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HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNTS
AND MUTUAL FUNDS
[LOGO] 1997 SEMI-ANNUAL REPORT
[ARTWORK]
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Table Of Contents
- A Message From The Chairman 1
- Fund Manager Discussions 2
- Portfolios At A Glance 11
- Financial Statements 16
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A Message From The Chairman
Chairman
Lowndes A. Smith
Chairman
Hartford Life
Dear Contractholder:
Virtually everyone knows the old adage, "May you live in interesting times."
For investors, our wish has always been, "May you live in rewarding times."
Certainly, the first half of this year was rewarding for variable annuity
investors, as well as for anyone involved in the financial markets. The good
economic news of 1996 spilled over into this year, and the equity markets
continued to experience a string of performance highs.
The portfolio managers at Wellington Management Company, LLP and The Hartford
Investment Management Company (HIMCO) took full advantage of these trends,
producing some outstanding results over the last six months. As you review this
report, I hope you'll be as gratified as we are with the value they've produced
for all our variable annuity contractholders.
But even more important, I hope you'll rest assured that no degree of short-term
success will ever take our eye off the ball. We know that the true measure of
our value to investors is our long-term performance. After all, variable
annuities are built to provide distinct advantages for those with long-term
goals. That's why, over the past 10 years, Americans have chosen to invest over
$300 billion in these crucially important financial programs, and why invested
assets in annuities have grown to over one-half trillion dollars.
Hartford Life has certainly been in the forefront of this trend. We remain the
dominant force in the variable annuity market today, with over $50 billion in
annuity assets under management and, according to VARDS, the nation's number one
spot in variable annuity sales.
There are many reasons for our success, including forward-thinking product
design, outstanding service, portfolio management by some of the finest
professionals in the industry and the continual realization that, although we
might occasionally live in "rewarding" times, over the long-term we will
always live in "interesting" times. That's because times change. Markets
change. But with the proper investing discipline, and through the unique
array of advantages that our products provide, we will strive to deliver the
kind of superior, long-term financial benefits that our annuity clients have
come to expect from a market leader like Hartford Life.
Thank you for your business and for being a part of our growing family of
annuity clients. We appreciate the opportunity to help you build a better
tomorrow.
Sincerely,
Lowndes A. Smith
Chairman
Hartford Life
1
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The Hartford Small Company Fund
Portfolio Manager
Mark Waterhouse
Vice President
Wellington Management Company, LLP
How Did The Fund Perform?
The Hartford Small Company Variable Annuity Fund returned 10.5% for the six
month period ended 6/30/97, outperforming both the Russell 2000 and the Lipper
Small Company Variable Annuity-Underlying Fund Average, which returned 10.2%
and 8.1%, respectively.
What contributed to the outperformance of the fund versus the index?
Within the Russell 2000 index, technology was the strongest performing
sector. The Fund benefited from a considerable overweight in this sector, 23%
versus 13% for the Russell 2000 index as of 6/30/97. The health care sector
also exhibited strength during the period, and we used the strength in both
the health care and technology sectors to trim some positions. We continue,
however to see upside in these areas and will maintain overweight positions,
as health care and technology tend to be "hallowed hunting grounds" for small
company stocks with substantial earnings growth potential. One other area of
note was the finance sector, which was a strong positive force for the Fund
both in terms of our overweight position and stock selection in the sector.
What Is Your Outlook For The Remainder Of 1997?
Given current valuation levels of the broad market, we anticipate a
relatively challenging investment environment during the remainder of 1997.
However, the combination of a favorable economic backdrop, strong corporate
fundamentals, and sustained cash inflows should significantly limit any
short-term declines. We saw a hint of a revival of the small cap market
during the second half of the period and are cautiously optimistic that our
sector of the market will begin its long awaited "catch-up" during the second
half of the year.
2
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The Hartford Capital Appreciation Fund
Portfolio Manager
Saul J. Pannell, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
For the six month period ended June 30, 1997, the Hartford Capital
Appreciation Fund outperformed the Lipper peer group. The Fund posted a
return of 14.6% versus 9.7% for the Lipper Capital Appreciation Variable
Annuity-Underlying Fund average.
What factors played a role in the outperformance of the Lipper peer group?
At the end of the period, the Fund's asset weighted market cap was $9.3
Billion, the median market cap was $1.7 Billion and the Fund's holdings were
invested in 156 companies. Looking at some of the Fund's most recent
successes, many of the better performers were concentrated in the Information
Technology sector. These included: Creative Technology Labs, a specialty
computer components supplier, Philips Electronics NV, the large Dutch
conglomerate, Credence Systems, a manufacturer of semiconductor test
equipment, and Oak Industries, a manufacturer of broadband infrastructure
components. We continue to increase foreign exposure on the margin, with new
positions in Unibanco (Brazilian bank holding company) and Corporation Geo
(Mexican homebuilder). Overall foreign investment levels were approximately
14% in the fund.
What Is Your Outlook For The Remainder Of 1997?
The overall markets continue to enjoy favorable tailwinds in the form of
moderate economic activity, declining long term interest rates, and favorable
supply/demand dynamics. The resumption of cash flows into equity funds
coupled with reported increased flows from offshore investors has revived the
uptrend in equity prices that was broken by the Federal Reserve's notching up
of short term rates several months ago.
Our overall strategy for the Fund remains dual faceted. We maintain an
emphasis on smaller companies with dynamic earnings growth prospects, and
couple that with an opportunistic trading approach to larger and mid cap
stocks where we typically see a catalyst for outperformance. We have tended
to roam off the beaten path, since historically that's where the most upside
potential has been. This approach, if executed well, should continue to
provide positive absolute and relative results over a reasonable time frame.
3
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The Hartford International Opportunities
Portfolio Manager
Trond Skramstad
Senior Vice President
and Partner
Wellington Management
Company, LLP
How Did The Fund Perform?
The Hartford International Opportunities Variable Annuity Fund provided a
total return of 10.3% for the six month period ended 6/30/97, underperforming
the Lipper International Equity Variable Annuity-Underlying Fund average
which returned 12.1% during the period.
Why Did The Fund Perform This Way?
The Fund maintained a sizable commitment to Europe during the period,
approximately 50% as of 6/30/97. While this represents a significant position
in any one region, this level of exposure represents an underweight relative
to the Morgan Stanley Capital International GDP Weighted Index ("the Index").
Also during the period, the Japanese market experienced a sharp rebound from
the first half of the year due to appreciation of the yen and the belief that
recent fiscal tightening will not impede economic recovery. In the last few
months as the market has appreciated, the Fund has moved to a more
conservative position in Japan relative to the Index. On-going economic
problems continued to plague the Pacific Basin markets, but on a
country-by-country basis, significant divergence took place. The market in
Hong Kong rebounded from a weak first quarter as the market anticipated the
Chinese takeover. The regional laggards were Thailand and Malaysia.
Thailand's equity market continued its precipitous decline on concerns of a
potential Baht devaluation and a worsening crisis in the financial system,
while the Malaysian market declined as a result of credit curbs announced by
the central bank.
What Is Your Outlook For The Remainder Of 1997?
With respect to the European markets, the Socialist victory in the French
election could remove some rigidity in the EMU process and actually benefit
individual market performance. We believe this leaves continental Europe
well-positioned for a period of moderate growth, low inflation and low
interest rates, typically an environment that benefits equity markets. In
Japan, the region is no longer significantly undervalued and going forward,
we may look for opportunities to further reduce the Funds' position by
selling into strength. Finally, in Hong Kong, given the recent appreciation
in the market, we are growing cautious and are likely to trim the Fund's
holdings in Hong Kong on any significant strength.
4
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The Hartford Stock Fund
Portfolio Manager
Rand L. Alexander, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
The Hartford Variable Annuity Stock Fund outperformed both the S&P 500 and
its Lipper peer group for the six month period ended June 30, 1997, providing
a return of 22.1%, versus 20.6% for the S&P 500 and 13.6% for the Lipper
Growth Variable Annuity-Underlying Fund average.
What factors were attributable to the stellar performance of the fund
compared to its Lipper peer group?
Our above average performance during the period was driven by our overweight
in some of the strongest performing sectors: pharmaceuticals, securities
brokers, and telecommunications equipment, and our underweight in utilities
which underperformed the market. The two largest individual holdings in the
fund, General Electric and Wal-Mart Stores were among the best performing
companies during the period, providing price appreciation of 34% and 49%,
respectively during the 6 month period ending 6/30/97. Also, during the
period we increased our exposure to mid cap companies, a segment that has
lagged the market over the past 12 months. We found good value in several
high quality mid cap companies which have strong market positions and
promising outlooks. Some of the companies we added include: Clear Channel
Communications, a diversified media company; EMC, a provider of high end
computer disc drives; Hertz, a leading car rental company; and Perkin Elmer,
a manufacturer of instrumentation for biotech research. We took advantage of
a brief period of weakness in the financial services sector, due to concerns
about another potential Fed rate hike, to increase our exposure to
financials. We added to our holdings in Allstate, American Express and Marsch
& McLennan while initiating a position in Fannie Mae. We continue to believe
that the backdrop for financial assets is positive.
What Is Your Outlook For The Remainder Of 1997?
Large capitalization stocks continue to outperform small caps as earnings
growth for large companies remains stronger and investors are willing to pay
up for reliability and global diversification. Inflation is low, economic
growth is not too strong, corporate profits are growing, and labor costs are
not out of control. Liquidity in corporate America remains quite high. Stock
buybacks and mergers and acquisitions continue at record levels. Prospects
for international growth for many large U.S. companies looks excellent, which
should benefit many of our holdings.
5
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The Hartford Dividend and Growth Fund
Portfolio Manager
Laurie A. Gabriel, CFA
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
For the six month period ended June 30, 1997, the Hartford Variable Annuity
Dividend and Growth Fund outperformed its Lipper peer group, providing a
return of 19.5% versus 16.8% for the Lipper Equity Income Variable
Annuity-Underlying Fund average. The fund continues to post strong results
versus the equity income competitors, placing the fund in the first quartile
for the 3 month and year-to-date periods.
What were the contributing factors to the funds outperformance versus its
Lipper peer group?
A major contributor to performance during the period was Health Care, due in
part to strong stock selection in the pharmaceutical industry. Warner-Lambert
was a top contributor because of two new drugs that received approval this
year. These new products combat cholesterol and diabetes, and revenues have
exceeded all expectations. Bristol-Myers Squibb also performed well with the
issuance of a patent for a cancer-fighting drug. Our overweighting in
electric utilities remains a source of disappointment resulting from a
combination of negative regulatory and competitive pressures. Toward the end
of June, however, we have seen an improvement in this industry, in
conjunction with the recent bond market strength. Duke Energy Corp and Edison
International are two of our largest electric utility holdings. Stock
selection in combination with a concentration in automobile and department
store names was a strong contributor in the Consumer Discretionary sector.
Mercantile Stores, performed well due to speculation of a potential takeover
by a large national department store chain and Ford Motor Company experienced
the highest profitability in North America in ten years, due largely to
massive cost cutting measures.
What Is Your Outlook For The Remainder Of 1997?
Broad diversification across economic sectors is an ongoing part of the
Fund's investment strategy. The Fund owned 91 positions at the end of the
period. Given the generally positive back drop of moderate economic growth
and a low inflation environment, we do not anticipate the current momentum
for US equities to reverse. Nonetheless, some risk to equities at these
valuation levels remains. With respect to this situation, we have begun to
add some more conservative holdings into the portfolio. In keeping with our
charter, the Fund continues to maintain an above-average yield (2.9% gross
yield currently versus 1.7% for the S&P 500 Index) and below average P/E and
beta. Relative to the market, the Fund should exhibit these value-oriented
characteristics over time.
6
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The Hartford International Advisers Fund
Portfolio Manager
Robert Evans
Vice President
Portfolio Manager
Wellington Management
Company, LLP
(International Fixed Income)
Portfolio Manager
Trond Skramstad
Senior Vice President
and Partner
Wellington Management
Company, LLP
How Did the Fund Perform?
The Hartford International Advisers Variable Annuity Fund returned 8.0% for
the six month period ended 6/30/97. The Fund slightly underperformed its
composite benchmark, comprised of 55% MSCI EAFE GDP-Net weighted Index, 35%
Salomon Brothers World Government Bond ex-US Index-hedged, and 10% US T-Bill,
which returned 8.5% for the period.
Why Did The Fund Perform This Way?
Please refer to the International Opportunities Fund commentary for a review
of the international equity market and the Fund's equity strategy.
After a turbulent first quarter, the global fixed income markets posted a
sterling second quarter of 1997. Lower inflation, moderating US economic
activity and further monetary ease in Europe and Australia quelled the fear
of higher global interest rates. After a slow start to the year,
international bonds, as representative by the Salomon Brothers World
Government Bond Index-ex US-hedged, gained 4.7% for the period.
What Is Your Outlook For The Remainder Of 1997?
After maintaining a neutral aggregate duration during most of the first 3
months of the year, the Fund held a longer than index aggregate portfolio
duration during the most recent 3 months, with overweight positions in
Germany, Sweden, UK, Australia and New Zealand and underweight positions in
Japan and Spain. The G-15 countries should continue to experience moderate
economic growth and low inflationary conditions for the remainder of 1997.
Economic activity, as measured by real GDP, is forecast to rise 2.8% with
2.1% inflation. This moderate level of economic growth and benign inflation
environment should provide an attractive environment for global fixed income
assets.
7
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The Hartford Advisers Fund
Portfolio Manager
Rand L. Alexander, CFA
Senior Vice President
and Partner
Wellington Management
Company, LLP
Portfolio Manager
Paul D. Kaplan
Senior Vice President
and Partner
Wellington Management Company, LLP
How Did The Fund Perform?
The Hartford Variable Annuity Advisers Fund outperformed its Lipper peer
group average for the six month period ended June 30, 1997, providing a total
return of 16.0% versus 10.4% for the Lipper Flexible Variable
Annuity-Underlying Fund average.
What were the contributing factors of the tremendous outperformance of the
fund versus the Lipper peer group?
The total return provided by the equity market during the period was simply
stunning. In the second quarter alone, the S&P 500 stock index was up 17.5%,
bringing the 6 month total return to approximately 20%. The Hartford Advisers
Funds above average performance during the period was driven by our
overweight in some of the strongest performing sectors: pharmaceuticals,
securities brokers, and telecommunications equipment, and our underweight in
utilities which underperformed the market. On the heals of an essentially
flat first 3 months of the year, the bond market has begun to show signs of
life with the Lehman Government/Corporate index generating a total return of
3.6% in the last 3 months of the period. It would appear that the bond market
is finally experiencing some abatement in the growth/inflation fears which
had gripped investors since the beginning of 1996.
What Is Your Outlook For The Remainder Of 1997?
The asset allocation at the end of the period was 70% stocks, 30% bonds and
0% in cash. For the bulk of the period, the Fund's equity weighting has been
at the high end of the its historical range and reflects our continued belief
that equities are more attractive than bonds. Bonds remain attractive
relative to cash and we will therefore carry only a very modest cash
commitment. Interest rates have fallen in response to the slowing economy and
low inflation, but we believe that the rate decline has farther to go. It
remains our view that inflation is currently not a threat and that the CPI is
likely to stay below 3.0%. If we are correct in our inflation assumptions,
then long-term Treasury bond yields of 6.8% are still too high, and we
believe that they will fall. Therefore, in the fixed income portion of the
portfolio we are maintaining a relatively long portfolio duration. We
continue to search for those conditions which would lead us to reduce our
exposure to one or the other of the financial markets, but to date we find no
evidence to convince us that we should reduce our holdings of either stocks
or bonds.
8
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The Hartford Bond Fund
Portfolio Manager
Alison D. Granger, CFA
Senior Vice President
The Hartford Investment
Management Company (HIMCO)
How Did the Fund Perform?
The Hartford Variable Annuity Bond Fund outperformed its Lipper peer group
average for the six month period ended June 30, 1997, providing a total
return of 3.7% versus 3.1% for the Lipper Corporate Debt "BBB" Rated Variable
Annuity-Underlying Fund average.
What were some of the contributing factors for beating the Lipper peer group?
- - Moderate portfolio duration management. The fund began and ended the first
half of 1997 carrying a portfolio duration which was approximately 10% longer
than the benchmark index. In February, however, we shortened the duration to
neutral, as we became concerned about a possible Fed tightening. The bond
market sold off between late February and mid-April, at which time we
lengthened our duration once again. The portfolio thereby benefited from the
rally which began then.
- - An allocation to BB-rated high yield corporate debt. Top performing
holdings within this asset class included Telecommunications, Inc. 7.875s of
'26, K-Mart Medium Term Notes, Brady Bonds issued by Argentina and Mexico,
and Long Island Lighting Co (LILCO) debentures, to name a few.
- - An allocation to discount mortgages. These securities provided greater
total return than other equal-duration choices available in other high
quality asset classes.
- - Higher portfolio yield. The portfolio carried a yield which was higher than
that of its index. This greater income accumulated and helped contribute to a
higher total return during the period.
What Is Your Outlook For The Remainder Of 1997?
We are currently assessing the wisdom of maintaining the funds long duration
posture given the success we have had in holding this position throughout the
bond market rally since mid-April and recent fundamental indications that the
economic slowdown of the past few months may be over.
We remain overweighted in the corporate and mortgage sectors, in order to
provide shareholders with a maximization of yield commensurate with the
fund's stated risk profile. Given our current fundamental outlook for the
economy and particular credits, we view pricing as generally fair. However,
should yields tighten relative to Treasuries, we will look to reduce our
allocation to these sectors, particularly to BB-rated corporate high yield.
We will look for potential investments in some of the Asian credits we have
so far avoided which have underperformed of late. And finally, we expect to
continue to add to positions in AAA-rated supranational issues when we find
them at attractive levels. We believe that the risk/reward profile of this
sector is currently very attractive.
9
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The Hartford Mortgage Securities Fund
Portfolio Manager
Timothy J. Wilhide
Senior Vice President
The Hartford Investment Management Company
(HIMCO)
How Did The Fund Perform?
The Hartford Variable Annuity Mortgage Securities Fund outperformed its
Lipper peer group average for the six month period ended June 30, 1997,
providing a total return of 3.6% versus 3.0% for the Lipper U.S. Mortgage
Variable Annuity-Underlying Fund average.
What contributed to the fund outperforming its Lipper average?
Mortgages were a stellar performer in the fixed income sector during the
period, easily outdistancing similar duration Treasuries and most investment
grade corporate bonds. Relatively stable interest rates and a moderate supply
of new mortgage securities coming to market explain this outperformance.
The Fund's yield to maturity and duration essentially matched that of the
Lehman Mortgage Backed Securities INDEX. The Mortgage market has of late
become extremely efficient at fairly pricing GNMA, FNMA and FHLMC securities,
thereby making attractive relative value trades more infrequent. Further, it
is difficult to outyield the index without taking an undue amount of risk.
Nevertheless ,some opportunities did arise, especially involving current
production thirty year paper and these contributed to the Fund's returns. The
Fund continues to benefit in terms of yield and price performance from its
positions in high quality non agency mortgage securities. This paper has
benefited from increased standardization and a widening circle of investors.
Among these securities are Commercial Mortgage Backed Securities (CMBS); late
in the first quarter the Fund added its first position in CMBS.
What Is Your Outlook For The Remainder Of 1997?
As we enter the Second Half of 1997 conditions still appear favorable for the
Mortgage market. The most important of these is a continuation of what is now
a long term trend of modest fluctuations in interest rates. The Federal
Reserve has surpassed itself in fostering a stable economic environment which
in turn has toned down interest rate volatility. This benefits Mortgages
because it makes refinancings more predictable. Also, mortgage origination is
running well under its pace of last year, making the supply-demand balance
favorable.
Until it becomes clear that the economy is moving off track, or the current
climate of stable interest rates is coming to an end, The Fund will continue
to emphasize current production thirty year Mortgages. The portfolio will
also continue to carefully monitor the non Agency mortgage market, with an
eye to adding further positions in such securities as CMBS as opportunities
arise.
10
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Portfolio at a Glance -
Hartford Small Company Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Mckesson 2.9%
2. Vencor Inc. 2.1%
3. Air Express International 1.9%
4. Firstplus Financial Group 1.8%
5. Heska Corp. 1.6%
6. Frontier Insurance Group 1.6%
7. Saks Holdings Inc. 1.6%
8. Peoples Heritage Fin'l Group 1.6%
9. M.S. Carriers 1.6%
10. Gilat Satellite Ntwk 1.6%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 23%
Information Technology 21%
Industrial & Commercial 17%
Health Care 15%
Information & Entertainment 10%
Portfolio Composition
Stock 98%
Cash 2%
Hartford Capital Appreciation Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Worldcom Inc. 1.9%
2. EMC Corp. - Mass 1.7%
3. Lucent Technologies 1.5%
4. Greenpoint Financial 1.4%
5. Morgan St. Dean Witter Discover 1.4%
6. Solectron Corp. 1.3%
7. Ace Ltd 1.3%
8. Philips Nv Adr 1.3%
9. Abbott Laboratories 1.3%
10. Rhone-Poulenc Rorer 1.2%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Information Technology 24%
Finance 17%
Health Care 17%
Industrial & Commercial 12%
Information & Entertainment 7%
Portfolio Composition
Stock 95%
Cash 5%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
11
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Hartford International Opportunities Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Unidanmark A Redg (Denmark) 1.5%
2 Canandian Pacific Ltd (Canada) 1.5%
3. Associated Brit Food (UK) 1.2%
4. Fiat Spa (Italy) 1.2%
5. Guinness Plc (UK) 1.2%
6. Matsushita Electric Co. (Japan) 1.1%
7. Aisin Seiki Co., Ltd (Japan) 1.1%
8. Namco Ltd (Japan) 1.1%
9. Pharmacia&Upjohn Dep (Sweden) 1.1%
10. Smurfit (Jefferson) Group (Ireland) 1.1%
Top 5 Countries as of:
June 30, 1997
% of Fund's
Investments
Japan 22%
United Kingdom 15%
France 8%
Germany 6%
Australia 4%
Portfolio Composition
Stock 97%
Cash 3%
Hartford Stock Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. General Electric 4.2%
2. Wal-Mart 2.4%
3. Royal Dutch Petroleum 2.3%
4 Travelers Group Inc. 2.2%
5. Boeing Company 2.1%
6. SBC Communications Inc. 2.1%
7. Merrill Lynch & Co., Inc 2.1%
8. McDonalds Corp. 2.1%
9. Gannett Co., Inc. 2.1%
10. IMB Corp. 2.0%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 17%
Healthcare 17%
Information Technology 16%
Industrial & Commercial 13%
Energy 9%
Portfolio Composition
Stock 96%
Cash 4%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
12
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Hartford Dividend & Growth Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Citicorp 4.2%
2. General Electric 3.6%
3. Philip Morris 3.4%
4. First Bank System Inc. 3.3%
5. Warner-Lambert Company 2.9%
6. Xerox 2.6%
7. Chevron Corp. 2.4%
8. Pharmacia & Upjohn 2.0%
9. Merck & Co., Inc. 2.0%
10. Allstate Corp. 1.9%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 17%
Utilities 15%
Health Care 13%
Consumer Staples 13%
Energy 12%
Portfolio Composition
Stock 98%
Cash 2%
Hartford International Advisers Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Unidanmark A Redg (Denmark) 1.1%
2. Mabuchi Motor (Japan) 0.9%
3. Fuji Machine Mfg. Co. (Japan) 0.8%
4. Canadian Pacific Ltd (Canada) 0.8%
5. Guinness Plc (UK) 0.8%
6. Fiat Spa (Italy) 0.8%
7. Smurfit (Jefferson) Group (Ireland) 0.8%
8. Associated Brit Food (UK) 0.8%
9. Pharmacia&Upjohn Dep (Sweden) 0.8%
10. Aisin Seiki Co., Ltd (Japan) 0.7%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Japan 21%
United Kingdom 14%
France 7%
Germany 6%
Italy 4%
Portfolio Composition
Stock 59%
Bonds 29%
Cash 12%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
13
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Hartford Advisers Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. General Electric 3.1%
2. Wal-Mart 1.8%
3. Travelers Group Inc. 1.7%
4. Royal Dutch Petroluem 1.6%
5. McDonalds Corp. 1.5%
6. SBC Communications Inc. 1.5%
7. Gannett Co., Inc. 1.5%
8. Merrill Lynch & Co. Inc. 1.5%
9. Boeing Company 1.5%
10. Xerox 1.4%
Top 5 Sectors as of:
June 30, 1997
% of Fund's
Investments
Finance 17%
Healthcare 17%
Information Technology 16%
Industrial & Commercial 13%
Energy 9%
Portfolio Composition
Stock 70%
Bonds 30%
Hartford Bond Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. Continental Airlines 1997-1 EETC 2.8%
2. Mass Mutual Life Ins. 2.7%
3. Landeskreditbank Baden 1.9%
4. Ralcorp Holdings 1.9%
5. Abbey National First Capital 1.9%
6. Interamer Dev Bk 1.8%
7. United Air Lines 1.8%
8. Tele-Communications Inc. 1.6%
9. Tennco Inc. 1.6%
10. Bayerische Landesbank Ny 1.5%
Credit Quality Distribution:
June 30, 1997
% of Fund's
Investments
AAA 42%
AA 9%
A 12%
BAA 13%
BA 19%
Not Rated 5%
Portfolio Composition
Corporates 59%
US Treasury/Agency 18%
Mortgage Related 7%
Short-Term 6%
Asset Backed 5%
Emerging Markets 3%
Supra-National 2%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
14
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Hartford Mortgage Securities Fund
Top Holdings as of:
June 30, 1997
% of Fund's
Investments
1. FNMA TBA 30 yr 7.0%, 7/25/27 4.6%
2. GNMA TBA 7.0%, 7/1/23 3.9%
3. Home Ownership Funding 144A 3.1%
4. FNMA TBA 7.5%, 7/1/27 3.1%
5. FNMA TBA 8.0%, 7/25/27 2.8%
6. GE Capital Mortgage Assoc. 94-26 A 2.4%
7. GE Capital Mortgage Assoc. 94-21 A 2.4%
8. FHLMC TBA 7.5%, 8/14/27 2.3%
9. FHLMC 9.5%, 11/1/08 1.9%
10. Asset Securitization Corp. 7.41%, 97-MD7 A1B 1.7%
Mortgage Issuer Distribution:
June 30, 1997
% of Fund's
Investments
GNMA 33%
FNMA 32%
FHLMC 32%
Conventional 3%
Portfolio Composition
Mortgage Pass-Throughs 76%
Collateralized Mortgage Securities 16%
REIT Debt 4%
Short-Term Securities 3%
US Treasury/Agency 1%
IN REGARDS TO THE MANAGER DISCUSSIONS AND THE TOP 10 HOLDINGS, SECURITIES
REFERRED TO MAY OR MAY NOT CURRENTLY BE HELD IN THE PORTFOLIO.
