
FUND FUND FUND BOND FUND
DIVISION 19 DIVISION 5 DIVISION 25 DIVISION 13
---------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds.................................... $ 6,145,468 $ 2,722,782 $ 880,537 $ 4,099,997
----------- ----------- ----------- -------------
EXPENSES:
Mortality and expense risk charge.............................. 1,406,545 868,477 312,242 867,297
Reimbursement of expenses (Note C)............................. -- -- -- --
----------- ----------- ----------- -------------
Total expenses.............................................. 1,406,545 868,477 312,242 867,297
----------- ----------- ----------- -------------
NET INVESTMENT INCOME ......................................... 4,738,923 1,854,305 568,295 3,232,700
----------- ----------- ----------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments........................ 383,884 2,215,215 493,479 (902,690)
Capital gains distributions from mutual funds.................. 11,661,872 -- -- --
Net unrealized appreciation (depreciation) of investments
during the period........................................... 15,029,134 16,576,887 5,233,280 (9,495,112)
----------- ----------- ----------- -------------
Net realized and unrealized gain (loss) on investments......... 27,074,890 18,792,102 5,726,759 (10,397,802)
----------- ----------- ----------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................................... $31,813,813 $20,646,407 $ 6,295,054 $(7,165,102)
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 9
SEPARATE ACCOUNT A 9
<TABLE>
<CAPTION>
VANGUARD VANGUARD
AGSPC FIXED INCOME FIXED INCOME
AGSPC CAPITAL GOVERNMENT SECURITIES FUND - SECURITIES FUND -
CONSERVATION FUND SECURITIES L/T CORPORATE L/T U.S. TREASURY AGSPC MONEY MARKET FUND
- ----------------------------- FUND PORTFOLIO PORTFOLIO -----------------------------
DIVISION 1 DIVISION 7 DIVISION 8 DIVISION 22 DIVISION 23 DIVISION 2 DIVISION 6
- ---------- ---------- ---------- ----------------- ----------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$206,229 $1,721,511 $2,528,592 $191,853 $230,608 $117,994 $3,115,446
-------- ---------- ---------- -------- -------- -------- ----------
31,806 265,155 418,256 34,613 43,747 23,835 627,465
-- -- -- -- -- -- --
-------- ---------- ---------- -------- -------- -------- ----------
31,806 265,155 418,256 34,613 43,747 23,835 627,465
-------- ---------- ---------- -------- -------- -------- ----------
174,423 1,456,356 2,110,336 157,240 186,861 94,159 2,487,981
-------- ---------- ---------- -------- -------- -------- ----------
3,603 (500,175) (457,660) 3,892 18,237 -- --
-- -- -- 5,835 -- -- --
(31,630) 261,610 (51,434) 24,845 (29,307) -- --
-------- ---------- ---------- -------- -------- -------- ----------
(28,027) (238,565) (509,094) 34,572 (11,070) -- --
-------- ---------- ---------- -------- -------- -------- ----------
$146,396 $1,217,791 $1,601,242 $191,812 $175,791 $ 94,159 $2,487,981
======== ========== ========== ======== ======== ======== ==========
</TABLE>
_______________________________________________________________________________
<PAGE> 10
10 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
INTERNATIONAL EQUITIES
FUND PUTNAM GLOBAL GROWTH FUND
------------------------------ -----------------------------
DIVISION 11 DIVISION 28
------------------------------ -----------------------------
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,
1997 1996 1997 1996*
------------------------------ -----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ........................ $ 605,978 $ 1,591,421 $ (136,228) $ 354,551
Net realized gain on investments .................... 4,208,438 10,405,298 55,739 1,237
Capital gains distributions from mutual funds ....... - 6,021,502 - 765,977
Net unrealized appreciation (depreciation)
of investments during the period ................. 14,386,419 (6,663,813) 4,262,699 (504,554)
----------------------------- ---------------------------
Increase in net assets resulting from
operations ................................. 19,200,835 11,354,408 4,182,210 617,211
----------------------------- ---------------------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................... 12,382,729 34,022,917 7,753,970 3,174,282
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ................ (4,332,905) (8,616,063) (229,434) (15,952)
Annuity benefit payments ............................ (5,280) (13,432) (754) -
Amounts transferred (to) from VALIC general account.. (31,078,772) (45,208,742) 7,237,026 13,833,517
----------------------------- ---------------------------
Increase (decrease) in net assets
resulting from principal transactions ...... (23,034,228) (19,815,320) 14,760,808 16,991,847
----------------------------- ---------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............. (3,833,393) (8,460,912) 18,943,018 17,609,058
NET ASSETS:
Beginning of period ................................. 191,226,528 199,687,440 17,609,058 -
----------------------------- ---------------------------
End of period ....................................... $187,393,135 $191,226,528 $36,552,076 $17,609,058
============================= ===========================
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period .............. 156,226,314 172,564,018 16,648,600 -
Purchase payments ................................... 10,317,239 28,526,458 6,971,256 3,377,941
Surrenders .......................................... (3,674,474) (7,207,422) (315,717) (16,466)
Transfers - interdivision and (to) from VALIC
general account .................................. (25,356,867) (37,656,740) 6,757,225 13,287,125
----------------------------- ---------------------------
Accumulation units end of period .................... 137,512,212 156,226,314 30,061,364 16,648,600
============================= ===========================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
------------------------------ -----------------------------
<S> <C> <C> <C> <C>
Accumulation unit value ............................. $ 1.361368 $ 1.222906 $ 1.214818 $ 1.057690
============================= ===========================
Annuity unit value assuming a 3.5% discount factor .. $ 1.043246 $ 0.953246 $ 1.173812 $ 1.039552
============================= ===========================
</TABLE>
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 11
SEPARATE ACCOUNT A 11
<TABLE>
<CAPTION>
AGSPC
AGSPC SMALL CAP
TEMPLETON FOREIGN FUND TEMPLETON INTERNATIONAL FUND SCIENCE & TECHNOLOGY FUND INDEX FUND
