<PAGE> 1
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CHAIRMAN'S LETTER 1
================================================================================
TO OUR PARTICIPANTS:
We are pleased to present the December 31, 1998, Annual Report to Contract
Owners for Separate Account A of The Variable Annuity Life Insurance Company. A
summary of the change in unit value for each fund and each product series
(Portfolio Director 1, Portfolio Director 2, Portfolio Director Plus,
Independence Plus, Group Unit Purchase and Impact) appears on pages two and
three.
1998 was a volatile year for investors around the world. Problems that began in
Asia in late 1997 circled the globe throughout 1998. Central banks, fearing the
worst lowered interest rates in the fourth quarter of 1998. The result was an
unexpected and dramatic rise in stock and bond prices worldwide.
The year was marked by extreme flight to quality. Investors general preference
was for larger cap growth in stocks over small cap value stocks, and U.S.
Treasury Securities.
The Standard & Poor's 500 Index, dominated by large cap, high-growth technology
and global consumer product companies, had a total return of 28.58%. The top 15
stocks alone accounted for half of the performance. It was a difficult year for
active equity fund managers, as almost 90% of the active managers lagged the S&P
500 Index returns. Also, the S&P 500 Index returns for the year outperformed
over 71% of all U.S.-traded common stocks. The medium to small-cap companies
lagged, with the large companies S&P MidCap 400 Index returning 6.27% and the
S&P SmallCap 600 Index, producing a negative 1.31%.
There was a greater variability in returns between growth and value components
of the equity indices. In the large capitalization arena, S&P 500/BARRA Growth
Index returned an outstanding 42.16%, while the S&P 500/BARRA Value Index
returned 14.67%. In the mid-cap sector, the S&P 400/BARRA Growth Index returned
34.86% compared to the S&P 400/BARRA Value Index return of 4.67%. However, the
small cap equity returns experienced wide variability, with the S&P SmallCap
600/BARRA Growth Index returning 2.29%, and the S&P SmallCap 600/BARRA Value
returning a negative 5.06%.
Globally, the pattern of investment results was very similar to the U.S. equity
returns. The MSCI world Index returned 22%. The top quintile of growth stocks
outperformed the bottom quintile of value stocks by over two times with returns
of 48% and 17%, respectively.
The yield on the 30 year Treasury bond opened the year at 5.92% and declined to
5.10% by the end of 1998, as the Federal Reserve lowered the federal fund rate
three times between September 29 and November 17, leaving the target rate at
4.75%.
For the year, the bond market return, reflected in the Lehman Aggregate Bond
Index, was 8.69% with the long U.S. Treasury Index showing the highest return of
13.52%, followed by the Long Corporate AA/Better Index 10.52%, and the High
Yield Index with 1.60%. Throughout the developed world international bond prices
appreciated as yields declined.
While international markets outside of North America and Europe remain
unsettled, the U.S. economy is experiencing unprecedented prosperity and growth.
Furthermore, with worldwide inflation rates low, and the Federal Reserve weary
of weakness in Asia and emerging markets, it appears that we can expect a
continuation of the current stable rate environment.
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
The Variable Annuity Life Insurance Company
February 18, 1999
This report is not authorized for distribution as advertising or sales
literature. This report is published exclusively for the information of the
variable annuity contract owners of the Company in accordance with section 30
(d) of the Investment Company Act of 1940.
"S&P 500(R)" and "Standard & Poor's MidCap 400 Index" are trademarks of Standard
& Poor's Corporation (S&P). The Stock Index Fund and MidCap Index Fund are not
sponsored, endorsed, sold or promoted by S&P and S&P makes no representation
regarding the advisability of investing in the funds. The Russell 2000(R) Index
is a trademark / service mark of the Frank Russell Company. Russell(TM) is a
trademark of the Frank Russell Company.
<PAGE> 2
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2 CHAIRMAN'S LETTER
================================================================================
<TABLE>
<CAPTION>
GROUP PORTFOLIO
UNIT INDEPENDENCE DIRECTOR
PURCHASE IMPACT PLUS 1
DIVISION DIVISION DIVISION DIVISION
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INTERNATIONAL GROWTH
AGSPC International Equities Fund ..................................... -- -- 11 11
Putnam Global Growth Fund ............................................. -- -- -- --
Templeton Foreign Fund ................................................ -- -- -- --
Templeton International Fund .......................................... -- -- -- 20
AGGRESSIVE GROWTH
AGSPC Science & Technology Fund ....................................... -- -- -- 17
AGSPC Small Cap Index Fund ............................................ -- -- 14 14
Dreyfus Variable Investment Fund - Small Cap Portfolio ................ -- -- 18
Putnam New Opportunities Fund ......................................... -- -- -- --
Putnam OTC & Emerging Growth Fund ..................................... -- -- -- --
GROWTH
AGSPC Growth Fund ..................................................... -- -- -- 15
AGSPC MidCap Index Fund ............................................... -- 4 4 4
American Century - Twentieth Century Ultra Fund ....................... -- -- -- --
Founders Growth Fund .................................................. -- -- -- --
GROWTH & INCOME
AGSPC Growth & Income Fund ............................................ -- -- -- 16
AGSPC Social Awareness Fund ........................................... -- -- 12 12
AGSPC Stock Index Fund ................................................ 10A,10B 10D 10C 10C
Neuberger Berman Guardian Trust ....................................... -- -- -- --
Scudder Growth and Income Fund ........................................ -- -- -- --
Vanguard Windsor II Fund .............................................. -- -- -- --
BALANCED GROWTH - INTERNATIONAL
Templeton Asset Allocation Fund ....................................... -- -- -- 19
BALANCED GROWTH - DOMESTIC
AGSPC Asset Allocation Fund ........................................... -- 5 5 5
Vanguard Wellington Fund .............................................. -- -- -- --
CURRENT INCOME
AGSPC International Government Bond Fund .............................. -- -- 13 13
CURRENT INCOME & CAPITAL PRESERVATION
AGSPC Capital Conservation Fund ....................................... -- 1 7 7
AGSPC Government Securities Fund ...................................... -- -- 8 8
Vanguard Fixed Income Securities Fund - Long-Term Corporate Fund ...... -- -- -- --
Vanguard Fixed Income Securities Fund - Long-Term Treasury Fund ....... -- -- -- --
LIQUIDITY & CAPITAL PRESERVATION
AGSPC Money Market Fund ............................................... -- 2 6 6
<CAPTION>
YEAR TO DATE
TOTAL RETURNS
PORTFOLIO PORTFOLIO FOR YEAR ENDING
DIRECTOR DIRECTOR DECEMBER 31,
2 PLUS ----------------------
DIVISION DIVISION 1998 1997
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
INTERNATIONAL GROWTH
AGSPC International Equities Fund ..................................... -- 11 17.57% 1.18%
Putnam Global Growth Fund ............................................. 28 28 27.48 12.20
Templeton Foreign Fund ................................................ 32 32 (5.82) 5.57
Templeton International Fund .......................................... -- 20 7.95 12.54
AGGRESSIVE GROWTH
AGSPC Science & Technology Fund ....................................... 17 17 40.71 1.57
AGSPC Small Cap Index Fund ............................................ -- 14 (2.92) 21.18
Dreyfus Variable Investment Fund - Small Cap Portfolio ................ -- 18 (4.51) 15.37
Putnam New Opportunities Fund ......................................... 26 26 23.12 21.31
Putnam OTC & Emerging Growth Fund ..................................... 27 27 9.87 9.08
GROWTH
AGSPC Growth Fund ..................................................... 15 15 16.96 19.80
AGSPC MidCap Index Fund ............................................... -- 4 17.80 30.45
American Century - Twentieth Century Ultra Fund ....................... 31 31 33.14 21.74
Founders Growth Fund .................................................. 30 30 23.76 25.25
GROWTH & INCOME
AGSPC Growth & Income Fund ............................................ -- 16 13.41 22.60
AGSPC Social Awareness Fund ........................................... 12 12 26.03 32.52
AGSPC Stock Index Fund ................................................ 10C 10C 27.14 31.77
Neuberger Berman Guardian Trust ....................................... 29 29 1.34 16.66
Scudder Growth and Income Fund ........................................ 21 21 4.99 28.80
Vanguard Windsor II Fund .............................................. 24 24 14.90 30.70
BALANCED GROWTH - INTERNATIONAL
Templeton Asset Allocation Fund ....................................... -- 19 5.07 14.07
BALANCED GROWTH - DOMESTIC
AGSPC Asset Allocation Fund ........................................... -- 5 17.19 21.40
Vanguard Wellington Fund .............................................. 25 25 10.65 21.65
CURRENT INCOME
AGSPC International Government Bond Fund .............................. 13 13 15.92 (5.79)
CURRENT INCOME & CAPITAL PRESERVATION
AGSPC Capital Conservation Fund ....................................... -- 7 6.30 7.49
AGSPC Government Securities Fund ...................................... -- 8 7.86 7.83
Vanguard Fixed Income Securities Fund - Long-Term Corporate Fund ...... 22 22 8.04 12.32
Vanguard Fixed Income Securities Fund - Long-Term Treasury Fund ....... 23 23 11.82 12.44
LIQUIDITY & CAPITAL PRESERVATION
AGSPC Money Market Fund ............................................... 6 6 4.12 4.13
</TABLE>
The total returns displayed show value after all management, administration fees
and fund expenses and do not include potential sales charges or maintenance
fees, if applicable. For total return information over a longer period, see the
Portfolio Director 1 and 2 prospectuses. The performance shown represents past
performance. The principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Past performance does not guarantee future returns.
<PAGE> 3
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CHAIRMAN'S LETTER 3
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<TABLE>
<CAPTION>
Group Portfolio Portfolio
Unit Independence Director Director
Purchase Impact Plus 1 2
- ------------------------------------------------------------------------------------------------------------------------------------
Division Division Division Division Division
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ACTIVELY MANAGED EQUITY FUNDS
American General International Growth Fund .............. -- -- -- -- --
American General Large Cap Growth Fund .................. -- -- -- -- --
American General Mid Cap Growth Fund .................... -- -- -- -- --
American General Small Cap Growth Fund .................. -- -- -- -- --
American General INternational Value Fund ............... -- -- -- -- --
American General Large Cap Value Fund ................... -- -- -- -- --
American General Mid Cap Value Fund ..................... -- -- -- -- --
American General Small Cap Value Fund ................... -- -- -- -- --
T. Rowe Price Small-Cap Stock Fund ...................... -- -- -- -- --
SPECIALTY EQUITY FUND
American General Socially Responsible Fund .............. -- -- -- -- --
BALANCED FUNDS
American General Balanced Fund .......................... -- -- -- -- --
INCOME FUNDS
American General High Yield Bond Fund ................... -- -- -- -- --
American General Strategic Bond Fund .................... -- -- -- -- --
American General Domestic Bond Fund ..................... -- -- -- -- --
American General Core Bond Fund ......................... -- -- -- -- --
MONEY MARKET FUND
American General Money Market Fund ...................... -- -- -- -- --
LIFESTYLE FUNDS
American General Growth Lifestyle Fund .................. -- -- -- -- --
American General Moderate Growth Lifestyle Fund ......... -- -- -- -- --
American General Conservative Growth Lifestyle Fund ..... -- -- -- -- --
Vanguard LifeStrategy Growth ............................ -- -- -- -- --
Vanguard LifeStrategy Moderate Growth ................... -- -- -- -- --
Vanguard LifeStrategy Conservative Growth ............... -- -- -- -- --
<CAPTION>
Year To Date
Total Returns
Portfolio For Year Ending
Director December 31,
Plus ------------------------
Division 1998 1997
--------- ---------- ----------
<S> <C> <C> <C>
ACTIVELY MANAGED EQUITY FUNDS
American General International Growth Fund .............. 33 5.17(a) N/A
American General Large Cap Growth Fund .................. 39 24.08(a) N/A
American General Mid Cap Growth Fund .................... 37 34.77(a) N/A
American General Small Cap Growth Fund .................. 35 34.94(a) N/A
American General International Value Fund ............... 34 14.99(a) N/A
American General Large Cap Value Fund ................... 40 24.66(a) N/A
American General Mid Cap Value Fund ..................... 38 25.47(a) N/A
American General Small Cap Value Fund ................... 36 16.53(a) N/A
T. Rowe Price Small-Cap Stock Fund ...................... 51 14.10(b) N/A
SPECIALTY EQUITY FUND
American General Socially Responsible Fund .............. 41 27.78(a) N/A
BALANCED FUNDS
American General Balanced Fund .......................... 42 17.01(a) N/A
INCOME FUNDS
American General High Yield Bond Fund ................... 60 5.31(a) N/A
American General Strategic Bond Fund .................... 59 4.99(a) N/A
American General Domestic Bond Fund ..................... 43 4.44(a) N/A
American General Core Bond Fund ......................... 58 2.92(a) N/A
MONEY MARKET FUND
American General Money Market Fund ...................... 44 1.33(a) N/A
LIFESTYLE FUNDS
American General Growth Lifestyle Fund .................. 48 19.25(a) N/A
American General Moderate Growth Lifestyle Fund ......... 49 18.54(a) N/A
American General Conservative Growth Lifestyle Fund ..... 50 16.20(a) N/A
Vanguard LifeStrategy Growth ............................ 52 16.81(b) N/A
Vanguard LifeStrategy Moderate Growth ................... 53 12.59(b) N/A
Vanguard LifeStrategy Conservative Growth ............... 54 8.40(b) N/A
</TABLE>
(a) Since August 26, 1998, initial capitalizations of Fund. See Note C.
(b) Since September 22, 1998, inception of the Division.
The total returns displayed show value after all management, administration fees
and fund expenses and do not include potential sales charges or maintenance
fees, if applicable. For total return information over a longer period, see the
Portfolio Director 1 and 2 prospectuses. The performance shown represents past
performance. The principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Past performance does not guarantee future returns.
