<PAGE> 1
----------------------
| Semi-Annual Report |
| To Contract Owners |
| June 30, 1998 |
----------------------
Separate
Account A
---------------------
[VALIC LOGO]
<PAGE> 2
================================================================================
CHAIRMAN'S LETTER 1
================================================================================
TO OUR PARTICIPANTS:
We are pleased to present the June 30, 1998, 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 (Portfolio
Director 1, Portfolio Director 2, Independence Plus, Group Unit Purchase and
Impact) appears on page two.
During the first six months of 1998 the stock market, as measured by the
Standard & Poor's 500 Index (S&P 500(R)), had a total return of 17.70%. The
performance disparity among the large and small companies which has
characterized the markets during the past several years continued. The Standard
& Poor's MidCap 400 (MidCap 400) earned 8.62% and the Russell 2000(R) produced
4.93%. This disparity has caused actively managed funds to lag the large
capitalization index fund. This was the result of active managers not investing
cash flows in a timely manner or including smaller companies in the portfolio.
The small cap funds generally returned less than 10%, while the larger
capitalization funds earned in excess of 10%, over this time frame.
The Stock market rose from January through March and leveled through June. The
Asian currency devaluations caused investors to worry that U.S. exports would
decline as consumers in Asian countries would not be able to afford American
goods. An increase in lower cost imports would also have a negative impact on
U.S. corporations. At this time those fears are justified in part.
The yield on the long term U.S. Government bond fluctuated between 5.82% and
6.11% through early May. As the Asian effects became evident bond yields
declined to less than 5.70%. The bond market, as measured by the Merrill Lynch
Corporate-Government Index, experienced a return of 4.24%. Lesser quality bonds
recorded negative returns for this period.
VALIC is in the process of modifying its systems to achieve Year 2000 readiness.
This endeavor is directed and managed by VALIC and monitored by the parent
company, American General Corporation. VALIC has developed clearly defined and
documented plans that have been implemented to minimize the risk of significant
negative impact on company operation.
These plans include the following activities: (1) perform an inventory of the
company's information technology and non-information technology systems; (2)
assess which items in the inventory may expose the company to business
interruptions due to Year 2000 issues; (3) test systems for Year 2000 readiness;
(4) reprogram or replace systems that are not Year 2000 ready; and (5) return
the systems to operation. The company expects to complete the forgoing
activities for all critical business systems by December 1998.
In addition, the company has business relationships with various third parties,
each of which must also be Year 2000 ready. Therefore, VALIC's plans also
include assessing and attempting to mitigate the risks associated with the
potential failure of third parties to achieve Year 2000 readiness. Due to the
various stages of the third parties' Year 2000 readiness, VALIC's efforts in
this regard will extend through 1999.
Through June 30, 1998, VALIC has incurred and expensed $13 million (pretax)
related to Year 2000 readiness, including $6.5 million incurred during the first
six months of 1998. VALIC currently anticipates that it will incur future costs
of $3 million (pretax) for additional internal staff, third party vendors, and
other expenses to achieve Year 2000 readiness.
Due to the magnitude and complexity of this project, risks and uncertainties
exist. If conversion of VALIC's systems is not completed on a timely basis (due
to non-performance by significant third-party vendors or other unforeseen
circumstances), or if significant third parties fail to achieve Year 2000
readiness on a timely basis, the Year 2000 issue could have a material adverse
impact on operations of the company.
If you have any questions about your contract or this report, we would be happy
to hear from you.
Respectfully,
/s/ THOMAS L. WEST, JR.
Thomas L. West, Jr., Chairman and CEO
The Variable Annuity Life Insurance Company
August 14, 1998
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> 3
================================================================================
2 CHAIRMAN'S LETTER CONTINUED
================================================================================
<TABLE>
<CAPTION>
GROUP
UNIT INDEPENDENCE
PURCHASE IMPACT PLUS
DIVISION DIVISION DIVISION
-------- -------- ------------
<S> <C> <C> <C>
INTERNATIONAL GROWTH
AGSPC International Equities Fund .......... -- -- 11
Putnam Global Growth Fund .................. -- -- --
Templeton Foreign Fund ..................... -- -- --
Templeton International Fund ............... -- -- --
AGGRESSIVE GROWTH
AGSPC Science & Technology Fund ............ -- -- --
AGSPC Small Cap Index Fund ................. -- -- 14
Dreyfus Small Cap Portfolio ................ -- -- --
Putnam New Opportunities Fund .............. -- -- --
Putnam OTC & Emerging Growth Fund .......... -- -- --
GROWTH
AGSPC Growth Fund .......................... -- -- --
AGSPC MidCap Index Fund .................... -- 4 4
American Century-
Twentieth Century Ultra Fund ............ -- -- --
Founders Growth Fund ....................... -- -- --
GROWTH & INCOME
AGSPC Growth & Income Fund ................. -- -- --
AGSPC Social Awareness Fund ................ -- -- 12
AGSPC Stock Index Fund ..................... 10A, 10B 10D 10C
Neuberger&Berman Guardian Trust ............ -- -- --
Scudder Growth and Income Fund ............. -- -- --
Vanguard/Windsor II ........................ -- -- --
BALANCED-GROWTH-INTERNATIONAL
Templeton Asset Allocation Fund ............ -- -- --
BALANCED-GROWTH-DOMESTIC
AGSPC Asset Allocation Fund ................ -- 5 5
Vanguard/Wellington Fund ................... -- -- --
CURRENT INCOME
AGSPC Intl Government Bond Fund ............ -- -- 13
CURRENT INCOME & CAPITAL PRESERVATION
AGSPC Capital Conservation Fund ............ -- 1 7
AGSPC Government Securities Fund ........... -- -- 8
Vanguard Fixed Income Securities Fund-
Long-Term Corporate Portfolio ........... -- -- --
Vanguard Fixed Income Securities Fund-
Long-Term U. S. Treasury Portfolio ...... -- -- --
LIQUIDITY & CAPITAL PRESERVATION
AGSPC Money Market Fund .................... -- 2 6
<CAPTION>
SIX MONTH ONE YEAR
PORTFOLIO PORTFOLIO TOTAL RETURN TOTAL RETURN
DIRECTOR DIRECTOR FOR THE FOR YEAR ENDING
1 2 PERIOD ENDING DECEMBER 31,
DIVISION DIVISION JUNE 30, 1998 1997
--------- --------- ------------ --------------
<S> <C> <C> <C> <C>
INTERNATIONAL GROWTH
AGSPC International Equities Fund .......... 11 -- 14.58% 1.18%
Putnam Global Growth Fund .................. -- 28 19.78 12.20
Templeton Foreign Fund ..................... -- 32 2.10 5.57
Templeton International Fund ............... 20 -- 13.68 12.54
AGGRESSIVE GROWTH
AGSPC Science & Technology Fund ............ 17 17 15.49 1.57
AGSPC Small Cap Index Fund ................. 14 -- 4.31 21.18
Dreyfus Small Cap Portfolio ................ 18 -- 5.37 15.37
Putnam New Opportunities Fund .............. -- 26 17.97 21.31
Putnam OTC & Emerging Growth Fund .......... -- 27 16.18 9.08
GROWTH
AGSPC Growth Fund .......................... 15 15 16.29 19.80
AGSPC MidCap Index Fund .................... 4 -- 8.05 30.45
American Century-
Twentieth Century Ultra Fund ............ -- 31 23.35 21.74
Founders Growth Fund ....................... -- 30 18.90 25.25
GROWTH & INCOME
AGSPC Growth & Income Fund ................. 16 -- 9.32 22.60
AGSPC Social Awareness Fund ................ 12 12 16.61 32.52
AGSPC Stock Index Fund ..................... 10C 10C 16.95 31.77
Neuberger&Berman Guardian Trust ............ -- 29 12.05 16.66
Scudder Growth and Income Fund ............. -- 21 9.39 28.80
Vanguard/Windsor II ........................ -- 24 14.14 30.70
BALANCED-GROWTH-INTERNATIONAL
Templeton Asset Allocation Fund ............ 19 -- 8.48 14.07
BALANCED-GROWTH-DOMESTIC
AGSPC Asset Allocation Fund ................ 5 -- 11.59 21.40
Vanguard/Wellington Fund ................... -- 25 8.26 21.65
CURRENT INCOME
AGSPC Intl Government Bond Fund ............ 13 13 1.92 (5.79)
CURRENT INCOME & CAPITAL PRESERVATION
AGSPC Capital Conservation Fund ............ 7 -- 3.56 7.49
AGSPC Government Securities Fund ........... 8 -- 3.50 7.83
Vanguard Fixed Income Securities Fund-
Long-Term Corporate Portfolio ........... -- 22 4.65 12.32
Vanguard Fixed Income Securities Fund-
Long-Term U. S. Treasury Portfolio ...... -- 23 5.36 12.44
LIQUIDITY & CAPITAL PRESERVATION
AGSPC Money Market Fund .................... 6 6 2.06 4.13
</TABLE>
<PAGE> 4
================================================================================
FINANCIAL STATEMENTS (Unaudited) 3
================================================================================
STATEMENT OF NET ASSETS
June 30, 1998
<TABLE>
<CAPTION>
ASSETS: ALL DIVISIONS
-----------------
<S> <C>
Total investment in shares of mutual funds, at market (cost $9,435,461,206) ................ $ 12,899,092,099
Balance due to VALIC general account ....................................................... (7,317,842)
-----------------
NET ASSETS ................................................................................. $ 12,891,774,257
=================
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts
(Net of applicable contract loans - partial withdrawals with right of reinvestment) ..... $ 12,870,171,571
Reserves for annuity contracts on benefit .................................................. 21,602,686
-----------------
TOTAL CONTRACT OWNER RESERVES .............................................................. $ 12,891,774,257
=================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1998
<TABLE>
<CAPTION>
INVESTMENT INCOME: ALL DIVISIONS
-----------------
<S> <C>
Dividends from mutual funds ................................................................ $ 77,512,053
-----------------
EXPENSES:
Mortality and expense risk charge .......................................................... 63,194,379
Reimbursement of expenses (Note C) ......................................................... (2,322,328)
-----------------
Total expenses .......................................................................... 60,872,051
-----------------
NET INVESTMENT INCOME ...................................................................... 16,640,002
-----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ........................................................... 103,686,984
Capital gains distributions from mutual funds .............................................. 43,285,676
Net unrealized appreciation of investments during the period ............................... 1,226,568,069
-----------------
Net realized and unrealized gain on investments ......................................... 1,373,540,729
-----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................................... $ 1,390,180,731
=================
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALL DIVISIONS
------------------------------------
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
----------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................................................... $ 16,640,002 $ 30,758,096
Net realized gain on investments ........................................................... 103,686,984 161,505,567
Capital gains distributions from mutual funds .............................................. 43,285,676 289,703,358
Net unrealized appreciation of investments during the period ............................... 1,226,568,069 1,001,756,337
----------------- ----------------
Increase in net assets resulting from operations ........................................ 1,390,180,731 1,483,723,358
----------------- ----------------
PRINCIPAL TRANSACTIONS:
Purchase payments .......................................................................... 1,149,567,312 1,798,552,034
Surrenders of accumulation units by terminations, withdrawals, and maintenance fees ........ (269,046,650) (328,105,329)
Annuity benefit payments ................................................................... (1,352,377) (2,273,125)
Amounts transferred from VALIC general account ............................................. 295,110,833 518,857,110
----------------- ----------------
Increase in net assets resulting from principal transactions ............................ 1,174,279,118 1,987,030,690
----------------- ----------------
TOTAL INCREASE IN NET ASSETS ............................................................... 2,564,459,849 3,470,754,048
NET ASSETS:
Beginning of period ........................................................................ 10,327,314,408 6,856,560,360
----------------- ----------------
End of period .............................................................................. $ 12,891,774,257 $ 10,327,314,408
================= ================
</TABLE>
<PAGE> 5
================================================================================
4 FINANCIAL STATEMENTS (Unaudited)
================================================================================
<TABLE>
<CAPTION>
AGSPC PUTNAM
STATEMENTS OF NET ASSETS INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
JUNE 30, 1998 EQUITIES GROWTH FOREIGN INTERNATIONAL
FUND FUND FUND FUND
DIVISION 11 DIVISION 28 DIVISION 32 DIVISION 20
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market .. $ 156,124,618 $ 101,872,594 $ 219,742,274 $ 839,935,570
Balance due (to) from VALIC general account ...... 719,663 (82,881) (108,130) (1,857,030)
------------- ------------- ------------- -------------
NET ASSETS ....................................... $ 156,844,281 $ 101,789,713 $ 219,634,144 $ 838,078,540
============= ============= ============= =============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts
(Net of applicable contract loans-partial
withdrawals with right of reinvestment) ....... $ 156,665,634 $ 101,748,612 $ 219,588,968 $ 837,852,173
Reserves for annuity contracts on benefit ........ 178,647 41,101 45,176 226,367
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES .................... $ 156,844,281 $ 101,789,713 $ 219,634,144 $ 838,078,540
============= ============= ============= =============
</TABLE>
STATEMENTS OF NET ASSETS
JUNE 30, 1998
<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>
ASSETS:
Investment in shares of mutual funds, at market ..................... $ 228,171,782 $ 309,286,805 $ 283,599,263 $ 355,714,374
Balance due (to) from VALIC general account ......................... (116,243) 49,053 (177,434) (119,839)
------------- ------------- ------------- -------------
NET ASSETS .......................................................... $ 228,055,539 $ 309,335,858 $ 283,481,829 $ 355,594,535
============= ============= ============= =============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of reinvestment) . $ 228,007,069 $ 309,274,612 $ 283,425,573 $ 355,466,638
Reserves for annuity contracts on benefit ........................... 48,470 61,246 56,256 127,897
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES ....................................... $ 228,055,539 $ 309,335,858 $ 283,481,829 $ 355,594,535
============= ============= ============= =============
</TABLE>
STATEMENTS OF NET ASSETS
JUNE 30, 1998
<TABLE>
<CAPTION>
AGSPC AGSPC
TEMPLETON ASSET VANGUARD/ INTERNATIONAL
ASSET ALLOCATION ALLOCATION WELLINGTON GOVERNMENT
FUND FUND FUND BOND FUND
DIVISION 19 DIVISION 5 DIVISION 25 DIVISION 13
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ...................... $ 355,332,491 $ 206,366,059 $ 282,866,578 $ 154,105,422
Balance due (to) from VALIC general account .......................... (189,445) (144,000) (324,285) (175,731)
------------- ------------- ------------- -------------
NET ASSETS ........................................................... $ 355,143,046 $ 206,222,059 $ 282,542,293 $ 153,929,691
============= ============= ============= =============
CONTRACT OWNER RESERVES:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of reinvestment) .. $ 354,836,052 $ 206,126,324 $ 282,511,693 153,883,276
Reserves for annuity contracts on benefit ............................ 306,994 95,735 30,600 46,415
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES ........................................ $ 355,143,046 $ 206,222,059 $ 282,542,293 $ 153,929,691
============= ============= ============= =============
</TABLE>
<PAGE> 6
================================================================================
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>
$ 1,089,725,506 $ 247,144,384 $ 909,362,790 $ 287,052,889 $ 131,355,760 $ 1,165,736,555 $ 809,327,449
(71,699) (616,420) (1,232,017) 122,820 (243,383) (254,875) (376,230)
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 1,089,653,807 $ 246,527,964 $ 908,130,773 $ 287,175,709 $ 131,112,377 $ 1,165,481,680 $ 808,951,219
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 1,089,273,932 $ 246,398,253 $ 907,908,738 $ 287,159,501 $ 131,067,564 $ 1,165,009,131 $ 808,584,559
379,875 129,711 222,035 16,208 44,813 472,549 366,660
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 1,089,653,807 $ 246,527,964 $ 908,130,773 $ 287,175,709 $ 131,112,377 $ 1,165,481,680 $ 808,951,219
=============== =============== =============== =============== =============== =============== ===============
</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>
$ 529,687,843 $ 41,635,948 $ 2,909,482,448 $ 55,026,654 $ 65,846,538 $ 230,522,025 $ 488,321,465
(504,069) 11,095 (522,708) (47,559) (40,197) (215,505) (238,607)
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 529,183,774 $ 41,647,043 $ 2,908,959,740 $ 54,979,095 $ 65,806,341 $ 230,306,520 $ 488,082,858
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 515,139,365 $ 39,644,005 $ 2,906,788,309 $ 54,769,159 $ 65,790,184 $ 230,226,565 $ 487,936,970
14,044,409 2,003,038 2,171,431 209,936 16,157 79,955 145,888
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 529,183,774 $ 41,647,043 $ 2,908,959,740 $ 54,979,095 $ 65,806,341 $ 230,306,520 $ 488,082,858
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<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>
$ 6,383,328 $ 59,014,579 $ 93,369,609 $ 39,219,289 $ 54,931,640 $ 4,603,115 $ 188,224,455
13,771 (168,891) (95,538) (264,017) (110,393) 12,374 (9,492)
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,397,099 $ 58,845,688 $ 93,274,071 $ 38,955,272 $ 54,821,247 $ 4,615,489 $ 188,214,963
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,392,390 $ 58,845,688 $ 93,274,071 $ 38,955,272 $ 54,808,034 $ 4,615,489 $ 188,197,768
4,709 -- -- -- 13,213 -- 17,195
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 6,397,099 $ 58,845,688 $ 93,274,071 $ 38,955,272 $ 54,821,247 $ 4,615,489 $ 188,214,963
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE> 7