15
<PAGE>
PERFORMANCE SUMMARY OF HARTFORD MUTUAL FUNDS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
FUNDS
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS FOR THE YEARS ENDED
-------------------------------------------------------------------------------------------------------------
1997(a) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Stock 22.06% 24.37% 34.10% (1.89)% 14.34% 10.04% 24.58% (3.87)% 26.02% 19.00% 5.41% 12.33% 31.49%
Bond 3.71 3.52 18.49 (3.95) 10.24 5.53 16.43 8.39 12.10 7.60 (0.01) 12.19 20.62
HVA Money
Market 2.57 5.19 5.74 3.95 2.94 3.63 6.01 8.09 9.10 7.40 6.49 6.77 8.53
Advisers 16.00 16.59 28.34 (2.74) 12.25 8.30 20.33 1.26 21.72 14.24 6.08 12.70 26.85
Capital
Appreciation 14.56 20.70 30.25 2.50 20.80 16.98 53.99 (10.90) 24.11 26.37 (4.31) 9.03 36.18
Mortgage
Securities 3.59 5.07 16.17 (1.61) 6.31 4.64 14.71 9.70 13.13 8.38 2.64 11.13 20.61
Index 20.22 22.09 36.55 0.94 9.12 6.82 29.53 (3.99) 30.47 16.35 (12.91)* -- --
International
Opportunities 10.27 12.93 13.93 (1.94) 33.73 (4.43) 13.00 (11.76)* -- -- -- -- --
Dividend
& Growth 19.54 22.91 36.37 1.96* -- -- -- -- -- -- -- -- --
International
Advisers 7.98 11.79 15.84* -- -- -- -- -- -- -- -- -- --
Small Company 10.47 7.15* -- -- -- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
MARKET INDICES
- ----------------------------------------------------------------------------------------------------------------------------
Standard
& Poor's 500
Stock Index 20.60% 22.95% 37.52% 1.31% 10.06% 7.61% 30.39% (3.11)% 31.62% 16.60% 5.49% 18.66% 31.70%
Lehman
Gov't/Corp.
Bond Index 2.74 2.90 19.24 (3.51) 11.03 7.58 16.13 8.28 14.24 7.58 2.29 15.62 21.30
90-Day
Treasury Bills 2.61 5.29 5.80 4.14 3.12 3.70 5.90 7.95 8.67 6.56 5.97 6.41 7.97
EAFEGDP 11.96 7.63 11.16 7.81 33.56 (9.65) 10.73 -- -- -- -- -- --
Frank Russell
2000 Index 10.20 16.51 28.45 (1.82) 18.71 18.41 46.04 (19.48) 16.26 25.02 (8.80) 5.68 31.04
Frank Russell
2500 Index 11.32 19.04 31.70 (1.07) 16.54 16.18 46.69 (14.88) 19.43 21.39 1.75 12.62 --
Lehman Mortgage
Backed Securities
Index 3.92 5.35 16.80 (1.61) 6.84 8.96 15.72 10.72 15.35 8.55 2.81 -- --
</TABLE>
(A) FOR SIX MONTHS ENDED JUNE 30, 1997
THE INCEPTION DATES OF THE FUNDS ARE AS FOLLOWS: STOCK AND BOND SECURITIES-
AUGUST 31, 1977, HVA MONEY MARKET- JUNE 30, 1980, ADVISERS - MARCH 31, 1983,
CAPITAL APPRECIATION- APRIL 2, 1984, MORTGAGE SECURITIES- JANUARY 1, 1985,
INDEX- MAY 1, 1987, INTERNATIONAL OPPORTUNITIES- JULY 2, 1990, DIVIDEND AND
GROWTH- MARCH 9, 1994, INTERNATIONAL ADVISERS- MARCH 1, 1995, AND SMALL
COMPANY- AUGUST 9, 1996.
* PARTITIAL-YEAR RETURNS ARE CALCULATED FROM THE FUND'S COMMENCEMENT THROUGH
YEAR-END.
THE PERFORMANCE FIGURES FOR MATUAL FUNDS DO NOT INCLUDE INSURANCE CHARGES
THAT ARE INCLUDED IN THE UNIT VALUES OF INDIVIDUAL PLANS.
TOTAL RETURN CONSIST OF ANY CHANGE IN THE MARKET PRICE OF SECURITIES OWNED BY
THE VARIOUS MATUAL FUNDS, AS WELL AS INCOME FROM DIVIDENDS OR INTEREST.
CALCULATIONS ASSUME REINVESTMENT OF INCOME. PERFORMANCE FIGURES REPRESENT
PAST RESULTS AND ARE NOT A GUARANTEE OF FUTURE PERFORMANCE. AN INVESTOR'S
UNIT WHEN REDEEMED, MAY BE WORTH MORE OR LESS THEN THE ORIGINAL COST. RESULTS
DO NOT TAKE INO ACCOUNT PERSONAL INCOME TAXES AND CAPITAL GAINS WHERE
APPLICABLE. MARKET INDICES ARE INCLUDED AS A BROAD MEASURE OF MARKET
PERFORMANCE, AND NO DIRECT COMPARISON WITH FUNDS IN INTENDED.
16
<PAGE>
HARTFORD LIFE INSURANCE COMPANIES
SEPARATE ACCOUNT FINANCIAL
STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
[STAG]
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 34,358,573
Cost $ 33,657,227
Market Value......... $34,808,740 -- -- --
Hartford Stock Fund,
Inc.
Shares 120,218,605
Cost $396,280,032
Market Value......... -- $575,964,333 -- --
HVA Money Market Fund,
Inc.
Shares 34,301,518
Cost $ 34,301,518
Market Value......... -- -- $34,301,518 --
Hartford Advisers Fund,
Inc.
Shares 276,020,258
Cost $489,838,783
Market Value......... -- -- -- $659,348,910
Hartford Capital
Appreciation Fund,
Inc.
Shares 107,034,718
Cost $329,922,033
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 23,041,686
Cost $ 24,265,816
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 40,497,605
Cost $ 78,372,729
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 50,396,655
Cost $ 61,657,703
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 30,841,051
Cost $ 44,822,497
Market Value......... -- -- -- --
Calvert Responsibly
Invested Balanced
Portfolio
Shares 12,764,816
Cost $ 20,836,119
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 80,104 313,117 150,922 33,623
Receivable from fund
shares sold.......... 24 -- 1 26,150
----------- ------------ ----------- -------------
Total Assets........... 34,888,868 576,277,450 34,452,441 659,408,683
----------- ------------ ----------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... 24 -- 1 26,093
Payable for fund shares
purchased............ 80,098 287,274 151,359 33,939
----------- ------------ ----------- -------------
Total Liabilities...... 80,122 287,274 151,360 60,032
----------- ------------ ----------- -------------
Net Assets (variable
annuity contract
liabilities)......... $34,808,746 $575,990,176 $34,301,081 $659,348,651
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
GROUP SUB-ACCOUNTS:
Units Owned by
Participants......... 8,020,161 42,840,167 12,261,388 135,452,832
Unit Values*........... $ 4.340156 $ 13.445096 $ 2.797488 $ 4.867736
</TABLE>
* Unit Value amounts represent an average of individual unit values, which
differ within each sub-account.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<PAGE>
<TABLE>
<CAPTION>
CALVERT
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND RESPONSIBLY INVESTED
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 34,358,573
Cost $ 33,657,227
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 120,218,605
Cost $396,280,032
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 34,301,518
Cost $ 34,301,518
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 276,020,258
Cost $489,838,783
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 107,034,718
Cost $329,922,033
Market Value......... $443,397,312 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 23,041,686
Cost $ 24,265,816
Market Value......... -- $24,646,608 -- -- -- --
Hartford Index Fund,
Inc.
Shares 40,497,605
Cost $ 78,372,729
Market Value......... -- -- $106,509,715 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 50,396,655
Cost $ 61,657,703
Market Value......... -- -- -- $72,293,145 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 30,841,051
Cost $ 44,822,497
Market Value......... -- -- -- -- $55,120,514 --
Calvert Responsibly
Invested Balanced
Portfolio
Shares 12,764,816
Cost $ 20,836,119
Market Value......... -- -- -- -- -- $25,019,038
Due from Hartford Life
Insurance Company.... 150,797 18 102,742 22,699 24,309 8,186
Receivable from fund
shares sold.......... 25,561 76,696 25,515 -- 1 13,978
----------------- --------------- ----------- ------------------ ------------- --------------------
Total Assets........... 443,573,670 24,723,322 106,637,972 72,315,844 55,144,824 25,041,202
----------------- --------------- ----------- ------------------ ------------- --------------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... 25,561 77,058 25,517 -- 1 10,668
Payable for fund shares
purchased............ 150,372 18 102,731 22,698 24,189 7,385
----------------- --------------- ----------- ------------------ ------------- --------------------
Total Liabilities...... 175,933 77,076 128,248 22,698 24,190 18,053
----------------- --------------- ----------- ------------------ ------------- --------------------
Net Assets (variable
annuity contract
liabilities)......... $443,397,737 $24,646,246 $106,509,724 $72,293,146 $55,120,634 $25,023,149
----------------- --------------- ----------- ------------------ ------------- --------------------
----------------- --------------- ----------- ------------------ ------------- --------------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
GROUP SUB-ACCOUNTS:
Units Owned by
Participants......... 59,306,992 9,828,572 59,820,591 44,241,975 31,081,511 10,568,632
Unit Values*........... $ 7.476315 $ 2.507612 $ 1.780486 $ 1.634040 $ 1.773422 $ 2.367681
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 774,248 $ 1,719,536 $ 628,524 $ 4,718,505
EXPENSES:
Mortality and expense
undertakings......... (139,176) (2,021,398) (100,737) (2,414,074)
----------- ------------ ----------- -------------
Net investment income
(loss)............. 635,072 (301,862) 527,787 2,304,431
----------- ------------ ----------- -------------
CAPITAL GAINS INCOME..... -- 24,157,334 -- 25,268,801
----------- ------------ ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 87,780 6,537,573 -- 4,506,039
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 393,416 70,558,942 -- 56,351,995
----------- ------------ ----------- -------------
Net gain (losses) on
investments........ 481,196 77,096,515 -- 60,858,034
----------- ------------ ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations.... $ 1,116,268 $100,951,987 $ 527,787 $88,431,266
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 836,191 $541,284 $ 419,011 $ 62,945 $ 297,301
EXPENSES:
Mortality and expense
undertakings......... (1,605,652) (96,910) (362,040) (265,025) (171,793)
----------------- --------------- ----------- ------------------ ------------
Net investment income
(loss)............. (769,461) 444,374 56,971 (202,080) 125,508
----------------- --------------- ----------- ------------------ ------------
CAPITAL GAINS INCOME..... 28,766,004 -- 6,533,234 4,696,573 1,059,984
----------------- --------------- ----------- ------------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 3,606,393 (27,520) 70,042 193,316 (17,878)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 23,087,476 355,400 9,644,160 1,727,319 6,462,909
----------------- --------------- ----------- ------------------ ------------
Net gain (losses) on
investments........ 26,693,869 327,880 9,714,202 1,920,635 6,445,031
----------------- --------------- ----------- ------------------ ------------
Net increase
(decrease) in net
assets resulting
from operations.... $54,690,412 $772,254 $16,304,407 $6,415,128 $7,630,523
----------------- --------------- ----------- ------------------ ------------
----------------- --------------- ----------- ------------------ ------------
<CAPTION>
CALVERT
RESPONSIBLY INVESTED
BALANCED PORTFOLIO
SUB-ACCOUNT
--------------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $--
EXPENSES:
Mortality and expense
undertakings......... (92,500)
-----------
Net investment income
(loss)............. (92,500)
-----------
CAPITAL GAINS INCOME..... --
-----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 3,976
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,356,076
-----------
Net gain (losses) on
investments........ 2,360,052
-----------
Net increase
(decrease) in net
assets resulting
from operations.... $2,267,552
-----------
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 635,072 $ (301,862) $ 527,787 $ 2,304,431
Capital gains income... -- 24,157,334 -- 25,268,801
Net realized gain
(loss) on security
transactions......... 87,780 6,537,573 -- 4,506,039
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 393,416 70,558,942 -- 56,351,995
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 1,116,268 100,951,987 527,787 88,431,266
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 1,602,875 20,617,556 1,252,516 28,297,317
Net transfers.......... (1,780,857) 8,180,713 12,155,253 (6,937,045)
Surrenders............. (2,730,421) (20,940,160) (5,942,732) (24,397,725)
----------- ------------ ------------ -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... (2,908,403) 7,858,109 7,465,037 (3,037,453)
----------- ------------ ------------ -------------
Total increase
(decrease) in net
assets............... (1,792,135) 108,810,096 7,992,824 85,393,813
NET ASSETS:
Beginning of period.... 36,600,881 467,180,080 26,308,257 573,954,838
----------- ------------ ------------ -------------
End of period.......... $34,808,746 $575,990,176 $ 34,301,081 $ 659,348,651
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
OPERATIONS:
Net investment income
(loss)............... $ 1,878,877 $ 2,263,596 $ 898,475 $ 9,658,681
Capital gains income... -- 14,883,740 -- 10,564,590
Net realized gain
(loss) on security
transactions......... 166,958 66,841,431 -- 58,999,565
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (1,199,667) 1,283,218 -- (4,260,635)
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 846,168 85,271,985 898,475 74,962,201
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 3,515,268 37,974,254 2,412,011 55,548,282
Net transfers.......... (2,237,323) 448,728 3,187,090 (13,204,076)
Surrenders............. (892,123) (9,114,856) (918,482) (11,940,914)
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 385,822 29,308,126 4,680,619 30,403,292
----------- ------------ ------------ -------------
Total increase
(decrease) in net
assets............... 1,231,990 114,580,111 5,579,094 105,365,493
NET ASSETS:
Beginning of period.... 35,368,891 352,599,969 20,729,163 468,589,345
----------- ------------ ------------ -------------
End of period.......... $36,600,881 $467,180,080 $ 26,308,257 $ 573,954,838
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (769,461) $ 444,374 $ 56,971 $ (202,080) $ 125,508
Capital gains income... 28,766,004 -- 6,533,234 4,696,573 1,059,984
Net realized gain
(loss) on security
transactions......... 3,606,393 (27,520) 70,042 193,316 (17,878)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 23,087,476 355,400 9,644,160 1,727,319 6,462,909
------------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 54,690,412 772,254 16,304,407 6,415,128 7,630,523
------------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 27,997,722 1,149,518 6,917,704 5,178,340 4,787,259
Net transfers.......... (8,311,713) (1,392,832) 11,391,118 (1,650,398) 12,371,729
Surrenders............. (19,376,079) (1,636,438) (4,080,244) (2,455,921) (795,562)
------------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 309,930 (1,879,752) 14,228,578 1,072,021 16,363,426
------------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets............... 55,000,342 (1,107,498) 30,532,985 7,487,149 23,993,949
NET ASSETS:
Beginning of period.... 388,397,395 25,753,744 75,976,739 64,805,997 31,126,685
------------------- ----------------- --------------- ------------------ ------------------
End of period.......... $443,397,737 $ 24,646,246 $ 106,509,724 $72,293,146 $55,120,634
------------------- ----------------- --------------- ------------------ ------------------
------------------- ----------------- --------------- ------------------ ------------------
U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------- ----------------- --------------- ------------------ ------------------
OPERATIONS:
Net investment income
(loss)............... $ 343,436 $ (1,092,104) $ 1,355,014 $ 728,190 $ 537,463
Capital gains income... -- 18,716,143 -- 935,734 1,423,334
Net realized gain
(loss) on security
transactions......... -- 29,382,290 (18,537) 5,514,280 2,372,529
Net unrealized
appreciation
(depreciation) of
investments during
the period........... -- 12,195,355 (351,685) 4,693,033 2,008,357
------------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 343,436 59,201,684 984,792 11,871,237 6,341,683
------------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 1,337,245 53,044,599 2,661,238 10,324,537 10,623,622
Net transfers.......... 259,211 (3,808,589) (3,090,374) 8,456,897 1,472,637
Surrenders............. (330,706) (6,625,610) (648,434) (1,299,479) (1,089,816)
------------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,265,750 42,610,400 (1,077,570) 17,481,955 11,006,443
------------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets............... 1,609,186 101,812,084 (92,778) 29,353,192 17,348,126
NET ASSETS:
Beginning of period.... 8,530,922 286,585,311 25,846,522 46,623,547 47,457,871
------------------- ----------------- --------------- ------------------ ------------------
End of period.......... $10,140,108 $388,397,395 $ 25,753,744 $75,976,739 $64,805,997
------------------- ----------------- --------------- ------------------ ------------------
------------------- ----------------- --------------- ------------------ ------------------
<CAPTION>
CALVERT
RESPONSIBLY INVESTED
BALANCED PORTFOLIO
SUB-ACCOUNT
--------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (92,500)
Capital gains income... --
Net realized gain
(loss) on security
transactions......... 3,976
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,356,076
--------------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,267,552
--------------------
UNIT TRANSACTIONS:
Purchases.............. 1,776,809
Net transfers.......... (603,669)
Surrenders............. (278,020)
--------------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 895,120
--------------------
Total increase
(decrease) in net
assets............... 3,162,672
NET ASSETS:
Beginning of period.... 21,860,477
--------------------
End of period.......... $25,023,149
--------------------
--------------------
CALVERT
DIVIDEND AND RESPONSIBLY INVESTED
GROWTH FUND BALANCED PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
-------------------- --------------------
OPERATIONS:
Net investment income
(loss)............... $ 299,029 $ 279,479
Capital gains income... 208,419 1,166,308
Net realized gain
(loss) on security
transactions......... 289,777 1,416,934
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,206,970 (711,714)
-------------------- --------------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,004,195 2,151,007
-------------------- --------------------
UNIT TRANSACTIONS:
Purchases.............. 4,720,731 3,423,700
Net transfers.......... 15,166,440 (640,735)
Surrenders............. (496,007) (453,414)
-------------------- --------------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 19,391,164 2,329,551
-------------------- --------------------
Total increase
(decrease) in net
assets............... 23,395,359 4,480,558
NET ASSETS:
Beginning of period.... 7,731,326 17,379,919
-------------------- --------------------
End of period.......... $31,126,685 $21,860,477
-------------------- --------------------
-------------------- --------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
<PAGE>
DC VARIABLE ACCOUNT-I
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
DC Variable Account-I (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contractholders of the Company in various
mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Hartford and Calvert
Responsibly Invested Series mutual funds are valued at the closing net
asset value per share as determined by the appropriate Fund as of June
30, 1997.
c) FEDERAL INCOME TAXES--For Federal income tax purposes, the Account
intends to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code by distributing substantially all of its
taxable income to variable annuity contract owners and otherwise
complying with the requirements for regulated investment companies.
Accordingly, no provision for Federal income taxes has been made. For
purposes of determining net realized taxable gains to be distributed,
the capital gains and losses of each Sub-Account within the Account are
combined. Distribution of any net realized capital gains so determined
will be made to the contract owners of the Sub-Account having net
realized capital gains. The cumulative realized losses used to offset
realized capital gains in each Sub-Account will be considered in the
determination of future distributions of realized capital gains to each
Sub-Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of up to .90%
of the Account's average daily net assets.
b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are
deducted through termination of units of interest from applicable
contract owners' accounts, in accordance with the terms of the
contracts.
4. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND:
On June 27, 1997, the Hartford U.S. Government Money Market Fund was merged
with the HVA Money Market Fund. Accordingly, all contract owner account
values held in the Hartford U.S. Government Money Market Fund were exchanged
for equivalent account values of HVA Money Market Fund on June 27, 1997.
8
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT ONE
[STAG]
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 1,484,467
Cost $ 1,481,132
Market Value......... $ 1,503,916 --
Hartford Stock Fund,
Inc.
Shares 1,384,520
Cost $ 3,492,211
Market Value......... -- $ 6,633,201
HVA Money Market Fund,
Inc.
Shares 2,241,491
Cost $ 2,241,491
Market Value......... -- --
Hartford Advisers Fund,
Inc.
Shares 7,713,145
Cost $10,154,798
Market Value......... -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 2,055,640
Cost $ 4,134,119
Market Value......... -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 3,109,168
Cost $ 3,366,775
Market Value......... -- --
Hartford Index Fund,
Inc.
Shares 202,812
Cost $ 394,417
Market Value......... -- --
Due From Hartford Life
Insurance Company...... 86,188 644
Receivable from fund
shares sold............ -- --
----------- -----------
Total Assets............. 1,590,104 6,633,845
----------- -----------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- --
Payable for fund shares
purchased............ 86,187 644
----------- -----------
Total Liabilities...... 86,187 644
----------- -----------
Net Assets (variable
life insurance
contract
liabilities)......... $ 1,503,917 $ 6,633,201
----------- -----------
----------- -----------
Units Owned by
Participants......... 686,500 1,367,557
Unit Price............. $ 2.190702 $ 4.850402
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE>
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 1,484,467
Cost $ 1,481,132
Market Value......... -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 1,384,520
Cost $ 3,492,211
Market Value......... -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 2,241,491
Cost $ 2,241,491
Market Value......... $2,241,491 -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 7,713,145
Cost $10,154,798
Market Value......... -- $18,424,930 -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 2,055,640
Cost $ 4,134,119
Market Value......... -- -- $8,515,603 -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 3,109,168
Cost $ 3,366,775
Market Value......... -- -- -- $ 3,325,730 --
Hartford Index Fund,
Inc.