<PAGE> 4
[Intentionally Left Blank]
<PAGE> 5
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FINANCIAL STATEMENTS 5
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<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
December 31, 1998
ASSETS: ALL DIVISIONS
----------------
<S> <C>
Total investment in shares of mutual funds, at market (cost $11,178,484,452) .................. $ 14,587,138,409
Balance due from VALIC general account ........................................................ 4,821,209
----------------
NET ASSETS .................................................................................... 14,591,959,618
================
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts
(Net of applicable contract loans -- partial withdrawals with right of reinvestment) ....... $ 14,481,888,528
Reserves for annuity contracts on benefit ..................................................... 22,530,083
Capital surplus (Note C) ...................................................................... 87,541,007
----------------
TOTAL CONTRACT OWNER RESERVES AND CAPITAL SURPLUS ............................................. $ 14,591,959,618
================
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the year ended December 31, 1998
INVESTMENT INCOME: ALL DIVISIONS
----------------
<S> <C>
Dividends from mutual funds ................................................................... $ 161,161,461
----------------
EXPENSES:
Mortality and expense risk charge ............................................................. 133,464,532
Reimbursement of expenses (Note C) ............................................................ (5,204,060)
----------------
Total expenses ................................................................................ 128,260,472
----------------
NET INVESTMENT INCOME ......................................................................... 32,900,989
----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments .............................................................. 256,062,773
Capital gains distributions from mutual funds ................................................. 599,950,475
Net unrealized appreciation of investments during the period .................................. 1,171,591,133
----------------
Net realized and unrealized gain on investments ............................................... 2,027,604,381
----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............................................. $ 2,060,505,370
================
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS ALL DIVISIONS
------------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................................................. $ 32,900,989 $ 30,758,096
Net realized gain on investments ...................................................... 256,062,773 161,505,567
Capital gains distributions from mutual funds ......................................... 599,950,475 289,703,358
Net unrealized appreciation of investments during the period .......................... 1,171,591,133 1,001,756,337
---------------- ----------------
Increase in net assets resulting from operations ................................... 2,060,505,370 1,483,723,358
---------------- ----------------
PRINCIPAL TRANSACTIONS:
Purchase payments ..................................................................... 2,363,611,528 1,798,552,034
Surrenders of accumulation units by terminations, withdrawals, and maintenance fees ... (576,063,916) (328,105,329)
Annuity benefit payments .............................................................. (2,688,910) (2,273,125)
Amounts transferred from VALIC general account ........................................ 419,281,138 518,857,110
---------------- ----------------
Increase in net assets resulting from principal transactions ....................... 2,204,139,840 1,987,030,690
---------------- ----------------
Total increase in net assets .......................................................... 4,264,645,210 3,470,754,048
NET ASSETS:
Beginning of period ................................................................... 10,327,314,408 6,856,560,360
---------------- ----------------
End of period ......................................................................... $ 14,591,959,618 $ 10,327,314,408
================ ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 6
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6 FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
AGSPC PUTNAM
INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
EQUITIES GROWTH FOREIGN INTERNATIONAL
FUND - FUND - FUND - FUND -
DIVISION 11 DIVISION 28 DIVISION 32 DIVISION 20
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ....................... $ 148,718,766 $ 162,850,092 $ 218,291,648 $ 769,418,093
Balance due (to) from VALIC general account ........................... (444,384) 244,949 176,625 78,110
------------- ------------- ------------- -------------
NET ASSETS ............................................................ $ 148,274,382 $ 163,095,041 $ 218,468,273 $ 769,496,203
============= ============= ============= =============
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans -- partial withdrawals with right of reinvestment) ... $ 148,099,853 $ 163,052,748 $ 218,427,558 $ 769,292,514
Reserves for annuity contracts on benefit ............................. 174,529 42,293 40,715 203,689
Capital Surplus (Note C) .............................................. -- -- -- --
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES AND CAPITAL SURPLUS ..................... $ 148,274,382 $ 163,095,041 $ 218,468,273 $ 769,496,203
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
AMERICAN CENTURY -
TWENTIETH FOUNDERS AGSPC AGSPC
CENTURY GROWTH GROWTH & SOCIAL
ULTRA FUND - FUND - INCOME FUND - AWARENESS FUND -
DIVISION 31 DIVISION 30 DIVISION 16 DIVISION 12
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ..................... $ 366,344,764 $ 412,424,559 $ 285,113,626 $ 434,890,057
Balance due (to) from VALIC general account ......................... 495,565 496,361 114,285 251,402
------------- ------------- ------------- -------------
NET ASSETS .......................................................... $ 366,840,329 $ 412,920,920 $ 285,227,911 $ 435,141,459
============= ============= ============= =============
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans -- partial withdrawals with right of reinvestment).. $ 366,789,363 $ 412,850,610 $ 285,171,395 $ 435,010,800
Reserves for annuity contracts on benefit ........................... 50,966 70,310 56,516 130,659
Capital Surplus (Note C) ............................................ -- -- -- --
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES AND CAPITAL SURPLUS ................... $ 366,840,329 $ 412,920,920 $ 285,227,911 $ 435,141,459
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
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 ...................... $ 324,138,930 $ 227,493,681 $ 406,576,731 $ 169,141,402
Balance due (to) from VALIC general account .......................... (10,923) 41,476 (66,066) 66,807
------------- ------------- ------------- -------------
NET ASSETS ........................................................... $ 324,128,007 $ 227,535,157 $ 406,510,665 $ 169,208,209
============= ============= ============= =============
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans -- partial withdrawals with right of reinvestment) .. $ 323,829,380 $ 227,370,013 $ 406,457,643 $ 169,153,179
Reserves for annuity contracts on benefit ............................ 298,627 165,144 53,022 55,030
Capital Surplus (Note C) ............................................. -- -- -- --
------------- ------------- ------------- -------------
TOTAL CONTRACT OWNER RESERVES AND CAPITAL SURPLUS .................... $ 324,128,007 $ 227,535,157 $ 406,510,665 $ 169,208,209
============= ============= ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
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SEPARATE ACCOUNT A 7
================================================================================
<TABLE>
<CAPTION>
AGSPC AGSPC DREYFUS VARIABLE PUTNAM PUTNAM OTC & AGSPC
SCIENCE & SMALL CAP INVESTMENT NEW EMERGING AGSPC MIDCAP
TECHNOLOGY INDEX FUND - 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>
$1,357,008,368 $ 225,671,866 $ 801,729,449 $ 411,790,940 $ 142,153,064 $1,213,041,349 $ 850,345,675
233,960 (1,195) 277,466 622,014 158,931 219,257 159,959
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$1,357,242,328 $ 225,670,671 $ 802,006,915 $ 412,412,954 $ 142,311,995 $1,213,260,606 $ 850,505,634
============== ============== ============== ============== ============== ============== ==============
$1,356,787,386 $ 225,553,498 $ 801,796,471 $ 412,396,437 $ 142,270,946 $1,212,743,548 $ 850,117,314
454,942 117,173 210,444 16,517 41,049 517,058 388,320
-- -- -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$1,357,242,328 $ 225,670,671 $ 802,006,915 $ 412,412,954 $ 142,311,995 $1,213,260,606 $ 850,505,634
============== ============== ============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
NEUBERGER
BERMAN SCUDDER VANGUARD
AGSPC STOCK INDEX FUND GUARDIAN GROWTH AND WINDSOR II
- ------------------------------------------------------------------ TRUST - INCOME FUND - FUND -
DIVISION 10A DIVISION 10B DIVISION 10C DIVISION 10D DIVISION 29 DIVISION 21 DIVISION 24
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 548,095,924 $ 42,538,426 $3,335,722,002 $ 56,510,591 $ 61,347,128 $ 247,754,620 $ 651,075,950
(342,049) 10,450 1,070,137 2,453 22,721 213,888 339,032
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 547,753,875 $ 42,548,876 $3,336,792,139 $ 56,513,044 $ 61,369,849 $ 247,968,508 $ 651,414,982
============== ============== ============== ============== ============== ============== ==============
$ 533,364,910 $ 40,484,822 $3,334,328,831 $ 56,292,876 $ 61,355,625 $ 247,893,617 $ 651,232,580
14,388,965 2,064,054 2,463,308 220,168 14,224 74,891 182,402
-- -- -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 547,753,875 $ 42,548,876 $3,336,792,139 $ 56,513,044 $ 61,369,849 $ 247,968,508 $ 651,414,982
============== ============== ============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
AGSPC
GOVERNMENT VANGUARD VANGUARD
AGSPC CAPITAL CONSERVATION FUND SECURITIES LONG-TERM LONG-TERM AGSPC MONEY MARKET FUND
- ------------------------------- FUND - CORPORATE FUND - TREASURY FUND - -------------------------------
DIVISION 1 DIVISION 7 DIVISION 8 DIVISION 22 DIVISION 23 DIVISION 2 DIVISION 6
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,286,289 $ 60,017,936 $ 113,502,848 $ 59,843,445 $ 119,293,240 $ 4,184,151 $ 266,261,605
13,504 (46,396) (40,451) 121,207 (41,034) 13,336 389,999
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 6,299,793 $ 59,971,540 $ 113,462,397 $ 59,964,652 $ 119,252,206 $ 4,197,487 $ 266,651,604
============== ============== ============== ============== ============== ============== ==============
$ 6,295,147 $ 59,971,540 $ 113,462,397 $ 59,964,652 $ 119,238,598 $ 4,197,487 $ 266,634,790
4,646 -- -- -- 13,608 -- 16,814
-- -- -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 6,299,793 $ 59,971,540 $ 113,462,397 $ 59,964,652 $ 119,252,206 $ 4,197,487 $ 266,651,604
============== ============== ============== ============== ============== ============== ==============
</TABLE>
<PAGE> 8
================================================================================
8 FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
AMERICAN AMERICAN AMERICAN AMERICAN
GENERAL GENERAL GENERAL GENERAL
INTERNATIONAL INTERNATIONAL SMALL CAP SMALL CAP
GROWTH FUND - VALUE FUND - GROWTH FUND - VALUE FUND -
DIVISION 33 DIVISION 34 DIVISION 35 DIVISION 36
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ....................... $ 3,853,567 $ 4,153,036 $ 5,279,473 $ 4,500,106
Balance due to VALIC general account .................................. (2,817) -- -- --
------------ ------------ ------------ ------------
NET ASSETS ............................................................ $ 3,850,750 $ 4,153,036 $ 5,279,473 $ 4,500,106
============ ============ ============ ============
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of reinvestment) .... $ -- $ -- $ -- $ --
Reserves for annuity contracts on benefit ............................. -- -- -- --
Capital surplus (Note C) .............................................. 3,850,750 4,153,036 5,279,473 4,500,106
------------ ------------ ------------ ------------
TOTAL CONTRACT OWNER RESERVES and Capital Surplus ..................... $ 3,850,750 $ 4,153,036 $ 5,279,473 $ 4,500,106
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
AMERICAN AMERICAN AMERICAN AMERICAN
GENERAL GENERAL GENERAL GENERAL
MID CAP MID CAP LARGE CAP LARGE CAP
GROWTH FUND - VALUE FUND - GROWTH FUND - VALUE FUND -
DIVISION 37 DIVISION 38 DIVISION 39 DIVISION 40
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ...................... $ 5,475,870 $ 4,972,209 $ 3,549,043 $ 3,626,750
Balance due to VALIC general account ................................. (270) -- (1,410) --
----------- ----------- ----------- -----------
NET ASSETS ........................................................... $ 5,475,600 $ 4,972,209 $ 3,547,633 $ 3,626,750
=========== =========== =========== ===========
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of reinvestment) ... $ -- $ -- $ -- $ --
Reserves for annuity contracts on benefit ............................ -- -- -- --
Capital surplus (Note C) ............................................. 5,475,600 4,972,209 3,547,633 3,626,750
----------- ----------- ----------- -----------
TOTAL CONTRACT OWNER RESERVES and Capital Surplus .................... $ 5,475,600 $ 4,972,209 $ 3,547,633 $ 3,626,750
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS
December 31, 1998
AMERICAN AMERICAN AMERICAN AMERICAN
GENERAL SOCIALLY GENERAL GENERAL GENERAL
RESPONSIBLE BALANCED DOMESTIC MONEY MARKET
FUND - FUND - BOND FUND - FUND -
DIVISION 41 DIVISION 42 DIVISION 43 DIVISION 44
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in shares of mutual funds, at market ...................... $ 6,409,166 $ 5,868,671 $ 1,309,568 $ 5,082,478
Balance due to VALIC general account ................................. -- -- -- --
------------ ------------ ------------ ------------
NET ASSETS ........................................................... $ 6,409,166 $ 5,868,671 $ 1,309,568 $ 5,082,478
============ ============ ============ ============
CONTRACT OWNER RESERVES AND CAPITAL SURPLUS:
Reserves for redeemable annuity contracts (Net of applicable
contract loans - partial withdrawals with right of reinvestment) ... $ -- $ -- $ -- $ --