================================================================================
6 FINANCIAL STATEMENTS (Unaudited)
================================================================================
<TABLE>
<CAPTION>
AGSPC PUTNAM
STATEMENTS OF OPERATIONS INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
For the six months ended June 30, 1998 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 ..................... $ 1,289,416 $ -- $ -- $ 17,844,520
------------- ------------- ------------- -------------
EXPENSES:
Mortality and expense risk charge ............... 779,196 482,546 1,303,624 5,023,580
Reimbursement of expenses (Note C) .............. -- (96,581) (264,157) --
------------- ------------- ------------- -------------
Total expenses ......................... 779,196 385,965 1,039,467 5,023,580
------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) .................... 510,220 (385,965) (1,039,467) 12,820,940
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ......... 2,162,470 (24,226) 78,966 26,483,888
Capital gains distributions from mutual funds ... -- -- -- 31,903,839
Net unrealized appreciation
of investments during the period ....... 18,684,988 13,741,012 3,351,363 28,283,056
------------- ------------- ------------- -------------
Net realized and unrealized gain on investments . 20,847,458 13,716,786 3,430,329 86,670,783
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 21,357,678 $ 13,330,821 $ 2,390,862 $ 99,491,723
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1998 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 ..................... $ -- $ -- $ 468,339 $ 1,553,882
------------- ------------- ------------- -------------
EXPENSES:
Mortality and expense risk charge ............... 1,062,064 1,482,484 1,339,740 1,510,370
Reimbursement of expenses (Note C) .............. (190,231) (296,438) -- --
------------- ------------- ------------- -------------
Total expenses ......................... 871,833 1,186,046 1,339,740 1,510,370
------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) .................... (871,833) (1,186,046) (871,401) 43,512
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ................ 618 -- 4,112,485 59,486
Capital gains distributions from mutual funds
Net unrealized appreciation ..................... -- -- -- --
of investments during the period ....... 36,228,525 41,447,380 21,053,856 44,966,468
------------- ------------- ------------- -------------
Net realized and unrealized gain on investments . 36,229,143 41,447,380 25,166,341 45,025,954
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 35,357,310 $ 40,261,334 $ 24,294,940 $ 45,069,466
============= ============= ============= =============
</TABLE>
<PAGE> 8
================================================================================
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>
$ -- $ 1,221,375 $ -- $ -- $ -- $ -- $ 3,394,419
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
5,036,509 1,210,403 5,579,269 1,366,747 696,495 5,239,386 3,903,537
-- -- (669,761) (273,311) (139,680) -- --
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
5,036,509 1,210,403 4,909,508 1,093,436 556,815 5,239,386 3,903,537
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(5,036,509) 10,972 (4,909,508) (1,093,436) (556,815) (5,239,386) (509,118)
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
19,582,118 3,904,174 8,307,812 8,264 180,643 4,152,520 6,855,427
-- -- -- -- -- -- --
128,012,250 5,891,162 42,362,918 36,432,304 16,985,056 158,020,189 52,708,030
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
147,594,368 9,795,336 50,670,730 36,440,568 17,165,699 162,172,709 59,563,457
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 142,557,859 $ 9,806,308 $ 45,761,222 $ 35,347,132 $ 16,608,884 $ 156,933,323 $ 59,054,339
============= ============= ============= ============= ============= ============= =============
</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>
$ 3,059,407 $ 240,731 $ 16,062,182 $ 320,004 $ 127,593 $ 2,128,713 $ 2,943,282
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2,510,268 110,365 13,067,018 263,465 359,440 1,176,147 2,218,240
-- (49,051) -- -- (71,816) (236,499) --
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2,510,268 61,314 13,067,018 263,465 287,624 939,648 2,218,240
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
549,139 179,417 2,995,164 56,539 (160,031) 1,189,065 725,042
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
16,440,566 1,176,216 5,771,918 1,989,621 98,972 115,085 7,047
-- -- -- -- -- 1,564,246 --
61,509,858 4,977,864 395,227,173 6,204,642 5,886,145 10,938,445 45,585,117
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
77,950,424 6,154,080 400,999,091 8,194,263 5,985,117 12,617,776 45,592,164
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 78,499,563 $ 6,333,497 $ 403,994,255 $ 8,250,802 $ 5,825,086 $ 13,806,841 $ 46,317,206
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE> 9
================================================================================
8 FINANCIAL STATEMENTS (Unaudited)
================================================================================
<TABLE>
<CAPTION>
AGSPC AGSPC
TEMPLETON ASSET VANGUARD/ INTERNATIONAL
STATEMENTS OF OPERATIONS ASSET ALLOCATION ALLOCATION WELLINGTON GOVERNMENT
For the six months ended June 30, 1998 FUND FUND FUND BOND FUND
DIVISION 19 DIVISION 5 DIVISION 25 DIVISION 13
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds .............................. $ 9,488,692 $ 2,884,172 $ 3,458,943 $ --
--------------- --------------- --------------- ---------------
EXPENSES:
Mortality and expense risk charge ........................ 2,144,239 976,397 1,281,369 799,144
Reimbursement of expenses (Note C) ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Total expenses .................................. 2,144,239 976,397 1,281,369 799,144
--------------- --------------- --------------- ---------------
NET INVESTMENT INCOME .................................... 7,344,453 1,907,775 2,177,574 (799,144)
--------------- --------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments .................. 2,545,812 1,707,088 17,910 (2,454,751)
Capital gains distributions from mutual funds ............ 9,560,656 -- -- --
Net unrealized appreciation (depreciation)
of investments during the period ................ 7,709,871 17,864,731 13,152,172 6,455,010
--------------- --------------- --------------- ---------------
Net realized and unrealized gain (loss) on investments ... 19,816,339 19,571,819 13,170,082 4,000,259
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ....................... $ 27,160,792 $ 21,479,594 $ 15,347,656 $ 3,201,115
=============== =============== =============== ===============
</TABLE>
<PAGE> 10
================================================================================
SEPARATE ACCOUNT A 9
================================================================================
<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>
$ 199,529 $ 1,798,284 $ 2,593,701 $ 941,486 $ 1,091,589 $ 112,266 $ 4,289,528
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
31,586 282,242 453,421 184,455 230,328 22,033 840,295
-- -- -- (15,042) (19,761) -- --
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
31,586 282,242 453,421 169,413 210,567 22,033 840,295
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
167,943 1,516,042 2,140,280 772,073 881,022 90,233 3,449,233
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
14,389 (11,936) 34,619 28,154 341,629 -- --
-- -- -- 256,935 -- -- --
39,740 462,493 950,618 415,819 1,019,814 -- --
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
54,129 450,557 985,237 700,908 1,361,443 -- --
- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
$ 222,072 $ 1,966,599 $ 3,125,517 $ 1,472,981 $ 2,242,465 $ 90,233 $ 3,449,233
=============== =============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE> 11
================================================================================
10 FINANCIAL STATEMENTS (Unaudited)
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
INTERNATIONAL EQUITIES
FUND
----------------------------------
DIVISION 11
----------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ..................................... $ 510,220 $ 1,546,185
Net realized gain (loss) on investments .......................... 2,162,470 8,844,811
Capital gains distributions from mutual funds .................... -- 4,593,062
Net unrealized appreciation (depreciation)
of investments during the period .............................. 18,684,988 (11,693,489)
--------------- ---------------
Increase (decrease) in net assets resulting from operations . 21,357,678 3,290,569
--------------- ---------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 8,164,862 21,604,936
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (5,060,505) (8,085,959)
Annuity benefit payments ......................................... (12,148) (10,712)
Amounts transferred (to) from VALIC general account .............. (19,606,388) (56,024,580)
--------------- ---------------
Increase (decrease) in net assets
resulting from principal transactions ..................... (16,514,179) (42,516,315)
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .......................... 4,843,499 (39,225,746)
NET ASSETS:
Beginning of period .............................................. 152,000,782 191,226,528
--------------- ---------------
End of period .................................................... $ 156,844,281 $ 152,000,782