Shares 202,812
Cost $ 394,417
Market Value......... -- -- -- -- $ 533,401
Due From Hartford Life
Insurance Company...... 9,484 6,525 760 -- --
Receivable from fund
shares sold............ -- -- -- -- 24,613
----------- ------------- ----------------- --------------- -----------
Total Assets............. 2,250,975 18,431,455 8,516,363 3,325,730 558,014
----------- ------------- ----------------- --------------- -----------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- -- -- 298 24,613
Payable for fund shares
purchased............ 12,175 6,525 850 2,730 --
----------- ------------- ----------------- --------------- -----------
Total Liabilities...... 12,175 6,525 850 3,028 24,613
----------- ------------- ----------------- --------------- -----------
Net Assets (variable
life insurance
contract
liabilities)......... $2,238,800 $18,424,930 $8,515,513 $ 3,322,702 $ 533,401
----------- ------------- ----------------- --------------- -----------
----------- ------------- ----------------- --------------- -----------
Units Owned by
Participants......... 1,284,533 4,908,341 1,617,105 1,509,684 151,320
Unit Price............. $ 1.742890 $ 3.753800 $ 5.265900 $ 2.200926 $ 3.524990
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 32,365 $ 20,427
EXPENSES:
Mortality and expense
undertakings......... (6,524) (26,855)
----------- -----------
Net investment income
(loss).............. 25,841 (6,428)
----------- -----------
CAPITAL GAINS INCOME..... -- 288,640
----------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 2,979 9,431
Net unrealized
appreciation
(depreciation) of
investment during the
period............... 16,440 881,595
----------- -----------
Net gain (losses) on
investments......... 19,419 891,026
----------- -----------
Net increase
(decrease) in net
assets resulting
from operations..... $ 45,260 $ 1,173,238
----------- -----------
----------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 50,244 $ 135,158 $ 16,555 $ 73,016 $ 2,706
EXPENSES:
Mortality and expense
undertakings......... (8,804) (76,600) (35,464) (14,764) (2,325)
----------- ------------- ----------------- --------------- -----------
Net investment income
(loss).............. 41,440 58,558 (18,909) 58,252 381
----------- ------------- ----------------- --------------- -----------
CAPITAL GAINS INCOME..... -- 731,667 587,118 -- 35,941
----------- ------------- ----------------- --------------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... -- 134,232 24,289 (457) (1,895)
Net unrealized
appreciation
(depreciation) of
investment during the
period............... -- 1,572,457 471,551 44,016 43,922
----------- ------------- ----------------- --------------- -----------
Net gain (losses) on
investments......... -- 1,706,689 495,840 43,559 42,027
----------- ------------- ----------------- --------------- -----------
Net increase
(decrease) in net
assets resulting
from operations..... $ 41,440 $2,496,914 $1,064,049 $101,811 $78,349
----------- ------------- ----------------- --------------- -----------
----------- ------------- ----------------- --------------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 25,841 $ (6,428)
Capital gains income... -- 288,640
Net realized gain
(loss) on security
transactions......... 2,979 9,431
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 16,440 881,595
------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 45,260 1,173,238
------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 784,609 1,421,887
Net transfers.......... (18,724) 305,020
Surrenders............. (287,597) (668,587)
Loan withdrawals....... (641,893) (879,427)
Cost of insurance...... (9,399) (19,907)
------------- -----------
Total increase
(decrease) in net
assets resulting from
unit transactions.... (173,004) 158,986
------------- -----------
Total increase
(decrease) in net
assets............... (127,744) 1,332,224
NET ASSETS:
Beginning of period.... 1,631,661 5,300,977
------------- -----------
End of period.......... $ 1,503,917 $ 6,633,201
------------- -----------
------------- -----------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
BOND FUND STOCK FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- -----------
OPERATIONS:
Net investment income
(loss)............... $ 85,877 $ 33,239
Capital gains income... -- 195,246
Net realized gain
(loss) on security
transactions......... (3,746) 23,047
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (43,706) 761,366
------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 38,425 1,012,898
------------- -----------
UNIT TRANSACTIONS:
Net transfers.......... (173,115) 102,684
Surrenders............. (7,288) (132,660)
Net loan withdrawals... (21,258) (86,390)
Cost of insurance and
other fees........... (18,325) (36,723)
------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (219,986) (153,089)
------------- -----------
Total increase
(decrease) in net
assets............... (181,561) 859,809
NET ASSETS:
Beginning of period.... 1,813,222 4,441,168
------------- -----------
End of period.......... $ 1,631,661 $ 5,300,977
------------- -----------
------------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
<TABLE>
<CAPTION>
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 41,440 $ 58,558 $ (18,909) $ 58,252 $ 381
Capital gains income... -- 731,667 587,118 -- 35,941
Net realized gain
(loss) on security
transactions......... -- 134,232 24,289 (457) (1,895)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... -- 1,572,457 471,551 44,016 43,922
----------- ------------- ----------------- --------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 41,440 2,496,914 1,064,049 101,811 78,349
----------- ------------- ----------------- --------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 837,110 5,805,878 1,313,089 1,040,366 335,550
Net transfers.......... (207,579) (83,615) (273,996) (34,324) 309,377
Surrenders............. (38,956) (1,061,895) (221,915) (50,665) (182,653)
Loan withdrawals....... (827,922) (5,071,244) (1,169,176) (1,088,851) (27,400)
Cost of insurance...... (18,339) (72,952) (22,158) (18,913) (212,089)
----------- ------------- ----------------- --------------- -----------
Total increase
(decrease) in net
assets resulting from
unit transactions.... (255,686) (483,828) (374,156) (152,387) 222,785
----------- ------------- ----------------- --------------- -----------
Total increase
(decrease) in net
assets............... (214,246) 2,013,086 689,893 (50,576) 301,134
NET ASSETS:
Beginning of period.... 2,453,046 16,411,844 7,825,620 3,373,278 232,267
----------- ------------- ----------------- --------------- -----------
End of period.......... $2,238,800 $18,424,930 $8,515,513 $3,322,702 $533,401
----------- ------------- ----------------- --------------- -----------
----------- ------------- ----------------- --------------- -----------
MONEY CAPITAL MORTGAGE
MARKET FUND ADVISERS FUND APPRECIATION FUND SECURITIES FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------------- --------------- -----------
OPERATIONS:
Net investment income
(loss)............... $ 107,643 $ 318,810 $ (15,548) $ 186,732 $ 2,317
Capital gains income... -- 359,796 443,649 -- 2,992
Net realized gain
(loss) on security
transactions......... -- 431,574 42,830 687 3,779
Net unrealized
appreciation
(depreciation) of
investments during
the period........... -- 1,204,135 856,429 (50,978) 28,647
----------- ------------- ----------------- --------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 107,643 2,314,315 1,327,360 136,441 37,735
----------- ------------- ----------------- --------------- -----------
UNIT TRANSACTIONS:
Net transfers.......... 641,843 (504,209) (235,710) (48,159) 69,128
Surrenders............. (1,102,403) (1,032,859) 114,483 (111,600) (29,698)
Net loan withdrawals... (114,450) (229,470) (137,347) (65,890) --
Cost of insurance and
other fees........... (40,348) (159,464) (44,885) (37,139) (1,839)
----------- ------------- ----------------- --------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (615,358) (1,926,002) (303,459) (262,788) 37,591
----------- ------------- ----------------- --------------- -----------
Total increase
(decrease) in net
assets............... (507,715) 388,313 1,023,901 (126,347) 75,326
NET ASSETS:
Beginning of period.... 2,960,761 16,023,531 6,801,719 3,499,625 156,941
----------- ------------- ----------------- --------------- -----------
End of period.......... $2,453,046 $16,411,844 $7,825,620 $3,373,278 $232,267
----------- ------------- ----------------- --------------- -----------
----------- ------------- ----------------- --------------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account One (the Account) is a separate investment account within
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contract owners of the Company in various
mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
life insurance contracts, provides the mortality and expense
undertakings and, with respect to the Account, receives an annual fee of
0.90% of the Account's average daily net assets.
b) DEDUCTION OF OTHER FEES--In accordance with the terms of the contracts,
the Company makes deductions for the cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners'
accounts.
16
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO
[STAG]
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 217,428,760
Cost $ 221,257,731
Market Value......... $220,277,511 -- -- --
Hartford Stock Fund,
Inc.
Shares 360,511,041
Cost $1,095,089,340
Market Value......... -- $1,727,199,388 -- --
HVA Money Market Fund,
Inc.
Shares 280,864,766
Cost $ 280,864,766
Market Value......... -- -- $280,864,766 --
Hartford Advisers Fund,
Inc.
Shares 1,439,652,483
Cost $2,459,139,610
Market Value......... -- -- -- $3,438,998,662
Hartford Capital
Appreciation Fund,
Inc.
Shares 397,889,201
Cost $1,178,316,710
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 181,339,786
Cost $ 195,501,188
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 138,137,660
Cost $ 249,632,280
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 314,608,569
Cost $ 366,204,454
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 286,270,239
Cost $ 393,365,481
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 38,845,852
Cost $ 44,310,166
Market Value......... -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 29,408,756
Cost $ 31,218,685
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 50,337 1,115,575 231,455 727,173
Receivable from fund
shares sold.......... 119,456 209,028 2,535,392 131,002
------------ -------------- ------------ --------------
Total Assets........... 220,447,304 1,728,523,991 283,631,613 3,439,856,837
------------ -------------- ------------ --------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 119,428 208,724 2,530,346 130,886
Payable for fund shares
purchased............ 50,138 1,113,974 231,370 726,479
------------ -------------- ------------ --------------
Total Liabilities...... 169,566 1,322,698 2,761,716 857,365
------------ -------------- ------------ --------------
Net Assets (variable
annuity contract
liabilities)......... $220,277,738 $1,727,201,293 $280,869,897 $3,438,999,472
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------ ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 217,428,760
Cost $ 221,257,731
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 360,511,041
Cost $1,095,089,340
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 280,864,766
Cost $ 280,864,766
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,439,652,483
Cost $2,459,139,610
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 397,889,201
Cost $1,178,316,710
Market Value......... $1,648,278,297 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 181,339,786
Cost $ 195,501,188
Market Value......... -- $193,970,646 -- -- -- --
Hartford Index Fund,
Inc.
Shares 138,137,660
Cost $ 249,632,280
Market Value......... -- -- $363,305,496 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 314,608,569
Cost $ 366,204,454
Market Value......... -- -- -- $451,300,645 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 286,270,239
Cost $ 393,365,481
Market Value......... -- -- -- -- $511,635,053 --
Hartford International
Advisers Fund, Inc.
Shares 38,845,852
Cost $ 44,310,166
Market Value......... -- -- -- -- -- $46,699,668
Hartford Small Company
Fund, Inc.
Shares 29,408,756
Cost $ 31,218,685
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company.... 2,502,290 8,476 383,101 471 1,225,901 217,616
Receivable from fund
shares sold.......... 1,715 141,113 3,680 163,361 173 17
----------------- --------------- ------------ ------------------ ------------ -------------
Total Assets........... 1,650,782,302 194,120,235 363,692,277 451,464,477 512,861,127 46,917,301
----------------- --------------- ------------ ------------------ ------------ -------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 1,715 136,900 3,594 163,115 145 16
Payable for fund shares
purchased............ 2,500,799 8,477 383,149 471 1,225,670 217,630
----------------- --------------- ------------ ------------------ ------------ -------------
Total Liabilities...... 2,502,514 145,377 386,743 163,586 1,225,815 217,646
----------------- --------------- ------------ ------------------ ------------ -------------
Net Assets (variable
annuity contract
liabilities)......... $1,648,279,788 $193,974,858 $363,305,534 $451,300,891 $511,635,312 $46,699,655
----------------- --------------- ------------ ------------------ ------------ -------------
----------------- --------------- ------------ ------------------ ------------ -------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... --
Hartford International
Advisers Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Small Company
Fund, Inc.
Shares
Cost
Market Value......... $34,569,551
Due from Hartford Life
Insurance Company.... 343,240
Receivable from fund
shares sold.......... 8
------------
Total Assets........... 34,912,799
------------
LIABILITIES
Due to Hartford Life
Insurance Company.... 12
Payable for fund shares
purchased............ 343,242
------------
Total Liabilities...... 343,254
------------
Net Assets (variable
annuity contract
liabilities)......... $34,569,545
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
CALVERT SMITH BARNEY SMITH BARNEY
RESPONSIBLY INVESTED CASH PORTFOLIO SMITH BARNEY GOVERNMENT PORTFOLIO
BALANCED PORTFOLIO CLASS A APPRECIATION FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------- ----------------- --------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,484,734
Cost $2,367,631
Market Value......... $2,910,078 -- -- --
Smith Barney Cash
Portfolio Class A
Shares 529,564
Cost $ 529,564
Market Value......... -- $529,565 -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 10,725
Cost $ 66,329
Market Value......... -- -- $160,824 --
Smith Barney Government
Portfolio Class A
Shares 40,588
Cost $ 40,588
Market Value......... -- -- -- $40,588
TCI Advantage Fund
Shares 30,981
Cost $ 189,042
Market Value......... -- -- -- --
TCI Growth Fund
Shares 133,728
Cost $1,497,887
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 84,336
Cost $1,487,983
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 144,420
Cost $2,261,497
Market Value......... -- -- -- --
Fidelity VIP II
Contrafund Fund
Shares 526,916
Cost $7,805,893
Market Value......... -- -- -- --
Fidelity VIP Growth
Fund
Shares 257,023
Cost $7,645,599
Market Value......... -- -- -- --
BB&T Growth and Income
Fund
Shares 57,851
Cost $ 604,979
Market Value......... -- -- -- --
Dividends receivable... -- 1,106 -- 91
Due from Hartford Life
Insurance Company.... 1,036 -- -- --
Receivable from fund
shares sold.......... -- -- 14 7
----------- -------------- -------- -------
Total Assets........... 2,911,114 530,671 160,838 40,686
----------- -------------- -------- -------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- 236 209 68
Payable for fund shares
purchased............ 457 27,259 -- --
----------- -------------- -------- -------
Total Liabilities...... 457 27,495 209 68
----------- -------------- -------- -------
Net Assets (variable
annuity contract
liabilities)......... $2,910,657 $503,176 $160,629 $40,618
----------- -------------- -------- -------
----------- -------------- -------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
20
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares 1,484,734
Cost $2,367,631
Market Value......... -- -- -- -- -- --
Smith Barney Cash
Portfolio Class A
Shares 529,564
Cost $ 529,564
Market Value......... -- -- -- -- -- --
Smith Barney
Appreciation Fund,
Inc.
Shares 10,725
Cost $ 66,329
Market Value......... -- -- -- -- -- --
Smith Barney Government
Portfolio Class A
Shares 40,588
Cost $ 40,588
Market Value......... -- -- -- -- -- --
TCI Advantage Fund
Shares 30,981
Cost $ 189,042
Market Value......... $193,320 -- -- -- -- --
TCI Growth Fund
Shares 133,728
Cost $1,497,887
Market Value......... -- $1,291,815 -- -- -- --
Fidelity VIP Overseas
Fund
Shares 84,336
Cost $1,487,983
Market Value......... -- -- $1,690,088 -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 144,420
Cost $2,261,497
Market Value......... -- -- -- $2,397,374 -- --
Fidelity VIP II
Contrafund Fund
Shares 526,916
Cost $7,805,893
Market Value......... -- -- -- -- $9,447,608 --
Fidelity VIP Growth
Fund
Shares 257,023
Cost $7,645,599
Market Value......... -- -- -- -- -- $8,790,195
BB&T Growth and Income
Fund
Shares 57,851
Cost $ 604,979
Market Value......... -- -- -- -- -- --
Dividends receivable... -- -- -- -- -- --
Due from Hartford Life
Insurance Company.... 84 472 1,000 4,178 1,990 288
Receivable from fund
shares sold.......... -- -- -- -- -- --
-------- ------------- --------------- ------------------ --------------- ------------
Total Assets........... 193,404 1,292,287 1,691,088 2,401,552 9,449,598 8,790,483
-------- ------------- --------------- ------------------ --------------- ------------
LIABILITIES
Due to Hartford Life
Insurance Company.... -- -- -- -- -- --
Payable for fund shares
purchased............ 84 472 1,038 3,768 1,988 276
-------- ------------- --------------- ------------------ --------------- ------------
Total Liabilities...... 84 472 1,038 3,768 1,988 276
-------- ------------- --------------- ------------------ --------------- ------------
Net Assets (variable
annuity contract
liabilities)......... $193,320 $1,291,815 $1,690,050 $2,397,784 $9,447,610 $8,790,207
-------- ------------- --------------- ------------------ --------------- ------------
-------- ------------- --------------- ------------------ --------------- ------------
<CAPTION>
BB&T
GROWTH AND
INCOME FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Calvert Responsibly
Invested Balanced
Portfolio
Shares
Cost
Market Value......... --
Smith Barney Cash
Portfolio Class A
Shares
Cost
Market Value......... --
Smith Barney
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... --
Smith Barney Government
Portfolio Class A
Shares
Cost
Market Value......... --
TCI Advantage Fund
Shares
Cost
Market Value......... --
TCI Growth Fund
Shares
Cost
Market Value......... --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... --
Fidelity VIP II Asset
Manager Fund
Shares
Cost
Market Value......... --
Fidelity VIP II
Contrafund Fund
Shares
Cost
Market Value......... --
Fidelity VIP Growth
Fund
Shares
Cost
Market Value......... --
BB&T Growth and Income
Fund
Shares
Cost
Market Value......... $602,230
Dividends receivable... --
Due from Hartford Life
Insurance Company.... 99,497
Receivable from fund
shares sold.......... --
------------
Total Assets........... 701,727
------------
LIABILITIES
Due to Hartford Life
Insurance Company.... --
Payable for fund shares
purchased............ 99,497
------------
Total Liabilities...... 99,497
------------
Net Assets (variable
annuity contract
liabilities)......... $602,230
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
21
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION
PERIOD:
<S> <C> <C> <C>
INDIVIDUAL SUB-ACCOUNTS
Bond Fund Qualified 1.00%....................... 282,016 $3.823736 $ 1,078,353
Bond Fund Non-Qualified 1.00%................... 1,962,165 3.765599 7,388,728
Bond Fund 1.25%................................. 99,520,198 1.981198 197,169,218
Bond Fund .25%.................................. 57,355 1.325698 76,035
Stock Fund Qualified 1.00%...................... 849,258 8.293869 7,043,631
Stock Fund Non-Qualified 1.00%.................. 3,295,779 7.930835 26,138,276
Stock Fund 1.25%................................ 355,507,099 4.302210 1,529,466,197
Stock Fund .25%................................. 1,059,065 2.271850 2,406,038
Money Market Fund Qualified 1.00%............... 1,244,554 2.516081 3,131,399
Money Market Fund Non-Qualified 1.00%........... 11,579,583 2.517273 29,148,972
Money Market Fund 1.25%......................... 149,215,806 1.617289 241,325,081
Money Market Fund .25%.......................... 354,760 1.206801 428,125
Advisers Fund Qualified 1.00%................... 3,437,846 5.010795 17,226,341
Advisers Fund Non-Qualified 1.00%............... 11,749,222 5.010795 58,872,945
Advisers Fund 1.25%............................. 984,615,801 3.349354 3,297,826,871
Advisers Fund .25%.............................. 1,055,878 1.877385 1,982,290
Capital Appreciation Fund Qualified 1.00%....... 863,992 7.674485 6,630,696
Capital Appreciation Fund Non-Qualified 1.00%... 2,603,742 7.670864 19,972,948
Capital Appreciation Fund 1.25%................. 334,697,221 4.565863 1,528,181,657
Capital Appreciation Fund .25%.................. 2,331,449 2.207977 5,147,786
Mortgage Securities Fund Qualified 1.00%........ 713,776 2.571320 1,835,346
Mortgage Securities Fund Non-Qualified 1.00%.... 7,471,227 2.571320 19,210,917
Mortgage Securities Fund 1.25%.................. 84,418,872 2.005984 169,342,907
Mortgage Securities Fund .25%................... 15,220 1.303519 19,840
Index Fund Qualified 1.00%...................... 54,922 1.341433 73,674
Index Fund Non-Qualified 1.00%.................. 440,438 1.341433 590,818
Index Fund 1.25%................................ 100,718,425 3.399356 342,377,781
Index Fund .25%................................. 211,954 2.189301 464,032
International Opportunities Fund Qualified
1.00%......................................... 354,863 1.653239 586,673
International Opportunities Fund Non-Qualified
1.00%......................................... 1,885,546 1.653181 3,117,148
International Opportunities Fund 1.25%.......... 267,926,998 1.624565 435,264,823
International Opportunities Fund .25%........... 746,247 1.826915 1,363,331
Dividend and Growth Fund Qualified 1.00%........ 332,050 1.976585 656,324
Dividend and Growth Fund Non-Qualified 1.00%.... 1,599,924 1.976585 3,162,385
Dividend and Growth Fund 1.25%.................. 253,696,757 1.960310 497,324,290
Dividend and Growth Fund .25%................... 267,095 2.026162 541,178
International Advisers Fund 1.00%............... 21,058 1.366085 28,767
International Advisers Fund Non-Qualified
1.00%......................................... 420,078 1.366085 573,863
International Advisers Fund 1.25%............... 33,895,106 1.358144 46,034,434
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
22
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
INDIVIDUAL SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
International Advisers Fund .25%................ 39,807 $1.390172 $ 55,339
Hartford Small Company 1.00%.................... 24,280 1.173269 28,486
Hartford Small Company Non-Qualified 1.00%...... 223,230 1.173269 261,909
Hartford Small Company 1.25%.................... 29,232,195 1.170679 34,221,517
Hartford Small Company .25%..................... 48,797 1.181087 57,633
Smith Barney Cash Portfolio Class A Qualified
1.00%......................................... 55,174 2.721193 150,138
Smith Barney Cash Portfolio Class A
Non-Qualified 1.00%........................... 125,371 2.815956 353,038
Smith Barney Appreciation Fund, Inc. Qualified
1.00%......................................... 18,647 8.614250 160,629
Smith Barney Government Portfolio Class A
Qualified 1.00%............................... 16,556 2.453452 40,618
BB&T Growth and Income Fund..................... 578,917 1.040270 602,230
--------------
Sub-total Individual Sub-Accounts............... 8,539,141,655
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 1,010,478 4.478533 4,525,460
Bond Fund 1.25% DCII............................ 1,539,128 4.315438 6,642,010
Bond Fund .15% DCII............................. 262,875 4.133299 1,086,541
Stock Fund Qualified 1.00% QP................... 3,263,756 13.869595 45,266,975
Stock Fund Qualified .825% QP................... 1,192,908 11.168396 13,322,865
Stock Fund Non-Qualified 1.00% NQ............... 87,765 10.882066 955,059
Stock Fund Non-Qualified .825% NQ............... 789,550 11.188011 8,833,493
Stock Fund 1.25% DCII........................... 4,821,873 13.364492 64,441,881
Stock Fund .15% DCII............................ 867,989 10.547521 9,155,127
Money Market Fund Qualified .375% QP............ 2,595 3.168032 8,221
Money Market Fund 1.25% DCII.................... 1,587,734 2.777708 4,410,263
Money Market Fund .15% DCII..................... 335,745 2.746154 922,008
Advisers Fund 1.25% DCII........................ 9,600,641 4.844391 46,509,261
Advisers Fund .15% DCII......................... 601,118 5.651353 3,397,129
Capital Appreciation Fund 1.25% DCII............ 10,312,433 7.439230 76,716,558
Capital Appreciation Fund .15% DCII............. 777,582 8.587008 6,677,100
Mortgage Securities Fund 1.25% DCII............. 1,015,955 2.492375 2,532,140
Mortgage Securities Fund .15% DCII.............. 104,151 2.858087 297,674
Index Fund 1.25% DCII........................... 4,693,759 3.409650 16,004,076
Index Fund .15% DCII............................ 441,901 3.745710 1,655,232
International Opportunities Fund 1.25% DCII..... 5,740,984 1.624795 9,327,922
International Opportunities Fund .15% DCII...... 461,592 1.754402 809,817
Dividend and Growth Fund........................ 5,053,208 1.763131 8,909,468
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII.................................... 1,197,410 2.218681 2,656,671
TCI Advantage Fund.............................. 153,021 1.202568 184,018
TCI Growth Fund................................. 1,311,253 0.979806 1,284,774
Fidelity VIP Overseas Fund...................... 1,267,972 1.332876 1,690,050
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
23
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Fidelity VIP II Asset Manager Fund.............. 1,763,898 $1.359367 $ 2,397,784
Fidelity VIP II Contrafund Fund................. 6,470,610 1.460006 9,447,129
Fidelity VIP Growth Fund........................ 6,392,047 1.374794 8,787,748
--------------
Sub-total Group Sub-Accounts.................... 358,854,454
--------------
TOTAL ACCUMULATION PERIOD......................... 8,897,996,109
--------------
ANNUITY CONTRACTS IN THE ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Bond Fund Non-Qualified 1.00%................... 15,732 3.765599 59,240
Bond Fund 1.25%................................. 334,625 1.981198 662,959
Stock Fund Non-Qualified 1.00%.................. 12,681 7.930835 100,569
Stock Fund 1.25%................................ 442,231 4.302210 1,902,570
Money Market Fund Qualified 1.00%............... 10,589 2.516081 26,644
Money Market Fund Non-Qualified 1.00%........... 84,262 2.517273 212,111
Money Market Fund 1.25%......................... 313,546 1.617289 507,094
Advisers Fund Qualified 1.00%................... 3,665 5.010795 18,366
Advisers Fund Non-Qualified 1.00%............... 62,660 5.010795 313,974
Advisers Fund 1.25%............................. 946,421 3.349354 3,169,899
Capital Appreciation Fund Non-Qualified 1.00%... 3,004 7.670864 23,045
Capital Appreciation Fund 1.25%................. 201,258 4.565863 918,915
Mortgage Securities Fund Non-Qualified 1.00%.... 79,761 2.571320 205,091
Mortgage Securities Fund 1.25%.................. 78,406 2.005984 157,281
Index Fund 1.25%................................ 78,209 3.399356 265,859
International Opportunities Fund 1.25%.......... 192,082 1.624565 312,050
Dividend and Growth Fund 1.25%.................. 246,744 1.960310 483,695
International Advisers Fund 1.25%............... 5,339 1.358144 7,252
--------------
Sub-total Individual Sub-Accounts............... 9,346,614
--------------
GROUP SUB-ACCOUNTS:
Bond Fund Qualified 1.00% QP.................... 77,205 4.478533 345,765
Bond Fund 1.25% DCII............................ 272,608 4.315438 1,176,422
Bond Fund 1.00% DCII............................ 11,537 4.460860 51,465
Bond Fund .15% DCII............................. 3,760 4.133299 15,542
Stock Fund Qualified 1.00% QP................... 227,367 13.869595 3,153,489
Stock Fund Qualified .825% QP................... 49,128 11.168396 548,679
Stock Fund Non-Qualified 1.00% NQ............... 4,982 10.882066 54,218
Stock Fund Non-Qualified .825% NQ............... 50,126 11.188011 560,815