Reserves for annuity contracts on benefit ............................ -- -- -- --
Capital surplus (Note C) ............................................. 6,409,166 5,868,671 1,309,568 5,082,478
------------ ------------ ------------ ------------
TOTAL CONTRACT OWNER RESERVES and Capital Surplus .................... $ 6,409,166 $ 5,868,671 $ 1,309,568 $ 5,082,478
============ ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
================================================================================
SEPARATE ACCOUNT A 9
================================================================================
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN AMERICAN
GENERAL GENERAL GENERAL GENERAL GENERAL GENERAL T. ROWE PRICE
GROWTH MODERATE GROWTH CONSERVATIVE GROWTH CORE STRATEGIC HIGH YIELD SMALL-CAP STOCK
LIFESTYLE FUND - LIFESTYLE FUND - LIFESTYLE FUND - BOND FUND - BOND FUND - BOND FUND FUND -
DIVISION 48 DIVISION 49 DIVISION 50 DIVISION 58 DIVISION 59 DIVISION 60 DIVISION 51
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,991,538 $ 5,950,028 $ 5,829,911 $ 5,161,936 $ 5,265,532 $ 5,282,173 $ 139
(9,933) (4,420) (1,198) -- -- -- --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 5,981,605 $ 5,945,608 $ 5,828,713 $ 5,161,936 $ 5,265,532 $ 5,282,173 $ 139
============== ============== ============== ============== ============== ============== ==============
$ -- $ -- $ -- $ -- $ -- $ -- $ 139
-- -- -- -- -- -- --
5,981,605 5,945,608 5,828,713 5,161,936 5,265,532 5,282,173 --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 5,981,605 $ 5,945,608 $ 5,828,713 $ 5,161,936 $ 5,265,532 $ 5,282,173 $ 139
============== ============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 10
===============================================================================
10 FINANCIAL STATEMENTS
===============================================================================
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS AGSPC PUTNAM
For the year ended December 31, 1998 INTERNATIONAL GLOBAL TEMPLETON TEMPLETON
EQUITIES GROWTH FOREIGN INTERNATIONAL
FUND - FUND - FUND - FUND -
DIVISION 11 DIVISION 28 DIVISION 32 DIVISION 20
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds .......................... $ 3,115,042 $ 607,762 $ 5,873,157 $ 17,844,520
------------ ------------ ------------ ------------
EXPENSES:
Mortality and expense risk charge .................... 1,507,006 1,281,924 2,636,652 9,900,147
Reimbursement of expenses (Note C) ................... -- (256,355) (526,963) --
------------ ------------ ------------ ------------
Total expenses .................................... 1,507,006 1,025,569 2,109,689 9,900,147
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ......................... 1,608,036 (417,807) 3,763,468 7,944,373
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments .............. 4,716,155 107,190 (1,076,896) 52,533,310
Capital gains distributions from mutual funds ........ 11,021,627 4,089,731 17,280,633 31,903,839
Net unrealized appreciation (depreciation)
of investments during the year ..................... 7,346,991 21,600,190 (34,315,820) (37,039,574)
------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) on investments 23,084,773 25,797,111 (18,112,083) 47,397,575
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $ 24,692,809 $ 25,379,304 $(14,348,615) $ 55,341,948
============ ============ ============ ============
AGSPC
STATEMENTS OF OPERATIONS AMERICAN CENTURY- FOUNDERS AGSPC SOCIAL
For the year ended December 31, 1998 TWENTIETH GROWTH GROWTH & AWARENESS
CENTURY ULTRA FUND - INCOME FUND - FUND -
FUND - DIVISION 30 DIVISION 16 DIVISION 12
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Dividends from mutual funds .......................... $ -- $ 202,602 $ 1,219,255 $ 3,599,599
------------ ------------ ------------ ------------
EXPENSES:
Mortality and expense risk charge .................... 2,804,758 3,631,491 2,643,321 3,409,326
Reimbursement of expenses (Note C) ................... (521,841) (726,411) -- --
------------ ------------ ------------ ------------
Total expenses .................................... 2,282,917 2,905,080 2,643,321 3,409,326
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ......................... (2,282,917) (2,702,478) (1,424,066) 190,273
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments ..................... 473,963 669,679 10,494,295 2,220,138
Capital gains distributions from mutual funds ........ 30,532,354 21,151,616 20,275,426 37,003,617
Net unrealized appreciation (depreciation)
of investments during the year .................... 39,033,600 42,627,883 3,996,252 38,477,902
------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) on investments 70,039,917 64,449,178 34,765,973 77,701,657
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......................... $ 67,757,000 $ 61,746,700 $ 33,341,907 $ 77,891,930
============ ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 11
================================================================================
SEPARATE ACCOUNT A 11
================================================================================
<TABLE>
<CAPTION>
AGSPC AGSPC DREYFUS VARIABLE PUTNAM PUTNAM OTC &
SCIENCE & SMALL CAP INVESTMENT FUND NEW EMERGING AGSPC AGSPC
TECHNOLOGY INDEX - SMALL CAP OPPORTUNITIES GROWTH GROWTH MIDCAP
FUND - FUND - PORTFOLIO - FUND - FUND - FUND - INDEX FUND -
DIVISION 17 DIVISION 14 DIVISION 18 DIVISION 26 DIVISION 27 DIVISION 15 DIVISION 4
------------- ------------- ------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ 2,611,782 $ 2,936 $ -- $ 4,436,796 $ -- $ 7,011,168
------------- ------------- ------------- -------------- ------------- ------------- -------------
10,381,062 2,289,688 10,348,098 3,363,729 1,438,779 10,623,737 7,700,596
-- -- (1,244,807) (672,401) (288,124) -- --
------------- ------------- ------------- -------------- ------------- ------------- -------------
10,381,062 2,289,688 9,103,291 2,691,328 1,150,655 10,623,737 7,700,596
------------- ------------- ------------- -------------- ------------- ------------- -------------
(10,381,062) 322,094 (9,100,355) (2,691,328) 3,286,141 (10,623,737) (689,428)
------------- ------------- ------------- -------------- ------------- ------------- -------------
34,745,563 8,661,321 19,673,784 872,455 (332,944) 11,720,556 26,826,443
113,616,462 18,436,501 15,549,964 12,546,729 -- 51,517,534 69,472,796
250,423,659 (34,899,835) (67,338,458) 53,605,222 9,278,020 114,925,718 30,964,965
------------- ------------- ------------- -------------- ------------- ------------- -------------
398,785,684 (7,802,013) (32,114,710) 67,024,406 8,945,076 178,163,808 127,264,204
------------- ------------- ------------- -------------- ------------- ------------- -------------
$ 388,404,622 $ (7,479,919) $ (41,215,065) $ 64,333,078 $ 12,231,217 $ 167,540,071 $ 126,574,776
============= ============= ============= ============== ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
NEUBERGER GROWTH AND VANGUARD
AGSPC STOCK INDEX FUND BERMAN INCOME WINDSOR II
------------------------------------------------------------------- GUARDIAN TRUST - FUND - FUND -
DIVISION 10A DIVISION 10B DIVISION 10C DIVISION 10D DIVISION 29 DIVISION 21 DIVISION 24
------------- ------------- ------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,134,933 $ 482,467 $ 33,994,984 $ 635,074 $ 266,705 $ 4,796,472 $ 11,495,781
------------- ------------- ------------- ------------- -------------- ------------- -------------
5,099,302 206,480 28,029,502 529,334 728,024 2,644,262 5,873,266
-- (82,027) -- -- (145,133) (528,762) --
------------- ------------- ------------- ------------- -------------- ------------- -------------
5,099,302 124,453 28,029,502 529,334 582,891 2,115,500 5,873,266
------------- ------------- ------------- ------------- -------------- ------------- -------------
1,035,631 358,014 5,965,482 105,740 (316,186) 2,680,972 5,622,515
------------- ------------- ------------- ------------- -------------- ------------- -------------
36,292,713 2,895,173 21,789,375 4,368,980 447,267 1,067,960 1,366,076
2,140,138 166,018 13,033,369 219,975 5,112,104 17,737,903 51,898,120
82,035,996 6,394,969 631,036,013 7,900,957 (5,621,588) (15,926,329) 278,987
------------- ------------- ------------- ------------- -------------- ------------- -------------
120,468,847 9,456,160 665,858,757 12,489,912 (62,217) 2,879,534 53,543,183
------------- ------------- ------------- ------------- -------------- ------------- -------------
$ 121,504,478 $ 9,814,174 $ 671,824,239 $ 12,595,652 $ (378,403) $ 5,560,506 $ 59,165,698
============= ============= ============= ============= ============== ============= -------------
</TABLE>
<PAGE> 12
================================================================================
12 FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
AGSPC AGSPC
TEMPLETON ASSET VANGUARD INTERNATIONAL
STATEMENTS OF OPERATIONS ASSET ALLOCATION ALLOCATION WELLINGTON GOVERNMENT
For the year ended December 31, 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 $ 5,918,741 $ 11,720,002 $ 3,619,997
------------ ------------ ------------ ------------
EXPENSES:
Mortality and expense risk charge ............. 4,189,971 2,045,234 3,573,103 1,622,993
Reimbursement of expenses (Note C) ............ -- -- -- --
------------ ------------ ------------ ------------
Total expenses ............................. 4,189,971 2,045,234 3,573,103 1,622,993
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ......................... 5,298,721 3,873,507 8,146,899 1,997,004
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ....... 10,513,951 2,520,862 453,710 (1,068,211)
Capital gains distributions from mutual funds . 9,560,576 12,936,405 30,281,535 872,765
Net unrealized appreciation (depreciation)
of investments during the year .............. (10,693,322) 13,072,376 (13,016,167) 21,926,900
------------ ------------ ------------ ------------
Net realized and unrealized gain on investments 9,381,205 28,529,643 17,719,078 21,731,454
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $ 14,679,926 $ 32,403,150 $ 25,865,977 $ 23,728,458
============ ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 13
================================================================================
FINANCIAL STATEMENTS 13
================================================================================
<TABLE>
<CAPTION>
AGSPC VANGUARD VANGUARD
GOVERNMENT LONG-TERM LONG-TERM
AGSPC CAPITAL CONSERVATION FUND SECURITIES CORPORATE TREASURY AGSPC MONEY MARKET FUND
- ------------------------------- FUND - FUND - FUND - ----------------------------
DIVISION 1 DIVISION 7 DIVISION 8 DIVISION 22 DIVISION 23 DIVISION 2 DIVISION 6
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 402,079 $ 3,710,371 $ 5,462,111 $ 2,478,178 $ 3,523,260 $ 230,073 $ 9,814,968
----------- ----------- ----------- ----------- ----------- ----------- -----------
63,904 585,563 993,952 504,256 798,645 46,056 1,965,005
-- -- -- (78,692) (132,544) -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
63,904 585,563 993,952 425,564 666,101 46,056 1,965,005
----------- ----------- ----------- ----------- ----------- ----------- -----------
338,175 3,124,808 4,468,159 2,052,614 2,857,159 184,017 7,849,963
----------- ----------- ----------- ----------- ----------- ----------- -----------
12,194 413,199 1,352,903 136,212 1,195,397 -- --
-- -- -- 1,044,043 -- -- --
35,832 (35,856) 1,437,930 (64,200) 2,611,560 -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
48,026 377,343 2,790,833 1,116,055 3,806,957 -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 386,201 $ 3,502,151 $ 7,258,992 $ 3,168,669 $ 6,664,116 $ 184,017 $ 7,849,963
============ =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE> 14
================================================================================
14 FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS AMERICAN AMERICAN AMERICAN AMERICAN
For the year ended December 31, 1998 GENERAL GENERAL GENERAL GENERAL
INTERNATIONAL INTERNATIONAL SMALL CAP SMALL CAP
GROWTH FUND - VALUE FUND - GROWTH FUND - VALUE FUND -
DIVISION 33* DIVISION 34* DIVISION 35* DIVISION 36*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds ................... $ -- $ 5,760 $ -- $ 13,079
---------- ---------- ---------- ----------
EXPENSES:
Mortality and expense risk charge ............. -- -- -- --
Reimbursement of expenses (Note C) ............ -- -- -- --
---------- ---------- ---------- ----------
Total expenses ............................. -- -- -- --
---------- ---------- ---------- ----------
NET INVESTMENT INCOME ......................... -- 5,760 -- 13,079
---------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments .............. -- -- -- --
Capital gains distributions from mutual funds . -- -- 18,373 51,644
Net unrealized appreciation
of investments during the year ............. 200,750 547,276 1,361,100 585,384
---------- ---------- ---------- ----------
Net realized and unrealized gain on investments 200,750 547,276 1,379,473 637,028
---------- ---------- ---------- ----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $ 200,750 $ 553,036 $1,379,473 $ 650,107
========== ========== ========== ==========
<CAPTION>
STATEMENTS OF OPERATIONS AMERICAN AMERICAN AMERICAN AMERICAN
For the year ended December 31, 1998 GENERAL GENERAL GENERAL GENERAL
MID CAP MID CAP LARGE CAP LARGE CAP
GROWTH FUND - VALUE FUND - GROWTH FUND - VALUE FUND -
DIVISION 37* DIVISION 38* DIVISION 39* DIVISION 40*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends from mutual funds ................... $ -- $ 10,079 $ 2,093 $ 10,224
---------- ---------- ---------- ----------
EXPENSES:
Mortality and expense risk charge ............. -- -- -- --
Reimbursement of expenses (Note C) ............ -- -- -- --
---------- ---------- ---------- ----------
Total expenses ............................. -- -- -- --
---------- ---------- ---------- ----------
NET INVESTMENT INCOME ......................... -- 10,079 2,093 10,224
---------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments .............. -- -- -- --
Capital gains distributions from mutual funds . -- 115,562 -- --
Net unrealized appreciation
of investments during the year .............. 1,425,600 896,569 695,540 716,526
---------- ---------- ---------- ----------
Net realized and unrealized gain on investments 1,425,600 1,012,131 695,540 716,526
---------- ---------- ---------- ----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $1,425,600 $1,022,210 $ 697,633 $ 726,750
========== ========== ========== ==========
</TABLE>
* For the period from August 26, 1998 (initial capital contribution date)
through December 31, 1998.
See Note C.