- ---------------------------- ---------------------------- ---------------------------- ----------------------------
DIVISION 32 DIVISION 20 DIVISION 17 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,
1997 1996* 1997 1996 1997 1996 1997 1996
- ---------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (374,128) $ 482,633 $ 11,634,241 $ (394,601) $ (3,643,377) $ (5,521,307) $ 244,760 $ 637,395
51,659 125 6,905,025 3,551,468 13,580,307 20,659,560 2,901,332 4,544,601
-- 285,587 6,157,699 1,324,253 -- 32,117,202 -- 11,216,991
8,818,306 1,121,790 55,254,044 78,888,709 15,439,941 15,569,750 14,494,359 7,711,563
- ---------------------------- --------------------------- --------------------------- ---------------------------
8,495,837 1,890,135 79,951,009 83,369,829 25,376,871 62,825,205 17,640,451 24,110,550
- ---------------------------- --------------------------- --------------------------- ---------------------------
26,104,808 9,386,263 63,778,931 121,376,573 101,610,397 181,422,903 13,364,548 31,004,229
(461,785) (122,577) (10,181,023) (9,699,818) (12,429,023) (14,164,178) (3,898,429) (7,478,000)
(369) -- (2,885) (3,367) (9,363) (40,073) (2,679) (563)
41,853,094 28,301,252 22,943,978 84,599,243 (5,852,123) 105,706,951 (12,205,901) (15,148,966)
- ---------------------------- --------------------------- --------------------------- ---------------------------
67,495,748 37,564,938 76,539,001 196,272,631 83,319,888 272,925,603 (2,742,461) 8,376,700
- ---------------------------- --------------------------- --------------------------- ---------------------------
75,991,585 39,455,073 156,490,010 279,642,460 108,696,759 335,750,808 14,897,990 32,487,250
39,455,073 -- 530,023,811 250,381,351 710,964,164 375,213,356 184,478,322 151,991,072
- ---------------------------- --------------------------- --------------------------- ---------------------------
$115,446,658 $ 39,455,073 $686,513,821 $530,023,811 $819,660,923 $710,964,164 $199,376,312 $184,478,322
============================ ============================ ============================ =============================
36,671,828 -- 378,581,949 219,124,926 315,809,646 187,862,232 103,320,842 98,335,995
23,063,602 10,156,940 43,228,261 97,229,761 47,913,735 84,389,312 7,352,443 18,844,484
(701,799) (116,295) (7,493,169) (7,187,616) (6,180,283) (6,049,987) (2,296,197) (4,305,572)
37,919,760 26,631,183 16,986,033 69,414,878 (3,197,240) 49,608,089 (6,647,736) (9,554,065)
- ---------------------------- --------------------------- --------------------------- ---------------------------
96,953,391 36,671,828 431,303,074 378,581,949 354,345,858 315,809,646 101,729,352 103,320,842
============================ ============================ ============================ =============================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
- ---------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.190401 $ 1.075896 $ 1.591433 $ 1.399702 $ 2.312197 $ 2.250471 $ 1.958735 $ 1.785442
============================ ============================ ============================ =============================
$ 1.150218 $ 1.057446 $ 1.436967 $ 1.285567 $ 2.073278 $ 2.052612 $ 1.640201 $ 1.520786
============================ ============================ ============================ =============================
</TABLE>
_______________________________________________________________________________
<PAGE> 12
12 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PUTNAM NEW OPPORTUNITIES
DREYFUS SMALL CAP PORTFOLIO FUND
---------------------------- --------------------------
DIVISION 18 DIVISION 26
---------------------------- --------------------------
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,
1997 1996 1997 1996*
---------------------------- --------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)......................................... $ (4,192,045) $ (5,324,689) $ (372,792) $ (91,811)
Net realized gain (loss) on investments.............................. 4,348,517 1,994,033 (21,375) 9,737
Capital gains distributions from mutual funds........................ -- 19,221,026 -- 333,927
Net unrealized appreciation (depreciation)
of investments during the period................................... 50,664,060 56,124,110 8,516,190 (1,619,779)
---------------------------- --------------------------
Increase (decrease) in net assets resulting from operations..... 50,820,532 72,014,480 8,122,023 (1,368,556)
---------------------------- --------------------------
PRINCIPAL TRANSACTIONS:
Purchase payments.................................................... 80,490,027 168,538,535 24,367,736 11,510,093
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees.................................. (12,535,848) (13,795,343 (616,878) (87,148)
Annuity benefit payments............................................. (6,378) (8,413) -- --
Amounts transferred (to) from VALIC general account.................. (28,641,532) 74,732,906 20,450,936 40,168,590
---------------------------- --------------------------
Increase (decrease) in net assets
resulting from principal transactions......................... 39,306,269 229,467,685 44,201,794 51,591,535
---------------------------- --------------------------
TOTAL INCREASE IN NET ASSETS......................................... 90,126,801 301,482,165 52,323,817 50,222,979
NET ASSETS:
Beginning of period.................................................. 658,386,059 356,903,894 50,222,979 --
---------------------------- --------------------------
End of period........................................................ $748,512,860 $658,386,059 $102,546,796 $50,222,979
============================ ===========================
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period............................... 428,883,250 267,735,219 53,001,699 --
Purchase payments.................................................... 52,418,343 117,376,109 25,700,524 13,342,250
Surrenders........................................................... (8,965,285) (8,756,141) (1,343,461) (87,502)
Transfers - interdivision and (to) from VALIC general account........ (17,674,258) 52,528,063 22,011,129 39,746,951
---------------------------- --------------------------
Accumulation units end of period..................................... 454,662,050 428,883,250 99,369,891 53,001,699
============================ ===========================
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