Stock Fund 1.25% DCII........................... 1,025,168 13.364492 13,700,854
Stock Fund 1.00% DCII........................... 2,741 13.826485 37,893
Stock Fund .15% DCII............................ 10,681 10.547521 112,662
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
24
<PAGE>
<TABLE>
<CAPTION>
UNITS
OWNED BY UNIT CONTRACT
PARTICIPANTS PRICE LIABILITY
------------ --------- --------------
GROUP SUB-ACCOUNTS -- (CONTINUED)
<S> <C> <C> <C>
Money Market Fund 1.25% DCII.................... 269,999 $2.777708 $ 749,980
Advisers Fund 1.25% DCII........................ 1,971,182 4.844391 9,549,174
Advisers Fund .15% DCII......................... 23,573 5.651353 133,222
Capital Appreciation Fund 1.25% DCII............ 529,931 7.439230 3,942,277
Capital Appreciation Fund .15% DCII............. 8,013 8.587008 68,807
Mortgage Securities Fund 1.25% DCII............. 149,923 2.492375 373,663
Index Fund 1.25% DCII........................... 545,483 3.409650 1,859,905
Index Fund .15% DCII............................ 3,780 3.745710 14,157
International Opportunities Fund 1.25% DCII..... 303,002 1.624795 492,315
International Opportunities Fund .15% DCII...... 15,282 1.754402 26,811
Dividend and Growth Fund........................ 316,466 1.763131 557,972
Calvert Responsibly Invested Balanced Portfolio
1.25% DCII.................................... 114,476 2.218681 253,986
TCI Advantage Fund.............................. 7,735 1.202568 9,302
TCI Growth Fund................................. 7,186 0.979806 7,041
Fidelity VIP II Contrafund Fund................. 329 1.460006 481
Fidelity VIP Growth Fund........................ 1,789 1.374794 2,460
--------------
Sub-total Group Sub-Accounts.................... 37,799,357
--------------
TOTAL ANNUITY PERIOD.............................. 47,145,971
--------------
GRAND TOTAL....................................... $8,945,142,080
--------------
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
25
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 4,733,036 $ 5,097,873 $ 7,021,833 $ 24,496,593
EXPENSES:
Mortality and expense
undertakings......... (1,289,997) (9,164,246) (1,664,430) (19,249,295)
------------ ------------ ----------- -------------
Net investment income
(loss)............. 3,443,039 (4,066,373) 5,357,403 5,247,298
------------ ------------ ----------- -------------
CAPITAL GAINS INCOME..... -- 71,973,235 -- 132,116,765
------------ ------------ ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (31,900) 607,278 -- 628,567
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,107,089 227,453,579 -- 312,426,850
------------ ------------ ----------- -------------
Net gain (losses) on
investments........ 3,075,189 228,060,857 -- 313,055,417
------------ ------------ ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations.... $ 6,518,228 $295,967,719 $ 5,357,403 $ 450,419,480
------------ ------------ ----------- -------------
------------ ------------ ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
26
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 3,128,343 $ 4,303,677 $ 1,474,092 $ 395,895
EXPENSES:
Mortality and expense
undertakings......... (9,136,111) (1,178,522) (1,900,362) (2,561,363)
----------------- --------------- ----------- ------------------
Net investment income
(loss)............. (6,007,768) 3,125,155 (426,270) (2,165,468)
----------------- --------------- ----------- ------------------
CAPITAL GAINS INCOME..... 109,478,655 -- 22,884,800 30,519,853
----------------- --------------- ----------- ------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (1,005,233) (112,444) (164,015) 8,425
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 96,267,429 2,638,602 33,535,096 10,861,580
----------------- --------------- ----------- ------------------
Net gain (losses) on
investments........ 95,262,196 2,526,158 33,371,081 10,870,005
----------------- --------------- ----------- ------------------
Net increase
(decrease) in net
assets resulting
from operations.... $198,733,083 $ 5,651,313 $55,829,611 $39,224,390
----------------- --------------- ----------- ------------------
----------------- --------------- ----------- ------------------
<CAPTION>
DIVIDEND AND INTERNATIONAL SMALL
GROWTH FUND ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,857,912 $1,605,717 $ 262
EXPENSES:
Mortality and expense
undertakings......... (2,515,630) (231,637) (141,128)
------------ ------------- ------------
Net investment income
(loss)............. 342,282 1,374,080 (140,866)
------------ ------------- ------------
CAPITAL GAINS INCOME..... 10,150,532 110,732 91,483
------------ ------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (6,495) 690 (1,668)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 62,236,952 1,503,538 3,276,408
------------ ------------- ------------
Net gain (losses) on
investments........ 62,230,457 1,504,228 3,274,740
------------ ------------- ------------
Net increase
(decrease) in net
assets resulting
from operations.... $ 72,723,271 $2,989,040 $3,225,357
------------ ------------- ------------
------------ ------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
27
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS -- (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
CALVERT SMITH BARNEY SMITH BARNEY
RESPONSIBLY INVESTED CASH PORTFOLIO SMITH BARNEY GOVERNMENT PORTFOLIO
BALANCED PORTFOLIO CLASS A APPRECIATION FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- --------------- ----------------- --------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $-- $13,828 $-- $ 976
EXPENSES:
Mortality and expense
undertakings......... (16,825) (2,810) (862) (199)
-------- ------- ------- -----
Net investment income
(loss).............. (16,825) 11,018 (862) 777
-------- ------- ------- -----
CAPITAL GAINS INCOME..... -- -- -- --
-------- ------- ------- -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (1,967) -- 6,535 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 272,543 -- 20,119 --
-------- ------- ------- -----
Net gain (losses) on
investments......... 270,576 -- 26,654 --
-------- ------- ------- -----
Net increase
(decrease) in net
assets resulting
from operations..... $253,751 $11,018 $25,792 $ 777
-------- ------- ------- -----
-------- ------- ------- -----
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
28
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------- ----------- ------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,818 $ -- $ 21,186 $ 65,855 $ 60,821 $ 48,646
EXPENSES:
Mortality and expense
undertakings......... (1,136) (6,761) (8,464) (12,831) (49,399) (48,202)
------- ----------- ------------- -------- --------------- ------------
Net investment income
(loss).............. 1,682 (6,761) 12,722 53,024 11,422 444
------- ----------- ------------- -------- --------------- ------------
CAPITAL GAINS INCOME..... 10,139 22,619 84,101 165,196 160,741 217,749
------- ----------- ------------- -------- --------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 89 (3,791) 683 435 154 5,699
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (1,445) (57,157) 120,729 (9,093) 713,593 758,779
------- ----------- ------------- -------- --------------- ------------
Net gain (losses) on
investments......... (1,356) (60,948) 121,412 (8,658) 713,747 764,478
------- ----------- ------------- -------- --------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $10,465 $(45,090) $218,235 $209,562 $885,910 $982,671
------- ----------- ------------- -------- --------------- ------------
------- ----------- ------------- -------- --------------- ------------
<CAPTION>
BB&T
GROWTH AND
INCOME FUND
SUB-ACCOUNT
-----------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 579
EXPENSES:
Mortality and expense
undertakings......... (118)
-----------
Net investment income
(loss).............. 461
-----------
CAPITAL GAINS INCOME..... --
-----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (2,749)
-----------
Net gain (losses) on
investments......... (2,749)
-----------
Net increase
(decrease) in net
assets resulting
from operations..... $(2,288)
-----------
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
29
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 3,443,039 $ (4,066,373) $ 5,357,403 $ 5,247,298
Capital gains income... -- 71,973,235 -- 132,116,765
Net realized gain
(loss) on security
transactions......... (31,900) 607,278 -- 628,567
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,107,089 227,453,579 -- 312,426,850
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 6,518,228 295,967,719 5,357,403 450,419,480
------------ -------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 13,847,694 104,846,284 34,668,657 186,510,446
Net transfers.......... (245,632) 27,946,859 (4,020,407) 3,559,095
Surrenders............. (9,879,067) (49,109,143) (38,289,911) (102,806,646)
Net annuity
transactions......... 306,483 838,711 320,586 610,016
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 4,029,478 84,522,711 (7,321,075) 87,872,911
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets............... 10,547,706 380,490,430 (1,963,672) 538,292,391
NET ASSETS:
Beginning of period.... 209,730,032 1,346,710,863 282,833,569 2,900,707,081
------------ -------------- ------------- ---------------
End of period.......... $220,277,738 $1,727,201,293 $280,869,897 $3,438,999,472
------------ -------------- ------------- ---------------
------------ -------------- ------------- ---------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------- ---------------
OPERATIONS:
Net investment income
(loss)............... $ 10,412,614 $ 4,107,642 $ 9,440,440 $ 43,421,909
Capital gains income... -- 41,100,004 -- 53,115,059
Net realized gain
(loss) on security
transactions......... (262,277) 3,161,056 -- 1,874,522
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (5,517,884) 189,613,138 -- 276,364,776
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,632,453 237,981,840 9,440,440 374,776,266
------------ -------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 27,446,873 174,128,189 70,557,174 322,583,889
Net transfers.......... (16,819,459) 27,816,288 67,229,895 (3,947,049)
Surrenders............. (16,860,465) (57,921,128) (52,794,253) (150,653,853)
Net annuity
transactions......... (32,192) (176,096) (239,109) 730,038
------------ -------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (6,265,243) 143,847,253 84,753,707 168,713,025
------------ -------------- ------------- ---------------
Total increase
(decrease) in net
assets............... (1,632,790) 381,829,093 94,194,147 543,489,291
NET ASSETS:
Beginning of period.... 211,362,822 964,881,770 188,639,422 2,357,217,790
------------ -------------- ------------- ---------------
End of period.......... $209,730,032 $1,346,710,863 $282,833,569 $2,900,707,081
------------ -------------- ------------- ---------------
------------ -------------- ------------- ---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (6,007,768) $ 3,125,155 $ (426,270) $ (2,165,468) $ 342,282
Capital gains income... 109,478,655 -- 22,884,800 30,519,853 10,150,532
Net realized gain
(loss) on security
transactions......... (1,005,233) (112,444) (164,015) 8,425 (6,495)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 96,267,429 2,638,602 33,535,096 10,861,580 62,236,952
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 198,733,083 5,651,313 55,829,611 39,224,390 72,723,271
----------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 94,710,759 4,456,981 33,356,421 19,944,432 73,472,726
Net transfers.......... (32,148,945) (6,866,387) 17,734,047 (3,150,956) 50,011,728
Surrenders............. (48,963,567) (9,023,857) (8,818,246) (15,631,474) (9,343,116)
Net annuity
transactions......... 148,037 (34,598) 400,681 118,506 436,782
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 13,746,284 (11,467,861) 42,672,903 1,280,508 114,578,120
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets............... 212,479,367 (5,816,548) 98,502,514 40,504,898 187,301,391
NET ASSETS:
Beginning of period.... 1,435,800,421 199,791,406 264,803,020 410,795,993 324,333,921
----------------- ----------------- --------------- ------------------ ------------------
End of period.......... $1,648,279,788 $ 193,974,858 $363,305,534 $451,300,891 $511,635,312
----------------- ----------------- --------------- ------------------ ------------------
----------------- ----------------- --------------- ------------------ ------------------
U.S. GOVERNMENT CAPITAL MORTGAGE INTERNATIONAL
MONEY MARKET FUND APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- --------------- ------------------ ------------------
OPERATIONS:
Net investment income
(loss)............... $ 55,409 $ (6,751,158) $ 10,767,099 $ 1,795,519 $ 2,571,271
Capital gains income... -- 70,324,118 -- 3,292,866 9,589,596
Net realized gain
(loss) on security
transactions......... -- 2,065,427 (435,741) 140,503 91,466
Net unrealized
appreciation
(depreciation) of
investments during
the period........... -- 154,074,827 (2,844,443) 36,167,970 28,439,913
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 55,409 219,713,214 7,486,915 41,396,858 40,692,246
----------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 216,658 200,411,434 9,051,920 47,675,352 43,044,896
Net transfers.......... (124,960) 495,679 (19,016,015) 21,152,822 20,223,935
Surrenders............. (77,729) (60,449,676) (19,091,976) (10,892,469) (21,614,763)
Net annuity
transactions......... (18,734) 658,118 (55,176) 75,085 141,714
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (4,765) 141,115,555 (29,111,247) 58,010,790 41,795,782
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets............... 50,644 360,828,769 (21,624,332) 99,407,648 82,488,028
NET ASSETS:
Beginning of period.... 1,541,876 1,074,971,652 221,415,738 165,395,372 328,307,965
----------------- ----------------- --------------- ------------------ ------------------
End of period.......... $ 1,592,520 $1,435,800,421 $199,791,406 $264,803,020 $410,795,993
----------------- ----------------- --------------- ------------------ ------------------
----------------- ----------------- --------------- ------------------ ------------------
<CAPTION>
INTERNATIONAL SMALL
ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,374,080 $ (140,866)
Capital gains income... 110,732 91,483
Net realized gain
(loss) on security
transactions......... 690 (1,668)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,503,538 3,276,408
------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,989,040 3,225,357
------------- ------------
UNIT TRANSACTIONS:
Purchases.............. 9,098,402 9,385,772
Net transfers.......... 5,883,485 8,744,488
Surrenders............. (1,087,154) (332,164)
Net annuity
transactions......... 6,708 --
------------- ------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 13,901,441 17,798,096
------------- ------------
Total increase
(decrease) in net
assets............... 16,890,481 21,023,453
NET ASSETS:
Beginning of period.... 29,809,174 13,546,092
------------- ------------
End of period.......... $ 46,699,655 $34,569,545
------------- ------------
------------- ------------
DIVIDEND AND
GROWTH FUND
SUB-ACCOUNT
-------------
OPERATIONS:
Net investment income
(loss)............... $ 2,667,791
Capital gains income... 2,810,352
Net realized gain
(loss) on security
transactions......... (3,931)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 38,471,770
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 43,945,982
-------------
UNIT TRANSACTIONS:
Purchases.............. 99,649,393
Net transfers.......... 73,409,821
Surrenders............. (8,580,693)
Net annuity
transactions......... 330,214
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 164,808,735
-------------
Total increase
(decrease) in net
assets............... 208,754,717
NET ASSETS:
Beginning of period.... 115,579,204
-------------
End of period.......... $324,333,921
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
CALVERT SMITH BARNEY SMITH BARNEY
RESPONSIBLY INVESTED CASH PORTFOLIO SMITH BARNEY GOVERNMENT PORTFOLIO
BALANCED PORTFOLIO CLASS A APPRECIATION FUND CLASS A
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------- ----------------- --------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (16,825) $ 11,018 $ (862) $ 777
Capital gains income... -- -- -- --
Net realized gain
(loss) on security
transactions......... (1,967) -- 6,535 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 272,543 -- 20,119 --
----------- -------------- ----------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 253,751 11,018 25,792 777
----------- -------------- ----------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 213,063 -- -- --
Net transfers.......... 8,344 -- -- --
Surrenders............. (205,358) (88,773) (38,024) (1)
Net annuity
transactions......... (20,372) -- -- --
----------- -------------- ----------------- -----------
Total increase
(decrease) in net
assets resulting from
unit transactions.... (4,323) (88,773) (38,024) (1)
----------- -------------- ----------------- -----------
Total increase
(decrease) in net
assets............... 249,428 (77,755) (12,232) 776
NET ASSETS:
Beginning of period.... 2,661,229 580,931 172,861 39,842
----------- -------------- ----------------- -----------
End of period.......... $2,910,657 $ 503,176 $ 160,629 $ 40,618
----------- -------------- ----------------- -----------
----------- -------------- ----------------- -----------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1996
CALVERT
RESPONSIBLY INVESTED INTERNATIONAL SMALL SMITH BARNEY
BALANCED PORTFOLIO ADVISERS FUND COMPANY FUND DAILY DIVIDEND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT* SUB-ACCOUNT
-------------------- -------------- ----------------- --------------------
OPERATIONS:
Net investment income
(loss)............... $ 29,407 $ 644,546 $ (17,678) $ 22,053
Capital gains income... 140,994 595,787 -- --
Net realized gain
(loss) on security
transactions......... 6,518 (3,562) 922 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 78,661 708,119 74,459 --
----------- -------------- ----------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... 255,580 1,944,890 57,703 22,053
----------- -------------- ----------------- -----------
UNIT TRANSACTIONS:
Purchases.............. 501,957 10,618,419 4,333,960 25
Net transfers.......... 86,346 10,257,798 9,203,248 --
Surrenders............. (81,242) (609,471) (48,819) (10,494)
Net annuity
transactions......... 135,085 -- -- --
----------- -------------- ----------------- -----------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 642,146 20,266,746 13,488,389 (10,469)
----------- -------------- ----------------- -----------
Total increase
(decrease) in net
assets............... 897,726 22,211,636 13,546,092 11,584
NET ASSETS:
Beginning of period.... 1,763,503 7,597,538 -- 569,347
----------- -------------- ----------------- -----------
End of period.......... $2,661,229 $29,809,174 $13,546,092 $ 580,931
----------- -------------- ----------------- -----------
----------- -------------- ----------------- -----------
</TABLE>
* From inception, August 9, 1996, to December 31, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
<PAGE>
<TABLE>
<CAPTION>
TCI TCI FIDELITY VIP FIDELITY VIP II FIDELITY VIP II
ADVANTAGE FUND GROWTH FUND OVERSEAS FUND ASSET MANAGER FUND CONTRAFUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- -------------------- -------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,682 $ (6,761) $ 12,722 $ 53,024 $ 11,422
Capital gains income... 10,139 22,619 84,101 165,196 160,741
Net realized gain
(loss) on security
transactions......... 89 (3,791) 683 435 154
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (1,445) (57,157) 120,729 (9,093) 713,593
-------- ----------- -------------- ------------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 10,465 (45,090) 218,235 209,562 885,910
-------- ----------- -------------- ------------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. 29,516 144,253 113,306 196,494 711,643
Net transfers.......... (7,598) 76,466 308,695 221,417 1,313,568
Surrenders............. (11,350) (22,569) (10,775) (63,704) (135,559)
Net annuity
transactions......... (308) (235) -- -- 453
-------- ----------- -------------- ------------------ ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 10,260 197,915 411,226 354,207 1,890,105
-------- ----------- -------------- ------------------ ---------------
Total increase
(decrease) in net
assets............... 20,725 152,825 629,461 563,769 2,776,015
NET ASSETS:
Beginning of period.... 172,595 1,138,990 1,060,589 1,834,015 6,671,595
-------- ----------- -------------- ------------------ ---------------
End of period.......... $193,320 $1,291,815 $1,690,050 $2,397,784 $9,447,610
-------- ----------- -------------- ------------------ ---------------
-------- ----------- -------------- ------------------ ---------------
SMITH BARNEY
SMITH BARNEY GOVERNMENT PORTFOLIO TCI TCI FIDELITY VIP
APPRECIATION FUND CLASS A ADVANTAGE FUND GROWTH FUND OVERSEAS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- -------------------- -------------- ------------------ ---------------
OPERATIONS:
Net investment income
(loss)............... $ 15,035 $ 1,646 $ 5,374 $ 86,878 $ (4,777)
Capital gains income... -- -- -- -- 4,080
Net realized gain
(loss) on security
transactions......... 174 -- (110) 527 985
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 11,776 -- 4,528 (155,560) 77,918
-------- ----------- -------------- ------------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 26,985 1,646 9,792 (68,155) 78,206
-------- ----------- -------------- ------------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 52,991 278,606 196,292
Net transfers.......... -- -- 63,519 248,714 626,400
Surrenders............. (2,558) (4,273) (218) (13,223) (27,202)
Net annuity
transactions......... -- -- (410) (374) --
-------- ----------- -------------- ------------------ ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... (2,558) (4,273) 115,882 513,723 795,490
-------- ----------- -------------- ------------------ ---------------
Total increase
(decrease) in net
assets............... 24,427 (2,627) 125,674 445,568 873,696
NET ASSETS:
Beginning of period.... 148,434 42,469 46,921 693,422 186,893
-------- ----------- -------------- ------------------ ---------------
End of period.......... $172,861 $ 39,842 $ 172,595 $1,138,990 $1,060,589
-------- ----------- -------------- ------------------ ---------------
-------- ----------- -------------- ------------------ ---------------
<CAPTION>
BB&T
FIDELITY VIP GROWTH AND
GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------ ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 444 $ 461
Capital gains income... 217,749 --
Net realized gain
(loss) on security
transactions......... 5,699 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 758,779 (2,749)
------------------ ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 982,671 (2,288)
------------------ ---------------
UNIT TRANSACTIONS:
Purchases.............. 759,175 604,518
Net transfers.......... 299,499 --
Surrenders............. (269,298) --
Net annuity
transactions......... 2,295 --
------------------ ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 791,671 604,518
------------------ ---------------
Total increase
(decrease) in net
assets............... 1,774,342 602,230
NET ASSETS:
Beginning of period.... 7,015,865 --
------------------ ---------------
End of period.......... $8,790,207 $ 602,230
------------------ ---------------
------------------ ---------------
FIDELITY VIP II FIDELITY VIP II FIDELITY VIP
ASSET MANAGER FUND CONTRAFUND FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------
OPERATIONS:
Net investment income
(loss)............... $ 14,241 $ (35,654) $ 10,178
Capital gains income... -- -- 115,329
Net realized gain
(loss) on security
transactions......... (71) (377) (6,795)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 126,112 910,896 420,263
------------------ --------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 140,282 874,865 538,975
------------------ --------------- ------------
UNIT TRANSACTIONS:
Purchases.............. 268,755 928,554 1,249,738
Net transfers.......... 1,181,511 3,162,455 3,357,091
Surrenders............. (95,811) (279,972) (334,425)
Net annuity
transactions......... -- -- --
------------------ --------------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,354,455 3,811,037 4,272,404
------------------ --------------- ------------
Total increase
(decrease) in net
assets............... 1,494,737 4,685,902 4,811,379
NET ASSETS:
Beginning of period.... 339,278 1,985,693 2,204,486
------------------ --------------- ------------
End of period.......... $1,834,015 $6,671,595 $7,015,865
------------------ --------------- ------------
------------------ --------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
<PAGE>
SEPARATE ACCOUNT TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Two (the Account) is a separate investment account with
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contract owners of the Company in various
mutual funds (the Funds) as directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Hartford, Smith
Barney, TCI, Fidelity and Calvert Responsibily Invested Series mutual
funds are valued at the closing net asset value per share as determined
by the appropriate Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of up to
1.25% of the Account's average daily net assets.
b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are
deducted through termination of units of interest from applicable
contract owners' accounts, in accordance with the terms of the
contracts.
4. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND:
On June 27, 1997, the Hartford U.S. Government Money Market Fund was merged
with the HVA Money Market Fund. Accordingly, all contract owner account
values held in the Hartford U.S. Government Money Market Fund were exchanged
for equivalent account values of HVA Money Market Fund on June 27, 1997.
34
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE ONE
[STAG]
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 4,330,282
Cost $ 4,274,533
Market Value......... $4,387,017 -- -- --
Hartford Stock Fund,
Inc.
Shares 4,659,559
Cost $16,787,120
Market Value......... -- $22,323,831 -- --
HVA Money Market Fund,
Inc.
Shares 17,608,926
Cost $17,608,926
Market Value......... -- -- $17,608,926 --
Hartford Advisers Fund,
Inc.
Shares 6,231,282
Cost $12,248,883
Market Value......... -- -- -- $14,885,099
Hartford Capital
Appreciation Fund,
Inc.
Shares 6,914,650
Cost $23,990,708
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 1,402,863
Cost $ 1,450,521
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 4,830,687
Cost $10,780,826
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,181,844
Cost $10,531,037
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 3,485,841
Cost $ 5,243,644
Market Value......... -- -- -- --
Fidelity VIP Equity
Income Fund
Shares 367,343
Cost $ 7,300,951
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 85,364
Cost $ 1,525,227
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 63,224
Cost $ 1,009,826
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 32,852 150,449 68,920 29,897
Receivable from fund
shares sold.......... -- -- -- --
----------- ------------ ------------ -------------
Total Assets........... 4,419,869 22,474,280 17,677,846 14,914,996
----------- ------------ ------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- -- -- --
Payable for fund shares
purchased............ 32,829 150,418 68,901 29,768
----------- ------------ ------------ -------------
Total Liabilities...... 32,829 150,418 68,901 29,768
----------- ------------ ------------ -------------
Net Assets (variable
life contract
liabilities)......... $4,387,040 $22,323,862 $17,608,945 $14,885,228
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 3,429,258 10,220,472 14,598,573 8,205,391
Unit Price............. $ 1.279297 $ 2.184230 $ 1.206210 $ 1.814079
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 4,330,282
Cost $ 4,274,533
Market Value......... -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 4,659,559
Cost $16,787,120
Market Value......... -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 17,608,926
Cost $17,608,926
Market Value......... -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 6,231,282
Cost $12,248,883
Market Value......... -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 6,914,650
Cost $23,990,708
Market Value......... $28,644,325 -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 1,402,863
Cost $ 1,450,521
Market Value......... -- $1,500,577 -- -- --
Hartford Index Fund,
Inc.
Shares 4,830,687
Cost $10,780,826
Market Value......... -- -- $12,704,829 -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,181,844
Cost $10,531,037
Market Value......... -- -- -- $11,736,715 --
Hartford Dividend and
Growth Fund, Inc.