** For the period from September 22, 1998 through December 31, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 15
================================================================================
SEPARATE ACCOUNT A 15
================================================================================
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
GENERAL AMERICAN AMERICAN AMERICAN GENERAL GENERAL
SOCIALLY AMERICAN GENERAL GENERAL GENERAL MODERATE CONSERVATIVE
RESPONSIBLE GENERAL DOMESTIC MONEY GROWTH GROWTH GROWTH
FUND - BALANCED FUND - BOND FUND - MARKET FUND - LIFESTYLE FUND - LIFESTYLE FUND - LIFESTYLE FUND -
DIVISION 41* DIVISION 42* DIVISION 43* DIVISION 44* DIVISION 48* DIVISION 49* DIVISION 50*
- ------------ --------------- ------------ ------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
$ 23,760 $ 29,084 $ 14,978 $ 82,478 $ 11,226 $ 19,912 $ 27,772
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- --
-- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
23,760 29,084 14,978 82,478 11,226 19,912 27,772
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- --
285,733 34,051 15,898 -- -- -- --
1,099,673 805,536 28,692 -- 970,379 925,696 800,941
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1,385,406 839,587 44,590 -- 970,379 925,696 800,941
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$1,409,166 $ 868,671 $ 59,568 $ 82,478 $ 981,605 $ 945,608 $ 828,713
========== ========== ========== ========== ========== ========== ==========
<CAPTION>
AMERICAN AMERICAN AMERICAN
GENERAL GENERAL GENERAL T. ROWE PRICE
CORE STRATEGIC HIGH YIELD SMALL-CAP STOCK
BOND FUND - BOND FUND - BOND FUND - FUND -
DIVISION 58* DIVISION 59* DIVISION 60* DIVISION 51**
- ------------ ------------ ------------ ----------------
<S> <C> <C> <C>
$ 50,247 $ 69,000 $ 92,262 $ --
- ---------- ---------- ---------- ----------
-- -- -- --
-- -- -- --
- ---------- ---------- ---------- ----------
-- -- -- --
- ---------- ---------- ---------- ----------
50,247 69,000 92,262 --
- ---------- ---------- ---------- ----------
-- -- -- --
16,291 11,064 -- --
95,397 185,469 189,911 --
- ---------- ---------- ---------- ----------
111,688 196,533 189,911 --
- ---------- ---------- ---------- ----------
$ 161,935 $ 265,533 $ 282,173 $ --
========== ========== ========== ==========
</TABLE>
<PAGE> 16
================================================================================
16 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC
INTERNATIONAL EQUITIES
FUND - DIVISION 11
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................................... $ 1,608,036 $ 1,546,185
Net realized gain (loss) on investments .............................. 4,716,155 8,844,811
Capital gains distributions from mutual funds ........................ 11,021,627 4,593,062
Net unrealized appreciation (depreciation)
of investments during the year ..................................... 7,346,991 (11,693,489)
------------- -------------
Increase (decrease) in net assets resulting from operations ..... 24,692,809 3,290,569
------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments .................................................... 14,604,832 21,604,936
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees .................................. (9,033,065) (8,085,959)
Annuity benefit payments ............................................. (17,602) (10,712)
Amounts transferred interdivision, and (to) from VALIC general account (33,973,374) (56,024,580)
------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ......................... (28,419,209) (42,516,315)
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .............................. (3,726,400) (39,225,746)
NET ASSETS:
Beginning of year .................................................... 152,000,782 191,226,528
------------- -------------
End of year .......................................................... $ 148,274,382 $ 152,000,782
============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ................................. 122,716,744 156,226,314
Purchase payments .................................................... 10,549,627 17,325,859
Surrenders ........................................................... (6,694,955) (6,456,410)
Transfers -- interdivision and (to) from VALIC general account ....... (24,759,665) (44,379,019)
------------- -------------
Total units outstanding, end of year ................................. 101,811,751 122,716,744
============= =============
Units outstanding, by class:
Standard units .................................................... 101,811,751 122,716,744
Enhanced units:
20 bp reduced ................................................... -- --
40 bp reduced ................................................... -- --
------------- -------------
Accumulation units end of year ....................................... 101,811,751 122,716,744
============= =============
<CAPTION>
DECEMBER 31
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Accumulation value per unit:
Standard unit...................................................... $ 1.454644 $ 1.237299
Enhanced unit:
20 bp reduced.................................................... -- --
40 bp reduced.................................................... -- --
</TABLE>
<TABLE>
<CAPTION>
PUTNAM GLOBAL GROWTH
FUND - DIVISION 28
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................................... $ (417,807) $ 825,963
Net realized gain (loss) on investments .............................. 107,190 172,968
Capital gains distributions from mutual funds ........................ 4,089,731 9,300,593
Net unrealized appreciation (depreciation)
of investments during the year ..................................... 21,600,190 (7,591,166)
------------- -------------
Increase (decrease) in net assets resulting from operations ..... 25,379,304 2,708,358
------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments .................................................... 45,226,423 18,196,466
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees .................................. (3,310,436) (812,004)
Annuity benefit payments ............................................. (2,617) (1,799)
Amounts transferred interdivision, and (to) from VALIC general account 36,967,959 21,134,329
------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ......................... 78,881,329 38,516,992
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .............................. 104,260,633 41,225,350
NET ASSETS:
Beginning of year .................................................... 58,834,408 17,609,058
------------- -------------
End of year .......................................................... $ 163,095,041 $ 58,834,408
============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ................................. 49,548,732 16,648,600
Purchase payments .................................................... 32,447,084 15,748,353
Surrenders ........................................................... (2,408,897) (675,628)
Transfers -- interdivision and (to) from VALIC general account ....... 28,040,873 17,827,407
------------- -------------
Total units outstanding, end of year ................................. 107,627,792 49,548,732
============= =============
Units outstanding, by class:
Standard units .................................................... 101,468,260 49,548,732
Enhanced units:
20 bp reduced ................................................... 6,153,771 --
40 bp reduced ................................................... 5,760 --
------------- -------------
Accumulation units end of year ....................................... 107,627,792 49,548,732
============= =============
<CAPTION>
DECEMBER 31
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Accumulation value per unit:
Standard unit...................................................... $ 1.512865 $ 1.186775
Enhanced unit:
20 bp reduced.................................................... 1.549587 --
40 bp reduced.................................................... 1.591007 --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 17
================================================================================
SEPARATE ACCOUNT A 17
================================================================================
<TABLE>
<CAPTION>
TEMPLETON FOREIGN TEMPLETON INTERNATIONAL AGSPC SCIENCE & TECHNOLOGY AGSPC SMALL CAP
FUND - DIVISION 32 FUND - DIVISION 20 FUND - DIVISION 17 INDEX FUND - DIVISION 14
- ---------------------------- ---------------------------- ----------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,763,468 $ 3,566,211 $ 7,944,373 $ 7,044,706 $ (10,381,062) $ (8,359,405) $ 322,094 $ 321,469
(1,076,896) 180,290 52,533,310 24,143,886 34,745,563 27,202,326 8,661,321 7,403,801
17,280,633 12,359,374 31,903,839 6,157,699 113,616,462 -- 18,436,501 17,477,318
(34,315,820) (16,286,999) (37,039,574) 33,826,345 250,423,659 (11,571,856) (34,899,835) 13,195,192
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
(14,348,615) (181,124) 55,341,948 71,172,636 388,404,622 7,271,065 (7,479,919) 38,397,780
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
72,575,285 63,929,059 114,632,129 127,443,761 195,575,628 203,196,325 28,153,952 26,031,893
(7,939,318) (2,231,179) (35,093,007) (21,498,080) (44,292,549) (27,661,660) (11,145,100) (8,101,115)
(1,991) (1,149) (9,179) (6,675) (17,543) (17,353) (7,293) (6,381)
(12,669,089) 79,881,321 (95,114,875) 22,603,734 (92,089,284) 15,908,913 (13,919,719) (10,731,749)
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
51,964,887 141,578,052 (15,584,932) 128,542,740 59,176,252 191,426,225 3,081,840 7,192,648
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
37,616,272 141,396,928 39,757,016 199,715,376 447,580,874 198,697,290 (4,398,079) 45,590,428
180,852,001 39,455,073 729,739,187 530,023,811 909,661,454 710,964,164 230,068,750 184,478,322
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
$ 218,468,273 $ 180,852,001 $ 769,496,203 $ 729,739,187 $1,357,242,328 $909,661,454 $ 225,670,671 $ 230,068,750
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
159,201,107 36,671,828 463,174,350 378,581,949 397,842,959 315,809,646 106,279,077 103,320,842
63,265,244 55,441,897 65,837,726 81,609,273 77,332,989 88,179,109 13,084,095 13,258,805
(7,600,467) (1,875,284) (21,321,029) (13,712,830) (17,946,718) (11,448,429) (5,229,338) (4,191,154)
(10,799,968) 68,962,666 (55,271,958) 16,695,958 (35,393,395) 5,302,633 (6,753,994) (6,109,416)
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
204,065,916 159,201,107 452,419,089 463,174,350 421,835,835 397,842,959 107,379,840 106,279,077
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
198,626,024 159,201,107 452,419,089 463,174,350 418,601,069 397,842,959 107,321,015 106,279,077
5,437,288 -- -- -- 3,228,389 -- 58,825 --
2,604 -- -- -- 6,377 -- -- --
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
204,065,916 159,201,107 452,419,089 463,174,350 421,835,835 397,842,959 107,379,840 106,279,077
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
<CAPTION>
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- ---------------------------- ---------------------------- ----------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.069704 $ 1.135778 $ 1.700398 $ 1.575168 $ 3.216190 $ 2.285739 $ 2.100506 $ 2.163595
1.094954 -- -- -- 3.241847 -- 2.125983 --
1.123840 -- -- -- 3.272354 -- -- --
</TABLE>
<PAGE> 18
================================================================================
18 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DREYFUS SMALL CAP
PORTFOLIO - DIVISION 18
--------------------------------
1998 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................................... $ (9,100,355) $ (7,877,254)
Net realized gain (loss) on investments .............................. 19,673,784 10,514,976
Capital gains distributions from mutual funds ........................ 15,549,964 47,781,324
Net unrealized appreciation (depreciation)
of investments during the year ..................................... (67,338,458) 56,534,602
------------- -------------
Increase (decrease) in net assets resulting from operations .......... (41,215,065) 106,953,648
------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments .................................................... 136,010,701 152,268,343
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees .................................. (37,151,392) (25,995,894)
Annuity benefit payments ............................................. (12,769) (13,079)
Amounts transferred interdivision, and (to) from VALIC general account (105,448,868) (41,774,769)
------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ........................ (6,602,328) 84,484,601
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .............................. (47,817,393) 191,438,249
Net Assets:
Beginning of year .................................................... 849,824,308 658,386,059
------------- -------------
End of year .......................................................... $ 802,006,915 $ 849,824,308
============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ................................. 479,851,525 428,883,250
Purchase payments .................................................... 78,837,263 92,300,416
Surrenders ........................................................... (22,827,377) (15,764,818)
Transfers -- interdivision and (to) from VALIC general account ....... (61,646,182) (25,567,323)
------------- -------------
Total units outstanding, end of year ................................. 474,215,229 479,851,525
============= =============
Units outstanding, by class:
Standard units .................................................... 474,215,229 479,851,525
Enhanced units:
20 bp reduced ................................................... -- --
40 bp reduced ................................................... -- --
------------- -------------
Accumulation units end of year ....................................... 474,215,229 479,851,525
============= =============
<CAPTION>
DECEMBER 31
--------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Accumulation value per unit:
Standard unit...................................................... $ 1.690786 $ 1.770622
Enhanced unit:
20 bp reduced.................................................... -- --
40 bp reduced.................................................... -- -
</TABLE>
<TABLE>
<CAPTION>
PUTNAM NEW OPPORTUNITIES
FUND - DIVISION 26
--------------------------------
1998 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ......................................... $ (2,691,328) $ (1,052,294)
Net realized gain (loss) on investments .............................. 872,455 242,887
Capital gains distributions from mutual funds ........................ 12,546,729 3,494,327
Net unrealized appreciation (depreciation)
of investments during the year ..................................... 53,605,222 18,445,868
------------- -------------
Increase (decrease) in net assets resulting from operations .......... 64,333,078 21,130,788
------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments .................................................... 108,017,017 51,769,269
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees .................................. (8,784,234) (2,540,805)
Annuity benefit payments ............................................. (575) (61)
Amounts transferred interdivision, and (to) from VALIC general account 84,011,090 44,254,408
Increase (decrease) in net assets
------------- -------------
resulting from principal transactions ........................ 183,243,298 93,482,811
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .............................. 247,576,376 114,613,599
Net Assets:
Beginning of year .................................................... 164,836,578 50,222,979
------------- -------------
End of year .......................................................... $ 412,412,954 $ 164,836,578
============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ................................. 143,395,066 53,001,699
Purchase payments .................................................... 85,839,361 49,995,408
Surrenders ........................................................... (6,337,162) (2,517,125)
Transfers -- interdivision and (to) from VALIC general account ....... 68,362,756 42,915,084
------------- -------------
Total units outstanding, end of year ................................. 291,260,021 143,395,066
============= =============
Units outstanding, by class:
Standard units .................................................... 280,523,297 143,395,066
Enhanced units:
20 bp reduced ................................................... 10,725,927 --
40 bp reduced ................................................... 10,797 --
------------- -------------
Accumulation units end of year ....................................... 291,260,021 143,395,066
============= =============
<CAPTION>
DECEMBER 31
--------------------------------
1998 1997
------------- -------------
Accumulation value per unit:
<S> <C> <C>
Standard unit...................................................... $ 1.415175 $ 1.149453
Enhanced unit:
20 bp reduced.................................................... 1.434946 --
40 bp reduced.................................................... 1.459115 --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 19
================================================================================
Separate Account A 19
================================================================================
<TABLE>
<CAPTION>
AMERICAN CENTURY -