---------------------------- ----------------------------
Accumulation unit value.............................................. $ 1.645859 $ 1.534694 $ 1.031931 $ 0.947573
============================ ============================
Annuity unit value assuming a 3.5% discount factor................... $ 1.486110 $ 1.409551 $ 0.997098 $ 0.931324
============================ ============================
</TABLE>
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 13
SEPARATE ACCOUNT A 13
<TABLE>
<CAPTION>
PUTNAM OTC & EMERGING AGSPC AGSPC AMERICAN CENTURY -
GROWTH FUND GROWTH FUND MIDCAP INDEX FUND TWENTIETH CENTURY ULTRA FUND
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
DIVISION 27 DIVISION 15 DIVISION 4 DIVISION 31
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
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,
1997 1996* 1997 1996 1997 1996 1997 1996*
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (273,775) $ (87,360) $ (3,445,121) $ (2,278,501) $ 646,570 $ 1,513,296 $ (187,556) $ (37,059)
(171,499) 9,014 1,978,208 130,878 8,914,043 17,436,698 15,154 18,993
-- 2,846,114 -- 11,891,551 -- 33,690,174 -- 884,238
3,668,173 (4,620,592) 62,769,702 58,161,783 58,010,108 33,029,566 5,926,139 (659,907)
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
3,222,899 (1,852,824) 61,302,789 67,905,711 67,570,721 85,669,734 5,753,737 206,265
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
17,243,048 11,571,920 98,994,080 164,255,730 33,924,284 76,583,041 15,642,292 4,513,492
(540,858) (77,988) (11,110,963) (10,378,550) (11,922,434) (21,727,656) (340,181) (29,941)
(730) -- (9,103) (38,688) (9,913) (19,036) (350) --
9,908,822 34,125,847 9,446,865 172,227,639 (32,660,576) (55,201,966) 19,770,152 12,627,842
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
26,610,282 45,619,779 97,320,879 326,066,131 (10,668,639) (365,617) 35,071,913 17,111,393
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
29,833,181 43,766,955 158,623,668 393,971,842 56,902,082 85,304,117 40,825,650 17,317,658
43,766,955 -- 635,115,607 241,143,765 565,711,393 480,407,276 17,317,658 --
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
$73,600,136 $43,766,955 $793,739,275 $635,115,607 $622,613,475 $565,711,393 $58,143,308 $17,317,658
- -============================= ============================== ============================== ==============================
48,902,828 -- 366,272,509 164,417,848 172,816,978 172,613,690 16,654,076 --
20,868,259 13,681,504 56,418,879 101,043,809 9,851,924 25,301,831 14,169,740 4,747,541
(1,264,996) (82,877) (7,181,846) (5,693,969) (3,658,237) (7,030,990) (303,223) (27,374)
12,062,032 35,304,201 6,496,361 106,504,821 (9,395,243) (18,067,553) 17,747,838 11,933,909
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
80,568,123 48,902,828 422,005,903 366,272,509 169,615,422 172,816,978 48,268,431 16,654,076
- -============================= ============================== ============================== ==============================
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.913038 $ 0.894978 $ 1.880074 $ 1.733324 $ 3.669119 $ 3.272588 $ 1.204081 $ 1.039845
============================= ============================== ============================== =============================
$ 0.882218 $ 0.879630 $ 1.685806 $ 1.580931 $ 2.253698 $ 2.044683 $ 1.163437 $ 1.022013
============================= ============================== ============================== =============================
</TABLE>
_______________________________________________________________________________
<PAGE> 14
14 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
FOUNDERS GROWTH FUND GROWTH & INCOME FUND
-------------------------- ----------------------------
DIVISION 30 DIVISION 16
-------------------------- ----------------------------
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,
1997 1996* 1997 1996
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..................................... $ (270,353) $ (28,065) $ (474,005) $ (402,222)
Net realized gain on investments................................. 11,773 - 731,475 483,596
Capital gains distributions from mutual funds.................... - 2,106,129 - 3,131,642
Net unrealized appreciation (depreciation)
of investments during the period............................... 10,093,142 (1,697,540) 22,804,179 19,205,904
--------------------------- -----------------------------
Increase in net assets resulting from operations............ 9,834,562 380,524 23,061,649 22,418,920
--------------------------- -----------------------------
PRINCIPAL TRANSACTIONS:
Purchase payments................................................ 20,290,055 8,595,522 23,451,687 41,180,652
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees.............................. (553,003) (36,494) (3,967,650) (2,962,157)
Annuity benefit payments......................................... - - (874) (1,598)
Amounts transferred (to) from VALIC general account.............. 21,200,365 23,178,924 5,505,070 43,756,812
--------------------------- -----------------------------
Increase (decrease) in net assets
resulting from principal transactions..................... 40,937,417 31,737,952 24,988,233 81,973,709
--------------------------- -----------------------------
TOTAL INCREASE IN NET ASSETS..................................... 50,771,979 32,118,476 48,049,882 104,392,629
NET ASSETS:
Beginning of period.............................................. 32,118,476 - 171,528,205 67,135,576
--------------------------- -----------------------------
End of period.................................................... $ 82,890,455 $32,118,476 $ 219,578,087 $ 171,528,205
============================ ============================
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period........................... 31,197,464 - 108,341,635 51,779,089
Purchase payments................................................ 18,273,714 9,274,157 14,181,204 28,095,895
Surrenders....................................................... (797,391) (32,596) (2,618,435) (1,842,881)
Transfers - interdivision and (to) from VALIC general account.... 19,716,004 21,955,903 3,699,673 30,309,532
--------------------------- -----------------------------
Accumulation units end of period................................. 68,389,791 31,197,464 123,604,077 108,341,635
============================ ============================
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Accumulation unit value.......................................... $ 1.211549 $ 1.029522 $ 1.776312 $ 1.583056