Shares 3,485,841
Cost $ 5,243,644
Market Value......... -- -- -- -- $6,230,051
Fidelity VIP Equity
Income Fund
Shares 367,343
Cost $ 7,300,951
Market Value......... -- -- -- -- --
Fidelity VIP Overseas
Fund
Shares 85,364
Cost $ 1,525,227
Market Value......... -- -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 63,224
Cost $ 1,009,826
Market Value......... -- -- -- -- --
Due from Hartford Life
Insurance Company.... -- -- 16,737 -- 12,501
Receivable from fund
shares sold.......... 8,232 5,374 -- 13,594 --
----------------- --------------- ----------- ------------------ ------------
Total Assets........... 28,652,557 1,505,951 12,721,566 11,750,309 6,242,552
----------------- --------------- ----------- ------------------ ------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... 6,679 5,374 -- 13,458 --
Payable for fund shares
purchased............ -- -- 16,744 -- 12,388
----------------- --------------- ----------- ------------------ ------------
Total Liabilities...... 6,679 5,374 16,744 13,458 12,388
----------------- --------------- ----------- ------------------ ------------
Net Assets (variable
life contract
liabilities)......... $28,645,878 $1,500,577 $12,704,822 $11,736,851 $6,230,164
----------------- --------------- ----------- ------------------ ------------
----------------- --------------- ----------- ------------------ ------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 14,321,700 1,170,300 6,030,179 7,112,610 3,438,922
Unit Price............. $ 2.000173 $ 1.282215 $ 2.106873 $ 1.650147 $ 1.811662
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Fidelity VIP Equity
Income Fund
Shares
Cost
Market Value......... $8,103,589 -- --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... -- $1,710,701 --
Fidelity VIP II Asset
Manager Fund
Shares
Cost
Market Value......... -- -- $1,049,510
Due from Hartford Life
Insurance Company.... 42,586 744 1,412
Receivable from fund
shares sold.......... -- -- --
------------------ ------------- ------------------
Total Assets........... 8,146,175 1,711,445 1,050,922
------------------ ------------- ------------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- -- --
Payable for fund shares
purchased............ 40,616 837 1,367
------------------ ------------- ------------------
Total Liabilities...... 40,616 837 1,367
------------------ ------------- ------------------
Net Assets (variable
life contract
liabilities)......... $8,105,559 $1,710,608 $1,049,555
------------------ ------------- ------------------
------------------ ------------- ------------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 5,082,664 1,208,443 748,011
Unit Price............. $ 1.594746 $1.415548 $1.403128
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
37
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTH ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 70,530 $ 58,982 $492,067 $ 94,241
----------- ----------- ----------- -------------
CAPITAL GAINS INCOME..... -- 827,575 -- 507,384
----------- ----------- ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 119 (454) -- 5,782
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 58,398 2,754,018 -- 1,246,166
----------- ----------- ----------- -------------
Net gain (losses) on
investments......... 58,517 2,753,564 -- 1,251,948
----------- ----------- ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $129,047 $ 3,640,121 $492,067 $1,853,573
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
38
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 49,733 $33,778 $ 41,595 $ 10,217 $ 29,243 $ 88,466
----------------- ------- ----------- ------------------ ------------ --------
CAPITAL GAINS INCOME..... 1,675,075 -- 620,188 745,516 100,558 444,785
----------------- ------- ----------- ------------------ ------------ --------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (3,340) 1,095 22,632 3,809 1,306 (1,950)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,759,331 19,531 1,096,351 341,678 675,709 431,450
----------------- ------- ----------- ------------------ ------------ --------
Net gain (losses) on
investments......... 1,755,991 20,626 1,118,983 345,487 677,015 429,500
----------------- ------- ----------- ------------------ ------------ --------
Net increase
(decrease) in net
assets resulting
from operations..... $3,480,799 $54,404 $1,780,766 1$,101,220 $806,816 $962,751
----------------- ------- ----------- ------------------ ------------ --------
----------------- ------- ----------- ------------------ ------------ --------
<CAPTION>
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- -------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 18,168 $25,384
------------- -------
CAPITAL GAINS INCOME..... 72,122 63,674
------------- -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 513 794
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 111,207 4,473
------------- -------
Net gain (losses) on
investments......... 111,720 5,267
------------- -------
Net increase
(decrease) in net
assets resulting
from operations..... $202,010 $94,325
------------- -------
------------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
39
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 70,530 $ 58,982 $ 492,067 $ 94,241
Capital gains income... -- 827,575 -- 507,384
Net realized gain
(loss) on security
transactions......... 119 (454) -- 5,782
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 58,398 2,754,018 -- 1,246,166
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 129,047 3,640,121 492,067 1,853,573
----------- ------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 391,485 1,332,584 33,102,458 1,464,587
Net transfers.......... 1,299,280 3,691,936 (36,545,731) 2,218,145
Surrenders............. (35,239) (485,292) (1,417,907) (204,355)
Net loan withdrawals... (10,782) (61,473) 1,232,015 (97,566)
Cost of insurance...... (71,861) (316,906) (717,011) (243,155)
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 1,572,883 4,160,849 (4,346,176) 3,137,656
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets............... 1,701,930 7,800,970 (3,854,109) 4,991,229
NET ASSETS:
Beginning of period.... 2,685,110 14,522,892 21,463,054 9,893,999
----------- ------------ ------------- -------------
End of period.......... $4,387,040 $ 22,323,862 $ 17,608,945 $14,885,228
----------- ------------ ------------- -------------
----------- ------------ ------------- -------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- -------------
OPERATIONS:
Net investment income
(loss)............... $ 130,339 $ 166,505 $ 617,137 $ 203,460
Capital gains income... -- 309,113 -- 107,033
Net realized gain
(loss) on security
transactions......... (2,539) (10,306) -- 1,174
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (35,847) 1,824,641 -- 815,705
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 91,953 2,289,953 617,137 1,127,372
----------- ------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 177,130 1,770,443 78,140,461 1,889,169
Net transfers.......... 932,335 4,457,656 (62,761,807) 2,840,668
Surrenders............. (69,207) (362,933) (814,963) (264,048)
Net loan withdrawals... (22,111) (179,201) (2,187,733) (50,031)
Cost of insurance...... (76,606) (391,509) (1,139,390) (289,178)
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 941,541 5,294,456 11,236,568 4,126,580
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets............... 1,033,494 7,584,409 11,853,705 5,253,952
NET ASSETS:
Beginning of period.... 1,651,616 6,938,483 9,609,349 4,640,047
----------- ------------ ------------- -------------
End of period.......... $2,685,110 $ 14,522,892 $ 21,463,054 $9,893,999
----------- ------------ ------------- -------------
----------- ------------ ------------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
<TABLE>
<CAPTION>
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------ ------------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 49,733 $ 33,778 $ 41,595 $ 10,217 $ 29,243
Capital gains income... 1,675,075 -- 620,188 745,516 100,558
Net realized gain
(loss) on security
transactions......... (3,340) 1,095 22,632 3,809 1,306
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,759,331 19,531 1,096,351 341,678 675,709
----------------- --------------- ------------ ------------------ ------------
Net increase (decrease)
in net assets
resulting from
operations........... 3,480,799 54,404 1,780,766 1,101,220 806,816
----------------- --------------- ------------ ------------------ ------------
UNIT TRANSACTIONS:
Purchases.............. 2,764,699 72,546 1,365,454 1,606,201 429,516
Net transfers.......... 3,449,322 41,182 3,802,340 911,871 2,112,620
Surrenders............. (584,352) (15,174) (1,333,225) (240,346) (283,967)
Net loan withdrawals... (170,679) (2,248) 1,219,180 (146,147) (1,243)
Cost of insurance...... (483,694) (26,722) (196,729) (216,587) (66,930)
----------------- --------------- ------------ ------------------ ------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 4,975,296 69,584 4,858,020 1,914,992 2,189,996
----------------- --------------- ------------ ------------------ ------------
Total increase
(decrease) in net
assets............... 8,456,095 123,988 6,638,786 3,016,212 2,996,812
NET ASSETS:
Beginning of period.... 20,189,783 1,376,589 6,066,036 8,720,639 3,233,352
----------------- --------------- ------------ ------------------ ------------
End of period.......... $28,645,878 $1,500,577 $ 12,704,822 $11,736,851 $6,230,164
----------------- --------------- ------------ ------------------ ------------
----------------- --------------- ------------ ------------------ ------------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------ ------------------ ------------
OPERATIONS:
Net investment income
(loss)............... $ 94,066 $ 61,146 $ 80,193 $ 120,669 $ 41,572
Capital gains income... 567,054 -- 33,058 118,054 2,804
Net realized gain
(loss) on security
transactions......... (15,665) 21 2,355 (1,547) 678
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,913,546 195 656,725 544,630 305,389
----------------- --------------- ------------ ------------------ ------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,559,001 61,362 772,331 781,806 350,443
----------------- --------------- ------------ ------------------ ------------
UNIT TRANSACTIONS:
Purchases.............. 3,679,346 125,959 2,296,903 1,694,971 278,275
Net transfers.......... 7,290,692 552,359 3,171,094 2,966,744 2,674,253
Surrenders............. (485,609) (13,643) (96,179) (285,131) (20,374)
Net loan withdrawals... (245,321) (8,001) (1,375,343) (69,836) (67,575)
Cost of insurance...... (644,012) (28,469) (200,560) (306,356) (42,548)
----------------- --------------- ------------ ------------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 9,595,096 628,205 3,795,915 4,000,392 2,822,031
----------------- --------------- ------------ ------------------ ------------
Total increase
(decrease) in net
assets............... 12,154,097 689,567 4,568,246 4,782,198 3,172,474
NET ASSETS:
Beginning of period.... 8,035,686 687,022 1,497,790 3,938,441 60,878
----------------- --------------- ------------ ------------------ ------------
End of period.......... $20,189,783 $1,376,589 $ 6,066,036 $8,720,639 $3,233,352
----------------- --------------- ------------ ------------------ ------------
----------------- --------------- ------------ ------------------ ------------
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 88,466 $ 18,168 $ 25,384
Capital gains income... 444,785 72,122 63,674
Net realized gain
(loss) on security
transactions......... (1,950) 513 794
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 431,450 111,207 4,473
------------------ --------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 962,751 202,010 94,325
------------------ --------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 688,885 173,424 105,255
Net transfers.......... 1,892,695 492,035 226,326
Surrenders............. (84,440) (123,891) (10,119)
Net loan withdrawals... (34,994) 17,325 (2,842)
Cost of insurance...... (130,432) (37,192) (18,209)
------------------ --------------- ------------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 2,331,714 521,701 300,411
------------------ --------------- ------------------
Total increase
(decrease) in net
assets............... 3,294,465 723,711 394,736
NET ASSETS:
Beginning of period.... 4,811,094 986,897 654,819
------------------ --------------- ------------------
End of period.......... $8,105,559 $1,710,608 $1,049,555
------------------ --------------- ------------------
------------------ --------------- ------------------
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------------
OPERATIONS:
Net investment income
(loss)............... $ 28,598 $ 2,647 $ 4,226
Capital gains income... 11,171 2,911 --
Net realized gain
(loss) on security
transactions......... (3,448) 1,350 884
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 333,297 71,916 32,712
------------------ --------------- ------------------
Net increase (decrease)
in net assets
resulting from
operations........... 369,618 78,824 37,822
------------------ --------------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 889,845 203,728 94,706
Net transfers.......... 3,109,762 760,222 513,253
Surrenders............. (64,856) (18,172) (14,935)
Net loan withdrawals... (111,464) (91,281) (1,047)
Cost of insurance...... (97,433) (22,781) (11,950)
------------------ --------------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 3,725,854 831,716 580,027
------------------ --------------- ------------------
Total increase
(decrease) in net
assets............... 4,095,472 910,540 617,849
NET ASSETS:
Beginning of period.... 715,622 76,357 36,970
------------------ --------------- ------------------
End of period.......... $4,811,094 $ 986,897 $ 654,819
------------------ --------------- ------------------
------------------ --------------- ------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
41
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Variable Life One (the Account) is a separate investment
account with Hartford Life Insurance Company (the Company) and is registered
with the Securities and Exchange Commission (SEC) as a unit investment trust
under the Investment Company Act of 1940, as amended. The Account consists
of twenty two sub-accounts. These financial statements include twelve
sub-accounts which invest solely in the Hartford and Fidelity Mutual Funds
(the Funds). The other ten sub-accounts, which invest in Putnam VT Funds,
are presented in separate financial statements. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable life contract owners of the Company in the Funds as
directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
42
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
[STAG]
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 678,225
Cost $ 674,856
Market Value......... $ 687,111 -- -- --
Hartford Stock Fund,
Inc.
Shares 865,328
Cost $3,537,102
Market Value......... -- $4,145,764 -- --
HVA Money Market Fund,
Inc.
Shares 6,003,379
Cost $6,003,379
Market Value......... -- -- $6,003,379 --
Hartford Advisers Fund,
Inc.
Shares 1,093,395
Cost $2,297,359
Market Value......... -- -- -- $2,611,870
Hartford Capital
Appreciation Fund,
Inc.
Shares 1,318,980
Cost $4,885,835
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 133,296
Cost $ 140,248
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 1,587,036
Cost $3,700,790
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 2,039,408
Cost $2,731,641
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 1,272,758
Cost $2,041,021
Market Value......... -- -- -- --
Fidelity VIP Equity
Income Fund
Shares 135,883
Cost $2,704,539
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 24,477
Cost $ 446,052
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 29,455
Cost $ 472,066
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 36,535 89,184 -- 6,419
Receivable from fund
shares sold.......... -- -- 448,731 --
----------- ----------- ----------- -------------
Total Assets........... 723,646 4,234,948 6,452,110 2,618,289
----------- ----------- ----------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- -- 448,474 --
Payable for fund shares
purchased............ 36,527 89,079 -- 6,341
----------- ----------- ----------- -------------
Total Liabilities...... 36,527 89,079 448,474 6,341
----------- ----------- ----------- -------------
Net Assets (variable
life contract
liabilities)......... $ 687,119 $4,145,869 $6,003,636 $2,611,948
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 537,107 1,898,092 4,977,272 1,439,820
Unit Price............. $ 1.279297 $ 2.184230 $ 1.206210 $ 1.814079
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 678,225
Cost $ 674,856
Market Value......... -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 865,328
Cost $3,537,102
Market Value......... -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 6,003,379
Cost $6,003,379
Market Value......... -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,093,395
Cost $2,297,359
Market Value......... -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 1,318,980
Cost $4,885,835
Market Value......... $5,463,950 -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 133,296
Cost $ 140,248
Market Value......... -- $ 142,581 -- -- --
Hartford Index Fund,
Inc.
Shares 1,587,036
Cost $3,700,790
Market Value......... -- -- $4,173,943 -- --
Hartford International
Opportunities Fund,
Inc.
Shares 2,039,408
Cost $2,731,641
Market Value......... -- -- -- $2,925,495 --
Hartford Dividend and
Growth Fund, Inc.
Shares 1,272,758
Cost $2,041,021
Market Value......... -- -- -- -- $2,274,731
Fidelity VIP Equity
Income Fund
Shares 135,883
Cost $2,704,539
Market Value......... -- -- -- -- --
Fidelity VIP Overseas
Fund
Shares 24,477
Cost $ 446,052
Market Value......... -- -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 29,455
Cost $ 472,066
Market Value......... -- -- -- -- --
Due from Hartford Life
Insurance Company.... 5,704 -- 96,652 21,399 10,493
Receivable from fund
shares sold.......... -- 920 -- -- --
----------------- --------------- ----------- ------------------ -------------
Total Assets........... 5,469,654 143,501 4,266,595 2,946,894 2,285,224
----------------- --------------- ----------- ------------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- 921 -- -- --
Payable for fund shares
purchased............ 5,444 -- 92,499 21,437 10,418
----------------- --------------- ----------- ------------------ -------------
Total Liabilities...... 5,444 921 92,499 21,437 10,418
----------------- --------------- ----------- ------------------ -------------
Net Assets (variable
life contract
liabilities)......... $5,464,210 $ 142,580 $4,174,096 $2,925,457 $2,274,806
----------------- --------------- ----------- ------------------ -------------
----------------- --------------- ----------- ------------------ -------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 2,731,869 111,198 1,981,181 1,772,847 1,255,646
Unit Price............. $ 2.000173 $ 1.282215 $ 2.106873 $ 1.650147 $ 1.811662
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Fidelity VIP Equity
Income Fund
Shares
Cost
Market Value......... $2,997,572 -- --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... -- $ 490,522 --
Fidelity VIP II Asset
Manager Fund
Shares
Cost
Market Value......... -- -- $ 488,960
Due from Hartford Life
Insurance Company.... 51,995 4,666 --
Receivable from fund
shares sold.......... -- -- 159
------------------ --------------- ----------
Total Assets........... 3,049,567 495,188 489,119
------------------ --------------- ----------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- -- 5,194
Payable for fund shares
purchased............ 53,680 4,757 --
------------------ --------------- ----------
Total Liabilities...... 53,680 4,757 5,194
------------------ --------------- ----------
Net Assets (variable
life contract
liabilities)......... $2,995,887 $ 490,431 $ 483,925
------------------ --------------- ----------
------------------ --------------- ----------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 1,878,598 346,461 344,890
Unit Price............. $ 1.594746 $ 1.415548 $ 1.403128
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 6,511 $ 7,795 $138,413 $ 14,543
----------- ----------- ----------- -------------
Net investment income
(loss).............. 6,511 7,795 138,413 14,543
----------- ----------- ----------- -------------
CAPITAL GAINS INCOME..... -- 103,392 2 75,982
----------- ----------- ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 37 541 -- 1,484
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 10,024 464,464 -- 220,728
----------- ----------- ----------- -------------
Net realized and
unrealized gain
(loss) on
investments......... 10,061 465,005 -- 222,212
----------- ----------- ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $16,572 $576,192 $138,415 $312,737
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
46
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 7,678 $ 1,491 $ 8,825 $ 2,106 $ 8,632
-------- ------ ----------- -------- ------------
Net investment income
(loss).............. 7,678 1,491 8,825 2,106 8,632
-------- ------ ----------- -------- ------------
CAPITAL GAINS INCOME..... 219,489 -- 128,080 128,065 33,614
-------- ------ ----------- -------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (23) 11 872 4,229 43
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 402,095 1,803 361,400 136,457 195,245
-------- ------ ----------- -------- ------------
Net realized and
unrealized gain
(loss) on
investments......... 402,072 1,814 362,272 140,686 195,288
-------- ------ ----------- -------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $629,239 $ 3,305 $499,177 $270,857 $237,534
-------- ------ ----------- -------- ------------
-------- ------ ----------- -------- ------------
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 28,391 $ 3,585 $12,026
-------- ------------- -------
Net investment income
(loss).............. 28,391 3,585 12,026
-------- ------------- -------
CAPITAL GAINS INCOME..... 142,745 14,231 30,166
-------- ------------- -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 327 27 3,975
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 172,325 35,769 (3,989)
-------- ------------- -------
Net realized and
unrealized gain
(loss) on
investments......... 172,652 35,796 (14)
-------- ------------- -------
Net increase
(decrease) in net
assets resulting
from operations..... $343,788 $53,612 $42,178
-------- ------------- -------
-------- ------------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 6,511 $ 7,795 $ 138,413 $ 14,543
Capital gains income... -- 103,392 2 75,982
Net realized gain
(loss) on security
transactions......... 37 541 -- 1,484
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 10,024 464,464 -- 220,728
----------- ------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 16,572 576,192 138,415 312,737
----------- ------------- ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 101,706 249,315 19,021,537 396,471
Net transfers.......... 372,874 1,683,624 (16,424,468) 570,505
Surrenders............. (5,530) (49,016) (216,940) (45,599)
Loan withdrawals....... -- (302) (312,021) (208)
Cost of insurance...... (8,353) (49,261) (214,880) (34,170)
----------- ------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 460,697 1,834,360 1,853,228 886,999
----------- ------------- ------------- -------------
Total increase
(decrease) in net
assets............... 477,269 2,410,552 1,991,643 1,199,736
NET ASSETS:
Beginning of period.... 209,850 1,735,317 4,011,993 1,412,212
----------- ------------- ------------- -------------
End of period.......... $687,119 $4,145,869 $ 6,003,636 $2,611,948
----------- ------------- ------------- -------------
----------- ------------- ------------- -------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ------------- -------------
OPERATIONS:
Net investment income
(loss)............... $ 4,617 $ 9,981 $ 56,534 $ 16,365
Net realized gain
(loss) on security
transactions......... 9 (88) -- 975
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,231 144,184 -- 93,783
----------- ------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 6,857 154,077 56,534 111,123
----------- ------------- ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 24,540 128,400 21,595,898 163,384
Net transfers.......... 184,962 1,479,101 (17,911,483) 1,195,723
Surrenders............. (2,166) (4,782) (350,401) (21,798)
Loan withdrawals....... -- (22,053) (23,407) (21,530)
Cost of insurance...... (4,343) (21,092) (286,663) (14,690)
----------- ------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 202,993 1,559,574 3,023,944 1,301,089
----------- ------------- ------------- -------------
Total increase
(decrease) in net
assets............... 209,850 1,713,651 3,080,478 1,412,212
NET ASSETS:
Beginning of period.... -- 21,666 931,515 --
----------- ------------- ------------- -------------
End of period.......... $209,850 $1,735,317 $ 4,011,993 $1,412,212
----------- ------------- ------------- -------------
----------- ------------- ------------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
48
<PAGE>
<TABLE>
<CAPTION>
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- ----------- ------------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 7,678 $ 1,491 $ 8,825 $ 2,106 $ 8,632
Capital gains income... 219,489 -- 128,080 128,065 33,614
Net realized gain
(loss) on security
transactions......... (23) 11 872 4,229 43
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 402,095 1,803 361,400 136,457 195,245
----------------- -------- ----------- ------------------- --------------
Net increase (decrease)
in net assets
resulting from
operations........... 629,239 3,305 499,177 270,857 237,534
----------------- -------- ----------- ------------------- --------------
UNIT TRANSACTIONS:
Purchases.............. 600,874 21,321 392,469 442,872 119,063
Net transfers.......... 2,053,595 78,259 2,171,340 991,711 1,415,587
Surrenders............. (68,440) (2,187) (41,494) (31,725) (22,385)
Loan withdrawals....... (357) -- (40) (109) (169)
Cost of insurance...... (71,357) (2,100) (47,602) (35,941) (23,832)
----------------- -------- ----------- ------------------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 2,514,315 95,293 2,474,673 1,366,808 1,488,264
----------------- -------- ----------- ------------------- --------------
Total increase
(decrease) in net
assets............... 3,143,554 98,598 2,973,850 1,637,665 1,725,798
NET ASSETS:
Beginning of period.... 2,320,656 43,982 1,200,246 1,287,792 549,008
----------------- -------- ----------- ------------------- --------------
End of period.......... $5,464,210 $142,580 $4,174,096 $2,925,457 $2,274,806
----------------- -------- ----------- ------------------- --------------
----------------- -------- ----------- ------------------- --------------
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- ----------- ------------------- --------------
OPERATIONS:
Net investment income
(loss)............... $ 5,970 $ 1,084 $ 9,179 $ 9,122 $ 4,704
Net realized gain
(loss) on security
transactions......... 512 -- 2,901 296 938
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 176,020 530 111,747 57,397 38,465
----------------- -------- ----------- ------------------- --------------
Net increase (decrease)
in net assets
resulting from
operations........... 182,502 1,614 123,827 66,815 44,107
----------------- -------- ----------- ------------------- --------------
UNIT TRANSACTIONS:
Purchases.............. 341,337 6,471 50,114 95,211 13,008
Net transfers.......... 1,756,480 37,915 1,092,579 1,031,056 560,046
Surrenders............. (21,886) (1,050) (92,837) (3,592) (47,416)
Loan withdrawals....... (21,502) -- -- (8,130) (12,999)
Cost of insurance...... (38,858) (968) (21,363) (33,663) (7,738)
----------------- -------- ----------- ------------------- --------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 2,015,571 42,368 1,028,493 1,080,882 504,901
----------------- -------- ----------- ------------------- --------------
Total increase
(decrease) in net
assets............... 2,198,073 43,982 1,152,320 1,147,697 549,008
NET ASSETS:
Beginning of period.... 122,583 -- 47,926 140,095 --
----------------- -------- ----------- ------------------- --------------
End of period.......... $2,320,656 $ 43,982 $1,200,246 $1,287,792 $ 549,008
----------------- -------- ----------- ------------------- --------------
----------------- -------- ----------- ------------------- --------------
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 28,391 $ 3,585 $ 12,026
Capital gains income... 142,745 14,231 30,166
Net realized gain
(loss) on security
transactions......... 327 27 3,975
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 172,325 35,769 (3,989)
------------------ ------------- --------
Net increase (decrease)
in net assets
resulting from
operations........... 343,788 53,612 42,178
------------------ ------------- --------
UNIT TRANSACTIONS:
Purchases.............. 193,443 19,572 47,190
Net transfers.......... 965,869 259,040 96,391
Surrenders............. (39,997) (6,511) (8,222)
Loan withdrawals....... (154) -- --
Cost of insurance...... (32,807) (2,342) (6,453)
------------------ ------------- --------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,086,354 269,759 128,906
------------------ ------------- --------
Total increase
(decrease) in net
assets............... 1,430,142 323,371 171,084
NET ASSETS:
Beginning of period.... 1,565,745 167,060 312,841
------------------ ------------- --------
End of period.......... $2,995,887 $490,431 $483,925
------------------ ------------- --------
------------------ ------------- --------
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
OPERATIONS:
Net investment income
(loss)............... $ -- $ -- $--
Net realized gain
(loss) on security
transactions......... 77 7 (450)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 120,671 8,702 20,884
------------------ ------------- --------
Net increase (decrease)
in net assets
resulting from
operations........... 120,748 8,709 20,434
------------------ ------------- --------
UNIT TRANSACTIONS:
Purchases.............. 116,685 12,350 1,532
Net transfers.......... 1,369,018 146,928 299,311
Surrenders............. (27,120) 361 (5,819)
Loan withdrawals....... (4) -- --
Cost of insurance...... (17,752) (1,288) (2,617)
------------------ ------------- --------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,440,827 158,351 292,407
------------------ ------------- --------
Total increase
(decrease) in net
assets............... 1,561,575 167,060 312,841
NET ASSETS:
Beginning of period.... 4,170 -- --
------------------ ------------- --------
End of period.......... $1,565,745 $167,060 $312,841
------------------ ------------- --------
------------------ ------------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
49
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Variable Life Two (the Account) is a separate investment
account within Hartford Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Account consists of twenty two sub-accounts. These financial statements
include twelve sub-accounts which invest solely in the Hartford and Fidelity
Mutual Funds (the Funds). The other ten sub-accounts, which invest in Putnam
VT Funds, are presented in separate financial statements. Both the Company
and the Account are subject to supervision and regulation by the Department
of Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable life contract owners of the Company in the Funds as
directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Hartford, and
Fidelity mutual funds are valued at the closing net asset value per
share as determined by the appropriate Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
50
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT FIVE
[STAG]
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 4,577,899
Cost $ 4,567,445
Market Value......... $4,637,879 -- -- --
Hartford Stock Fund,
Inc.
Shares 5,330,875
Cost $ 20,021,128
Market Value......... -- $25,540,090 -- --
HVA Money Market Fund,
Inc.
Shares 17,486,958
Cost $ 17,486,958
Market Value......... -- -- $17,486,958 --
Hartford Advisers Fund,
Inc.