PUTNAM OTC & EMERGING AGSPC GROWTH AGSPC MIDCAP INDEX TWENTIETH CENTURY ULTRA
GROWTH FUND - DIVISION 27 FUND - DIVISION 15 FUND - DIVISION 4 FUND - DIVISION 31
- ---------------------------- ----------------------------- ---------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,286,141 $ (720,013) $ (10,623,737) $ (7,550,418) $ (689,428) $ 535,199 $ (2,282,917) $ (633,243)
(332,944) (47,363) 11,720,556 6,207,654 26,826,443 19,471,600 473,963 316,651
-- -- 51,517,534 15,041,175 69,472,796 39,891,431 30,532,354 24,559,704
9,278,020 8,912,297 114,925,718 132,575,644 30,964,965 109,426,279 39,033,600 (16,326,801)
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
12,231,217 8,144,921 167,540,071 146,274,055 126,574,776 169,324,509 67,757,000 7,916,311
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
36,165,527 32,976,492 183,983,180 185,814,571 71,049,146 66,141,090 95,865,928 43,175,072
(4,499,407) (1,887,137) (45,145,966) (24,997,689) (37,639,412) (24,993,718) (6,987,387) (1,444,132)
(2,072) (1,777) (23,099) (18,116) (23,570) (20,499) (1,933) (950)
960,600 14,456,676 (34,517,049) (764,959) (40,068,991) (45,549,090) 86,438,332 56,804,430
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
32,624,648 45,544,254 104,297,066 160,033,807 (6,682,827) (4,422,217) 175,314,940 98,534,420
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
44,855,865 53,689,175 271,837,137 306,307,862 119,891,949 164,902,292 243,071,940 106,450,731
97,456,130 43,766,955 941,423,469 635,115,607 730,613,685 565,711,393 123,768,389 17,317,658
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
$ 142,311,995 $ 97,456,130 $1,213,260,606 $ 941,423,469 $ 850,505,634 $730,613,685 $ 366,840,329 $123,768,389
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
99,785,041 48,902,828 453,172,490 366,272,509 171,065,657 172,816,978 97,745,282 16,654,076
36,257,228 36,775,163 82,864,073 99,349,760 16,010,438 17,600,471 63,913,168 36,243,458
(4,704,400) (2,370,530) (20,670,419) (12,033,793) (8,724,789) (6,688,206) (4,133,151) (1,152,164)
1,221,835 16,477,580 (16,039,778) (415,986) (9,311,419) (12,663,586) 59,835,828 45,999,912
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
132,559,704 99,785,041 499,326,366 453,172,490 169,039,887 171,065,657 217,361,127 97,745,282
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
129,463,792 99,785,041 494,997,997 453,172,490 169,039,887 171,065,657 209,221,513 97,745,282
3,092,839 -- 4,324,799 -- -- -- 8,116,612 --
3,073 -- 3,570 -- -- -- 23,002 --
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
132,559,704 99,785,041 499,326,366 453,172,490 169,039,887 171,065,657 217,361,127 97,745,282
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
<CAPTION>
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- ---------------------------- ----------------------------- ---------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.072660 $ 0.976262 $ 2.428587 $ 2.076503 $ 5.029093 $ 4.269122 $ 1.685503 $ 1.265937
1.098295 -- 2.448443 -- -- -- 1.737734 --
1.127653 -- 2.471473 -- -- -- 1.798208 --
</TABLE>
<PAGE> 20
================================================================================
20 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOUNDERS GROWTH AGSPC GROWTH & INCOME
FUND - DIVISION 30 FUND - DIVISION 16
----------------------------- -----------------------------
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) .................................... $ (2,702,478) $ (229,837) $ (1,424,066) $ (1,206,116)
Net realized gain on investments ................................ 669,679 270,661 10,494,295 3,270,580
Capital gains distributions from mutual funds ................... 21,151,616 21,678,474 20,275,426 2,863,622
Net unrealized appreciation (depreciation)
of investments during the year ................................ 42,627,883 (6,466,051) 3,996,252 38,217,716
------------- ------------- ------------- -------------
Increase in net assets resulting from operations ........... 61,746,700 15,253,247 33,341,907 43,145,802
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ............................................... 117,393,497 54,770,398 39,532,854 44,825,180
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. (9,478,330) (1,863,811) (11,951,930) (8,344,519)
Annuity benefit payments ........................................ (1,096) (66) (3,597) (2,954)
Amounts transferred interdivision, and (to) from
VALIC general account ......................................... 72,791,918 70,189,987 (32,787,298) 5,944,261
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions .................... 180,705,989 123,096,508 (5,209,971) 42,421,968
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS .................................... 242,452,689 138,349,755 28,131,936 85,567,770
NET ASSETS:
Beginning of year ............................................... $ 170,468,231 32,118,476 257,095,975 171,528,205
------------- ------------- ------------- -------------
End of year ..................................................... 412,920,920 $ 170,468,231 $ 285,227,911 $ 257,095,975
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ............................ 132,167,162 31,197,464 132,434,555 108,341,635
Purchase payments ............................................... 80,460,723 45,575,203 19,715,398 24,988,066
Surrenders ...................................................... (6,588,832) (1,491,261) (6,142,924) (4,697,640)
Transfers -- interdivision and (to) from VALIC general account .. 52,471,956 56,885,756 (16,456,334) 3,802,494
------------- ------------- ------------- -------------
Total units outstanding, end of year ............................ 258,511,009 132,167,162 129,550,695 132,434,555
============= ============= ============= =============
Units outstanding, by class:
Standard units ............................................... 250,777,959 132,167,162 129,550,695 132,434,555
Enhanced units:
20 bp reduced .............................................. 7,720,189 -- -- --
40 bp reduced .............................................. 12,861 -- -- --
------------- ------------- ------------- -------------
Accumulation units end of year .................................. 258,511,009 132,167,162 129,550,695 132,434,555
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
----------------------------- -----------------------------
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Accumulation value per unit:
Standard unit ................................................ $ 1.595913 $ 1.289513 $ 2.201234 $ 19981997
Enhanced unit:
20 bp reduced .............................................. 1.633282 -- -- --
40 bp reduced .............................................. 1.676366 -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 21
================================================================================
SEPARATE ACCOUNT A 21
================================================================================
<TABLE>
<CAPTION>
AGSPC STOCK INDEX FUND
AGSPC SOCIAL AWARENESS ----------------------------------------------------------------
FUND - DIVISION 12 DIVISION 10A DIVISION 10B
- ------------------------------ ------------------------------ ------------------------------
1998 1997 1998 1997 1998 1997
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C>
$ 190,273 $ 281,520 $ 1,035,631 $ 2,030,016 $ 358,014 $ 399,877
2,220,138 1,158,707 36,292,713 23,392,823 2,895,173 2,137,197
37,003,617 9,560,562 2,140,138 2,365,369 166,018 185,844
38,477,902 33,369,211 82,035,996 89,338,679 6,394,969 6,910,324
- ------------- ------------- ------------- ------------- ------------- -------------
77,891,930 44,370,000 121,504,478 117,126,887 9,814,174 9,633,242
- ------------- ------------- ------------- ------------- ------------- -------------
72,710,322 44,746,508 4,116,842 3,670,819 204,507 231,218
(13,355,087) (5,475,293) (30,874,894) (24,373,318) (2,153,577) (2,331,031)
(9,481) -- (1,996,857) (1,717,390) (327,696) (285,785)
54,323,803 55,022,728 (14,779,077) (3,572,644) (1,934,563) (1,027,537)
- ------------- ------------- ------------- ------------- ------------- -------------
113,669,557 94,293,943 (43,533,986) (25,992,533) (4,211,329) (3,413,135)
- ------------- ------------- ------------- ------------- ------------- -------------
191,561,487 138,663,943 77,970,492 91,134,354 5,602,845 6,220,107
243,579,972 104,916,029 469,783,383 378,649,029 36,946,031 30,725,924
- ------------- ------------- ------------- ------------- ------------- -------------
$ 435,141,459 $ 243,579,972 $ 547,753,875 $ 469,783,383 $ 42,548,876 $ 36,946,031
============= ============= ============= ============= ============= =============
81,577,104 46,574,016 25,835,933 27,379,389 1,256,974 1,380,401
21,359,028 16,505,152 206,729 226,321 6,328 9,647
(3,889,138) (1,970,414) (1,549,859) (1,529,579) (68,344) (92,576)
16,555,822 20,468,350 (766,299) (240,198) (63,845) (40,498)
- ------------- ------------- ------------- ------------- ------------- -------------
115,602,816 81,577,104 23,726,504 25,835,933 1,131,113 1,256,974
============= ============= ============= ============= ============= =============
114,382,494 81,577,104 23,726,504 25,835,933 1,131,113 1,256,974
1,218,871 -- -- -- -- --
1,451 -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- -------------
115,602,816 81,577,104 23,726,504 25,835,933 1,131,113 1,256,974
============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31 DECEMBER 31
- ------------------------------ ------------------------------ ------------------------------
1998 1997 1998 1997 1998 1997
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C>
$ 3.762308 $ 2.985333 $ 22.479709 $ 17.679054 $ 35.792019 $ 27956641
3.825649 -- -- --
3.897214 -- -- --
</TABLE>
<PAGE> 22
================================================================================
22 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC STOCK INDEX FUND
-----------------------------------
DIVISION 10C
---------------------------------
1998 1997
---------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ...................................... $ 5,965,482 $ 9,342,792
Net realized gain on investments .................................. 21,789,375 19,691,626
Capital gains distributions from mutual funds ..................... 13,033,369 11,611,427
Net unrealized appreciation (depreciation)
of investments during the year .................................. 631,036,013 475,943,738
--------------- ---------------
Increase (decrease) in net assets resulting from operations ... 671,824,239 516,589,583
--------------- ---------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................. 372,858,039 264,734,800
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................... (130,840,043) (73,944,144)
Annuity benefit payments .......................................... (164,035) (120,896)
Amounts transferred interdivision, and (to) from
VALIC general account ........................................... 112,786,439 72,721,787
--------------- ---------------
Increase (decrease) in net assets
resulting from principal transactions ...................... 354,640,400 263,391,547
--------------- ---------------
TOTAL INCREASE IN NET ASSETS ...................................... 1,026,464,639 779,981,130
NET ASSETS:
Beginning of year ................................................. 2,310,327,500 1,530,346,370
--------------- ---------------
End of year ....................................................... $ 3,336,792,139 $ 2,310,327,500
=============== ===============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year .............................. 615,053,124 536,806,965
Purchase payments ................................................. 85,764,962 77,757,636
Surrenders ........................................................ (29,978,801) (20,920,257)
Transfers -- interdivision and (to) from VALIC general account .... 27,731,410 21,408,780
--------------- ---------------
Total units outstanding, end of year .............................. 698,570,695 615,053,124
=============== ===============
Units outstanding, by class:
Standard units .................................................. 691,680,049 615,053,124
Enhanced units:
20 bp reduced ................................................ 6,859,835 --
40 bp reduced ................................................ 30,811 --
--------------- ---------------
Accumulation units end of year .................................... 698,570,695 615,053,124
=============== ===============
<CAPTION>
AGSPC STOCK INDEX FUND
---------------------------------
DIVISION 10D
---------------------------------
1998 1997
---------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ...................................... $ 105,740 $ 222,212
Net realized gain on investments .................................. 4,368,980 3,421,747
Capital gains distributions from mutual funds ..................... 219,975 249,976
Net unrealized appreciation (depreciation)
of investments during the year .................................. 7,900,957 9,003,055
--------------- ---------------
Increase (decrease) in net assets resulting from operations ... 12,595,652 12,896,990
--------------- ---------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................. 654,342 789,193
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................... (3,879,247) (2,598,402)
Annuity benefit payments .......................................... (15,905) (13,201)
Amounts transferred interdivision, and (to) from
VALIC general account ........................................... (2,514,825) (3,872,680)
--------------- ---------------
Increase (decrease) in net assets
resulting from principal transactions ...................... (5,755,635) (5,695,090)
--------------- ---------------
TOTAL INCREASE IN NET ASSETS ...................................... 6,840,017 7,201,900
NET ASSETS:
Beginning of year ................................................. 49,673,027 42,471,127
--------------- ---------------
End of year ....................................................... $ 56,513,044 $ 49,673,027
=============== ===============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year .............................. 7,438,537 8,381,704
Purchase payments ................................................. 88,428 132,628
Surrenders ........................................................ (521,941) (430,026)
Transfers -- interdivision and (to) from VALIC general account .... (349,228) (645,769)
--------------- ---------------
Total units outstanding, end of year .............................. 6,655,796 7,438,537
=============== ===============
Units outstanding, by class:
Standard units .................................................. 6,655,796 7,438,537
Enhanced units:
20 bp reduced ................................................ -- --
40 bp reduced ................................................ -- --
--------------- ---------------
Accumulation units end of year .................................... 6,655,796 7,438,537
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
--------------------------------- ---------------------------------
1998 1997 1998 1997
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Accumulation value per unit:
Standard unit........................... $ 4.772052 $ 3.753436 $ 8.457722 $ 6.652806
Enhanced unit:
20 bp reduced........................ 4.875028 -- -- --
40 bp reduced........................ 4.991135 -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 23
================================================================================
SEPARATE ACCOUNT A 23
================================================================================
<TABLE>
<CAPTION>
NEUBERGER BERMAN SCUDDER GROWTH AND VANGUARD WINDSOR II TEMPLETON ASSET
GUARDIAN TRUST - DIVISION 29 INCOME FUND - DIVISION 21 FUND - DIVISION 24 ALLOCATION FUND - DIVISION 19
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (316,186) $ (99,741) $ 2,680,972 $ 1,085,048 $ 5,622,515 $ 3,037,913 $ 5,298,721 $ 2,826,899
447,267 406,993 1,067,960 269,953 1,366,076 741,743 10,513,951 982,063
5,112,104 3,161,542 17,737,903 8,952,194 51,898,120 18,541,072 9,560,576 11,661,872
(5,621,588) (1,574,737) (15,926,329) 4,003,711 278,987 16,110,878 (10,693,322) 13,366,704
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(378,403) 1,894,057 5,560,506 14,310,906 59,165,698 38,431,606 14,679,926 28,837,538
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
18,727,026 14,861,097 79,800,185 37,754,331 172,075,011 82,698,118 55,452,646 61,278,823
(1,971,281) (661,852) (7,670,739) (1,502,937) (18,029,126) (3,075,223) (15,786,958) (9,457,167)
-- -- (3,718) (2,106) (6,802) (1,497) (22,337) (19,742)
(1,314,316) 21,010,215 34,897,873 66,400,722 162,813,002 115,544,417 (47,069,555) 41,633,946
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
15,441,429 35,209,460 107,023,601 102,650,010 316,852,085 195,165,815 (7,426,204) 93,435,860
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
15,063,026 37,103,517 112,584,107 116,960,916 376,017,783 233,597,421 7,253,722 122,273,398
46,306,823 9,203,306 135,384,401 18,423,485 275,397,199 41,799,778 316,874,285 194,600,887
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 61,369,849 $ 46,306,823 $ 247,968,508 $ 135,384,401 $ 651,414,982 $ 275,397,199 $ 324,128,007 $ 316,874,285
============= ============= ============= ============= ============= ============= ============= =============
35,406,663 8,211,592 94,225,984 16,524,046 187,929,868 37,292,761 196,150,946 137,384,670
13,737,161 11,711,541 51,892,138 28,874,922 105,145,249 63,199,633 32,881,580 38,574,901
(1,683,029) (501,980) (5,008,156) (1,088,301) (10,145,505) (2,242,658) (10,222,721) (5,822,716)