=============== ===============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 122,716,744 156,226,314
Purchase payments ................................................ 5,893,539 17,325,859
Surrenders ....................................................... (3,804,319) (6,456,410)
Transfers - interdivision and (to) from VALIC general account .... (14,294,559) (44,379,019)
--------------- ---------------
Accumulation units end of period ................................. 110,511,405 122,716,744
=============== ===============
<CAPTION>
JUNE 30, 1998 DEC 31, 1997
--------------- ---------------
<S> <C> <C>
Accumulation unit value .......................................... $ 1.417642 $ 1.237299
=============== ===============
Annuity unit value assuming a 3.5% discount factor ............... $ 1.049650 $ 0.931882
=============== ===============
<CAPTION>
PUTNAM GLOBAL GROWTH FUND
----------------------------------
DIVISION 28
----------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ..................................... $ (385,965) $ 825,963
Net realized gain (loss) on investments .......................... (24,226) 172,968
Capital gains distributions from mutual funds .................... -- 9,300,593
Net unrealized appreciation (depreciation)
of investments during the period .............................. 13,741,012 (7,591,166)
--------------- ---------------
Increase (decrease) in net assets resulting from operations . 13,330,821 2,708,358
--------------- ---------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 15,493,582 18,196,466
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (1,340,520) (812,004)
Annuity benefit payments ......................................... (1,110) (1,799)
Amounts transferred (to) from VALIC general account .............. 15,472,532 21,134,329
--------------- ---------------
Increase (decrease) in net assets
resulting from principal transactions ..................... 29,624,484 38,516,992
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .......................... 42,955,305 41,225,350
NET ASSETS:
Beginning of period .............................................. 58,834,408 17,609,058
--------------- ---------------
End of period .................................................... $ 101,789,713 $ 58,834,408
=============== ===============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 49,548,732 16,648,600
Purchase payments ................................................ 11,414,508 15,748,353
Surrenders ....................................................... (1,084,522) (675,628)
Transfers - interdivision and (to) from VALIC general account .... 11,684,706 17,827,407
--------------- ---------------
Accumulation units end of period ................................. 71,563,424 49,548,732
=============== ===============
<CAPTION>
JUNE 30, 1998 DEC 31, 1997
--------------- ---------------
<S> <C> <C>
Accumulation unit value .......................................... $ 1.421500 $ 1.186775
=============== ===============
Annuity unit value assuming a 3.5% discount factor ............... $ 1.327096 $ 1.127017
=============== ===============
</TABLE>
<PAGE> 12
================================================================================
SEPARATE ACCOUNT A 11
================================================================================
<TABLE>
<CAPTION>
AGSPC
TEMPLETON FOREIGN FUND TEMPLETON INTERNATIONAL FUND SCIENCE & TECHNOLOGY FUND
- ----------------------------------- ----------------------------------- -----------------------------------
DIVISION 32 DIVISION 20 DIVISION 17
- ----------------------------------- ----------------------------------- -----------------------------------
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,
1998 1997 1998 1997 1998 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ (1,039,467) $ 3,566,211 $ 12,820,940 $ 7,044,706 $ (5,036,509) $ (8,359,405)
78,966 180,290 26,483,888 24,143,886 19,582,118 27,202,326
-- 12,359,374 31,903,839 6,157,699 -- --
3,351,363 (16,286,999) 28,283,056 33,826,345 128,012,250 (11,571,856)
- --------------- --------------- --------------- --------------- --------------- ---------------
2,390,862 (181,124) 99,491,723 71,172,636 142,557,859 7,271,065
- --------------- --------------- --------------- --------------- --------------- ---------------
38,808,442 63,929,059 62,177,010 127,443,761 103,782,128 203,196,325
(3,944,961) (2,231,179) (18,491,047) (21,498,080) (21,207,558) (27,661,660)
(1,054) (1,149) (4,858) (6,675) (9,616) (17,353)
1,528,854 79,881,321 (34,833,475) 22,603,734 (45,130,460) 15,908,913
- --------------- --------------- --------------- --------------- --------------- ---------------
36,391,281 141,578,052 8,847,630 128,542,740 37,434,494 191,426,225
- --------------- --------------- --------------- --------------- --------------- ---------------
38,782,143 141,396,928 108,339,353 199,715,376 179,992,353 198,697,290
180,852,001 39,455,073 729,739,187 530,023,811 909,661,454 710,964,164
- --------------- --------------- --------------- --------------- --------------- ---------------
$ 219,634,144 $ 180,852,001 $ 838,078,540 $ 729,739,187 $ 1,089,653,807 $ 909,661,454
=============== =============== =============== =============== =============== ===============
159,201,107 36,671,828 463,174,350 378,581,949 397,842,959 315,809,646
31,743,914 55,441,897 34,560,978 81,609,273 40,721,225 88,179,109
(3,772,350) (1,875,284) (11,185,543) (13,712,830) (8,940,498) (11,448,429)
2,156,776 68,962,666 (18,666,235) 16,695,958 (16,980,161) 5,302,633
- --------------- --------------- --------------- --------------- --------------- ---------------
189,329,447 159,201,107 467,883,550 463,174,350 412,643,525 397,842,959
=============== =============== =============== =============== =============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 1.159676 $ 1.135778 $ 1.790728 $ 1.575168 $ 2.639721 $ 2.285739
=============== =============== =============== =============== =============== ===============
$ 1.082659 $ 1.078588 $ 1.562270 $ 1.397849 $ 2.286958 $ 2.014348
=============== =============== =============== =============== =============== ===============
<CAPTION>
AGSPC
SMALL CAP
INDEX FUND
-----------------------------------
DIVISION 14
-----------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
--------------- ---------------
<C> <C>
$ 10,972 $ 321,469
3,904,174 7,403,801
-- 17,477,318
5,891,162 13,195,192
--------------- ---------------
9,806,308 38,397,780
--------------- ---------------
15,124,084 26,031,893
(5,826,123) (8,101,115)
(3,871) (6,381)
(2,641,184) (10,731,749)
--------------- ---------------
6,652,906 7,192,648
--------------- ---------------
16,459,214 45,590,428
230,068,750 184,478,322
--------------- ---------------
$ 246,527,964 $ 230,068,750
=============== ===============
106,279,077 103,320,842
6,489,656 13,258,805
(2,532,772) (4,191,154)
(1,058,932) (6,109,416)
--------------- ---------------
109,177,029 106,279,077
=============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997
--------------- ---------------
<C> <C>
$ 2.256869 $ 2.163595
=============== ===============
$ 1.825977 $ 1.780625
=============== ===============
</TABLE>
<PAGE> 13
================================================================================
12 FINANCIAL STATEMENTS (Unaudited)
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DREYFUS SMALL CAP PORTFOLIO PUTNAM NEW OPPORTUNITIES 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,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ..................................... $ (4,909,508) $ (7,877,254) $ (1,093,436) $ (1,052,294)
Net realized gain (loss) on investments .......................... 8,307,812 10,514,976 8,264 242,887
Capital gains distributions from mutual funds .................... -- 47,781,324 -- 3,494,327
Net unrealized appreciation (depreciation)
of investments during the period .............................. 42,362,918 56,534,602 36,432,304 18,445,868
------------- ------------- ------------- -------------
Increase in net assets resulting from operations ............ 45,761,222 106,953,648 35,347,132 21,130,788
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 74,006,456 152,268,343 46,172,989 51,769,269
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (19,125,396) (25,995,894) (3,579,946) (2,540,805)
Annuity benefit payments ......................................... (6,570) (13,079) (250) (61)
Amounts transferred (to) from VALIC general account .............. (42,329,247) (41,774,769) 44,399,206 44,254,408
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ..................... 12,545,243 84,484,601 86,991,999 93,482,811
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS ..................................... 58,306,465 191,438,249 122,339,131 114,613,599
NET ASSETS:
Beginning of period .............................................. 849,824,308 658,386,059 164,836,578 50,222,979
------------- ------------- ------------- -------------
End of period .................................................... $ 908,130,773 $ 849,824,308 $ 287,175,709 $ 164,836,578
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 479,851,525 428,883,250 143,395,066 53,001,699
Purchase payments ................................................ 39,245,189 92,300,416 35,528,973 49,995,408
Surrenders ....................................................... (11,144,907) (15,764,818) (2,718,677) (2,517,125)
Transfers - interdivision and (to) from VALIC general account .... (21,329,249) (25,567,323) 35,546,444 42,915,084
------------- ------------- ------------- -------------