Shares 19,882,485
Cost $ 40,146,134
Market Value......... -- -- -- 47,494,684
Hartford Capital
Appreciation Fund,
Inc.
Shares 9,377,179
Cost $ 33,296,347
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 1,567,983
Cost $ 1,649,379
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 5,072,492
Cost $ 10,965,043
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,194,625
Cost $ 10,807,442
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 10,101,438
Cost $ 14,475,715
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 1,610,340
Cost $ 1,843,267
Market Value......... -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 374,325
Cost $ 410,067
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company.... 3,425 125,681 -- 38,935
Receivable from fund
shares sold.......... -- -- 753,738 --
----------- ----------- ------------- -------------
Total Assets........... 4,641,304 25,665,771 18,240,696 47,533,619
----------- ----------- ------------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- -- 753,598 --
Payable for fund shares
purchased............ 3,426 125,680 -- 38,923
----------- ----------- ------------- -------------
Total Liabilities...... 3,426 125,680 753,598 38,923
----------- ----------- ------------- -------------
Net Assets (variable
life contract
liabilities)......... $4,637,878 $25,540,091 $17,487,098 $47,494,696
----------- ----------- ------------- -------------
----------- ----------- ------------- -------------
Units owned by
Participants......... 3,648,448 12,678,765 15,349,726 27,538,010
Unit Price............. $ 1.271192 $ 2.014399 $ 1.139245 $ 1.724696
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 4,577,899
Cost $ 4,567,445
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 5,330,875
Cost $ 20,021,128
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 17,486,958
Cost $ 17,486,958
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 19,882,485
Cost $ 40,146,134
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 9,377,179
Cost $ 33,296,347
Market Value......... $38,845,490 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 1,567,983
Cost $ 1,649,379
Market Value......... -- $1,677,198 -- -- -- --
Hartford Index Fund,
Inc.
Shares 5,072,492
Cost $ 10,965,043
Market Value......... -- -- $13,340,780 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,194,625
Cost $ 10,807,442
Market Value......... -- -- -- $11,755,051 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 10,101,438
Cost $ 14,475,715
Market Value......... -- -- -- -- $18,053,745 --
Hartford International
Advisers Fund, Inc.
Shares 1,610,340
Cost $ 1,843,267
Market Value......... -- -- -- -- -- $1,935,917
Hartford Small Company
Fund, Inc.
Shares 374,325
Cost $ 410,067
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company.... 62,356 -- 200,294 113,214 192,771 5,911
Receivable from fund
shares sold.......... -- 174 -- -- -- --
----------------- --------------- ----------- ------------------ ------------ -------------
Total Assets........... 38,907,846 1,677,372 13,541,074 11,868,265 18,246,516 1,941,828
----------------- --------------- ----------- ------------------ ------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... -- 174 -- -- -- --
Payable for fund shares
purchased............ 62,354 -- 200,291 113,212 192,767 5,910
----------------- --------------- ----------- ------------------ ------------ -------------
Total Liabilities...... 62,354 174 200,291 113,212 192,767 5,910
----------------- --------------- ----------- ------------------ ------------ -------------
Net Assets (variable
life contract
liabilities)......... $38,845,492 $1,677,198 $13,340,783 $11,755,053 $18,053,749 $1,935,918
----------------- --------------- ----------- ------------------ ------------ -------------
----------------- --------------- ----------- ------------------ ------------ -------------
Units owned by
Participants......... 21,643,329 1,325,806 6,682,567 8,133,403 9,060,016 1,384,495
Unit Price............. $ 1.794802 $ 1.265041 $ 1.996356 $ 1.445281 $ 1.992684 $ 1.398284
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value.........
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... --
Hartford International
Advisers Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Small Company
Fund, Inc.
Shares
Cost
Market Value......... $ 440,014
Due from Hartford Life
Insurance Company.... 8,838
Receivable from fund
shares sold.......... --
------------
Total Assets........... 448,852
------------
LIABILITIES:
Due to Hartford Life
Insurance Company.... --
Payable for fund shares
purchased............ 8,838
------------
Total Liabilities...... 8,838
------------
Net Assets (variable
life contract
liabilities)......... $ 440,014
------------
------------
Units owned by
Participants......... 405,116
Unit Price............. $1.086144
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
53
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 85,720 $ 67,171 $461,645 $ 309,306
----------- ----------- ----------- -------------
CAPITAL GAINS INCOME..... -- 933,599 -- 1,663,628
----------- ----------- ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (6) 2,228 -- 572
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 70,750 3,202,496 -- 4,160,224
----------- ----------- ----------- -------------
Net gain (losses) on
investments......... 70,744 3,204,724 -- 4,160,796
----------- ----------- ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $156,464 $ 4,205,494 $461,645 $6,133,730
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 69,662 $33,682 $ 50,784 $ 9,590 $ 100,908 $ 70,580
----------------- ------- ----------- ------------------ ------------ --------------
CAPITAL GAINS INCOME..... 2,382,496 -- 787,478 661,603 364,880 4,758
----------------- ------- ----------- ------------------ ------------ --------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 1,869 93 2,981 1,844 895 3,938
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,311,202 23,297 1,201,376 396,670 2,158,989 62,318
----------------- ------- ----------- ------------------ ------------ --------------
Net gain (losses) on
investments......... 2,313,071 23,390 1,204,357 398,514 2,159,884 66,256
----------------- ------- ----------- ------------------ ------------ --------------
Net increase
(decrease) in net
assets resulting
from operations..... $4,765,229 $57,072 $ 2,042,619 1$,069,707 $2,625,672 $141,594
----------------- ------- ----------- ------------------ ------------ --------------
----------------- ------- ----------- ------------------ ------------ --------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 1
------------
CAPITAL GAINS INCOME..... 427
------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 4
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 29,964
------------
Net gain (losses) on
investments......... 29,968
------------
Net increase
(decrease) in net
assets resulting
from operations..... $30,396
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 85,720 $ 67,171 $ 461,645 $ 309,306
Capital gains income... -- 933,599 -- 1,663,628
Net realized gain
(loss) on security
transactions......... (6) 2,228 -- 572
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 70,750 3,202,496 -- 4,160,224
----------- ------------ ------------ -----------------
Net increase (decrease)
in net assets
resulting from
operations........... 156,464 4,205,494 461,645 6,133,730
----------- ------------ ------------ -----------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 30,476,136 --
Net transfers.......... 1,345,977 4,886,782 (29,583,079) 7,790,185
Surrenders............. (30,588) (204,871) (844,391) (720,586)
Loan withdrawals....... (22,889) (40,206) (1,142,180) 14,828
Cost of insurance...... (12,642) (69,570) (76,359) (139,815)
----------- ------------ ------------ -----------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 1,279,858 4,572,135 (1,169,873) 6,944,612
----------- ------------ ------------ -----------------
Total increase
(decrease) in net
assets............... 1,436,322 8,777,629 (708,228) 13,078,342
NET ASSETS:
Beginning of period.... 3,201,556 16,762,462 18,195,326 34,416,354
----------- ------------ ------------ -----------------
End of period.......... $4,637,878 $25,540,091 $17,487,098 $47,494,696
----------- ------------ ------------ -----------------
----------- ------------ ------------ -----------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -----------------
OPERATIONS:
Net investment income
(loss)............... $ 154,157 $ 173,109 $ 711,690 $ 654,458
Capital gains income... -- 247,892 -- 263,891
Net realized gain
(loss) on security
transactions......... (352) (96) -- (3,790)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (26,709) 2,003,388 -- 2,721,905
----------- ------------ ------------ -----------------
Net increase (decrease)
in net assets
resulting from
operations........... 127,096 2,424,293 711,690 3,636,464
----------- ------------ ------------ -----------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 82,517,329 --
Net transfers.......... 2,030,523 10,080,041 (71,001,713) 21,840,419
Surrenders............. (39,577) (209,688) (280,151) (444,541)
Net loan withdrawals... 12,868 (96,267) (5,090,962) (483,514)
Cost of insurance and
other fees........... (15,332) (75,894) (144,970) (155,225)
----------- ------------ ------------ -----------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,988,482 9,698,192 5,999,533 20,757,139
----------- ------------ ------------ -----------------
Total increase in net
assets............... 2,115,578 12,122,485 6,711,223 24,393,603
NET ASSETS:
Beginning of period.... 1,085,978 4,639,977 11,484,103 10,022,751
----------- ------------ ------------ -----------------
End of period.......... $3,201,556 $16,762,462 $18,195,326 $34,416,354
----------- ------------ ------------ -----------------
----------- ------------ ------------ -----------------
</TABLE>
* From inception, August 9, 1996, to December 31, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 69,662 $ 33,682 $ 50,784 $ 9,590 $ 100,908 $ 70,580
Capital gains income... 2,382,496 -- 787,478 661,603 364,880 4,758
Net realized gain
(loss) on security
transactions......... 1,869 93 2,981 1,844 895 3,938
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,311,202 23,297 1,201,376 396,670 2,158,989 62,318
----------------- --------------- ----------- ------------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,765,229 57,072 2,042,619 1,069,707 2,625,672 141,594
----------------- --------------- ----------- ------------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- -- -- --
Net transfers.......... 5,205,552 215,185 2,538,444 2,650,622 4,008,336 409,921
Surrenders............. (465,538) (43,961) (260,074) (170,087) (141,689) (29,507)
Loan withdrawals....... (107,657) (1,998) (32,169) (18,996) (54,201) (5,360)
Cost of insurance...... (117,130) (5,288) (36,423) (31,910) (49,105) (5,602)
----------------- --------------- ----------- ------------------ ------------ -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 4,515,227 163,938 2,209,778 2,429,629 3,763,341 369,452
----------------- --------------- ----------- ------------------ ------------ -------------
Total increase
(decrease) in net
assets............... 9,280,456 221,010 4,252,397 3,499,336 6,389,013 511,046
NET ASSETS:
Beginning of period.... 29,565,036 1,456,188 9,088,386 8,255,717 11,664,736 1,424,872
----------------- --------------- ----------- ------------------ ------------ -------------
End of period.......... $38,845,492 $1,677,198 $13,340,783 $11,755,053 $18,053,749 $1,935,918
----------------- --------------- ----------- ------------------ ------------ -------------
----------------- --------------- ----------- ------------------ ------------ -------------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ -------------
OPERATIONS:
Net investment income
(loss)............... $ 141,479 $ 74,538 $ 121,461 $ 104,616 $ 166,958 $ 39,973
Capital gains income... 852,649 -- 55,597 71,613 66,764 28,703
Net realized gain
(loss) on security
transactions......... 3,905 (264) 3,624 (826) 582 (2,872)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,844,514 (3,548) 1,040,510 450,264 1,210,967 25,925
----------------- --------------- ----------- ------------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 3,842,547 70,726 1,221,192 625,667 1,445,271 91,729
----------------- --------------- ----------- ------------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- -- -- --
Net transfers.......... 15,368,388 847,165 6,030,465 5,773,754 7,935,692 1,218,628
Surrenders............. (398,849) (36,769) (173,115) (98,814) (137,508) (13,045)
Net loan withdrawals... (232,211) (1,547) (142,073) (48,108) (65,640) (4)
Cost of insurance and
other fees........... (142,060) (7,811) (38,685) (34,733) (46,158) (5,555)
----------------- --------------- ----------- ------------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 14,595,268 801,038 5,676,592 5,592,099 7,686,386 1,200,024
----------------- --------------- ----------- ------------------ ------------ -------------
Total increase in net
assets............... 18,437,815 871,764 6,897,784 6,217,766 9,131,657 1,291,753
NET ASSETS:
Beginning of period.... 11,127,221 584,424 2,190,602 2,037,951 2,533,079 133,119
----------------- --------------- ----------- ------------------ ------------ -------------
End of period.......... $29,565,036 $1,456,188 $9,088,386 $8,255,717 $11,664,736 $1,424,872
----------------- --------------- ----------- ------------------ ------------ -------------
----------------- --------------- ----------- ------------------ ------------ -------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
-------------
<S> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1
Capital gains income... 427
Net realized gain
(loss) on security
transactions......... 4
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 29,964
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 30,396
-------------
UNIT TRANSACTIONS:
Purchases.............. --
Net transfers.......... 410,309
Surrenders............. (1,223)
Loan withdrawals....... --
Cost of insurance...... (451)
-------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 408,635
-------------
Total increase
(decrease) in net
assets............... 439,031
NET ASSETS:
Beginning of period.... 983
-------------
End of period.......... $440,014
-------------
-------------
SMALL
COMPANY FUND
SUBACCOUNT*
-------------
OPERATIONS:
Net investment income
(loss)............... $ --
Capital gains income... --
Net realized gain
(loss) on security
transactions......... --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (17)
-------------
Net increase (decrease)
in net assets
resulting from
operations........... (17)
-------------
UNIT TRANSACTIONS:
Purchases.............. 1,000
Net transfers.......... --
Surrenders............. --
Net loan withdrawals... --
Cost of insurance and
other fees........... --
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,000
-------------
Total increase in net
assets............... 983
NET ASSETS:
Beginning of period.... --
-------------
End of period.......... $ 983
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
57
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Five (the Account) is a separate investment account with
Hartford Life Insurance Company (the Company) and is registered with the
Securities and Exchange Commission (SEC) as a unit investment trust under
the Investment Company Act of 1940, as amended. Both the Company and the
Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable life contract owners of the Company in various mutual
funds (the Funds) as directed by the contract ownerss.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
58
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT ONE
[STAG]
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ -------------- ------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 169,597,479
Cost $ 171,072,401
Market Value......... $171,819,546 -- -- --
Hartford Stock Fund,
Inc.
Shares 340,811,887
Cost $1,212,317,223
Market Value......... -- $1,632,821,232 -- --
HVA Money Market Fund,
Inc.
Shares 208,764,060
Cost $ 208,764,060
Market Value......... -- -- $208,764,060 --
Hartford Advisers Fund,
Inc.
Shares 1,249,920,406
Cost $2,363,912,080
Market Value......... -- -- -- $2,985,772,369
Hartford Capital
Appreciation Fund,
Inc.
Shares 443,731,641
Cost $1,498,272,654
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 70,370,601
Cost $ 75,561,702
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 125,680,716
Cost $ 265,220,982
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 415,886,551
Cost $ 521,698,731
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 459,905,475
Cost $ 652,405,452
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 95,201,173
Cost $ 109,003,281
Market Value......... -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 54,871,903
Cost $ 58,558,137
Market Value......... -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 396,157 2,870,405 -- 4,862,727
Receivable from fund
shares sold.......... -- -- 694,529 --
------------ -------------- ------------- --------------
Total Assets........... 172,215,703 1,635,691,637 209,458,589 2,990,635,096
------------ -------------- ------------- --------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- 696,130 --
Payable for fund shares
purchased............ 396,236 2,869,063 -- 4,862,064
------------ -------------- ------------- --------------
Total Liabilities...... 396,236 2,869,063 696,130 4,862,064
------------ -------------- ------------- --------------
Net Assets (variable
annuity contract
liabilities)......... $171,819,467 $1,632,822,574 $208,762,459 $2,985,773,032
------------ -------------- ------------- --------------
------------ -------------- ------------- --------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 86,535,618 379,292,652 129,009,907 890,709,525
Unit Price............. $ 1.981198 $ 4.302210 $ 1.617289 $ 3.349354
ANNUITY CONTRACTS IN THE
ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 189,418 238,467 71,821 737,910
Unit Price............. $ 1.981198 $ 4.302210 $ 1.617289 $ 3.349354
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 169,597,479
Cost $ 171,072,401
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 340,811,887
Cost $1,212,317,223
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 208,764,060
Cost $ 208,764,060
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 1,249,920,406
Cost $2,363,912,080
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 443,731,641
Cost $1,498,272,654
Market Value......... $1,838,183,171 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 70,370,601
Cost $ 75,561,702
Market Value......... -- $75,272,124 -- -- -- --
Hartford Index Fund,
Inc.
Shares 125,680,716
Cost $ 265,220,982
Market Value......... -- -- $ 330,543,426 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 415,886,551
Cost $ 521,698,731
Market Value......... -- -- -- $596,582,187 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 459,905,475
Cost $ 652,405,452
Market Value......... -- -- -- -- $821,963,762 --
Hartford International
Advisers Fund, Inc.
Shares 95,201,173
Cost $ 109,003,281
Market Value......... -- -- -- -- -- $114,448,852
Hartford Small Company
Fund, Inc.
Shares 54,871,903
Cost $ 58,558,137
Market Value......... -- -- -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 2,148,459 93,265 1,069,846 1,106,444 3,001,743 370,555
Receivable from fund
shares sold.......... -- -- -- -- -- --
----------------- --------------- ------------- ------------------ ------------- -------------
Total Assets........... 1,840,331,630 75,365,389 331,613,272 597,688,631 824,965,505 114,819,407
----------------- --------------- ------------- ------------------ ------------- -------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- -- -- -- --
Payable for fund shares
purchased............ 2,012,675 93,754 1,064,965 1,106,291 3,001,100 370,576
----------------- --------------- ------------- ------------------ ------------- -------------
Total Liabilities...... 2,012,675 93,754 1,064,965 1,106,291 3,001,100 370,576
----------------- --------------- ------------- ------------------ ------------- -------------
Net Assets (variable
annuity contract
liabilities)......... $1,838,318,955 $75,271,635 $ 330,548,307 $596,582,340 $821,964,405 $114,448,831
----------------- --------------- ------------- ------------------ ------------- -------------
----------------- --------------- ------------- ------------------ ------------- -------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 402,450,436 37,523,547 97,224,198 367,020,792 419,136,061 84,254,747
Unit Price............. $ 4.565863 $ 2.005984 $ 3.399356 $ 1.624565 $ 1.960310 $ 1.358144
ANNUITY CONTRACTS IN THE
ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 172,015 -- 14,310 205,105 167,215 13,807
Unit Price............. $ 4.565863 $ -- $ 3.399356 $ 1.624565 $ 1.960310 $ 1.358144
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
-------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... --
Hartford International
Advisers Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Small Company
Fund, Inc.
Shares
Cost
Market Value......... $64,501,099
Due from ITT Hartford
Life and Annuity
Insurance Company.... 347,255
Receivable from fund
shares sold.......... --
-------------
Total Assets........... 64,848,354
-------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... --
Payable for fund shares
purchased............ 347,137
-------------
Total Liabilities...... 347,137
-------------
Net Assets (variable
annuity contract
liabilities)......... $64,501,217
-------------
-------------
DEFERRED ANNUITY
CONTRACTS IN THE
ACCUMULATION PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 55,084,064
Unit Price............. $ 1.170679
ANNUITY CONTRACTS IN THE
ANNUITY PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 13,206
Unit Price............. $ 1.170679
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
61
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 3,497,173 $ 4,479,878 $4,925,387 $ 20,086,271
EXPENSES:
Mortality and expense
undertakings......... (977,210) (8,358,966) (1,200,166) (16,048,915)
------------- ------------- ------------- -------------
Net investment income
(loss).............. 2,519,963 (3,879,088) 3,725,221 4,037,356
------------- ------------- ------------- -------------
CAPITAL GAINS INCOME..... -- 62,602,913 -- 107,409,178
------------- ------------- ------------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 1,519 18,508 -- 173
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,424,784 207,767,595 -- 264,488,985
------------- ------------- ------------- -------------
Net gain (losses) on
investments......... 2,426,303 207,786,103 -- 264,489,158
------------- ------------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $ 4,946,266 $ 266,509,928 $3,725,221 $ 375,935,692
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- --------------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 3,307,799 $1,643,058 $ 1,263,527 $ 507,647 $ 4,455,953
EXPENSES:
Mortality and expense
undertakings......... (9,709,864) (462,004) (1,673,333) (3,241,830) (3,953,507)
----------------- --------------- --------------- --------------------- ------------------
Net investment income
(loss).............. (6,402,065) 1,181,054 (409,806) (2,734,183) 502,446
----------------- --------------- --------------- --------------------- ------------------
CAPITAL GAINS INCOME..... 112,339,947 -- 19,616,096 37,513,752 15,828,765
----------------- --------------- --------------- --------------------- ------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (58,490) 938 196,049 (8,740) --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 111,309,571 979,424 29,500,250 16,719,314 98,277,900
----------------- --------------- --------------- --------------------- ------------------
Net gain (losses) on
investments......... 111,251,081 980,362 29,696,299 16,710,574 98,277,900
----------------- --------------- --------------- --------------------- ------------------
Net increase
(decrease) in net
assets resulting
from operations..... $217,188,963 $2,161,416 $ 48,902,589 $51,490,143 $ 114,609,111
----------------- --------------- --------------- --------------------- ------------------
----------------- --------------- --------------- --------------------- ------------------
<CAPTION>
INTERNATIONAL SMALL
ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT
--------------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $3,867,653 $ 459
EXPENSES:
Mortality and expense
undertakings......... (560,537) (258,824)
--------------- ------------
Net investment income
(loss).............. 3,307,116 (258,365)
--------------- ------------
CAPITAL GAINS INCOME..... 262,472 170,800
--------------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 1,781 (1,400)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 3,753,567 5,732,153
--------------- ------------
Net gain (losses) on
investments......... 3,755,348 5,730,753
--------------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $7,324,936 $5,643,188
--------------- ------------
--------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 2,519,963 $ (3,879,088) $ 3,725,221 $ 4,037,356
Capital gains income... -- 62,602,913 -- 107,409,178
Net realized gain
(loss) on security
transactions......... 1,519 18,508 -- 173
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,424,784 207,767,595 -- 264,488,985
------------- --------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,946,266 266,509,928 3,725,221 375,935,692
------------- --------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 21,194,767 203,271,643 90,326,057 316,999,819
Net transfers.......... 2,784,983 57,422,474 (44,364,405) 64,062,105
Surrenders............. (4,036,183) (21,032,643) (16,110,606) (52,096,178)
Net annuity
transactions......... 367,423 300,071 (3,230) 376,426
------------- --------------- ------------- ---------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 20,310,990 239,961,545 29,847,816 329,342,172
------------- --------------- ------------- ---------------
Total increase
(decrease) in net
assets............... 25,257,256 506,471,473 33,573,037 705,277,864
NET ASSETS:
Beginning of period.... 146,562,211 1,126,351,101 175,189,422 2,280,495,168
------------- --------------- ------------- ---------------
End of period.......... $ 171,819,467 $ 1,632,822,574 $ 208,762,459 $ 2,985,773,032
------------- --------------- ------------- ---------------
------------- --------------- ------------- ---------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- --------------- ------------- ---------------
OPERATIONS:
Net investment income
(loss)............... $ 6,179,469 $ 2,739,156 $ 5,458,975 $ 30,356,891
Capital gains income... -- 23,889,792 -- 32,217,082
Net realized gain
(loss) on security
transactions......... (12,579) 125,474 -- 5,867
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (2,390,902) 143,331,264 -- 201,866,663
------------- --------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from
operations........... 3,775,988 170,085,686 5,458,975 264,446,503
------------- --------------- ------------- ---------------
UNIT TRANSACTIONS:
Purchases.............. 50,521,787 328,658,597 170,409,309 548,125,217
Net transfers.......... 6,860,514 111,488,442 (87,853,221) 158,897,610
Surrenders............. (5,504,050) (23,567,485) (14,470,700) (70,519,197)
Net annuity
transactions......... 1,807 394,242 8,095 766,829
------------- --------------- ------------- ---------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 51,880,058 416,973,796 68,093,483 637,270,459
------------- --------------- ------------- ---------------
Total increase
(decrease) in net
assets............... 55,656,046 587,059,482 73,552,458 901,716,962
NET ASSETS:
Beginning of period.... 90,906,165 539,291,619 101,636,964 1,378,778,206
------------- --------------- ------------- ---------------
End of period.......... $ 146,562,211 $ 1,126,351,101 $ 175,189,422 $ 2,280,495,168
------------- --------------- ------------- ---------------
------------- --------------- ------------- ---------------
</TABLE>
* From inception, August 9, 1996, to December 31, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ (6,402,065) $ 1,181,054 $ (409,806) $ (2,734,183) $ 502,446 $ 3,307,116
Capital gains income... 112,339,947 -- 19,616,096 37,513,752 15,828,765 262,472
Net realized gain
(loss) on security
transactions......... (58,490) 938 196,049 (8,740) -- 1,781
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 111,309,571 979,424 29,500,250 16,719,314 98,277,900 3,753,567
----------------- --------------- ------------- ------------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 217,188,963 2,161,416 48,902,589 51,490,143 114,609,111 7,324,936
----------------- --------------- ------------- ------------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 200,477,792 6,453,475 51,695,403 51,163,419 159,362,739 26,432,266
Net transfers.......... 27,475,280 (4,334,910) 14,509,831 16,868,400 60,144,165 10,268,826
Surrenders............. (24,971,635) (3,647,277) (3,890,946) (7,918,423) (10,369,536) (1,412,229)
Net annuity
transactions......... 71,404 -- 29,182 13,483 127,420 17,973
----------------- --------------- ------------- ------------------ ------------- -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 203,052,841 (1,528,712) 62,343,470 60,126,879 209,264,788 35,306,836
----------------- --------------- ------------- ------------------ ------------- -------------
Total increase
(decrease) in net
assets............... 420,241,804 632,704 111,246,059 111,617,022 323,873,899 42,631,772
NET ASSETS:
Beginning of period.... 1,418,077,151 74,638,931 219,302,248 484,965,318 498,090,506 71,817,059
----------------- --------------- ------------- ------------------ ------------- -------------
End of period.......... $1,838,318,955 $75,271,635 $ 330,548,307 $596,582,340 $821,964,405 $114,448,831
----------------- --------------- ------------- ------------------ ------------- -------------
----------------- --------------- ------------- ------------------ ------------- -------------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ------------- ------------------ ------------- -------------
OPERATIONS:
Net investment income
(loss)............... $ (5,913,744) $ 3,346,436 $ 1,224,839 $ 2,771,532 $ 3,729,650 $ 1,500,255
Capital gains income... 50,334,274 -- 1,690,389 8,880,986 3,429,737 1,446,895
Net realized gain
(loss) on security
transactions......... (93,060) 11,668 238,066 7,755 (2,773) (563)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 142,164,193 (882,583) 25,487,376 31,201,375 53,771,055 1,479,032
----------------- --------------- ------------- ------------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 186,491,663 2,475,521 28,640,670 42,861,648 60,927,669 4,425,619
----------------- --------------- ------------- ------------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 403,482,054 13,476,913 83,760,185 110,673,155 205,512,019 37,280,366
Net transfers.......... 129,133,556 2,655,230 33,248,800 47,078,167 101,413,217 19,003,957
Surrenders............. (30,210,654) (2,722,173) (3,699,700) (11,782,890) (7,316,597) (1,178,598)
Net annuity
transactions......... 288,203 -- 203 81,416 146,210 31
----------------- --------------- ------------- ------------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 502,693,159 13,409,970 113,309,488 146,049,848 299,754,849 55,105,756
----------------- --------------- ------------- ------------------ ------------- -------------
Total increase
(decrease) in net
assets............... 689,184,822 15,885,491 141,950,158 188,911,496 360,682,518 59,531,375
NET ASSETS:
Beginning of period.... 728,892,329 58,753,440 77,352,090 296,053,822 137,407,988 12,285,684
----------------- --------------- ------------- ------------------ ------------- -------------
End of period.......... $1,418,077,151 $74,638,931 $ 219,302,248 $484,965,318 $498,090,506 $71,817,059
----------------- --------------- ------------- ------------------ ------------- -------------
----------------- --------------- ------------- ------------------ ------------- -------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
-------------
<S> <C>
OPERATIONS:
Net investment income
(loss)............... $ (258,365)
Capital gains income... 170,800
Net realized gain
(loss) on security
transactions......... (1,400)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 5,732,153
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 5,643,188
-------------
UNIT TRANSACTIONS:
Purchases.............. 22,247,058
Net transfers.......... 11,049,448
Surrenders............. (468,629)
Net annuity
transactions......... 14,623
-------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 32,842,500
-------------
Total increase
(decrease) in net
assets............... 38,485,688
NET ASSETS:
Beginning of period.... 26,015,529
-------------
End of period.......... $64,501,217
-------------
-------------
SMALL
COMPANY FUND
SUB-ACCOUNT*
-------------
OPERATIONS:
Net investment income
(loss)............... $ (33,591)
Capital gains income... --
Net realized gain
(loss) on security
transactions......... 1,014
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 210,808
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 178,231
-------------
UNIT TRANSACTIONS:
Purchases.............. 14,704,067
Net transfers.......... 11,169,302
Surrenders............. (36,071)
Net annuity
transactions......... --
-------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 25,837,298
-------------
Total increase
(decrease) in net
assets............... 26,015,529
NET ASSETS:
Beginning of period.... --
-------------
End of period.......... $26,015,529
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65
<PAGE>
SEPARATE ACCOUNT ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account One (the Account) is a separate investment account with ITT
Hartford Life & Annuity Insurance Company (the Company) and is registered
with the Securities and Exchange Commission (SEC) as a unit investment trust
under the Investment Company Act of 1940, as amended. Both the Company and
the Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable annuity contract owners of the Company in various
mutual funds (the Funds) as directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
a) MORTALITY AND EXPENSE UNDERTAKINGS--The Company, as issuer of variable
annuity contracts, provides the mortality and expense undertakings and,
with respect to the Account, receives a maximum annual fee of 1.25% of
the Account's average daily net assets.
b) DEDUCTION OF ANNUAL MAINTENANCE FEE--Annual maintenance fees are
deducted through termination of units of interest from applicable
contract owners' accounts, in accordance with the terms of the
contracts.