(1,186,725) 15,985,510 23,203,013 49,915,317 103,638,092 89,680,132 (27,846,098) 26,014,091
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
46,274,070 35,406,663 164,312,979 94,225,984 386,567,704 187,929,868 190,963,707 196,150,946
============= ============= ============= ============= ============= ============= ============= =============
45,261,146 35,406,663 159,815,811 94,225,984 372,737,595 187,929,868 190,963,707 196,150,946
1,012,671 -- 4,494,004 -- 13,800,156 -- -- --
253 -- 3,163 -- 29,953 -- -- --
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
46,274,070 35,406,663 164,312,979 94,225,984 386,567,704 187,929,868 190,963,707 196,150,946
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.324970 $ 1.307438 $ 1.507724 $ 1.436011 $ 1.683226 $ 1.464949 $ 1.695764 $ 1.613943
1.368269 -- 1.542160 -- 1.723020 -- -- --
1.418252 -- 1.582856 -- 1.770257 -- -- --
</TABLE>
<PAGE> 24
================================================================================
24 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGSPC ASSET ALLOCATION VANGUARD WELLINGTON
FUND - DIVISION 5 FUND - DIVISION 25
----------------------------- -----------------------------
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ............................................. $ 3,873,507 $ 3,768,356 $ 8,146,899 $ 3,011,918
Net realized gain (loss) on investments ........................... 2,520,862 5,941,975 453,710 713,048
Capital gains distributions from mutual funds ..................... 12,936,405 10,546,782 30,281,535 7,375,024
Net unrealized appreciation (depreciation)
of investments during the year .................................. 13,072,376 14,486,554 (13,016,167) 3,998,391
------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from operations ... 32,403,150 34,743,667 25,865,977 15,098,381
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................. 16,199,430 11,497,764 128,896,516 51,882,204
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................... (12,309,318) (10,611,952) (11,075,983) (2,456,686)
Annuity benefit payments .......................................... (9,811) (8,301) (1,770) (68)
Amounts transferred interdivision, and (to) from
VALIC general account ........................................... 6,673,714 (24,272,661) 106,781,378 66,331,198
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ...................... 10,554,015 (23,395,150) 224,600,141 115,756,648
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........................... 42,957,165 11,348,517 250,466,118 130,855,029
NET ASSETS:
Beginning of year ................................................. 184,577,992 173,229,475 156,044,547 25,189,518
------------- ------------- ------------- -------------
End of year ....................................................... $ 227,535,157 $ 184,577,992 $ 406,510,665 $ 156,044,547
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year .............................. 57,307,351 65,292,617 116,429,781 22,866,634
Purchase payments ................................................. 4,579,044 3,898,053 87,356,196 42,072,769
Surrenders ........................................................ (3,567,970) (3,591,047) (6,659,976) (1,913,812)
Transfers -- interdivision and (to) from VALIC general account .... 1,950,743 (8,292,272) 76,359,783 53,404,190
------------- ------------- ------------- -------------
Total units outstanding, end of year .............................. 60,269,168 57,307,351 273,485,784 116,429,781
============= ============= ============= =============
Units outstanding, by class:
Standard units .................................................... 60,237,818 57,307,351 253,840,498 116,429,781
Enhanced units:
20 bp reduced ................................................. 31,350 -- 19,636,072 --
40 bp reduced ................................................. -- -- 9,214 --
------------- ------------- ------------- -------------
Accumulation units end of year .................................... 60,269,168 57,307,351 273,485,784 116,429,781
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
----------------------------- -----------------------------
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Standard unit............................................... $ 3.772519 $ 3.219282 $ 1.482836 $ 1.340109
Enhanced unit:
20 bp reduced............................................. 3.882024 -- 1.529797 --
40 bp reduced............................................. -- -- 1.585688 --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 25
================================================================================
SEPARATE ACCOUNT A 25
================================================================================
<TABLE>
<CAPTION>
AGSPC
AGSPC INTERNATIONAL CAPITAL CONSERVATION FUND
GOVERNMENT BOND ------------------------------------------------------------- AGSPC GOVERNMENT SECURITIES
FUND - DIVISION 13 DIVISION 1 DIVISION 7 FUND - DIVISION 8
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,997,004 $ 4,595,764 $ 338,175 $ 344,608 $ 3,124,808 $ 2,913,560 $ 4,468,159 $ 4,230,305
(1,068,211) (3,911,328) 12,194 23,005 413,199 (805,486) 1,352,903 (985,278)
872,765 136,607 -- -- -- -- -- --
21,926,900 (11,068,351) 35,832 90,579 (35,856) 1,739,391 1,437,930 3,130,717
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
23,728,458 (10,247,308) 386,201 458,192 3,502,151 3,847,465 7,258,992 6,375,744
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
25,413,792 40,582,861 146,532 366,816 7,027,648 7,324,860 12,902,909 12,424,460
(7,785,118) (6,757,210) (562,370) (389,473) (3,833,561) (3,026,469) (5,395,424) (3,958,609)
(2,691) (274) (455) (526) -- -- -- --
(38,345,989) (35,550,483) (97,641) (509,353) (2,143,426) (8,016,607) 10,528,632 (12,246,246)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(20,720,006) (1,725,106) (513,934) (532,536) 1,050,661 (3,718,216) 18,036,117 (3,780,395)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
3,008,452 (11,972,414) (127,733) (74,344) 4,552,812 129,249 25,295,109 2,595,349
166,199,757 178,172,171 6,427,526 6,501,870 55,418,728 55,289,479 88,167,288 85,571,939
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 169,208,209 $ 166,199,757 $ 6,299,793 $ 6,427,526 $ 59,971,540 $ 55,418,728 $ 113,462,397 $ 88,167,288
============= ============= ============= ============= ============= ============= ============= =============
111,480,591 112,601,593 1,831,961 1,991,536 28,242,598 30,286,494 45,034,894 47,130,169
16,433,799 27,009,353 40,472 109,285 3,402,874 3,840,755 6,558,071 6,646,726
(5,105,973) (4,696,042) (155,629) (116,952) (1,879,505) (1,555,673) (2,679,928) (2,143,349)
(24,924,879) (23,434,313) (27,361) (151,908) (1,014,305) (4,328,978) 4,816,634 (6,598,652)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
97,883,538 111,480,591 1,689,443 1,831,961 28,751,662 28,242,598 53,729,671 45,034,894
============= ============= ============= ============= ============= ============= ============= =============
97,473,851 111,480,591 1,689,443 1,831,961 28,751,662 28,242,598 53,729,671 45,034,894
408,156 -- -- -- -- -- -- --
1,531 -- -- -- -- -- -- --
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
97,883,538 111,480,591 1,689,443 1,831,961 28,751,662 28,242,598 53,729,671 45,034,894
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.728006 $ 1.490645 $ 3.726168 $ 3.505970 $ 2.085846 $ 1.962239 $ 2.111727 $ 1.957755
1.751922 -- -- -- -- -- -- --
1.777571 -- -- -- -- -- -- --
</TABLE>
<PAGE> 26
================================================================================
26 FINANCIAL STATEMENTS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VANGUARD LONG-TERM VANGUARD LONG-TERM
CORPORATE FUND - DIVISION 22 TREASURY FUND - DIVISION 23
----------------------------- -----------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ............................................. $ 2,052,614 $ 506,655 $ 2,857,159 $ 567,564
Net realized gain on investments .................................. 136,212 36,716 1,195,397 94,335
Capital gains distributions from mutual funds ..................... 1,044,043 156,984 -- --
Net unrealized appreciation (depreciation)
of investments during the year .................................. (64,200) 643,127 2,611,560 1,066,785
------------- ------------- ------------- -------------
Increase in net assets resulting from operations .............. 3,168,669 1,343,482 6,664,116 1,728,684
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ................................................. 18,953,737 6,013,744 30,970,739 6,985,216
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................... (1,608,861) (167,812) (2,748,295) (265,787)
Annuity benefit payments .......................................... -- -- (813) (176)
Amounts transferred interdivision, and (to) from
VALIC general account ........................................... 19,011,058 9,719,778 60,728,245 10,813,576
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from principal transactions ....................... 36,355,934 15,565,710 88,949,876 17,532,829
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........................... 39,524,603 16,909,192 95,613,992 19,261,513
NET ASSETS:
Beginning of year ................................................. 20,440,049 3,530,857 23,638,214 4,376,701
------------- ------------- ------------- -------------
End of year ....................................................... $ 59,964,652 $ 20,440,049 $ 119,252,206 $ 23,638,214
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year .............................. 17,371,407 3,370,441 20,041,920 4,174,369
Purchase payments ................................................. 15,098,601 5,633,849 23,916,542 6,619,458
Surrenders ........................................................ (1,333,865) (151,626) (1,937,227) (227,789)
Transfers -- interdivision and (to) from VALIC general account .... 15,936,430 8,518,743 48,342,694 9,475,882
------------- ------------- ------------- -------------
Total units outstanding, end of year .............................. 47,072,573 17,371,407 90,363,929 20,041,920
============= ============= ============= =============
Units outstanding, by class:
Standard units .................................................... 44,122,646 17,371,407 86,673,300 20,041,920
Enhanced units:
20 bp reduced ................................................. 2,949,044 -- 3,682,809 --
40 bp reduced ................................................. 883 -- 7,820 --
------------- ------------- ------------- -------------
Accumulation units end of year .................................... 47,072,573 17,371,407 90,363,929 20,041,920
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
----------------------------- -----------------------------
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Accumulation value per unit:
Standard unit............................................... $ 1.271278 $ 1.176649 $ 1.318263 $ 1.178938
Enhanced unit:
20 bp reduced............................................. 1.312731 -- 1.349397 --
40 bp reduced............................................. 1.360696 -- 1.384079 --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 27
================================================================================
SEPARATE ACCOUNT A 27
================================================================================
<TABLE>
<CAPTION>
AGSPC
MONEY MARKET FUND
- ----------------------------------------------------------------
DIVISION 2 DIVISION 6
- ------------------------------ ------------------------------
1998 1997 1998 1997
- ------------- ------------- ------------- -------------
<S> <C> <C> <C>
$ 184,017 $ 188,513 $ 7,849,963 $ 5,293,164
-- -- -- --
-- -- -- --
-- -- -- --
- ------------- ------------- ------------- -------------
184,017 188,513 7,849,963 5,293,164
- ------------- ------------- ------------- -------------
90,884 123,738 87,624,322 58,442,609
(292,611) (277,223) (33,439,890) (16,317,039)
-- -- (1,603) (1,592)
(364,560) (334,772) 63,714,230 (27,271,186)
- ------------- ------------- ------------- -------------
(566,287) (488,257) 117,897,059 14,852,792
- ------------- ------------- ------------- -------------
(382,270) (299,744) 125,747,022 20,145,956
4,579,757 4,879,501 140,904,582 120,758,626
- ------------- ------------- ------------- -------------
$ 4,197,487 $ 4,579,757 $ 266,651,604 $ 140,904,582
============= ============= ============= =============
1,931,439 2,142,534 84,182,521 75,124,095
37,542 53,405 56,361,872 35,256,772
(120,614) (119,264) (17,562,213) (10,205,685)
(148,034) (145,236) 29,891,462 (15,992,661)
- ------------- ------------- ------------- -------------
1,700,333 1,931,439 152,873,642 84,182,521
============= ============= ============= =============
1,700,333 1,931,439 147,547,688 84,182,521
-- -- 5,325,479 --
-- -- 475 --
- ------------- ------------- ------------- -------------
1,700,333 1,931,439 152,873,642 84,182,521
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
- ----------------------------------------------------------------
1998 1997 1998 1997
- ----------------------------------------------------------------
<S> <C> <C> <C>
$ 2.468627 $ 2.371163 $ 1.742617 $ 1.673590
-- -- 1.786658 --
-- -- 1.833793 --
</TABLE>
<PAGE> 28
===============================================================================
28 FINANCIAL STATEMENTS
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AMERICAN GENERAL INTERNATIONAL AMERICAN GENERAL INTERNATIONAL
GROWTH FUND - DIVISION 33 VALUE FUND - DIVISION 33
------------------------------ ------------------------------
1998 1997 1998 1997
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
OPERATIONS: $ -- $ -- $ 5,760 $ --
Net investment income ................................. -- -- -- --
Net realized gain on investments
Capital gains distributions from
mutual funds ........................................ -- -- -- --
Net unrealized appreciation
of investments during the year ...................... 200,750 -- 547,276 --
---------- --------- ---------- ---------
Increase in net assets resulting
from operations ................................ 200,750 -- 553,036 --
---------- --------- ---------- ---------
PRINCIPAL TRANSACTIONS:
Purchase payments ..................................... -- -- -- --
Surrenders of accumulation units by
terminations, withdrawals, and maintenance
fees ................................................ -- -- -- --
Annuity benefit payments .............................. -- -- -- --
Amounts transferred interdivision, and from
VALIC general account ............................... 3,650,000 -- 3,600,000 --
---------- --------- ---------- ---------
Increase in net assets
resulting from principal transactions ............ 3,650,000 -- 3,600,000 --
---------- --------- ---------- ---------
TOTAL INCREASE IN NET ASSETS .......................... 3,850,750 -- 4,153,036 --
NET ASSETS:
Beginning of year ..................................... -- -- -- --
End of year ........................................... $3,850,750 $ -- $4,153,036 $ --
========== ========= ========== =========
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year .................. -- -- -- --
Purchase payments ..................................... -- -- -- --
Surrenders ............................................ -- -- -- --
Transfers -- interdivision and from VALIC
general account ..................................... -- -- -- --
---------- --------- ---------- ---------
Total units outstanding, end of year .................. -- -- -- --
========== ========= ========== =========
Units outstanding, by class:
Standard units ...................................... -- -- -- --
Enhanced units:
20 bp reduced .................................... -- -- -- --
40 bp reduced .................................... -- -- -- --
---------- --------- ---------- ---------
Accumulation units end of year ........................ -- -- -- --
========== ========= ========== =========
DECEMBER 31 DECEMBER 31
------------------------- -------------------------
1998 1997 1998 1997
---------- --------- ---------- ---------
Accumulation value per unit:
Standard unit ....................................... -- -- -- --
Enhanced unit:
20 bp reduced .................................... -- -- -- --
40 bp reduced .................................... -- -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 29
===============================================================================
SEPARATE ACCOUNT A 29
===============================================================================
<TABLE>
<CAPTION>
AMERICAN GENERAL SMALL CAP AMERICAN GENERAL SMALL CAP AMERICAN GENERAL MID CAP AMERICAN GENERAL MID CAP
GROWTH FUND - DIVISION 35 VALUE FUND - DIVISION 36 GROWTH FUND - DIVISION 37 VALUE FUND - DIVISION 38
- ----------------------------- ------------------------------ ----------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ -- $ -- $ 13,079 $ -- $ -- $ -- $ 10,079 $ --
-- -- -- -- -- -- -- --
18,373 -- 51,644 -- -- -- 115,562 --
1,361,100 -- 585,384 -- 1,425,600 -- 896,569 --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
1,379,473 -- 650,107 -- 1,425,600 -- 1,022,210 --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
3,900,000 -- 3,849,999 -- 4,050,000 -- 3,949,999 --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
3,900,000 -- 4,500,106 -- 5,475,600 -- 4,972,209 --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
5,279,473 -- 4,500,106 -- 5,475,600 -- 4,972,209 --
-- -- -- -- -- -- -- --
$ 5,279,473 $ -- $ 4,500,106 $ -- $ 5,475,600 $ -- $ 4,972,209 $ --
============= =========== ============= =========== ============= =========== ============= ===========