Accumulation units end of period ................................. 486,622,558 479,851,525 211,751,806 143,395,066
============= ============= ============= =============
<CAPTION>
June 30, 1998 Dec. 31, 1997 June 30, 1998 Dec. 31, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value .......................................... $ 1.865735 $ 1.770622 $ 1.355962 $ 1.149453
============= ============= ============= =============
Annuity unit value assuming a 3.5% discount factor ............... $ 1.627708 $ 1.571300 $ 1.265908 $ 1.091574
============= ============= ============= =============
</TABLE>
<PAGE> 14
================================================================================
SEPARATE ACCOUNT A 13
================================================================================
<TABLE>
<CAPTION>
PUTNAM OTC & EMERGING AGSPC AGSPC
GROWTH FUND GROWTH FUND MIDCAP INDEX FUND
- --------------------------------- --------------------------------- ---------------------------------
DIVISION 27 DIVISION 15 DIVISION 4
- --------------------------------- --------------------------------- ---------------------------------
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,
1998 1997 1998 1997 1998 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ (556,815) $ (720,013) $ (5,239,386) $ (7,550,418) $ (509,118) $ 535,199
180,643 (47,363) 4,152,520 6,207,654 6,855,427 19,471,600
-- -- -- 15,041,175 -- 39,891,431
16,985,056 8,912,297 158,020,189 132,575,644 52,708,030 109,426,279
- --------------- --------------- --------------- --------------- --------------- ---------------
16,608,884 8,144,921 156,933,323 146,274,055 59,054,339 169,324,509
- --------------- --------------- --------------- --------------- --------------- ---------------
18,063,312 32,976,492 93,043,358 185,814,571 37,704,821 66,141,090
(2,234,911) (1,887,137) (21,898,577) (24,997,689) (18,362,204) (24,993,718)
(1,115) (1,777) (12,940) (18,116) (12,080) (20,499)
1,220,077 14,456,676 (4,006,953) (764,959) (47,342) (45,549,090)
- --------------- --------------- --------------- --------------- --------------- ---------------
17,047,363 45,544,254 67,124,888 160,033,807 19,283,195 (4,422,217)
- --------------- --------------- --------------- --------------- --------------- ---------------
33,656,247 53,689,175 224,058,211 306,307,862 78,337,534 164,902,292
97,456,130 43,766,955 941,423,469 635,115,607 730,613,685 565,711,393
- --------------- --------------- --------------- --------------- --------------- ---------------
$ 131,112,377 $ 97,456,130 $ 1,165,481,680 $ 941,423,469 $ 808,951,219 $ 730,613,685
=============== =============== =============== =============== =============== ===============
99,785,041 48,902,828 453,172,490 366,272,509 171,065,657 172,816,978
16,683,349 36,775,163 40,509,471 99,349,760 8,195,517 17,600,471
(2,350,967) (2,370,530) (10,101,467) (12,033,793) (4,096,803) (6,688,206)
1,426,472 16,477,580 (1,117,601) (415,986) 124,225 (12,663,586)
- --------------- --------------- --------------- --------------- --------------- ---------------
115,543,895 99,785,041 482,462,893 453,172,490 175,288,596 171,065,657
=============== =============== =============== =============== =============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 1.134179 $ 0.976262 $ 2.414696 $ 2.076503 $ 4.612876 $ 4.269122
=============== =============== =============== =============== =============== ===============
$ 1.058853 $ 0.927104 $ 2.092006 $ 1.829953 $ 2.737620 $ 2.577196
=============== =============== =============== =============== =============== ===============
<CAPTION>
AMERICAN CENTURY -
TWENTIETH CENTURY ULTRA FUND
---------------------------------
DIVISION 31
---------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
--------------- ---------------
<C> <C>
$ (871,833) $ (633,243)
618 316,651
-- 24,559,704
36,228,525 (16,326,801)
--------------- ---------------
35,357,310 7,916,311
--------------- ---------------
39,787,181 43,175,072
(2,556,201) (1,444,132)
(903) (950)
31,699,763 56,804,430
--------------- ---------------
68,929,840 98,534,420
--------------- ---------------
104,287,150 106,450,731
123,768,389 17,317,658
--------------- ---------------
$ 228,055,539 $ 123,768,389
=============== ===============
97,745,282 16,654,076
27,069,804 36,243,458
(1,766,149) (1,152,164)
22,912,218 45,999,912
--------------- ---------------
145,961,155 97,745,282
=============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997
--------------- ---------------
<C> <C>
$ 1.561536 $ 1.265937
=============== ===============
$ 1.457829 $ 1.202193
=============== ===============
</TABLE>
<PAGE> 15
================================================================================
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,
1998 1997 1998 1997
------------- ------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) ..................................... $ (1,186,046) $ (229,837) $ (871,401) $ (1,206,116)
Net realized gain (loss) on investments .......................... -- 270,661 4,112,485 3,270,580
Capital gains distributions from mutual funds .................... -- 21,678,474 -- 2,863,622
Net unrealized appreciation (depreciation)
of investments during the period .............................. 41,447,380 (6,466,051) 21,053,856 38,217,716
------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from operations . 40,261,334 15,253,247 24,294,940 43,145,802
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 56,081,883 54,770,398 21,855,054 44,825,180
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (3,673,938) (1,863,811) (5,955,286) (8,344,519)
Annuity benefit payments ......................................... (384) (66) (1,854) (2,954)
Amounts transferred (to) from VALIC general account .............. 46,198,732 70,189,987 (13,807,000) 5,944,261
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ..................... 98,606,293 123,096,508 2,090,914 42,421,968
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS ..................................... 138,867,627 138,349,755 26,385,854 85,567,770
NET ASSETS:
Beginning of period .............................................. 170,468,231 32,118,476 257,095,975 171,528,205
------------- ------------- ------------- -------------
End of period .................................................... $ 309,335,858 $ 170,468,231 $ 283,481,829 $ 257,095,975
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 132,167,162 31,197,464 132,434,555 108,341,635
Purchase payments ................................................ 38,464,708 45,575,203 10,654,566 24,988,066
Surrenders ....................................................... (2,799,585) (1,491,261) (3,032,355) (4,697,640)
Transfers - interdivision and (to) from VALIC general account .... 33,836,430 56,885,756 (6,476,480) 3,802,494
------------- ------------- ------------- -------------
Accumulation units end of period ................................. 201,668,715 132,167,162 133,580,286 132,434,555
============= ============= ============= =============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value .......................................... $ 1.533244 $ 1.289513 $ 2.121762 $ 1.940905
============= ============= ============= =============
Annuity unit value assuming a 3.5% discount factor ............... $ 1.431417 $ 1.224581 $ 1.838217 $ 1.710454
============= ============= ============= =============
</TABLE>
<PAGE> 16
================================================================================
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,
1998 1997 1998 1997 1998 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 43,512 $ 281,520 $ 549,139 $ 2,030,016 $ 179,417 $ 399,877
59,486 1,158,707 16,440,566 23,392,823 1,176,216 2,137,197
-- 9,560,562 -- 2,365,369 -- 185,844
44,966,468 33,369,211 61,509,858 89,338,679 4,977,864 6,910,324
- --------------- --------------- --------------- --------------- --------------- ---------------
45,069,466 44,370,000 78,499,563 117,126,887 6,333,497 9,633,242
- --------------- --------------- --------------- --------------- --------------- ---------------
37,382,214 44,746,508 1,921,593 3,670,819 106,745 231,218
(5,717,768) (5,475,293) (15,089,125) (24,373,318) (1,473,284) (2,331,031)
(7,451) -- (996,438) (1,717,390) (162,141) (285,785)
35,288,102 55,022,728 (4,935,202) (3,572,644) (103,805) (1,027,537)
- --------------- --------------- --------------- --------------- --------------- ---------------
66,945,097 94,293,943 (19,099,172) (25,992,533) (1,632,485) (3,413,135)
- --------------- --------------- --------------- --------------- --------------- ---------------
112,014,563 138,663,943 59,400,391 91,134,354 4,701,012 6,220,107
243,579,972 104,916,029 469,783,383 378,649,029 36,946,031 30,725,924
- --------------- --------------- --------------- --------------- --------------- ---------------
$ 355,594,535 $ 243,579,972 $ 529,183,774 $ 469,783,383 $ 41,647,043 $ 36,946,031
=============== =============== =============== =============== =============== ===============
81,577,104 46,574,016 25,835,933 27,379,389 1,256,974 1,380,401
11,132,182 16,505,152 98,194 226,321 3,408 9,647
(1,703,858) (1,970,414) (887,732) (1,529,579) (86,378) (92,576)
11,097,380 20,468,350 (245,672) (240,198) (4,592) (40,498)
- --------------- --------------- --------------- --------------- --------------- ---------------
102,102,808 81,577,104 24,800,723 25,835,933 1,169,412 1,256,974
=============== =============== =============== =============== =============== ===============
<CAPTION>