============================ ============================
Annuity unit value assuming a 3.5% discount factor............... $ 1.170652 $ 1.011867 $ 1.592765 $ 1.443874
============================ ============================
</TABLE>
- ---------------------
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 15
SEPARATE ACCOUNT A 15
<TABLE>
<CAPTION>
AGSPC
SOCIAL AWARENESS FUND AGSPC STOCK INDEX FUND
- ----------------------------- --------------------------------------------------------------
DIVISION 12 DIVISION 10A DIVISION 10B
- ----------------------------- ----------------------------- -----------------------------
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,
1997 1996 1997 1996 1997 1996
- -------------- ------------ -------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
$ 85,134 $ 546,469 $ 1,163,647 $ 3,186,584 $ 204,464 $ 462,074
347,163 778,115 10,289,020 12,767,086 945,570 2,085,848
-- 10,715,745 -- 2,739,498 -- 222,372
24,239,759 4,483,540 62,244,080 51,675,655 4,910,350 3,182,195
---------------------------- ---------------------------- ---------------------------
24,672,056 16,523,869 73,696,747 70,368,823 6,060,384 5,952,489
---------------------------- ---------------------------- ---------------------------
18,046,256 18,543,307 1,676,371 4,265,439 141,803 501,306
(1,671,289) (3,798,307) (10,263,171) (22,309,652) (935,471) (2,364,484)
-- -- (851,595) (1,401,028) (136,446) (250,350)
23,553,577 13,547,350 (5,571,112) (13,443,730) (703,755) (1,406,730)
---------------------------- ---------------------------- ---------------------------
39,928,544 28,292,350 (15,009,507) (32,888,971) (1,633,869) (3,520,258)
---------------------------- ---------------------------- ---------------------------
64,600,600 44,816,219 58,687,240 37,479,852 4,426,515 2,432,231
104,916,029 60,099,810 378,649,029 341,169,177 30,725,924 28,293,693
---------------------------- ---------------------------- ---------------------------
$169,516,629 $104,916,029 $437,336,269 $378,649,029 $35,152,439 $30,725,924
============================ ============================ ===========================
46,574,016 32,750,120 27,379,389 29,995,363 1,380,401 1,560,525
7,245,024 9,143,695 110,984 323,038 5,926 26,729
(672,672) (1,827,332) (710,414) (1,822,126) (40,613) (123,291)
9,526,508 6,507,533 (365,668) (1,116,886) (28,102) (83,562)
---------------------------- ---------------------------- ---------------------------
62,672,876 46,574,016 26,414,291 27,379,389 1,317,612 1,380,401
============================ ============================ ===========================
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
---------------------------- ---------------------------- ----------------------------
$ 2.704351 $ 2.252673 $ 16.078116 $ 13.413891 $ 25.338553 $ 21.070956
============================ ============================ ===========================
$ 2.072403 $ 1.755941 $ 4.563962 $ 3.873132 $ 6.116452 $ 5.173716
============================ ============================ ===========================
</TABLE>
_______________________________________________________________________________
<PAGE> 16
16 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC STOCK INDEX FUND
------------------------------------------------------------
DIVISION 10C DIVISION 10D
------------------------------ ----------------------------
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,
1997 1996 1997 1996
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................................... $ 5,160,109 $ 11,741,408 $ 130,512 $ 363,909
Net realized gain on investments................................ 6,346,107 10,129,542 1,271,632 2,391,364
Capital gains distributions from mutual funds................... -- 11,061,404 -- 307,213
Net unrealized appreciation (depreciation)
of investments during the period.............................. 304,093,493 222,475,966 6,794,600 4,964,983
-------------- -------------- ----------- -----------
Increase in net assets resulting from operations........... 315,599,709 255,408,320 8,196,744 8,027,469
-------------- -------------- ----------- -----------
PRINCIPAL TRANSACTIONS:
Purchase payments............................................... 127,972,797 210,185,191 372,321 1,004,698
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees............................. (31,676,491) (49,624,470) (889,351) (2,219,367)
Annuity benefit payments........................................ (58,336) (61,625) (6,676) (10,433)
Amounts transferred (to) from VALIC general account............. 26,166,900 47,055,243 (1,695,919) (5,536,446)
-------------- -------------- ----------- -----------
Increase (decrease) in net assets
resulting from principal transactions.................... 122,404,870 207,554,339 (2,219,625) (6,761,548)
-------------- -------------- ----------- -----------
TOTAL INCREASE IN NET ASSETS.................................... 438,004,579 462,962,659 5,977,119 1,265,921
NET ASSETS:
Beginning of period............................................. 1,530,346,370 1,067,383,711 42,471,127 41,205,206
-------------- -------------- ----------- -----------
End of period................................................... $1,968,350,949 $1,530,346,370 $48,448,246 $42,471,127
============== ============== =========== ===========
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period.......................... 536,806,965 455,255,243 8,381,704 9,885,873
Purchase payments............................................... 40,578,870 80,768,570 68,505 231,458
Surrenders...................................................... (10,338,675) (18,096,464) (163,804) (486,940)
Transfers - interdivision and (to) from VALIC general account... 9,084,772 18,879,616 (308,499) (1,248,687)
-------------- -------------- ----------- -----------
Accumulation units end of period................................ 576,131,932 536,806,965 7,977,906 8,381,704
============== ============== =========== ===========
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1997 1996 1997 1996
-------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Accumulation unit value......................................... $ 3.413736 $ 2.848437 $ 6.050860 $ 5.049088
============== ============== =========== ===========
Annuity unit value assuming a 3.5% discount factor.............. $ 2.456990 $ 2.085358 $ 3.572583 $ 3.032347
============== ============== =========== ===========