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
-- -- -- -- -- -- -- --
============= =========== ============= =========== ============= =========== ============= ===========
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
-- -- -- -- -- -- -- --
============= =========== ============= =========== ============= =========== ============= ===========
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- ----------------------------- ------------------------------ ----------------------------- ---------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- -- -- --
</TABLE>
<PAGE> 30
===============================================================================
30 FINANCIAL STATEMENTS
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AMERICAN GENERAL LARGE CAP AMERICAN GENERAL LARGE CAP
GROWTH FUND - DIVISION 39 VALUE FUND - DIVISION 40
---------------------------- ----------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income ........................................... $ 2,093 $ -- $ 10,224 $ --
Net realized gain on investments ................................ -- -- -- --
Capital gains distributions from mutual funds ................... -- -- -- --
Net unrealized appreciation
of investments during the year ................................ 695,540 -- 716,526 --
------------- ------------- ------------- -------------
Increase in net assets resulting from operations ........... 697,633 -- 726,750 --
------------- ------------- ------------- -------------
PRINCIPAL TRANSACTIONS:
Purchase payments ............................................... -- -- -- --
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. -- -- -- --
Annuity benefit payments ........................................ -- -- -- --
Amounts transferred interdivision, and from VALIC general account 2,850,000 -- 2,900,000 --
------------- ------------- ------------- -------------
Increase in net assets
resulting from principal transactions .................... 2,850,000 -- 2,900,000 --
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS .................................... 3,547,633 -- 3,626,750 --
------------- ------------- ------------- -------------
Net Assets:
Beginning of year ............................................... -- -- -- --
End of year ..................................................... $ 3,547,633 $ -- $ 3,626,750 $ --
============= ============= ============= =============
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ............................ -- -- -- --
Purchase payments ............................................... - -- -- --
Surrenders ...................................................... -- -- -- --
Transfers -- interdivision and from VALIC general account ....... -- -- -- --
------------- ------------- ------------- -------------
Total units outstanding, end of year............................. -- -- -- --
============= ============= ============= =============
Units outstanding, by class:
Standard units ................................................ -- -- -- --
Enhanced units:
20 bp reduced ............................................... -- -- -- --
40 bp reduced ............................................... -- -- -- --
------------- ------------- ------------- -------------
Accumulation units end of year .................................. -- -- -- --
============= ============= ============= =============
DECEMBER 31 DECEMBER 31
----------------------------- -----------------------------
1998 1997 1998 1997
Accumulation value per unit: ------------- -------------- ------------- --------------
Standard unit $ -- $ -- $ -- $ --
Enhanced unit:
20 bp reduced -- -- -- --
40 bp reduced -- -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 31
===============================================================================
SEPARATE ACCOUNT A 31
===============================================================================
<TABLE>
<CAPTION>
AMERICAN GENERAL SOCIALLY AMERICAN GENERAL BALANCED AMERICAN GENERAL DOMESTIC AMERICAN GENERAL MONEY
RESPONSIBLE FUND - DIVISION 41 FUND - DIVISION 42 BOND FUND - DIVISION 43 MARKET FUND - DIVISION 44
- ------------------------------ -------------------------- -------------------------- ---------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 23,760 $ -- $ 29,084 $ -- $ 14,978 $ -- $ 82,478 $ --
-- -- -- -- -- -- -- --
285,733 -- 34,051 -- 15,898 -- -- --
1,099,673 -- 805,536 -- 28,692 -- -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,409,166 -- 868,671 -- 59,568 -- 82,478 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
5,000,000 -- 5,000,000 -- 1,250,000 -- 5,000,000 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
5,000,000 -- 5,000,000 -- 1,250,000 -- 5,000,000 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
6,409,166 -- 5,868,671 -- 1,309,568 -- 5,082,478 --
-- -- -- -- -- -- -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 6,409,166 $ -- $ 5,868,671 $ -- $ 1,309,568 $ -- $ 5,082,478 $ --
============ ============ ============ ============ ============ ============ ============ ============
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- -- -- --
============ ============ ============ ============ ============ ============ ============ ============
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- -- -- --
============ ============ ============ ============ ============ ============ ============ ============
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
- -------------------------- -------------------------- -------------------------- --------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
</TABLE>
<PAGE> 32
===============================================================================
32 FINANCIAL STATEMENTS
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AMERICAN GENERAL
AMERICAN GENERAL MODERATE GROWTH LIFESTYLE
FUND - DIVISION 49 FUND - DIVISION 49
------------------------ ------------------------
1998 1997 1998 1997
------------ ---------- ------------ ----------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income ........................................... $ 11,226 $ -- $ 19,912 $ --
Net realized gain on investments ................................ -- -- -- --
Capital gains distributions from mutual funds ................... -- -- -- --
Net unrealized appreciation
of investments during the year ................................. 970,379 -- 925,696 --
------------ ---------- ------------ ----------
Increase in net assets resulting from operations ........... 981,605 -- 945,608 --
------------ ---------- ------------ ----------
PRINCIPAL TRANSACTIONS:
Purchase payments ............................................... -- -- -- --
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ............................. -- -- -- --
Annuity benefit payments ........................................ -- -- -- --
Amounts transferred interdivision, and from VALIC
general account ............................................... 5,000,000 -- 5,000,000 --
------------ ---------- ------------ ----------
Increase in net assets
resulting from principal transactions .................... 5,000,000 -- 5,000,000 --
------------ ---------- ------------ ----------
TOTAL INCREASE IN NET ASSETS .................................... 5,981,605 -- 5,945,608 --
------------ ---------- ------------ ----------
NET ASSETS:
Beginning of year ............................................... -- -- -- --
------------ ---------- ------------ ----------
End of year ..................................................... $ 5,981,605 $ -- $ 5,945,608 $ --
============ ========== ============ ==========
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ............................ -- -- -- --
Purchase payments ............................................... -- -- -- --
Surrenders ...................................................... -- -- -- --
Transfers - interdivision and from VALIC general account ........ -- -- -- --
------------ ---------- ------------ ----------
Total units outstanding, end of year ............................ -- -- -- --
============ ========== ============ ==========
Units outstanding, by class:
Standard units ................................................ -- -- -- --
Enhanced units:
20 bp reduced .............................................. -- -- -- --
40 bp reduced .............................................. -- -- -- --
------------ ---------- ------------ ----------
Accumulation units end of year .................................. -- -- -- --
============ ========== ============ ==========
DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
1998 1997 1998 1997
------------ ---------- ------------ ----------
Accumulation value per unit:
Standard unit ................................................. $ -- $ -- $ -- $ --
Enhanced unit:
20 bp reduced .............................................. -- -- -- --
40 bp reduced .............................................. -- -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 33
===============================================================================
SEPARATE ACCOUNT A 33
===============================================================================
<TABLE>
<CAPTION>
AMERICAN GENERAL
CONSERVATIVE GROWTH LIFESTYLE AMERICAN GENERAL CORE BOND AMERICAN GENERAL STRATEGIC
FUND - DIVISION 50 FUND - DIVISION 58 BOND FUND - DIVISION 59
- --------------------------- --------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
- ----------- -------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 27,772 $ -- $ 50,247 $ -- $ 69,000 $ --
-- -- -- -- -- --
-- -- 16,291 -- 11,064 --
800,941 -- 95,397 -- 185,469 --
- ----------- -------- -------------- ---------- ------------- -------------
828,713 -- 161,935 -- 265,533 --
- ----------- -------- -------------- ---------- ------------- -------------
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
5,000,000 -- 5,000,001 -- 4,999,999 --
- ----------- -------- -------------- ---------- ------------- -------------
5,000,000 -- 5,000,001 -- 4,999,999 --
- ----------- -------- -------------- ---------- ------------- -------------
5,828,713 -- 5,161,936 -- 5,265,532 --
-- -- -- -- -- --
- ----------- -------- -------------- ---------- ------------- -------------
$ 5,828,713 $ -- $ 5,161,936 $ -- $ 5,265,532 $ --
- ----------- -------- -------------- ---------- ------------- -------------
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
- ----------- -------- -------------- ---------- ------------- -------------
-- -- -- -- -- --
- ----------- -------- -------------- ---------- ------------- -------------
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
- ----------- -------- -------------- ---------- ------------- -------------
-- -- -- -- -- --
- ----------- -------- -------------- ---------- ------------- -------------
DECEMBER 31 DECEMBER 31 DECEMBER 31
- --------------------------- --------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
- ----------- -------- -------------- ---------- ------------- -------------
$ -- $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- --
-- -- -- -- -- --
</TABLE>
<PAGE> 34
===============================================================================
34 FINANCIAL STATEMENTS
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AMERICAN GENERAL
HIGH YIELD BOND T. ROWE PRICE SMALL-CAP
FUND - DIVISION 60 STOCK FUND - DIVISION 51
--------------------------- ---------------------------
1998 1997 1998 1997
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .............................................. $ 92,262 $ -- $ -- $ --
Net realized gain on investments ................................... -- -- -- --
Capital gains distributions from mutual funds ...................... -- -- -- --
Net unrealized appreciation
of investments during the year .................................. 189,911 -- -- --
---------- ------------ ---------- ------------
Increase in net assets resulting from operations .............. 282,173 -- -- --
---------- ------------ ---------- ------------
PRINCIPAL TRANSACTIONS:
Purchase payments .................................................. -- -- 139 --
Surrenders of accumulation units by terminations,
withdrawals, and maintenance fees ................................ -- -- -- --
Annuity benefit payments ........................................... -- -- -- --
Amounts transferred interdivision, and from VALIC general account .. 5,000,000 -- -- --
---------- ------------ ---------- ------------
Increase in net assets
resulting from principal transactions ....................... 5,000,000 -- 139 --
---------- ------------ ---------- ------------
TOTAL INCREASE IN NET ASSETS ....................................... 5,282,173 -- 139 --
NET ASSETS:
Beginning of year .................................................. -- -- -- --
---------- ------------ ---------- ------------
End of year ........................................................ $5,282,173 $ -- $ 139 $ --
---------- ------------ ---------- ------------
CHANGE IN UNITS OUTSTANDING:
Accumulation units beginning of year ............................... -- -- -- --
Purchase payments .................................................. -- -- 122 --
Surrenders ......................................................... -- -- -- --
Transfers -- interdivision and from VALIC general account .......... -- -- -- --
---------- ------------ ---------- ------------
Total units outstanding, end of year ............................... -- -- 122 --
---------- ------------ ---------- ------------
Units outstanding, by class:
Standard units ................................................... -- -- 122 --
Enhanced units:
20 bp reduced ................................................. -- -- -- --
40 bp reduced ................................................. -- -- -- --
---------- ------------ ---------- ------------
Accumulation units end of year ..................................... -- -- 122 --
---------- ------------ ---------- ------------
DECEMBER 31 DECEMBER 31
--------------------------- ---------------------------
1998 1997 1998 1997
---------- ------------ ---------- ------------
Accumulation value per unit:
Standard unit..................................................... $ -- $ -- $1.141049 $ --
Enhanced unit:
20 bp reduced.................................................. -- -- -- --
40 bp reduced.................................................. -- -- -- --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 35
===============================================================================
SEPARATE ACCOUNT A 35
===============================================================================
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 fifty-five 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)
American General Series Portfolio Company 3 ("AGSPC 3"):
American General International Growth Fund (Division 33)
American General Large Cap Growth Fund (Division 39)
American General Mid Cap Growth Fund (Division 37)
American General Small Cap Growth Fund(Division 35)
American General International Value Fund (Division 34)
American General Large Cap Value Fund (Division 40)
American General Mid Cap Value Fund (Division 38)
American General Small Cap Value Fund (Division 36)
American General Socially Responsible Fund (Division 41)
American General Balanced Fund (Division 42)
American General High Yield Bond Fund (Division 60)
American General Strategic Bond Fund (Division 59)
American General Domestic Bond Fund (Division 43)
American General Core Bond Fund (Division 58)
American General Money Market Fund (Division 44)
American General Growth Lifestyle Fund (Division 48)
American General Moderate Growth
Lifestyle Fund (Division 49)
American General Conservative Growth
Lifestyle Fund (Division 50)
Dreyfus Variable Investment Fund -
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 Long-Term Corporate Fund (Division 22)
Vanguard Long-Term Treasury Fund (Division 23)
Vanguard Wellington Fund (Division 25)
Vanguard Windsor II Fund (Division 24)
Vanguard Lifestrategy Growth Fund (Division 52)
Vanguard Lifestrategy Moderate Growth Fund (Division 53)
Vanguard Lifestrategy Conservative Growth Fund (Division 54)
T. Rowe Price Small-Cap Stock Fund (Division 51)
Divisions 33 through 54 and 58 through 60 became available to contract holders
of the Separate Account effective September 22,1998.
NOTE B -- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The assets 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.
USE OF ESTIMATES. The financial statements have been prepared in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect amounts reported in the financial statements and disclosure of contingent
assets and liabilities. Ultimate results could differ from these estimates.
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 each 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 purchase 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, the Annuity 2000 Mortality Table, and the 1994 Group Annuity
Reserve Mortality Table have 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.
ACCUMULATION UNITS. VALIC offers both standard and enhanced contracts.
These contracts may have different Separate Account charges.
<PAGE> 36
===============================================================================
36 NOTES TO FINANCIAL STATEMENTS
===============================================================================
NOTE C -- TRANSACTIONS WITH AFFILIATES
VALIC serves as investment advisor ("the Advisor"), transfer agent, and
accounting services agent to AGSPC and AGSPC 3. American General Investment
Management, LLP, an affiliate of the Advisor, serves as investment sub-advisor
to certain AGSPC 3 mutual funds.