June 30, 1998 Dec. 31, 1997 June 30, 1998 Dec. 31, 1997 June 30, 1998 Dec. 31, 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 3.481302 $ 2.985333 $ 20.678249 $ 17.679054 $ 32.808936 $ 27.956641
=============== =============== =============== =============== =============== ===============
$ 2.577630 $ 2.248428 $ 5.671372 $ 4.932202 $ 7.652044 $ 6.632506
=============== =============== =============== =============== =============== ===============
</TABLE>
<PAGE> 17
================================================================================
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,
1998 1997 1998 1997
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................................... $ 2,995,164 $ 9,342,792 $ 56,539 $ 222,212
Net realized gain (loss) on investments ........................ 5,771,918 19,691,626 1,989,621 3,421,747
Capital gains distributions from mutual funds .................. -- 11,611,427 -- 249,976
Net unrealized appreciation (depreciation)
of investments during the period ............................ 395,227,173 475,943,738 6,204,642 9,003,055
--------------- --------------- ------------- -------------
Increase (decrease) in net assets resulting from operations. 403,994,255 516,589,583 8,250,802 12,896,990
--------------- --------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments .............................................. 182,411,076 264,734,800 328,267 789,193
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ........................... (59,057,525) (73,944,144) (1,803,449) (2,598,402)
Annuity benefit payments ....................................... (84,653) (120,896) (8,464) (13,201)
Amounts transferred (to) from VALIC general account ............ 71,369,087 72,721,787 (1,461,088) (3,872,680)
--------------- --------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ................... 194,637,985 263,391,547 (2,944,734) (5,695,090)
--------------- --------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS ................................... 598,632,240 779,981,130 5,306,068 7,201,900
NET ASSETS:
Beginning of period ............................................ 2,310,327,500 1,530,346,370 49,673,027 42,471,127
--------------- --------------- ------------- -------------
End of period .................................................. $ 2,908,959,740 $ 2,310,327,500 $ 54,979,095 $ 49,673,027
=============== =============== ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ......................... 615,053,124 536,806,965 7,438,537 8,381,704
Purchase payments .............................................. 42,638,343 77,757,636 45,354 132,628
Surrenders ..................................................... (14,076,990) (20,920,257) (245,085) (430,026)
Transfers - interdivision and (to) from VALIC general account .. 18,521,881 21,408,780 (199,490) (645,769)
--------------- --------------- ------------- -------------
Accumulation units end of period ............................... 662,136,358 615,053,124 7,039,316 7,438,537
=============== =============== ============= =============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value ........................................ $ 4.389825 $ 3.753436 $ 7.780466 $ 6.652806
=============== =============== ============= =============
Annuity unit value assuming a 3.5% discount factor ............. $ 3.052729 $ 2.655080 $ 4.438519 $ 3.860513
=============== =============== ============= =============
</TABLE>
<PAGE> 18
================================================================================
SEPARATE ACCOUNT A 17
================================================================================
<TABLE>
<CAPTION>
NEUBERGER&BERMAN SCUDDER GROWTH AND
GUARDIAN TRUST INCOME FUND VANGUARD/WINDSOR II
- ------------------------------- ------------------------------- -------------------------------
DIVISION 29 DIVISION 21 DIVISION 24
- ------------------------------- ------------------------------- -------------------------------
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,
1998 1997 1998 1997 1998 1997
- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ (160,031) $ (99,741) $ 1,189,065 $ 1,085,048 $ 725,042 $ 3,037,913
98,972 406,993 115,085 269,953 7,047 741,743
-- 3,161,542 1,564,246 8,952,194 -- 18,541,072
5,886,145 (1,574,737) 10,938,445 4,003,711 45,585,117 16,110,878
- -------------- -------------- -------------- -------------- -------------- --------------
5,825,086 1,894,057 13,806,841 14,310,906 46,317,206 38,431,606
10,468,112 14,861,097 43,742,351 37,754,331 75,720,243 82,698,118
(645,107) (661,852) (2,995,391) (1,502,937) (7,950,582) (3,075,223)
-- -- (1,970) (2,106) (2,825) (1,497)
3,851,427 21,010,215 40,370,288 66,400,722 98,601,617 115,544,417
- -------------- -------------- -------------- -------------- -------------- --------------
13,674,432 35,209,460 81,115,278 102,650,010 166,368,453 195,165,815
19,499,518 37,103,517 94,922,119 116,960,916 212,685,659 233,597,421
46,306,823 9,203,306 135,384,401 18,423,485 275,397,199 41,799,778
- -------------- -------------- -------------- -------------- -------------- --------------
$ 65,806,341 $ 46,306,823 $ 230,306,520 $ 135,384,401 $ 488,082,858 $ 275,397,199
============== ============== ============== ============== ============== ==============
35,406,663 8,211,592 94,225,984 16,524,046 187,929,868 37,292,761
7,150,215 11,711,541 27,396,149 28,874,922 45,762,044 63,199,633
(659,021) (501,980) (1,822,843) (1,088,301) (4,634,303) (2,242,658)
2,995,594 15,985,510 26,733,777 49,915,317 62,667,116 89,680,132
- -------------- -------------- -------------- -------------- -------------- --------------
44,893,451 35,406,663 146,533,067 94,225,984 291,724,725 187,929,868
============== ============== ============== ============== ============== ==============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ 1.464982 $ 1.307438 $ 1.570816 $ 1.436011 $ 1.672151 $ 1.464949
============== ============== ============== ============== ============== ==============
$ 1.367689 $ 1.241604 $ 1.466491 $ 1.363703 $ 1.561099 $ 1.391183
============== ============== ============== ============== ============== ==============
<CAPTION>
TEMPLETON ASSET
ALLOCATION FUND
-------------------------------
DIVISION 19
-------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
-------------- --------------
<C> <C>
$ 7,344,453 $ 2,826,899
2,545,812 982,063
9,560,576 11,661,872
7,709,951 13,366,704
-------------- --------------
27,160,792 28,837,538
30,628,302 61,278,823
(7,793,496) (9,457,167)
(12,050) (19,742)
(11,714,787) 41,633,946
-------------- --------------
11,107,969 93,435,860
38,268,761 122,273,398
316,874,285 194,600,887
-------------- --------------
$ 355,143,046 $ 316,874,285
============== ==============
196,150,946 137,384,670
17,661,032 38,574,901
(5,080,712) (5,822,716)
(6,054,553) 26,014,091
-------------- --------------
202,676,713 196,150,946
============== ==============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997
-------------- --------------
<S> <C>
$ 1.750749 $ 1.613943
============== ==============
$ 1.527392 $ 1.432259
============== ==============
</TABLE>
<PAGE> 19
================================================================================
18 FINANCIAL STATEMENTS (Unaudited)
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
ASSET ALLOCATION
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,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ............................................ $ 1,907,775 $ 3,768,356 $ 2,177,574 $ 3,011,918
Net realized gain (loss) on investments .......................... 1,707,088 5,941,975 17,910 713,048
Capital gains distributions from mutual funds .................... -- 10,546,782 -- 7,375,024
Net unrealized appreciation (depreciation)
of investments during the period .............................. 17,864,731 14,486,554 13,152,172 3,998,391
------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from operations . 21,479,594 34,743,667 15,347,656 15,098,381
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 7,642,146 11,497,764 48,919,696 51,882,204
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (6,332,182) (10,611,952) (4,067,899) (2,456,686)
Annuity benefit payments ......................................... (4,652) (8,301) (617) (68)
Amounts transferred (to) from VALIC general account .............. (1,140,839) (24,272,661) 66,298,910 66,331,198
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ..................... 164,473 (23,395,150) 111,150,090 115,756,648
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .......................... 21,644,067 11,348,517 126,497,746 130,855,029
NET ASSETS:
Beginning of period .............................................. 184,577,992 173,229,475 156,044,547 25,189,518
------------- ------------- ------------- -------------
End of period .................................................... $ 206,222,059 $ 184,577,992 $ 282,542,293 $ 156,044,547
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 57,307,351 65,292,617 116,429,781 22,866,634
Purchase payments ................................................ 2,195,457 3,898,053 33,580,337 42,072,769
Surrenders ....................................................... (1,859,027) (3,591,047) (2,712,413) (1,913,812)
Transfers - interdivision and (to) from VALIC general account .... (263,771) (8,292,272) 47,339,924 53,404,190
------------- ------------- ------------- -------------
Accumulation units end of period ................................. 57,380,010 57,307,351 194,637,629 116,429,781