</TABLE>
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 17
SEPARATE ACCOUNT A 17
<TABLE>
<CAPTION>
NEUBERGER&BERMAN SCUDDER GROWTH AND TEMPLETON ASSET
GUARDIAN TRUST INCOME FUND VANGUARD/WINDSOR II ALLOCATION FUND
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
DIVISION 29 DIVISION 21 DIVISION 24 DIVISION 19
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
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,
1997 1996* 1997 1996* 1997 1996* 1997 1996
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (58,555) $ 15,594 $ 5,388 $ 120,254 $ 469,631 $ 488,057 $ 4,738,923 $ 1,458,222
101,066 10,864 65,935 22,419 97,858 11,774 383,884 430,651
-- 128,127 543,650 607,596 -- 1,554,790 11,661,872 2,566,073
1,807,561 348,451 6,340,489 84,718 13,764,266 (217,368) 15,029,134 19,843,521
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
1,850,072 503,036 6,955,462 834,987 14,331,755 1,837,253 31,813,813 24,298,467
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
5,371,609 2,108,685 13,914,572 4,643,308 35,237,767 10,178,409 28,207,720 46,026,342
(150,553) (21,439) (272,036) (23,004) (663,484) (103,527) (4,724,330) (3,839,217)
-- -- (657) -- (381) -- (8,787) (39,584)
7,490,793 6,613,024 23,168,295 12,968,194 55,325,524 29,887,643 19,263,321 33,529,527
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
12,711,849 8,700,270 36,810,174 17,588,498 89,899,426 39,962,525 42,737,924 75,677,068
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
14,561,921 9,203,306 43,765,636 18,423,485 104,231,181 41,799,778 74,551,737 99,975,535
9,203,306 -- 18,423,485 -- 41,799,778 -- 194,600,887 94,625,352
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
$ 23,765,227 $ 9,203,306 $ 62,189,121 $ 18,423,485 $146,030,959 $ 41,799,778 $269,152,624 $194,600,887
============================== ============================ ============================= =============================
8,211,592 -- 16,524,046 -- 37,292,761 -- 137,384,670 78,494,505
4,451,450 2,109,025 11,492,182 4,726,075 29,075,941 10,359,662 18,639,732 35,369,271
(141,516) (19,267) (248,265) (21,254) (650,563) (91,924) (3,219,293) (2,676,756)
6,306,803 6,121,834 19,470,862 11,819,225 46,738,709 27,025,023 13,062,337 26,197,650
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
18,828,329 8,211,592 47,238,825 16,524,046 112,456,848 37,292,761 165,867,446 137,384,670
============================== ============================ ============================= =============================
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
- ------------------------------ ----------------------------- ----------------------------- -----------------------------
$ 1.261427 $ 1.120770 $ 1.315313 $ 1.114950 $ 1.298065 $ 1.120855 $ 1.621261 $ 1.414844
============================== ============================ ============================= =============================
$ 1.218847 $ 1.101550 $ 1.270915 $ 1.095830 $ 1.254249 $ 1.101634 $ 1.463900 $ 1.299474
============================== ============================ ============================= =============================
</TABLE>
_____________________________________________________________________________
<PAGE> 18
18 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
Timed Opportunity
Fund Vanguard/Wellington Fund
-------------------------- ---------------------------
DIVISION 5 DIVISION 25
-------------------------- ---------------------------
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,
1997 1996 1997 1996*
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income.......................................... $ 1,854,305 $ 4,134,407 $ 568,295 $ 326,600
Net realized gain (loss) on investments........................ 2,215,215 7,668,485 493,479 -
Capital gains distributions from mutual funds.................. - 18,741,770 - 818,129
Net unrealized appreciation (depreciation)
of investments during the period............................. 16,576,887 (13,565,417) 5,233,280 (444,072)
----------------------------------------------------------
Increase (decrease) in net assets resulting from
operations.............................................. 20,646,407 16,979,245 6,295,054 700,657
----------------------------------------------------------
PRINCIPAL TRANSACTIONS:
Purchase payments.............................................. 6,093,556 15,126,160 23,800,863 7,042,246
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees............................ (4,904,616) (11,037,733) (877,356) (12,075)
Annuity benefit payments....................................... (3,964) (7,329) - -
Amounts transferred (to) from VALIC general account............ (13,713,234) (30,784,573) 23,994,726 17,458,690
----------------------------------------------------------
Increase (decrease) in net assets
resulting from principal transactions................... (12,528,258) (26,703,475) 46,918,233 24,488,861
----------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 8,118,149 (9,724,230) 53,213,287 25,189,518
NET ASSETS:
Beginning of period............................................ 173,229,475 182,953,705 25,189,518 -
----------------------------------------------------------
End of period.................................................. $181,347,624 $173,229,475 $78,402,805 $ 25,189,518
============================ ============================
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period......................... 65,292,617 75,851,431 22,866,634 -
Purchase payments.............................................. 2,169,368 6,003,535 20,434,732 7,335,077
Surrenders..................................................... (1,806,463) (4,376,494) (935,263) (12,748)
Transfers - interdivision and (to) from VALIC general
account...................................................... (4,875,361) (12,185,855) 21,171,352 15,544,305
----------------------------------------------------------
Accumulation units end of period............................... 60,780,161 65,292,617 63,537,455 22,866,634
============================ ============================
June 30, 1997 Dec. 31, 1996 June 30, 1997 Dec. 31, 1996
---------------------------- ----------------------------
Accumulation unit value........................................ $ 2.982243 $ 2.651899 $ 1.233962 $ 1.101584
============================ ============================
Annuity unit value assuming a 3.5% discount factor............. $ 1.857984 $ 1.680570 $ 1.192309 $ 1.082693
============================ ============================