The Separate Account is charged for mortality and expense risks
assumed by VALIC and for distribution and administrative services provided by
VALIC. The standard 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 through 8, 10A, 10C and 10D, 11 through
17, 33 through 44, 48 through 50, and 58 through 60, 1.00%; and for Divisions
18 through 32, and 51 through 54, 1.25%. Certain 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 21 through 23, 26 through 30, 32 through 44, 48
through 50, and 58 through 60, 0.25%; for Division 31, 0.24% (effective
December 8, 1997, the expense reduction for Division 31 became 0.20% on the
first $75,000,000, and 0.25% on the excess over $75,000,000); and for Division
18, 0.15% (commencing July 1, 1997). Separate Account charges may be reduced if
contracts are issued to certain types of plans that are expected to result in
lower costs to VALIC. Consequently, each division may offer separate "classes"
of units of beneficial interest reflecting reductions in separate account
charges.
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
years ended December 31, 1998 and 1997, VALIC reduced expenses of Division 10B
by $82,027 and $85,996, respectively.
A portion of the annual contract maintenance charge is assessed on
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 $5,575,601 and $4,510,903 for the
years ended December 31, 1998 and 1997, respectively.
VALIC received surrender charges of $4,581,641 and $2,769,370 for the
years ended December 31, 1998 and 1997, respectively. In addition, VALIC
received $53,171 and $6,156 for the year ended December 31, 1998, in sales load
on variable annuity purchase payments for Divisions 10A and 10B, respectively.
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 contributed to the Separate Account, $100,000 and $74,900,000 on
August 26, 1998 and September 1, 1998, respectively, in order to provide
initial funding for the AGSPC 3 mutual funds. Capital surplus amounts reflected
in the Statements of Net Assets for Divisions 33 through 44, 48 through 50 and
58 through 60 are not subject to contract holder charges since they do not
represent reserves for annuity contracts issued.
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 December 31, 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 13,079,920 $11.37 $ 148,718,766 $ 148,478,416 $ 240,350
Putnam Global Growth Fund ................. 28 13,080,357 12.45 162,850,092 149,345,622 13,504,470
Templeton Foreign Fund .................... 32 26,018,073 8.39 218,291,648 267,772,677 (49,481,029)
Templeton International Fund .............. 20 37,187,918 20.69 769,418,093 672,572,557 96,845,536
AGSPC Science & Technology Fund ........... 17 52,052,496 26.07 1,357,008,368 1,058,583,311 298,425,057
AGSPC Small Cap Index Fund ................ 14 14,788,462 15.26 225,671,866 216,780,123 8,891,743
Dreyfus Variable Investment Fund -
Small Cap Portfolio ..................... 18 14,871,620 53.91 801,729,449 709,332,114 92,397,335
Putnam New Opportunities Fund ............. 26 7,047,598 58.43 411,790,940 341,359,629 70,431,311
Putnam OTC & Emerging Growth Fund ......... 27 8,240,758 17.25 142,153,064 128,583,339 13,569,725
AGSPC Growth Fund ......................... 15 53,087,130 22.85 1,213,041,349 867,944,168 345,097,181
AGSPC MidCap Index Fund ................... 4 33,517,770 25.37 850,345,675 593,845,989 256,499,686
American Century - Twentieth Century
Ultra Fund .............................. 31 10,965,109 33.41 366,344,764 344,297,873 22,046,891
Founders Growth Fund ...................... 30 20,206,988 20.41 412,424,559 377,960,267 34,464,292
AGSPC Growth & Income Fund ................ 16 14,227,222 20.04 285,113,626 214,814,089 70,299,537
AGSPC Social Awareness Fund ............... 12 19,099,259 22.77 434,890,057 350,790,377 84,099,680
AGSPC Stock Index Fund .................... 10A,B,C,D 106,096,626 37.54 3,982,866,943 2,020,245,208 1,962,621,735
Neuberger Berman Guardian Trust ........... 29 3,796,199 16.16 61,347,128 68,195,002 (6,847,874)
Scudder Growth and Income Fund ............ 21 9,416,745 26.31 247,754,620 259,592,520 (11,837,900)
Vanguard Windsor II Fund .................. 24 21,811,605 29.85 651,075,950 634,903,452 16,172,498
Templeton Asset Allocation Fund ........... 19 14,431,830 22.46 324,138,930 290,415,546 33,723,384
AGSPC Asset Allocation Fund ............... 5 16,111,443 14.12 227,493,681 191,458,464 36,035,217
</TABLE>
<PAGE> 37
===============================================================================
SEPARATE ACCOUNT A 37
===============================================================================
<TABLE>
<CAPTION>
UNREALIZED
MARKET APPRECIATION
UNDERLYING FUND DIVISION SHARES PRICE MARKET COST (DEPRECIATION)
-------- ------ ----- ------ ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Vanguard Wellington Fund ................. 25 13,852,716 29.35 $ 406,576,731 $ 416,038,579 $ (9,461,848)
AGSPC International Government
Bond Fund .............................. 13 13,339,220 12.68 169,141,402 158,031,435 11,109,967
AGSPC Capital Conservation Fund .......... 1 & 7 6,849,612 9.68 66,304,225 65,365,302 938,923
AGSPC Government Securities Fund ......... 8 10,966,460 10.35 113,502,848 110,444,717 3,058,131
Vanguard Fixed Income Securities Fund:
Long-Term Corporate Fund ............... 22 6,441,710 9.29 59,843,445 59,275,925 567,520
Long-Term Treasury Fund ................ 23 10,501,171 11.36 119,293,240 115,581,241 3,711,999
AGSPC Money Market Fund .................. 2 & 6 270,445,756 1.00 270,445,756 270,445,756 --
American General International
Growth Fund ............................ 33 365,269 10.55 3,853,567 3,652,817 200,750
American General Large Cap Growth Fund ... 39 285,293 12.44 3,549,043 2,853,503 695,540
American General Mid Cap Growth Fund ..... 37 405,021 13.52 5,475,870 4,050,270 1,425,600
American General Small Cap Growth Fund ... 35 391,362 13.49 5,279,473 3,918,373 1,361,100
American General International
Value Fund ............................. 34 360,507 11.52 4,153,036 3,605,760 547,276
American General Large Cap Value Fund .... 40 290,838 12.47 3,626,750 2,910,224 716,526
American General Mid Cap Value Fund ...... 38 405,233 12.27 4,972,209 4,075,640 896,569
American General Small Cap Value Fund .... 36 390,634 11.52 4,500,106 3,914,722 585,384
American General Socially
Responsible Fund ....................... 41 525,342 12.20 6,409,166 5,309,493 1,099,673
American General Balanced Fund ........... 42 505,484 11.61 5,868,671 5,063,135 805,536
American General High Yield Bond Fund .... 60 508,880 10.38 5,282,173 5,092,262 189,911
American General Strategic Bond Fund ..... 59 507,766 10.37 5,265,532 5,080,063 185,469
American General Domestic Bond Fund ...... 43 128,012 10.23 1,309,568 1,280,876 28,692
American General Core Bond Fund .......... 58 506,569 10.19 5,161,936 5,066,538 95,398
American General Money Market Fund ....... 44 5,082,478 1.00 5,082,478 5,082,478 --
American General Growth Lifestyle Fund ... 48 501,813 11.94 5,991,538 5,021,159 970,379
American General Moderate Growth
Lifestyle Fund ......................... 49 502,116 11.85 5,950,028 5,024,332 925,696
American General Conservative Growth
Lifestyle Fund ......................... 50 502,580 11.60 5,829,911 5,028,970 800,941
T. Rowe Price Small-Cap Stock Fund ....... 51 7 20.79 139 139 --
Total .................................. 853,696,997 $14,587,138,409 $11,178,484,452 $ 3,408,653,957
</TABLE>
NOTE E -- FEDERAL INCOME TAXES
VALIC is taxed as a life insurance company under the Internal Revenue
Code and includes the operations of the Separate Account in determining its
federal income tax liability. Under current federal income tax law, the
investment income and capital gains from sales 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 year ended December 31, 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 ................... $ 70,340,669 $ 86,195,191
Putnam Global Growth Fund Division 28 ........................... 84,411,341 2,105,181
Templeton Foreign Fund Division 32 .............................. 82,320,483 9,313,676
Templeton International Fund Division 20 ........................ 176,311,032 153,728,857
AGSPC Science & Technology Fund Division 17 ..................... 262,237,519 101,549,488
AGSPC Small Cap Index Fund Division 14 .......................... 56,957,370 35,775,340
Dreyfus Variable Investment Fund -
Small Cap Portfolio Division 18 ........................... 63,341,013 64,349,216
Putnam New Opportunities Fund Division 26 ....................... 196,437,438 3,727,492
Putnam OTC & Emerging Growth Fund Division 27 ................... 43,601,585 7,874,482
AGSPC Growth Fund Division 15 ................................... 168,030,279 22,896,950
AGSPC MidCap Index Fund Division 4 .............................. 121,443,834 59,433,835
American Century - Twentieth Century Ultra Fund Division 31 ..... 206,441,197 3,102,142
Founders Growth Fund Division 30 ................................ 203,148,927 4,157,924
AGSPC Growth & Income Fund Division 16 .......................... 35,712,751 22,023,607
</TABLE>
<PAGE> 38
===============================================================================
38 NOTES TO FINANCIAL STATEMENTS
===============================================================================
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- --------------
<S> <C> <C>
AGSPC Social Awareness Fund Division 12 .............................. $ 155,478,764 $ 4,747,514
AGSPC Stock Index Fund:
Division 10A ................................................ 16,487,825 57,170,007
Division 10B ................................................ 1,430,916 5,138,856
Division 10C ................................................ 409,382,612 36,743,609
Division 10D ................................................ 2,305,198 7,769,904
Neuberger Berman Guardian Trust Division 29 .......................... 24,369,333 4,106,246
Scudder Growth and Income Fund Division 21 ........................... 134,037,172 6,545,427
Vanguard Windsor II Fund Division 24 ................................. 380,154,266 5,838,118
Templeton Asset Allocation Fund Division 19 .......................... 48,497,460 40,983,269
AGSPC Asset Allocation Fund Division 5 ............................... 37,672,428 10,217,954
Vanguard Wellington Fund Division 25 ................................. 267,401,470 4,016,568
AGSPC International Government Bond Fund Division 13 ................. 63,147,566 81,054,776
AGSPC Capital Conservation Fund:
Division 1 .................................................. 832,531 1,006,283
Division 7 .................................................. 16,631,338 12,372,606
AGSPC Government Securities Fund Division 8 .......................... 54,546,370 32,043,559
Vanguard Long-Term Corporate Fund Division 22 ........................ 42,256,730 2,903,724
Vanguard Long-Term Treasury Fund Division 23 ......................... 102,868,659 11,315,873
AGSPC Money Market Fund:
Division 2 .................................................. 2,987,800 3,330,427
Division 6 .................................................. 379,702,464 248,100,695
American General International Growth Fund Division 33 ............... 3,652,817 --
American General Large Cap Growth Fund Division 39 ................... 2,853,503 --
American General Mid Cap Growth Fund Division 37 ..................... 4,050,270 --
American General Small Cap Growth Fund Division 35 ................... 3,918,373 --
American General International Value Fund Division 34 ................ 3,605,760 --
American General Large Cap Value Fund Division 40 .................... 2,910,224 --
American General Mid Cap Value Fund Division 38 ...................... 4,075,640 --
American General Small Cap Value Fund Division 36 .................... 3,914,722 --
American General Socially Responsible Fund Division 41 ............... 5,309,493 --
American General Balanced Fund Division 42 ........................... 5,063,135 --
American General High Yield Bond Fund Division 60 .................... 5,092,262 --
American General Strategic Bond Fund Division 59 ..................... 5,080,063 --
American General Domestic Bond Fund Division 43 ...................... 1,280,876 --
American General Core Bond Fund Division 58 .......................... 5,066,538 --
American General Money Market Fund Division 44 ....................... 5,082,478 --
American General Growth Lifestyle Fund Division 48 ................... 5,021,159 --
American General Moderate Growth Lifestyle Fund Division 49 .......... 5,024,332 --
American General Conservative Growth Lifestyle Fund Division 50 ...... 5,028,970 --
T. Rowe Price Small-Cap Stock Fund Division 51 .............. 139 --
-------------- --------------
Total ....................................................... $3,986,957,094 $1,151,638,796
============== ==============
</TABLE>
NOTE G -- YEAR 2000 (UNAUDITED)
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 its operations.
These plans include the following activities: (1) perform an inventory
of VALIC's information technology and non-information technology systems; (2)
assess which items in the inventory may expose VALIC 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.
In addition, the Separate Account and VALIC have 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, as
well as contingency plans for any identified risks or shortcomings, 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 December 31, 1998, VALIC has incurred and expensed $26.7
million (pretax) related to Year 2000 readiness, including $20.2 million
incurred in 1998.
As of December 31, 1998, VALIC has completed the inventory,
assessment, testing, reprogramming and implementation phases of the plan with
respect to its critical systems. VALIC believes its comprehensive plan and
resource commitment will allow it to meet its Year 2000 objectives. However,
the Year 2000 issue remains complex and the risks, uncertainties, and
unforeseen circumstances associated with the Year 2000 issue could have a
material adverse impact on VALIC and the Separate Account.
<PAGE> 39
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REPORT OF INDEPENDENT AUDITORS 39
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TO THE BOARD OF THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AND CONTRACT OWNERS
OF THE VARIABLE ANNUITY LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
We have audited the accompanying statements of net assets of The Variable
Annuity Life Insurance Company Separate Account A ("the Separate Account") and
each of the divisions (1, 2, 4, 5, 6, 7, 8, 10A, 10B, 10C, 10D, 11 through 44
inclusive, 48 through 51 inclusive, and 58 through 60, inclusive) comprising
the Separate Account as of December 31, 1998. We have also audited the related
statements of operations for the year then ended and the statements of changes
in net assets for each of the two years in the period then ended of the
Separate Account and each of its divisions except for divisions 33 through 44
inclusive, divisions 48 through 50 inclusive, and divisions 58 through 60,
inclusive, for which we have audited the statements of operations and changes
in net assets for the period from August 26, 1998 (inception) to December 31,
1998, and for division 51 for which we have audited the statements of
operations and changes in net assets for the period from September 22, 1998
(inception) through December 31, 1998. These financial statements are the
responsibility of the Separate Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1998,
by correspondence with the transfer agents. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Separate Account and each
of the divisions comprising the Separate Account at December 31, 1998, and the
results of their operations and changes in their net assets for each of the
periods identified above, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Houston, Texas
February 15, 1999