============= ============= ============= =============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Accumulation unit value .......................................... $ 3.592302 $ 3.219282 $ 1.450823 $ 1.340109
============= ============= ============= =============
Annuity unit value assuming a 3.5% discount factor ............... $ 2.162416 $ 1.971210 $ 1.354468 $ 1.272630
============= ============= ============= =============
</TABLE>
<PAGE> 20
================================================================================
SEPARATE ACCOUNT A 19
================================================================================
<TABLE>
<CAPTION>
AGSPC
INTERNATIONAL GOVERNMENT AGSPC
BOND FUND CAPITAL CONSERVATION FUND
- --------------------------------- --------------------------------- ---------------------------------
DIVISION 13 DIVISION 1 DIVISION 7
- --------------------------------- --------------------------------- ---------------------------------
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,
1998 1997 1998 1997 1998 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ (799,144) $ 4,595,764 $ 167,943 $ 344,608 $ 1,516,042 $ 2,913,560
(2,454,751) (3,911,328) 14,389 23,005 (11,936) (805,486)
-- 136,607 -- -- -- --
6,455,010 (11,068,351) 39,740 90,579 462,493 1,739,391
- --------------- --------------- --------------- --------------- --------------- ---------------
3,201,115 (10,247,308) 222,072 458,192 1,966,599 3,847,465
- --------------- --------------- --------------- --------------- --------------- ---------------
14,073,495 40,582,861 53,750 366,816 3,930,913 7,324,860
(3,528,732) (6,757,210) (168,543) (389,473) (1,742,681) (3,026,469)
(1,063) (274) (227) (526) -- --
(26,014,881) (35,550,483) (137,479) (509,353) (727,871) (8,016,607)
- --------------- --------------- --------------- --------------- --------------- ---------------
(15,471,181) (1,725,106) (252,499) (532,536) 1,460,361 (3,718,216)
- --------------- --------------- --------------- --------------- --------------- ---------------
(12,270,066) (11,972,414) (30,427) (74,344) 3,426,960 129,249
166,199,757 178,172,171 6,427,526 6,501,870 55,418,728 55,289,479
- --------------- --------------- --------------- --------------- --------------- ---------------
$ 153,929,691 $ 166,199,757 $ 6,397,099 $ 6,427,526 $ 58,845,688 $ 55,418,728
=============== =============== =============== =============== =============== ===============
111,480,591 112,601,593 1,831,961 1,991,536 28,242,598 30,286,494
9,624,430 27,009,353 14,923 109,285 1,944,530 3,840,755
(2,467,307) (4,696,042) (47,455) (116,952) (889,972) (1,555,673)
(17,351,367) (23,434,313) (38,641) (151,908) (338,894) (4,328,978)
- --------------- --------------- --------------- --------------- --------------- ---------------
101,286,347 111,480,591 1,760,788 1,831,961 28,958,262 28,242,598
=============== =============== =============== =============== =============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 1.519259 $ 1.490645 $ 3.630414 $ 3.505970 $ 2.032086 $ 1.962239
=============== =============== =============== =============== =============== ===============
$ 1.205492 $ 1.203136 $ 1.896888 $ 1.863379 $ 1.327229 $ 1.303657
=============== =============== =============== =============== =============== ===============
<CAPTION>
AGSPC
GOVERNMENT SECURITIES
FUND
- ---------------------------------
DIVISION 8
- ---------------------------------
FOR THE FOR THE
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
- --------------- ---------------
<C> <C>
$ 2,140,280 $ 4,230,305
34,619 (985,278)
-- --
950,618 3,130,717
- --------------- ---------------
3,125,517 6,375,744
- --------------- ---------------
6,255,565 12,424,460
(2,166,746) (3,958,609)
-- --
(2,107,553) (12,246,246)
- --------------- ---------------
1,981,266 (3,780,395)
- --------------- ---------------
5,106,783 2,595,349
88,167,288 85,571,939
- --------------- ---------------
$ 93,274,071 $ 88,167,288
=============== ===============
45,034,894 47,130,169
3,396,714 6,646,726
(1,124,850) (2,143,349)
(1,273,540) (6,598,652)
- --------------- ---------------
46,033,218 45,034,894
=============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997
- --------------- ---------------
<S> <C>
$ 2.026234 $ 1.957755
=============== ===============
$ 1.323407 $ 1.300676
=============== ===============
</TABLE>
<PAGE> 21
================================================================================
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,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ............................................ $ 772,073 $ 506,655 $ 881,022 $ 567,564
Net realized gain (loss) on investments .......................... 28,154 36,716 341,629 94,335
Capital gains distributions from mutual funds .................... 256,935 156,984 -- --
Net unrealized appreciation (depreciation)
of investments during the period .............................. 415,819 643,127 1,019,814 1,066,785
------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from operations . 1,472,981 1,343,482 2,242,465 1,728,684
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................ 8,351,658 6,013,744 10,697,913 6,985,216
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (879,219) (167,812) (714,555) (265,787)
Annuity benefit payments ......................................... -- -- (273) (176)
Amounts transferred (to) from VALIC general account .............. 9,569,803 9,719,778 18,957,483 10,813,576
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ..................... 17,042,242 15,565,710 28,940,568 17,532,829
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .......................... 18,515,223 16,909,192 31,183,033 19,261,513
NET ASSETS:
Beginning of period .............................................. 20,440,049 3,530,857 23,638,214 4,376,701
------------- ------------- ------------- -------------
End of period .................................................... $ 38,955,272 $ 20,440,049 $ 54,821,247 $ 23,638,214
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of period ........................... 17,371,407 3,370,441 20,041,920 4,174,369
Purchase payments ................................................ 6,786,702 5,633,849 8,778,233 6,619,458
Surrenders ....................................................... (830,355) (151,626) (678,889) (227,789)
Transfers - interdivision and (to) from VALIC general account .... 8,276,003 8,518,743 15,965,983 9,475,882
------------- ------------- ------------- -------------
Accumulation units end of period ................................. 31,603,757 17,371,407 44,107,247 20,041,920
============= ============= ============= =============
<CAPTION>
June 30, 1998 Dec. 31, 1997 June 30, 1998 Dec. 31, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value .......................................... $ 1.231417 $ 1.176649 $ 1.242144 $ 1.178938
============= ============= ============= =============
Annuity unit value assuming a 3.5% discount factor ............... $ 1.149628 $ 1.117400 $ 1.159647 $ 1.119575
============= ============= ============= =============
</TABLE>
<PAGE> 22
================================================================================
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,
1998 1997 1998 1997
- --------------- --------------- --------------- ---------------
<S> <C> <C> <C>
$ 90,233 $ 188,513 $ 3,449,233 $ 5,293,164
- --------------- --------------- --------------- ---------------
-- -- -- --
-- -- -- --
-- -- -- --
- --------------- --------------- --------------- ---------------
90,233 188,513 3,449,233 5,293,164
- --------------- --------------- --------------- ---------------
38,747 123,738 36,629,364 58,442,609
(123,880) (277,223) (13,539,313) (16,317,039)
-- -- (800) (1,592)
30,632 (334,772) 20,771,897 (27,271,186)
- --------------- --------------- --------------- ---------------
(54,501) (488,257) 43,861,148 14,852,792
- --------------- --------------- --------------- ---------------
35,732 (299,744) 47,310,381 20,145,956
4,579,757 4,879,501 140,904,582 120,758,626
- --------------- --------------- --------------- ---------------
$ 4,615,489 $ 4,579,757 $ 188,214,963 $ 140,904,582
=============== =============== =============== ===============
1,931,439 2,142,534 84,182,521 75,124,095
16,221 53,405 19,900,858 35,256,772
(51,606) (119,264) (7,678,583) (10,205,685)
11,326 (145,236) 13,755,026 (15,992,661)
- --------------- --------------- --------------- ---------------
1,907,380 1,931,439 110,159,822 84,182,521
=============== =============== =============== ===============
<CAPTION>
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
- --------------- --------------- --------------- ---------------
<S> <C> <C> <C>
$ 2.419805 $ 2.371163 $ 1.708039 $ 1.673590
=============== =============== =============== ===============
$ 1.412122 $ 1.407542 $ 1.103386 $ 1.099730
=============== =============== =============== ===============
</TABLE>
<PAGE> 23
================================================================================
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 Asset Allocation 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)
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> 24
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SEPARATE ACCOUNT A 23
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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, 0.23%. On May 1, 1998, VALIC elected to
voluntarily reduce the Separate Account charge to Divisions 22 and 23 by 0.25%,
on an annual basis. VALIC may withdraw this voluntary expense reduction at any
time.