</TABLE>
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 19
SEPARATE ACCOUNT A 19
<TABLE>
<CAPTION>
AGSPC AGSPC
INTERNATIONAL GOVERNMENT AGSPC GOVERNMENT SECURITIES
BOND FUND CAPITAL CONSERVATION FUND FUND
- -------------------------- --------------------------------------------------------- ---------------------------
DIVISION 13 DIVISION 1 DIVISION 7 DIVISION 8
- -------------------------- ---------------------------- ------------------------- ---------------------------
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,
1997 1996 1997 1996 1997 1996 1997 1996
- -------------------------- ---------------------------- ------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,232,700 $ 6,561,676 $ 174,423 $ 385,044 $ 1,456,356 $ 3,053,956 $ 2,110,336 $ 4,076,937
(902,690) 1,815,703 3,603 60,355 (500,175) (425,696) (457,660) (378,294)
-- 295,588 -- -- -- -- -- --
(9,495,112) (2,362,017) (31,630) (428,426) 261,610 (2,170,354) (51,434) (2,658,037)
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
(7,165,102) 6,310,950 146,396 16,973 1,217,791 457,906 1,601,242 1,040,606
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
22,978,635 48,300,297 196,833 280,092 3,949,775 10,990,401 6,627,857 18,451,360
(3,162,055) (4,925,561) (252,520) (624,478) (1,325,441) (2,515,394) (1,929,046) (3,354,710)
(19) (33) (258) (512) -- -- -- --
(10,736,414) 16,174,338 (251,834) (953,654) (6,082,389) (7,231,500) (7,836,443) (2,269,092)
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
9,080,147 59,549,041 (307,779) (1,298,552) (3,458,055) 1,243,507 (3,137,632) 12,827,558
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
1,915,045 65,859,991 (161,383) (1,281,579) (2,240,264) 1,701,413 (1,536,390) 13,868,164
178,172,171 112,312,180 6,501,870 7,783,449 55,289,479 53,588,066 85,571,939 71,703,775
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
$ 180,087,216 $178,172,171 $6,340,487 $6,501,870 $53,049,215 $55,289,479 $84,035,549 $85,571,939
============================= ============================ ============================ ============================
112,601,583 73,369,250 1,991,536 2,402,085 30,286,494 29,573,808 47,130,169 39,847,053
15,321,583 31,815,367 60,563 87,169 2,113,301 6,098,740 3,638,654 10,391,393
(2,397,015) (3,112,236) (77,480) (196,821) (724,686) (1,343,357) (1,129,907) (1,871,516)
(6,863,367) 10,529,212 (76,961) (300,897) (3,282,282) (4,042,697) (4,229,906) (1,236,761)
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
118,662,794 112,601,593 1,897,658 1,991,536 28,392,827 30,286,494 45,409,010 47,130,169
============================= ============================ ============================ ============================
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
- ------------------------------ ------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.517557 $ 1.582230 $ 3.338752 $ 3.262402 $ 1.868402 $ 1.825549 $ 1.850636 $ 1.815651
============================= ============================ ============================ ============================
$ 1.246265 $ 1.321708 $ 1.805519 $ 1.794552 $ 1.263010 $ 1.255251 $ 1.250999 $ 1.248443
============================= ============================ ============================ ============================
</TABLE>
_______________________________________________________________________________
<PAGE> 20
20 FINANCIAL STATEMENTS (Unaudited)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VANGUARD FIXED INCOME VANGUARD FIXED INCOME
SECURITIES FUND - L/T SECURITIES FUND - L/T
CORPORATE PORTFOLIO U.S. TREASURY PORTFOLIO
-------------------------- ----------------------------
DIVISION 22 DIVISION 23
-------------------------- ----------------------------
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,
1997 1996* 1997 1996*
-------------------------- ----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ........................................... $ 157,240 $ 36,167 $ 186,861 $ 46,282
Net realized gain on investments................................. 3,892 2,260 18,237 2,349
Capital gains distributions from mutual funds.................... 5,835 31,298 - -
Net unrealized appreciation (depreciation)
of investments during the period............................... 24,845 (11,407) (29,307) 33,654
--------------------------- ----------------------------
Increase in net assets resulting from operations............ 191,812 58,318 175,791 82,285
=========================== ============================
PRINCIPAL TRANSACTIONS:
Purchase payments................................................ 2,032,128 1,030,635 2,781,749 1,117,289
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees.............................. (61,373) (3,212) (53,406) (9,447)
Annuity benefit payments......................................... - - - -
Amounts transferred (to) from VALIC general account.............. 2,016,926 2,445,116 2,218,112 3,186,574
--------------------------- ----------------------------
Increase (decrease) in net assets
resulting from principal transactions..................... 3,987,681 3,472,539 4,946,455 4,294,416
--------------------------- ----------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......................... 4,179,493 3,530,857 5,122,246 4,376,701
NET ASSETS:
Beginning of period.............................................. 3,530,857 - 4,376,701 -
--------------------------- ----------------------------
End of period.................................................... $ 7,710,350 $ 3,530,857 $ 9,498,947 $ 4,376,701
============================ ============================
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period........................... 3,370,441 - 4,174,369 -
Purchase payments................................................ 1,949,959 1,099,573 2,678,336 1,138,211
Surrenders....................................................... (58,278) (3,347) (57,004) (9,203)
Transfers - interdivision and (to) from VALIC general account.... 1,934,544 2,274,215 2,143,904 3,045,361
--------------------------- ----------------------------
Accumulation units end of period................................. 7,196,666 3,370,441 8,939,605 4,174,369
============================ ============================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Accumulation unit value.......................................... $ 1.071378 $ 1.047595 $ 1.062569 $ 1.048470
============================ ============================
Annuity unit value assuming a 3.5% discount factor............... $ 1.035214 $ 1.029630 $ 1.026702 $ 1.030490