66
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE ONE
[STAG]
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 300,098
Cost $ 299,744
Market Value......... $ 304,030 -- -- --
Hartford Stock Fund,
Inc.
Shares 110,387
Cost $ 491,276
Market Value......... -- $ 528,863 -- --
HVA Money Market Fund,
Inc.
Shares 1,697,932
Cost $1,697,932
Market Value......... -- -- $1,697,932 --
Hartford Advisers Fund,
Inc.
Shares 86,889
Cost $ 203,054
Market Value......... -- -- -- $ 207,558
Hartford Capital
Appreciation Fund,
Inc.
Shares 190,992
Cost $ 738,765
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 13,768
Cost $ 14,495
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 179,085
Cost $ 442,535
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 407,409
Cost $ 555,431
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 163,416
Cost $ 275,137
Market Value......... -- -- -- --
Fidelity VIP Equity
Income Fund
Shares 11,060
Cost $ 232,738
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 6,444
Cost $ 119,675
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 3,204
Cost $ 52,531
Market Value......... -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 16,197 -- -- 50,639
Receivable from fund
shares sold.......... -- 171 76,545 --
----------- ----------- ----------- -------------
Total Assets........... 320,227 529,034 1,774,477 258,197
----------- ----------- ----------- -------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- 164 76,545 --
Payable for fund shares
purchased............ 16,196 -- -- 50,637
----------- ----------- ----------- -------------
Total Liabilities...... 16,196 164 76,545 50,637
----------- ----------- ----------- -------------
Net Assets (variable
life contract
liabilities)......... $ 304,031 $ 528,870 $1,697,932 $ 207,560
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 237,654 242,131 1,407,658 114,416
Unit Price............. $1.279297 $2.184230 $1.206210 $1.814079
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 300,098
Cost $ 299,744
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 110,387
Cost $ 491,276
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 1,697,932
Cost $1,697,932
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 86,889
Cost $ 203,054
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 190,992
Cost $ 738,765
Market Value......... $ 791,194 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 13,768
Cost $ 14,495
Market Value......... -- $ 14,727 -- -- -- --
Hartford Index Fund,
Inc.
Shares 179,085
Cost $ 442,535
Market Value......... -- -- $ 470,999 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 407,409
Cost $ 555,431
Market Value......... -- -- -- $ 584,421 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 163,416
Cost $ 275,137
Market Value......... -- -- -- -- $ 292,065 --
Fidelity VIP Equity
Income Fund
Shares 11,060
Cost $ 232,738
Market Value......... -- -- -- -- -- $ 243,993
Fidelity VIP Overseas
Fund
Shares 6,444
Cost $ 119,675
Market Value......... -- -- -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 3,204
Cost $ 52,531
Market Value......... -- -- -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 6,913 -- 4,283 -- 1,155 16,410
Receivable from fund
shares sold.......... -- 2,123 -- 13,188 -- --
----------------- --------------- ----------- ---------- ------------ ----------
Total Assets........... 798,107 16,850 475,282 597,609 293,220 260,403
----------------- --------------- ----------- ---------- ------------ ----------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- 2,123 -- 13,200 -- --
Payable for fund shares
purchased............ 6,914 -- 4,313 -- 1,160 16,413
----------------- --------------- ----------- ---------- ------------ ----------
Total Liabilities...... 6,914 2,123 4,313 13,200 1,160 16,413
----------------- --------------- ----------- ---------- ------------ ----------
Net Assets (variable
life contract
liabilities)......... $ 791,193 $ 14,727 $ 470,969 $ 584,409 $ 292,060 $ 243,990
----------------- --------------- ----------- ---------- ------------ ----------
----------------- --------------- ----------- ---------- ------------ ----------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 395,562 11,485 223,539 354,155 161,211 152,996
Unit Price............. $ 2.000173 $ 1.282215 $2.106873 $1.650147 $1.811662 $1.594746
<CAPTION>
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... -- --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... -- --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... -- --
Fidelity VIP Equity
Income Fund
Shares
Cost
Market Value......... -- --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... $ 129,142 --
Fidelity VIP II Asset
Manager Fund
Shares
Cost
Market Value......... -- $ 53,181
Due from ITT Hartford
Life and Annuity
Insurance Company.... 273 --
Receivable from fund
shares sold.......... -- 17
------------- ----------
Total Assets........... 129,415 53,198
------------- ----------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- 17
Payable for fund shares
purchased............ 272 --
------------- ----------
Total Liabilities...... 272 17
------------- ----------
Net Assets (variable
life contract
liabilities)......... $ 129,143 $ 53,181
------------- ----------
------------- ----------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 91,232 37,902
Unit Price............. $1.415548 $1.403128
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $1,101 $ 127 $20,094 $ 102
----------- ----------- ----------- ------
CAPITAL GAINS INCOME..... -- 558 -- 584
----------- ----------- ----------- ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 3 (96) -- 6
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 4,273 37,526 -- 4,456
----------- ----------- ----------- ------
Net gain (losses) on
investments......... 4,276 37,430 -- 4,462
----------- ----------- ----------- ------
Net increase
(decrease) in net
assets resulting
from operations..... $5,377 $38,115 $20,094 $5,148
----------- ----------- ----------- ------
----------- ----------- ----------- ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 552 $ 177 $ 277 $ 298 $ 371
------- ----- ----------- ------- ------------
CAPITAL GAINS INCOME..... 10,410 -- 4,291 14,471 815
------- ----- ----------- ------- ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 29 16 22 (113) 328
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 52,383 221 28,399 28,921 16,917
------- ----- ----------- ------- ------------
Net gain (losses) on
investments......... 52,412 237 28,421 28,808 17,245
------- ----- ----------- ------- ------------
Net increase
(decrease) in net
assets resulting
from operations..... $63,374 $ 414 $32,989 $43,577 $18,431
------- ----- ----------- ------- ------------
------- ----- ----------- ------- ------------
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 374 $ 373 $ 66
------- ------------- -----
CAPITAL GAINS INCOME..... 1,882 1,481 165
------- ------------- -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (188) (223) 26
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 11,201 9,423 600
------- ------------- -----
Net gain (losses) on
investments......... 11,013 9,200 626
------- ------------- -----
Net increase
(decrease) in net
assets resulting
from operations..... $13,269 $11,054 $857
------- ------------- -----
------- ------------- -----
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
71
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1,101 $ 127 $ 20,094 $ 102
Capital gains income... -- 558 -- 584
Net realized gain
(loss) on security
transactions......... 3 (96) -- 6
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 4,273 37,526 -- 4,456
----------- ----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 5,377 38,115 20,094 5,148
----------- ----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 15,206 7,610 7,478,925 4,120
Net transfers.......... 285,604 487,410 (6,093,109) 198,870
Surrenders............. (1,010) (614) (24,212) (551)
Cost of insurance...... (2,290) (4,885) (95,782) (1,082)
----------- ----------- ------------ -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 297,510 489,521 1,265,822 201,357
----------- ----------- ------------ -------------
Total increase
(decrease) in net
assets............... 302,887 527,636 1,285,916 206,505
NET ASSETS:
Beginning of period.... 1,144 1,234 412,016 1,055
----------- ----------- ------------ -------------
End of period.......... $304,031 $528,870 $1,697,932 $207,560
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, OCTOBER 3, 1996 TO DECEMBER 31,
1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------ -------------
OPERATIONS:
Net investment income
(loss)............... $ 17 $ 3 $ 137 $ 7
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 12 61 -- 48
----------- ----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... 29 64 137 55
----------- ----------- ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000 436,756 1,000
Net transfers.......... 115 170 (18,268) --
Surrenders............. -- -- (2,162) --
Cost of insurance...... -- -- (4,447) --
----------- ----------- ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,115 1,170 411,879 1,000
----------- ----------- ------------ -------------
Total increase
(decrease) in net
assets............... 1,144 1,234 412,016 1,055
NET ASSETS:
Beginning of period.... -- -- -- --
----------- ----------- ------------ -------------
End of period.......... $ 1,144 $ 1,234 $ 412,016 $ 1,055
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 552 $ 177 $ 277 $ 298 $ 371 $ 374
Capital gains income... 10,410 -- 4,291 14,471 815 1,882
Net realized gain
(loss) on security
transactions......... 29 16 22 (113) 328 (188)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 52,383 221 28,399 28,921 16,917 11,201
-------- ------- ----------- -------- -------------- --------
Net increase (decrease)
in net assets
resulting from
operations........... 63,374 414 32,989 43,577 18,431 13,269
-------- ------- ----------- -------- -------------- --------
UNIT TRANSACTIONS:
Purchases.............. 73,146 9 18,005 72,621 591 3,421
Net transfers.......... 664,740 13,797 417,891 477,204 271,807 228,766
Surrenders............. (3,392) (225) 5,101 (4,717) (1,083) (1,309)
Cost of insurance...... (9,385) (293) (4,156) (8,534) (2,117) (1,941)
-------- ------- ----------- -------- -------------- --------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 725,109 13,288 436,841 536,574 269,198 228,937
-------- ------- ----------- -------- -------------- --------
Total increase
(decrease) in net
assets............... 788,483 13,702 469,830 580,151 287,629 242,206
NET ASSETS:
Beginning of period.... 2,710 1,025 1,139 4,258 4,431 1,784
-------- ------- ----------- -------- -------------- --------
End of period.......... $791,193 $14,727 $470,969 $584,409 $292,060 $243,990
-------- ------- ----------- -------- -------------- --------
-------- ------- ----------- -------- -------------- --------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ -------------- ------------------
OPERATIONS:
Net investment income
(loss)............... $ 3 $ 14 $ 5 $ 8 $ 11 $--
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 46 11 65 68 12 54
-------- ------- ----------- -------- -------------- --------
Net increase (decrease)
in net assets
resulting from
operations........... 49 25 70 76 23 54
-------- ------- ----------- -------- -------------- --------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000 1,000 1,000 1,000 1,000
Net transfers.......... 1,661 -- 69 3,182 3,436 760
Surrenders............. -- -- -- -- (11) (13)
Cost of insurance...... -- -- -- -- (17) (17)
-------- ------- ----------- -------- -------------- --------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 2,661 1,000 1,069 4,182 4,408 1,730
-------- ------- ----------- -------- -------------- --------
Total increase
(decrease) in net
assets............... 2,710 1,025 1,139 4,258 4,431 1,784
NET ASSETS:
Beginning of period.... -- -- -- -- -- --
-------- ------- ----------- -------- -------------- --------
End of period.......... $ 2,710 $1,025 $ 1,139 $ 4,258 $ 4,431 $ 1,784
-------- ------- ----------- -------- -------------- --------
-------- ------- ----------- -------- -------------- --------
<CAPTION>
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 373 $ 66
Capital gains income... 1,481 165
Net realized gain
(loss) on security
transactions......... (223) 26
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 9,423 600
-------- -------
Net increase (decrease)
in net assets
resulting from
operations........... 11,054 857
-------- -------
UNIT TRANSACTIONS:
Purchases.............. 2,738 3,668
Net transfers.......... 116,367 48,308
Surrenders............. (718) (209)
Cost of insurance...... (1,342) (493)
-------- -------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 117,045 51,274
-------- -------
Total increase
(decrease) in net
assets............... 128,099 52,131
NET ASSETS:
Beginning of period.... 1,044 1,050
-------- -------
End of period.......... $129,143 $53,181
-------- -------
-------- -------
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------------
OPERATIONS:
Net investment income
(loss)............... $-- $--
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 44 50
-------- -------
Net increase (decrease)
in net assets
resulting from
operations........... 44 50
-------- -------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000
Net transfers.......... -- --
Surrenders............. -- --
Cost of insurance...... -- --
-------- -------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,000 1,000
-------- -------
Total increase
(decrease) in net
assets............... -- --
NET ASSETS:
Beginning of period.... -- --
-------- -------
End of period.......... $ 1,044 $ 1,050
-------- -------
-------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
73
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Variable Life One (the Account) is a separate investment
account with ITT Hartford Life and Annuity Insurance Company (the Company)
and is registered with the Securities and Exchange Commission (SEC) as a
unit investment trust under the Investment Company Act of 1940, as amended.
The Account consists of twenty two sub-accounts. These financial statements
include twelve sub-accounts which invest solely in Hartford and Fidelity
Mutual Funds (the Funds). The other ten sub-accounts, which invest in the
Putnam VT Funds, are presented in separate financial statements. Both the
Company and the Account are subject to supervision and regulation by the
Department of Insurance of the State of Connecticut and the SEC. The Account
invests deposits by variable life contract owners of the Company in the
Funds as directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
74
<PAGE>
ITT HARTFORD LIFE & ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
[STAG]
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 83,899
Cost $84,270
Market Value......... $ 84,998 -- -- --
Hartford Stock Fund,
Inc.
Shares 1,532
Cost $ 6,438
Market Value......... -- $ 7,342 -- --
HVA Money Market Fund,
Inc.
Shares 415,512
Cost $415,512
Market Value......... -- -- $ 415,512 --
Hartford Advisers Fund,
Inc.
Shares 11,820
Cost $25,827
Market Value......... -- -- -- $ 28,235
Hartford Capital
Appreciation Fund,
Inc.
Shares 6,897
Cost $26,772
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 2,570
Cost $ 2,717
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 9,127
Cost $21,871
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 34,453
Cost $47,478
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 5,364
Cost $ 8,762
Market Value......... -- -- -- --
Fidelity VIP Equity
Income Fund
Shares 559
Cost $11,792
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 285
Cost $ 5,437
Market Value......... -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 215
Cost $ 3,436
Market Value......... -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 72 -- -- --
Receivable from shares
sold................. -- -- 2,096 --
----------- ------------ ------------ -------------
Total Assets........... 85,070 7,342 417,608 28,235
----------- ------------ ------------ -------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- 2,097 --
Payable for fund shares
purchased............ 72 -- -- --
----------- ------------ ------------ -------------
Total Liabilities...... 72 -- 2,097 --
----------- ------------ ------------ -------------
Net Assets (variable
life contract
liabilities)......... $ 84,998 $ 7,342 $ 415,511 $ 28,235
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 66,442 3,361 344,476 15,564
Unit Price............. $ 1.279297 $ 2.184230 $ 1.206210 $ 1.814079
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 83,899
Cost $84,270
Market Value......... -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 1,532
Cost $ 6,438
Market Value......... -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 415,512
Cost $415,512
Market Value......... -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 11,820
Cost $25,827
Market Value......... -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 6,897
Cost $26,772
Market Value......... $ 28,573 -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 2,570
Cost $ 2,717
Market Value......... -- $ 2,749 -- -- --
Hartford Index Fund,
Inc.
Shares 9,127
Cost $21,871
Market Value......... -- -- $ 24,003 -- --
Hartford International
Opportunities Fund,
Inc.
Shares 34,453
Cost $47,478
Market Value......... -- -- -- $ 49,423 --
Hartford Dividend and
Growth Fund, Inc.
Shares 5,364
Cost $ 8,762
Market Value......... -- -- -- -- $ 9,587
Fidelity VIP Equity
Income Fund
Shares 559
Cost $11,792
Market Value......... -- -- -- -- --
Fidelity VIP Overseas
Fund
Shares 285
Cost $ 5,437
Market Value......... -- -- -- -- --
Fidelity VIP II Asset
Manager Fund
Shares 215
Cost $ 3,436
Market Value......... -- -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... -- -- -- -- --
Receivable from shares
sold................. 100 -- 2 106 58
----------------- --------------- ----------- ---------- ------------
Total Assets........... 28,673 2,749 24,005 49,529 9,645
----------------- --------------- ----------- ---------- ------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... 98 -- -- 106 59
Payable for fund shares
purchased............ -- -- -- -- --
----------------- --------------- ----------- ---------- ------------
Total Liabilities...... 98 -- -- 106 59
----------------- --------------- ----------- ---------- ------------
Net Assets (variable
life contract
liabilities)......... $ 28,575 $ 2,749 $ 24,005 $ 49,423 $ 9,586
----------------- --------------- ----------- ---------- ------------
----------------- --------------- ----------- ---------- ------------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 14,286 2,144 11,394 29,950 5,291
Unit Price............. $ 2.000173 $ 1.282215 $ 2.106873 $ 1.650147 $ 1.811662
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ ------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... -- -- --
Fidelity VIP Equity
Income Fund
Shares
Cost
Market Value......... $ 12,340 -- --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... -- $ 5,708 --
Fidelity VIP II Asset
Manager Fund
Shares
Cost
Market Value......... -- -- $ 3,568
Due from ITT Hartford
Life and Annuity
Insurance Company.... 56 75 --
Receivable from shares
sold................. -- -- --
---------- ------------- ----------
Total Assets........... 12,396 5,783 3,568
---------- ------------- ----------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- --
Payable for fund shares
purchased............ 56 75 --
---------- ------------- ----------
Total Liabilities...... 56 75 --
---------- ------------- ----------
Net Assets (variable
life contract
liabilities)......... $ 12,340 $ 5,708 $ 3,568
---------- ------------- ----------
---------- ------------- ----------
VARIABLE LIFE CONTRACTS
IN THE ACCUMULATION
PERIOD:
INDIVIDUAL SUB-ACCOUNTS:
Units Owned by
Participants......... 7,737 4,033 2,543
Unit Price............. $ 1.594746 $1.415548 $1.403128
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
77
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $1,789 $ 10 $1,822 $ 199
----------- ----- ----------- ------
CAPITAL GAINS INCOME... -- 113 -- 1,075
----------- ----- ----------- ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 3 3 -- 6
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,213 840 -- 2,537
----------- ----- ----------- ------
Net gain (losses) on
investments......... 1,216 843 -- 2,543
----------- ----- ----------- ------
Net increase
(decrease) in net
assets resulting
from operations..... $3,005 $966 $1,822 $3,817
----------- ----- ----------- ------
----------- ----- ----------- ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
78
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 22 $23 $ 49 $ 36 $ 20
------ --- ----------- ------ -----
CAPITAL GAINS INCOME... 385 -- 574 2,408 30
------ --- ----------- ------ -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 26 -- 41 41 13
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,758 21 2,066 1,654 763
------ --- ----------- ------ -----
Net gain (losses) on
investments......... 1,784 21 2,107 1,695 776
------ --- ----------- ------ -----
Net increase
(decrease) in net
assets resulting
from operations..... $2,191 $44 $2,730 $4,139 $826
------ --- ----------- ------ -----
------ --- ----------- ------ -----
<CAPTION>
FIDELITY VIP FIDELITY VIP FIDELITY VIP II
EQUITY INCOME FUND OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------ --------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 18 $ 38 $ 37
----- ----- -----
CAPITAL GAINS INCOME... 91 150 92
----- ----- -----
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... -- 2 2
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 491 227 82
----- ----- -----
Net gain (losses) on
investments......... 491 229 84
----- ----- -----
Net increase
(decrease) in net
assets resulting
from operations..... $600 $417 $213
----- ----- -----
----- ----- -----
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
79
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $1,789 $ 10 $ 1,822 $ 199
Capital gains income... -- 113 -- 1,075
Net realized gain
(loss) on security
transactions......... 3 3 -- 6
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,213 840 -- 2,537
----------- ----------- ----------- -------
Net increase (decrease)
in net assets
resulting from
operations........... 3,005 966 1,822 3,817
----------- ----------- ----------- -------
UNIT TRANSACTIONS:
Purchases.............. -- -- 629,105 --
Net transfers.......... 19,222 5,601 (242,885) 4,910
Surrenders............. (1,388) (233) (14,557) (404)
Cost of insurance...... (429) (59) (5,488) (117)
----------- ----------- ----------- -------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 17,405 5,309 366,175 4,389
----------- ----------- ----------- -------
Total increase
(decrease) in net
assets............... 20,410 6,275 367,997 8,206
NET ASSETS:
Beginning of period.... 64,588 1,067 47,514 20,029
----------- ----------- ----------- -------
End of period.......... $84,998 $7,342 $ 415,511 $28,235
----------- ----------- ----------- -------
----------- ----------- ----------- -------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION, OCTOBER 3, 1996 TO DECEMBER 31,
1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ---------------
OPERATIONS:
Net investment income
(loss)............... $ 389 $ 3 $ 286 $ 53
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (484) 64 -- (129)
----------- ----------- ----------- -------
Net increase (decrease)
in net assets
resulting from
operations........... (95) 67 286 (76)
----------- ----------- ----------- -------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000 176,110 1,000
Net transfers.......... 63,683 -- (127,365) 19,105
Surrenders............. -- -- (1,225) --
Cost of insurance...... -- -- (292) --
----------- ----------- ----------- -------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 64,683 1,000 47,228 20,105
----------- ----------- ----------- -------
Total increase
(decrease) in net
assets............... 64,588 1,067 47,514 20,029
NET ASSETS:
Beginning of period.... -- -- -- --
----------- ----------- ----------- -------
End of period.......... $64,588 $1,067 $ 47,514 $20,029
----------- ----------- ----------- -------
----------- ----------- ----------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
80
<PAGE>
<TABLE>
<CAPTION>
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 22 $ 23 $ 49 $ 36 $ 20 $ 18
Capital gains income... 385 -- 574 2,408 30 91
Net realized gain
(loss) on security
transactions......... 26 -- 41 41 13 --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 1,758 21 2,066 1,654 763 491
------- ------ ----------- ------- ------ -------
Net increase (decrease)
in net assets
resulting from
operations........... 2,191 44 2,730 4,139 826 600
------- ------ ----------- ------- ------ -------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- -- -- --
Net transfers.......... 26,352 1,712 22,025 26,693 8,271 10,743
Surrenders............. (737) (31) (902) (1,415) (531) (34)
Cost of insurance...... (275) (1) (919) (415) (48) (25)
------- ------ ----------- ------- ------ -------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 25,340 1,680 20,204 24,863 7,692 10,684
------- ------ ----------- ------- ------ -------
Total increase
(decrease) in net
assets............... 27,531 1,724 22,934 29,002 8,518 11,284
NET ASSETS:
Beginning of period.... 1,044 1,025 1,071 20,421 1,068 1,056
------- ------ ----------- ------- ------ -------
End of period.......... $28,575 $2,749 $24,005 $49,423 $9,586 $12,340
------- ------ ----------- ------- ------ -------
------- ------ ----------- ------- ------ -------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND FIDELITY VIP
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND EQUITY INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ ------------------
OPERATIONS:
Net investment income
(loss)............... $ 2 $ 14 $ 5 $ 25 $ 6 $ --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 42 11 66 291 62 56
------- ------ ----------- ------- ------ -------
Net increase (decrease)
in net assets
resulting from
operations........... 44 25 71 316 68 56
------- ------ ----------- ------- ------ -------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000 1,000 1,000 1,000 1,000
Net transfers.......... -- -- -- 19,105 -- --
Surrenders............. -- -- -- -- -- --
Cost of insurance...... -- -- -- -- -- --
------- ------ ----------- ------- ------ -------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 1,000 1,000 1,000 20,105 1,000 1,000
------- ------ ----------- ------- ------ -------
Total increase
(decrease) in net
assets............... 1,044 1,025 1,071 20,421 1,068 1,056
NET ASSETS:
Beginning of period.... -- -- -- -- -- --
------- ------ ----------- ------- ------ -------
End of period.......... $ 1,044 $1,025 $ 1,071 $20,421 $1,068 $ 1,056
------- ------ ----------- ------- ------ -------
------- ------ ----------- ------- ------ -------
<CAPTION>
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 38 $ 37
Capital gains income... 150 92
Net realized gain
(loss) on security
transactions......... 2 2
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 227 82
------ ------
Net increase (decrease)
in net assets
resulting from
operations........... 417 213
------ ------
UNIT TRANSACTIONS:
Purchases.............. -- --
Net transfers.......... 4,347 2,326
Surrenders............. (62) (20)
Cost of insurance...... (38) (1)
------ ------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 4,247 2,305
------ ------
Total increase
(decrease) in net
assets............... 4,664 2,518
NET ASSETS:
Beginning of period.... 1,044 1,050
------ ------
End of period.......... $5,708 $3,568
------ ------
------ ------
FIDELITY VIP FIDELITY VIP II
OVERSEAS FUND ASSET MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------
OPERATIONS:
Net investment income
(loss)............... $ -- $ --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 44 50
------ ------
Net increase (decrease)
in net assets
resulting from
operations........... 44 50
------ ------
UNIT TRANSACTIONS:
Purchases.............. 1,000 1,000
Net transfers.......... -- --
Surrenders............. -- --
Cost of insurance...... -- --
------ ------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 1,000 1,000
------ ------
Total increase
(decrease) in net
assets............... 1,044 1,050
NET ASSETS:
Beginning of period.... -- --
------ ------
End of period.......... $1,044 $1,050
------ ------
------ ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
81
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Variable Life Two (the Account) is a separate investment
account with ITT Hartford Life and Annuity Insurance Company (the Company)
and is registered with the Securities and Exchange Commission (SEC) as a
unit investment trust under the Investment Company Act of 1940, as amended.