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, 1998 and the year ended December 31, 1997, VALIC
reduced expenses of Division 10B by $49,051 and $85,996, 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 $2,650,380 and $4,510,903 for the six
months ended June 30, 1998, and the year ended December 31, 1997, respectively.
VALIC received surrender charges of $2,126,736 and $2,769,370 for the six
months ended June 30, 1998 and the year ended December 31, 1997, respectively.
In addition, VALIC received $63,727 and $7,426 for the year ended December 31,
1997, in sales load on variable annuity purchase payments for Divisions 10A and
10B, respectively. VALIC received $29,440 and $3,229 for the six months ended
June 30, 1998, 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, 1998:
<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 12,945,650 $ 12.06 $ 156,124,618 $ 144,546,272 $ 11,578,346
Putnam Global Growth Fund................ 28 8,496,492 11.99 101,872,594 96,227,302 5,645,292
Templeton Foreign Fund................... 32 21,522,259 10.21 219,742,274 231,556,120 (11,813,846)
Templeton International Fund............. 20 38,796,097 21.65 839,935,570 677,767,404 162,168,166
AGSPC Science & Technology Fund.......... 17 46,829,639 23.27 1,089,725,506 913,711,857 176,013,649
AGSPC Small Cap Index Fund............... 14 13,791,543 17.92 247,144,384 197,461,644 49,682,740
Dreyfus Small Cap Portfolio.............. 18 15,020,855 60.54 909,362,790 707,264,079 202,098,711
Putnam New Opportunities Fund............ 26 4,976,648 57.68 287,052,889 233,794,496 53,258,393
Putnam OTC & Emerging Growth Fund........ 27 6,983,295 18.81 131,355,760 110,078,999 21,276,761
AGSPC Growth Fund........................ 15 49,332,889 23.63 1,165,736,555 777,544,903 388,191,652
AGSPC MidCap Index Fund.................. 4 31,838,222 25.42 809,327,449 531,084,698 278,242,751
American Century - Twentieth Century
Ultra Fund............................ 31 6,740,679 33.85 228,171,782 208,929,965 19,241,817
Founders Growth Fund..................... 30 14,977,573 20.65 309,286,805 276,003,015 33,283,790
AGSPC Growth & Income Fund............... 16 13,660,846 20.76 283,599,263 196,242,123 87,357,140
AGSPC Social Awareness Fund.............. 12 15,445,699 23.03 355,714,374 265,126,128 90,588,246
AGSPC Stock Index Fund................... 10A,B,C,D 101,897,213 34.70 3,535,832,893 1,832,659,556 1,703,173,337
Neuberger&Berman Guardian Trust.......... 29 3,387,139 19.44 65,846,538 61,186,679 4,659,859
Scudder Growth and Income Fund........... 21 7,811,656 29.51 230,522,025 215,495,151 15,026,874
Vanguard/Windsor II...................... 24 14,951,682 32.66 488,321,465 426,842,838 61,478,627
Templeton Asset Allocation Fund.......... 19 15,422,416 23.04 355,332,491 303,205,834 52,126,657
AGSPC Asset Allocation Fund.............. 5 14,340,928 14.39 206,366,059 165,538,487 40,827,572
Vanguard/Wellington Fund................. 25 8,942,999 31.63 282,866,578 266,160,087 16,706,491
AGSPC Intl Government Bond Fund.......... 13 13,518,012 11.40 154,105,422 158,467,345 (4,361,923)
AGSPC Capital Conservation Fund.......... 1 & 7 6,749,012 9.69 65,397,907 63,956,727 1,441,180
AGSPC Government Securities Fund......... 8 9,198,977 10.15 93,369,609 90,798,790 2,570,819
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Portfolio......... 22 4,190,099 9.36 39,219,289 38,171,750 1,047,539
Long-Term U.S. Treasury Portfolio .... 23 5,016,594 10.95 54,931,640 52,811,387 2,120,253
AGSPC Money Market Fund.................. 2 & 6 192,827,570 1.00 192,827,570 192,827,570 --
-------------------------------------------------------
$12,899,092,099 $ 9,435,461,206 $ 3,463,630,893
-------------------------------------------------------
</TABLE>
<PAGE> 25
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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, 1998, 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.................................... $ 22,067,993 $ 39,301,041
Putnam Global Growth Fund Division 28............................................ 29,796,169 476,914
Templeton Foreign Fund Division 32............................................... 37,255,087 1,620,699
Templeton International Fund Division 20......................................... 120,644,448 66,818,005
AGSPC Science & Technology Fund Division 17...................................... 84,093,917 53,113,896
AGSPC Small Cap Index Fund Division 14........................................... 18,718,205 12,097,506
Dreyfus Small Cap Portfolio Division 18.......................................... 29,898,380 21,608,647
Putnam New Opportunities Fund Division 26........................................ 86,047,951 38,948
Putnam OTC & Emerging Growth Fund Division 27.................................... 18,978,442 2,269,265
AGSPC Growth Fund Division 15.................................................... 69,915,711 7,613,610
AGSPC MidCap Index Fund Division 4............................................... 33,203,869 13,984,145
American Century - Twentieth Century Ultra Fund Division 31...................... 68,459,208 14,717
Founders Growth Fund Division 30................................................. 97,703,431 -
AGSPC Growth & Income Fund Division 16........................................... 9,624,803 8,125,814
AGSPC Social Awareness Fund Division 12.......................................... 67,352,353 124,699
AGSPC Stock Index Fund:
Division 10A.................................................................. 7,174,791 25,886,769
Division 10B.................................................................. 667,157 2,141,514
Division 10C.................................................................. 208,231,341 10,005,594
Division 10D.................................................................. 692,436 3,565,405
Neuberger & Berman Guardian Trust Division 29.................................... 14,018,710 415,650
Scudder Growth and Income Fund Division 21....................................... 84,755,249 407,998
Vanguard/Windsor II Division 24.................................................. 167,646,460 31,896
Templeton Asset Allocation Fund Division 19...................................... 36,748,246 8,475,629
AGSPC Asset Allocation Fund Division 5........................................... 9,025,825 6,677,554
Vanguard/Wellington Fund Division 25............................................. 114,077,596 135,385
AGSPC International Government Bond Fund Division 13............................. 15,109,277 31,194,037
AGSPC Capital Conservation Fund:
Division 1.................................................................... 329,830 412,646
Division 7.................................................................... 8,952,866 5,770,704
AGSPC Government Securities Fund Division 8...................................... 17,649,756 13,474,587
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Portfolio Division 22..................................... 19,420,402 1,063,516
Long-Term U.S. Treasury Portfolio Division 23................................. 34,203,126 4,566,426
AGSPC Money Market Fund:
Division 2.................................................................... 1,612,084 1,535,748
Division 6.................................................................... 185,185,859 131,621,242
---------------- ----------------
Total $ 1,719,260,978 $ 474,590,206
================ ================
</TABLE>
<PAGE> 26
THE VARIABLE ANNUITY LIVE INSURANCE COMPANY [BULK RATE
SEPARATE ACCOUNT A INDICIA]
P.O. Box 3206
Houston, Texas 77253-3206
VA 3479 VER 6/98 [RECYCLE LOGO]