============================ ============================
</TABLE>
- ---------------------
* For the period from July 1, 1996 to December 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
_______________________________________________________________________________
<PAGE> 21
SEPARATE ACCOUNT A 21
<TABLE>
<CAPTION>
AGSPC
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,
1997 1996 1997 1996
- -------------------------------- -----------------------------------------
<S> <C> <C> <C>
$ 94,159 $ 216,537 $ 2,487,981 $ 3,525,805
-- -- -- --
-- -- -- --
-- -- -- --
- -------------------------------- -----------------------------------------
94,159 216,537 2,487,981 3,525,805
- -------------------------------- -----------------------------------------
58,460 163,293 26,394,442 40,448,483
(98,693) (465,203) (7,196,934) (13,617,200)
-- -- (795) (1,584)
(112,520) (1,426,148) (10,115,164) 10,145,727
- -------------------------------- -----------------------------------------
(152,753) (1,728,058) 9,081,549 36,975,426
- -------------------------------- -----------------------------------------
(58,594) (1,511,521) 11,569,530 40,501,231
4,879,501 6,391,022 120,758,626 80,257,395
- -------------------------------- -----------------------------------------
4,820,907 4,879,501 132,328,156 120,758,626
================================ =========================================
2,142,534 2,917,361 75,124,095 51,907,757
25,527 73,255 16,307,843 25,572,924
(42,956) (208,252) (4,444,554) (8,565,366)
(49,357) (639,830) (6,266,749) 6,208,780
- -------------------------------- -----------------------------------------
2,075,748 2,142,534 80,720,635 75,124,095
================================ =========================================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997 DEC. 31, 1996 JUNE 30, 1997 DEC. 31, 1996
- -------------------------------- -----------------------------------------
<S> <C> <C> <C>
$ 2.322491 $ 2.277444 $ 1.639113 $ 1.607212
=============================== ========================================
$ 1.402746 $ 1.399179 $ 1.095901 $ 1.093041
=============================== ========================================
</TABLE>
_______________________________________________________________________________
<PAGE> 22
22 NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 thirty-three 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"):
AGSPC Stock Index Fund (Divisions 10A, B, C, and D)
AGSPC MidCap Index Fund (Division 4)
AGSPC Small Cap Index Fund (Division 14)
AGSPC International Equities Fund (Division 11)
AGSPC Growth Fund (Division 15)
AGSPC Growth & Income Fund (Division 16)
AGSPC Science & Technology Fund (Division 17)
AGSPC Social Awareness Fund (Division 12)
AGSPC Timed Opportunity Fund (Division 5)
AGSPC Capital Conservation Fund (Divisions 1 and 7)
AGSPC Government Securities Fund (Division 8)
AGSPC International Government Bond Fund (Division 13)
AGSPC Money Market Fund (Divisions 2 and 6)
Dreyfus Variable Investment Fund -
Dreyfus Small Cap Portfolio (Division 18)
Founders Growth Fund (Division 30)
Neuberger&Berman Guardian Trust (Division 29)
Putnam Global Growth Fund (Division 28)
Putnam New Opportunities Fund (Division 26)
Putnam OTC & Emerging Growth Fund (Division 27)
Scudder Growth and Income Fund (Division 21)
Templeton Foreign Fund (Division 32)
Templeton Variable Products Series Fund:
Templeton Asset Allocation Fund (Division 19)
Templeton International Fund (Division 20)
American Century - Twentieth Century Ultra Fund (Division 31)
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Portfolio (Division 22)
Long-Term U.S. Treasury Portfolio (Division 23)
Vanguard/Wellington Fund (Division 25)
Vanguard/Windsor II (Division 24)
Divisions 21 through 32 commenced operations on July 1, 1996.
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 as
reported by the Fund.
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 1983(a) Individual Mortality Table has been
used in the computation of annuity reserves for currently payable contracts.
Participants are able to elect assumed investment rates between 3.0% and 6.0%,
as regulated by the applicable state laws.
_______________________________________________________________________________
<PAGE> 23
SEPARATE ACCOUNT A 23
NOTE C -- TRANSACTIONS WITH AFFILIATES
VALIC serves as investment adviser, transfer agent, and accounting services
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, 0.85% on the first
$10,000,000, 0.425% on the next $90,000,000, and 0.21% 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 through 32, 1.25%. Certain
unaffiliated mutual funds reimburse to VALIC a portion of the distribution or
administrative costs associated with offering their funds through a VALIC
annuity contract. VALIC, in turn reduces the separate account charge to that
division by the amount of the reimbursement. The expense reduction is credited
daily based on the following annual rates: for Divisions 26 through 30 and
Division 32, 0.25%; for Division 31, 0.20%.
Pursuant to the reorganization agreement entered into on April 17, 1987,
which transferred VALIC Separate Accounts One and Two into Separate Account A
Divisions 10A and 10B, respectively, expenses of each division (as defined to
include underlying mutual fund expenses) are limited to the following rates
based on average daily net assets: Division 10A, 1.4157% on the first
$359,065,787, 1.36% on the next $40,934,213, and 1.32% on the excess over
$400,000,000; Division 10B, 0.6966% on the first $25,434,267, 0.5% on the next
$74,565,733, and 0.25% on the excess over $100,000,000. Accordingly, during the
six months ended June 30, 1997 and the year ended December 31, 1996, VALIC
reduced expenses of Division 10B by $40,075 and $73,695, respectively.
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 $2,203,956 and $3,625,368 for the six
months ended June 30, 1997, and the year ended December 31, 1996, respectively.
VALIC received surrender charges of $1,223,705 and $1,998,356 for the six
months ended June 30, 1997 and the year ended December 31, 1996, respectively.
In addition, VALIC received $76,330 and $11,846 for the year ended December 31,
1996, in sales load on variable annuity purchase payments for Divisions 10A and
10B, respectively. VALIC received $36,222 and $4,237 for the six months ended
June 30, 1997, in sales load on variable annuity purchase payments for
Divisions 10A and 10B, respectively.
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, 1997:
<TABLE>
<CAPTION>
Unrealized
Market Appreciation
Underlying Fund Division Shares Price Market Cost (Depreciation)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGSPC International Equities Fund........ 11 15,672,393 $12.05 $188,852,339 $169,879,073 $18,973,266
Putnam Global Growth Fund................ 28 2,921,365 12.49 36,487,847 32,729,702 3,758,145
Templeton Foreign Fund................... 32 9,996,785 11.52 115,162,967 105,222,871 9,940,096
Templeton International Fund............. 20 33,936,080 20.26 687,544,971 532,232,162 155,312,809
AGSPC Science & Technology Fund.......... 17 40,618,167 20.18 819,674,615 744,661,420 75,013,195
AGSPC Small Cap Index Fund............... 14 11,839,833 16.85 199,501,192 154,410,447 45,090,745
Dreyfus Small Cap Portfolio.............. 18 13,330,473 56.20 749,172,561 595,307,310 153,865,251
Putnam New Opportunities Fund............ 26 2,301,287 44.47 102,338,246 95,441,835 6,896,411
Putnam OTC & Emerging Growth Fund........ 27 4,904,840 14.99 73,523,553 74,475,972 (952,419)
AGSPC Growth Fund........................ 15 42,852,716 18.52 793,632,305 633,266,784 160,365,521
AGSPC MidCap Index Fund.................. 4 29,133,311 21.38 622,870,194 448,751,645 174,118,549
American Century - Twentieth Century
Ultra Fund............................ 31 1,767,830 32.70 57,808,050 52,541,818 5,266,232
Founders Growth Fund..................... 30 4,379,593 18.77 82,204,956 73,809,354 8,395,602
AGSPC Growth & Income Fund............... 16 12,570,026 17.47 219,598,359 168,708,611 50,889,748
AGSPC Social Awareness Fund.............. 12 9,079,709 18.64 169,245,767 132,753,441 36,492,326
AGSPC Stock Index Fund................... 10A,B,C,D 91,501,074 27.20 2,488,829,230 1,456,728,703 1,032,100,527
Neuberger&Berman Guardian Trust.......... 29 1,324,828 17.93 23,754,159 21,598,147 2,156,012
Scudder Growth and Income Fund........... 21 2,292,581 27.02 61,945,551 55,520,344 6,425,207
Vanguard/Windsor II...................... 24 5,273,324 27.57 145,385,541 131,838,643 13,546,898
Templeton Asset Allocation Fund.......... 19 12,060,036 22.31 269,059,414 222,980,277 46,079,137
AGSPC Timed Opportunity Fund............. 5 14,027,996 12.93 181,381,989 156,328,824 25,053,165
Vanguard/Wellington Fund................. 25 2,695,964 29.06 78,344,716 73,555,508 4,789,208
AGSPC Intl Government Bond Fund.......... 13 15,765,734 11.43 180,202,344 189,446,038 (9,243,694)
AGSPC Capital Conservation Fund.......... 1 & 7 6,321,253 9.40 59,419,772 60,080,816 (661,044)
AGSPC Government Securities Fund......... 8 8,641,611 9.73 84,082,871 85,644,820 (1,561,949)
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Portfolio......... 22 879,667 8.73 7,679,497 7,666,059 13,438
Long-Term U.S. Treasury Portfolio .... 23 967,385 9.83 9,509,391 9,505,044 4,347
AGSPC Money Market Fund.................. 2 & 6 135,024,199 1.00 135,024,199 135,024,199 -
--------------------------------------------------
$8,642,236,596 $6,620,109,867 $2,022,126,729
==================================================
</TABLE>
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<PAGE> 24
24 NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued
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, 1997, the aggregate cost of purchases and
proceeds from sales of investments were:
<TABLE>
<CAPTION>
Purchases Sales
-------------------------------
<S> <C> <C>
AGSPC International Equities Fund Division 11 ....... $ 45,749,486 $ 66,602,179
Putnam Global Growth Fund Division 28 ............... 15,499,947 825,115
Templeton Foreign Fund Division 32 .................. 68,009,644 783,391
Templeton International Fund Division 20 ............ 121,502,702 25,762,284
AGSPC Science & Technology Fund Division 17.......... 120,749,888 39,673,440
AGSPC Small Cap Index Fund Division 14 .............. 11,183,849 13,599,552
Dreyfus Small Cap Portfolio Division 18 ............. 52,347,887 15,591,906
Putnam New Opportunities Fund Division 26 ........... 44,749,837 719,257
Putnam OTC & Emerging Growth Fund Division 27 ....... 27,448,231 964,218
AGSPC Growth Fund Division 15 ....................... 99,774,469 4,709,476
AGSPC MidCap Index Fund Division 4 .................. 16,897,952 26,632,735
American Century - Twentieth Century Ultra Fund
Division 31 ....................................... 34,954,888 347,568
Founders Growth Fund Division 30 .................... 40,701,878 474,456
AGSPC Growth & Income Fund Division 16 .............. 26,741,087 1,962,338
AGSPC Social Awareness Fund Division 12 ............. 41,003,814 1,117,577
AGSPC Stock Index Fund:
Division 10A ..................................... 7,016,742 20,691,063
Division 10B ..................................... 488,174 1,895,543
Division 10C ..................................... 140,981,701 13,669,359
Division 10D ..................................... 970,748 3,071,143
Neuberger&Berman Guardian Trust Division 29 ......... 13,421,214 720,303
Scudder Growth and Income Fund Division 21 .......... 37,827,020 613,148
Vanguard/Windsor II Division 24 ..................... 90,737,570 650,447
Templeton Asset Allocation Fund Division 19 ......... 61,073,328 1,698,831
AGSPC Timed Opportunity Fund Division 5 ............. 4,128,988 14,684,251
Vanguard/Wellington Fund Division 25 ................ 53,190,104 5,597,849
AGSPC International Government Bond Fund Division 13. 36,064,649 23,486,310
AGSPC Capital Conservation Fund:
Division 1 ....................................... 339,481 432,762
Division 7 ....................................... 3,240,927 5,205,783
AGSPC Government Securities Fund Division 8 ......... 5,487,085 6,465,394
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Portfolio Division 22 ........ 4,961,590 839,181
Long-Term U.S. Treasury Portfolio Division 23 .... 6,082,092 1,150,931
AGSPC Money Market Fund:
Division 2 ....................................... 1,125,927 1,185,160
Division 6 ....................................... 155,176,004 145,341,331
-------------------------------
Total ......................................... $1,389,628,903 $447,164,281
===============================
</TABLE>
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