The Account consists of twenty two sub-accounts. These financial statements
include twelve sub-accounts which invest solely in Hartford and Fidelity
Mutual Funds (the Funds). The other ten sub-accounts, which invest in Putnam
VT Funds, are presented in separate financial statements. Both the Company
and the Account are subject to supervision and regulation by the Department
of Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable life contract owners of the Company in the Funds as
directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
82
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT FIVE
[STAG]
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<CAPTION>
MONEY ADVISERS
BOND FUND STOCK FUND MARKET FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 2,237,511
Cost $ 2,222,848
Market Value......... $2,266,827 -- -- --
Hartford Stock Fund,
Inc.
Shares 5,139,753
Cost $19,674,058
Market Value......... -- $24,624,429 -- --
HVA Money Market Fund,
Inc.
Shares 11,850,820
Cost $11,850,820
Market Value......... -- -- $11,850,820 --
Hartford Advisers Fund,
Inc.
Shares 13,132,217
Cost $26,911,387
Market Value......... -- -- -- $31,369,847
Hartford Capital
Appreciation Fund,
Inc.
Shares 8,123,969
Cost $29,290,975
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 907,955
Cost $ 954,878
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 3,010,450
Cost $ 6,638,228
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 7,156,913
Cost $ 9,507,131
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 9,671,051
Cost $14,114,261
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 1,679,022
Cost $ 1,923,345
Market Value......... -- -- -- --
Hartford Small Company
Fund, Inc.
Shares 219,004
Cost $ 236,355
Market Value......... -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 1,566 76,166 -- 228,212
Receivable from fund
shares sold.......... -- -- 458,982 --
------------ ----------- ----------- -----------
Total Assets........... 2,268,393 24,700,595 12,309,802 31,598,059
------------ ----------- ----------- -----------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- 458,029 --
Payable for fund shares
purchased............ 1,563 76,145 -- 228,060
------------ ----------- ----------- -----------
Total Liabilities...... 1,563 76,145 458,029 228,060
------------ ----------- ----------- -----------
Net Assets (variable
life contract
liabilities)......... $2,266,830 $24,624,450 $11,851,773 $31,369,999
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Units owned by
participants......... 1,783,232 12,224,217 10,403,183 18,188,712
Unit Price............. $1.2711920 $ 2.014399 $ 1.139245 $ 1.724696
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
84
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 2,237,511
Cost $ 2,222,848
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 5,139,753
Cost $19,674,058
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 11,850,820
Cost $11,850,820
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 13,132,217
Cost $26,911,387
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 8,123,969
Cost $29,290,975
Market Value......... $33,653,995 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 907,955
Cost $ 954,878
Market Value......... -- $ 971,197 -- -- -- --
Hartford Index Fund,
Inc.
Shares 3,010,450
Cost $ 6,638,228
Market Value......... -- -- $7,917,559 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 7,156,913
Cost $ 9,507,131
Market Value......... -- -- -- $10,266,470 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 9,671,051
Cost $14,114,261
Market Value......... -- -- -- -- $17,284,538 --
Hartford International
Advisers Fund, Inc.
Shares 1,679,022
Cost $ 1,923,345
Market Value......... -- -- -- -- -- $2,018,485
Hartford Small Company
Fund, Inc.
Shares 219,004
Cost $ 236,355
Market Value......... -- -- -- -- -- --
Due from ITT Hartford
Life and Annuity
Insurance Company.... 134,881 249 158,979 72,638 195,778 564
Receivable from fund
shares sold.......... -- -- -- -- -- --
----------------- --------------- ----------- ------------------ ------------- -------------
Total Assets........... 33,788,876 971,446 8,076,538 10,339,108 17,480,316 2,019,049
----------------- --------------- ----------- ------------------ ------------- -------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... -- -- -- -- -- --
Payable for fund shares
purchased............ 135,549 248 158,844 72,625 195,735 562
----------------- --------------- ----------- ------------------ ------------- -------------
Total Liabilities...... 135,549 248 158,844 72,625 195,735 562
----------------- --------------- ----------- ------------------ ------------- -------------
Net Assets (variable
life contract
liabilities)......... $33,653,327 $ 971,198 $7,917,694 $10,266,483 $17,284,581 $2,018,487
----------------- --------------- ----------- ------------------ ------------- -------------
----------------- --------------- ----------- ------------------ ------------- -------------
Units owned by
participants......... 18,750,440 767,721 3,966,073 7,103,451 8,674,020 1,443,546
Unit Price............. $ 1.794802 $1.265041 $ 1.996356 $ 1.445281 $ 1.992684 $ 1.398284
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value.........
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... --
Hartford International
Advisers Fund, Inc.
Shares
Cost
Market Value......... --
Hartford Small Company
Fund, Inc.
Shares
Cost
Market Value......... $ 257,436
Due from ITT Hartford
Life and Annuity
Insurance Company.... --
Receivable from fund
shares sold.......... 14
------------
Total Assets........... 257,450
------------
LIABILITIES:
Due to ITT Hartford
Life and Annuity
Insurance Company.... 28
Payable for fund shares
purchased............ --
------------
Total Liabilities...... 28
------------
Net Assets (variable
life contract
liabilities)......... $ 257,422
------------
------------
Units owned by
participants......... 237,005
Unit Price............. $1.086144
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
85
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $44,059 $ 65,122 $305,261 $ 198,523
----------- ----------- ------------ -------------
CAPITAL GAINS INCOME..... -- 904,272 -- 1,045,984
----------- ----------- ------------ -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... 597 10,524 -- 1,708
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 34,407 3,070,836 -- 2,725,131
----------- ----------- ------------ -------------
Net gain (losses) on
investments......... 35,004 3,081,360 -- 2,726,839
----------- ----------- ------------ -------------
Net increase
(decrease) in net
assets resulting
from operations..... $79,063 $ 4,050,754 $305,261 $3,971,346
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
86
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 59,166 $18,578 $ 30,326 $ 8,358 $ 93,086 $ 72,657
----------------- ------- ----------- -------- ------------- -------------
CAPITAL GAINS INCOME..... 1,971,454 -- 474,812 587,257 328,863 4,846
----------------- ------- ----------- -------- ------------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (602) 31 (1,141) 644 (4,584) 314
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,087,060 12,832 718,146 333,296 2,059,780 67,990
----------------- ------- ----------- -------- ------------- -------------
Net gain (losses) on
investments......... 2,086,458 12,863 717,005 333,940 2,055,196 68,304
----------------- ------- ----------- -------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $4,117,078 $31,441 $ 1,222,143 $929,555 $2,477,145 $145,807
----------------- ------- ----------- -------- ------------- -------------
----------------- ------- ----------- -------- ------------- -------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 1
------------
CAPITAL GAINS INCOME..... 284
------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions......... (160)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 21,017
------------
Net gain (losses) on
investments......... 20,857
------------
Net increase
(decrease) in net
assets resulting
from operations..... $21,142
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
87
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 44,059 $ 65,122 $ 305,261 $ 198,523
Capital gains income... -- 904,272 -- 1,045,984
Net realized gain
(loss) on security
transactions......... 597 10,524 -- 1,708
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 34,407 3,070,836 -- 2,725,131
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 79,063 4,050,754 305,261 3,971,346
----------- ------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 17 50,241 29,214,459 233,543
Net transfers.......... 479,492 5,698,619 (28,459,816) 6,180,317
Surrenders............. (15,780) (343,140) (113,302) (390,591)
Loan withdrawals....... (1,004) (39,860) (676,157) (75,713)
Cost of insurance...... (6,559) (61,645) (50,336) (85,768)
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 456,166 5,304,215 (85,152) 5,861,788
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets............... 535,229 9,354,969 220,109 9,833,134
NET ASSETS:
Beginning of period.... 1,731,601 15,269,481 11,631,664 21,536,865
----------- ------------ ------------- -------------
End of period.......... $2,266,830 $ 24,624,450 $ 11,851,773 $31,369,999
----------- ------------ ------------- -------------
----------- ------------ ------------- -------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- -------------
OPERATIONS:
Net investment income
(loss)............... $ 61,277 $ 140,710 $ 404,912 $ 357,873
Capital gains income... -- 185,013 -- 116,357
Net realized gain
(loss) on security
transactions......... (451) 524 -- 415
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,527 1,657,996 -- 1,542,513
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 63,353 1,984,243 404,912 2,017,158
----------- ------------ ------------- -------------
UNIT TRANSACTIONS:
Purchases.............. -- 29 68,474,293 17,409
Net transfers.......... 1,407,699 9,799,913 (59,831,330) 15,943,206
Surrenders............. (40,106) (233,750) (203,050) (281,648)
Net loan withdrawals... -- (71,384) (1,787,588) (82,526)
Cost of insurance and
other fees........... (5,636) (53,381) (82,442) (79,595)
----------- ------------ ------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 1,361,957 9,441,427 6,569,883 15,516,846
----------- ------------ ------------- -------------
Total increase
(decrease) in net
assets............... 1,425,310 11,425,670 6,974,795 17,534,004
NET ASSETS:
Beginning of period.... 306,291 3,843,811 4,656,869 4,002,861
----------- ------------ ------------- -------------
End of period.......... $1,731,601 $ 15,269,481 $ 11,631,664 $21,536,865
----------- ------------ ------------- -------------
----------- ------------ ------------- -------------
</TABLE>
* From inception, August 1, 1996, to December 31, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
88
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 59,166 $ 18,578 $ 30,326 $ 8,358 $ 93,086 $ 72,657
Capital gains income... 1,971,454 -- 474,812 587,257 328,863 4,846
Net realized gain
(loss) on security
transactions......... (602) 31 (1,141) 644 (4,584) 314
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,087,060 12,832 718,146 333,296 2,059,780 67,990
----------------- --------------- ----------- ------------------ ------------ --------------
Net increase (decrease)
in net assets
resulting from
operations........... 4,117,078 31,441 1,222,143 929,555 2,477,145 145,807
----------------- --------------- ----------- ------------------ ------------ --------------
UNIT TRANSACTIONS:
Purchases.............. 103,252 -- 28 40,039 156 140
Net transfers.......... 6,043,405 268,911 1,558,345 2,806,516 4,711,436 487,080
Surrenders............. (354,457) (6,902) (82,587) (151,778) (128,368) (14,104)
Loan withdrawals....... (25,252) (498) (14,744) 2,256 (24,910) (1,656)
Cost of insurance...... (85,912) (2,843) (21,349) (26,378) (42,505) (5,672)
----------------- --------------- ----------- ------------------ ------------ --------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 5,681,036 258,668 1,439,693 2,670,655 4,515,809 465,788
----------------- --------------- ----------- ------------------ ------------ --------------
Total increase
(decrease) in net
assets............... 9,798,114 290,109 2,661,836 3,600,210 6,992,954 611,595
NET ASSETS:
Beginning of period.... 23,855,213 681,089 5,255,858 6,666,273 10,291,627 1,406,892
----------------- --------------- ----------- ------------------ ------------ --------------
End of period.......... $33,653,327 $971,198 $7,917,694 $10,266,483 $17,284,581 $2,018,487
----------------- --------------- ----------- ------------------ ------------ --------------
----------------- --------------- ----------- ------------------ ------------ --------------
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ --------------
OPERATIONS:
Net investment income
(loss)............... $ 100,190 $ 24,643 $ 56,990 $ 75,641 $ 128,284 $ 33,540
Capital gains income... 542,857 -- 18,617 46,012 41,509 28,341
Net realized gain
(loss) on security
transactions......... (2,788) (687) 3,838 (26) (280) 38
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 2,060,719 577 523,283 366,466 967,296 22,219
----------------- --------------- ----------- ------------------ ------------ --------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,700,978 24,533 602,728 488,093 1,136,809 84,138
----------------- --------------- ----------- ------------------ ------------ --------------
UNIT TRANSACTIONS:
Purchases.............. 29 -- -- -- -- --
Net transfers.......... 14,180,908 513,118 4,159,498 5,005,094 7,624,232 1,187,324
Surrenders............. (360,928) (14,119) (66,581) (107,782) (155,061) (10,618)
Net loan withdrawals... (88,831) (1) (65,105) (24,312) (39,663) (7,147)
Cost of insurance and
other fees........... (88,601) (2,230) (18,114) (23,891) (32,690) (4,435)
----------------- --------------- ----------- ------------------ ------------ --------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 13,642,577 496,768 4,009,698 4,849,109 7,396,818 1,165,124
----------------- --------------- ----------- ------------------ ------------ --------------
Total increase
(decrease) in net
assets............... 16,343,555 521,301 4,612,426 5,337,202 8,533,627 1,249,262
NET ASSETS:
Beginning of period.... 7,511,658 159,788 643,432 1,329,071 1,758,000 157,633
----------------- --------------- ----------- ------------------ ------------ --------------
End of period.......... $23,855,213 $681,089 $5,255,858 $6,666,273 $10,291,627 $1,406,895
----------------- --------------- ----------- ------------------ ------------ --------------
----------------- --------------- ----------- ------------------ ------------ --------------
<CAPTION>
SMALL
COMPANY FUND
SUB-ACCOUNT
------------
<S> <C>
OPERATIONS:
Net investment income
(loss)............... $ 1
Capital gains income... 284
Net realized gain
(loss) on security
transactions......... (160)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 21,017
------------
Net increase (decrease)
in net assets
resulting from
operations........... 21,142
------------
UNIT TRANSACTIONS:
Purchases.............. --
Net transfers.......... 225,702
Surrenders............. (203)
Loan withdrawals....... (275)
Cost of insurance...... (346)
------------
Total increase
(decrease) in net
assets resulting from
unit transactions.... 224,878
------------
Total increase
(decrease) in net
assets............... 246,020
NET ASSETS:
Beginning of period.... 11,402
------------
End of period.......... $257,422
------------
------------
SMALL
COMPANY FUND
SUB-ACCOUNT*
------------
OPERATIONS:
Net investment income
(loss)............... $ 1
Capital gains income... --
Net realized gain
(loss) on security
transactions......... --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 64
------------
Net increase (decrease)
in net assets
resulting from
operations........... 65
------------
UNIT TRANSACTIONS:
Purchases.............. 1,000
Net transfers.......... 10,337
Surrenders............. --
Net loan withdrawals... --
Cost of insurance and
other fees........... --
------------
Net increase (decrease)
in net assets
resulting from unit
transactions......... 11,337
------------
Total increase
(decrease) in net
assets............... 11,402
NET ASSETS:
Beginning of period.... --
------------
End of period.......... $11,402
------------
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
89
<PAGE>
SEPARATE ACCOUNT FIVE
- --------------------------------------------------------------------------------
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Separate Account Five (the Account) is a separate investment account within
ITT Hartford Life & Annuity Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. Both
the Company and the Account are subject to supervision and regulation by the
Department of Insurance of the State of Connecticut and the SEC. The Account
invests deposits by variable life contract owners of the Company in various
mutual funds (the Funds) as directed by the contract owners.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains
income represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate
Fund as of June 30, 1997.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as
an insurance company under the Internal Revenue Code. Under current law,
no federal income taxes are payable with respect to the operations of
the Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
90
<PAGE>
HARTFORD MUTUAL FUNDS
SCHEDULE OF INVESTMENTS
[STAG]
<PAGE>
HARTFORD BOND FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 21.7%
U.S. TREASURY NOTES -- 9.3%
$ 1,100,000 5.00% due 01/31/98.......... $ 1,095,532
5,100,000 5.00% due 02/15/99.......... 5,020,313
3,900,000 5.625% due 11/30/98......... 3,881,721
2,000,000 5.875% due 08/15/98......... 1,999,376
1,300,000 5.875% due 10/31/98......... 1,298,375
5,950,000 6.00% due 05/31/98.......... 5,959,300
1,000,000 6.00% due 08/31/97.......... 1,000,625
4,000,000 6.125% due 08/31/98......... 4,010,000
3,300,000 6.25% due 07/31/98.......... 3,314,438
1,000,000 6.75% due 05/31/99.......... 1,011,563
6,000,000 6.75% due 06/30/99.......... 6,073,128
2,450,000 6.75% due 07/31/99.......... 2,485,986
100,000 6.875% due 08/31/99......... 101,500
4,900,000 7.25% due 02/15/98.......... 4,944,409
100,000 7.50% due 10/31/99.......... 102,844
-------------
42,299,110
-------------
U.S. TREASURY BONDS -- 4.9%
5,500,000 6.50% due 11/15/26.......... 5,271,409
1,692,000 6.75% due 08/15/26.......... 1,674,023
2,980,000 6.875% due 08/15/25......... 2,989,313
3,900,000 8.125% due 08/15/19......... 4,447,221
6,500,000 8.75% due 05/15/17.......... 7,820,313
-------------
22,202,279
-------------
U.S. TREASURY STRIPS -- 0.5%
1,900,000 0.00% due 08/15/15.......... 545,034
12,250,000 0.00% due 11/15/24.......... 1,892,870
-------------
2,437,904
-------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 7.0%
Pass-Throughs
25,563,737 6.00% due 05/01/12 -
05/01/26.................... 24,566,167
4,500,000 6.50% due 07/25/12.......... 4,407,181
Multifamily Dus
2,957,189 6.48% due 12/01/05.......... 2,879,445
-------------
31,852,793
-------------
Total U.S. treasuries &
Federal agencies............ $ 98,792,086
-------------
-------------
CORPORATE BONDS AND NOTES -- 51.6%
CABLE -- 4.8%
Continental Cablevision, Inc.
1,000,000 9.50% due 08/01/13.......... $ 1,137,106
Jones Intercable, Inc.
5,000,000 8.875% due 04/01/07......... 5,050,000
Lenfest Communications Inc.
1,250,000 8.375% due 11/01/05......... 1,229,688
Rogers Cablesystems Inc.
5,900,000 9.625% due 08/01/02......... 6,209,750
Tele-Communications, Inc. MTN
7,000,000 6.58% due 02/15/05.......... 7,150,276
Tele-Communications, Inc.
1,000,000 7.875% due 02/15/26......... 953,198
-------------
21,730,018
-------------
CHEMICALS -- 0.3%
Terra Industries Inc.
1,250,000 10.50% due 06/15/05......... 1,353,125
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
COLLEGES -- 0.9%
Massachusetts Institute of
Technology
$ 4,400,000 7.25% due 11/02/2096........ $ 4,316,061
-------------
ENERGY & SERVICES -- 1.6%
Gulf Canada Resources Ltd.
3,900,000 8.35% due 08/01/06.......... 4,124,250
Union Oil Co. of California
MTN
2,500,000 9.375% due 02/15/11......... 2,949,300
-------------
7,073,550
-------------
FINANCIAL SERVICES -- 16.1%
Abbey National First Capital
7,575,000 8.20% due 10/15/04.......... 8,075,888
Ahmanson (H.F.) & Co. MTN
5,500,000 6.35% due 09/01/98.......... 5,510,461
American Re Corp.
3,700,000 7.45% due 12/15/26.......... 3,656,292
Bayerische Landesbank (NY)
7,000,000 6.20% due 02/09/06.......... 6,664,840
Charles Schwab Corp. MTN
3,000,000 6.63% due 08/04/98.......... 3,011,895
Chase Manhattan Corp.
3,000,000 7.75% due 11/01/99.......... 3,085,926
General Motors Acceptance
Corp. MTN
4,000,000 5.875% due 01/12/99......... 3,978,876
Landeskreditbank
Baden-Wuerttemberg
7,900,000 7.625% due 02/01/23......... 8,222,960
Lehman Brothers Holdings Inc.
2,850,000 8.875% due 03/01/02......... 3,050,871
Lehman Brothers Inc.
3,000,000 10.00% due 05/15/99......... 3,179,760
Massachusetts Mutual Life
Insurance Co.*
11,750,000 7.625% due 11/15/23......... 11,688,665
Mellon Financial Co.
4,000,000 6.30% due 06/01/00.......... 3,969,500
Phoenix Home Life Mutual
Insurance Co.*
2,750,000 6.95% due 12/01/06.......... 2,674,977
Salomon Inc.
2,500,000 7.00% due 01/20/98.......... 2,512,075
Societe Generale (NY)
3,490,000 9.875% due 07/15/03......... 3,963,035
-------------
73,246,021
-------------
FOOD, BEVERAGE & TOBACCO --
1.8%
Ralcorp Holdings Inc.
7,400,000 8.75% due 09/15/04.......... 8,159,891
-------------
FUNERAL/CEMETERY SERVICES --
0.9%
Loewen Group International
Inc.
3,900,000 8.25% due 10/15/03.......... 4,031,918
-------------
GAMING -- 0.2%
Trump Atlantic City Inc.
900,000 11.25% due 05/01/06......... 877,500
-------------
HEALTH CARE -- 1.3%
Tenet Healthcare Corp.
1,900,000 7.875% due 01/15/03......... 1,895,250
Tenet Healthcare Corp.
3,900,000 8.00% due 01/15/05.......... 3,909,750
-------------
5,805,000
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
92
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
HOME BUILDING -- 0.9%
U.S. Home Corp.
$ 4,190,000 7.95% due 03/01/01.......... $ 4,173,609
-------------
INDUSTRIAL MATERIALS -- 0.2%
Borden Chemicals and Plastics
LP
1,000,000 9.50% due 05/01/05.......... 1,050,000
-------------
MEDIA & SERVICES -- 1.3%
Turner Broadcasting System,
Inc.
5,900,000 7.40% due 02/01/04.......... 5,910,154
-------------
PACKAGING & CONTAINERS -- 1.8%
Owens-Illinois Inc.
1,000,000 8.10% due 05/15/07.......... 1,021,219
Tenneco Inc.
6,850,000 8.20% due 11/15/99.......... 7,110,512
-------------
8,131,731
-------------
PAPER & FOREST PRODUCTS --
1.6%
Buckeye Cellulose Corp.
1,395,000 8.50% due 12/15/05.......... 1,395,000
Domtar, Inc.
4,000,000 9.50% due 08/01/16.......... 4,140,000
Quno Corp.
1,750,000 9.125% due 05/15/05......... 1,881,250
-------------
7,416,250
-------------
REAL ESTATE -- 1.7%
Duke Realty LP
5,000,000 7.25% due 09/22/02.......... 5,038,920
ERP Operating LP
2,500,000 6.59% due 12/22/97.......... 2,505,245
-------------
7,544,165
-------------
RETAIL -- 2.7%
K Mart Corp.
1,000,000 12.50% due 03/01/05......... 1,200,000
K Mart Corp. MTN
5,000,000 8.96% due 12/10/19.......... 4,706,250
Proffitt's Inc.
1,400,000 8.125% due 05/15/04......... 1,403,500
Stop and Shop Companies, Inc.
4,585,000 9.75% due 02/01/02.......... 5,063,755
-------------
12,373,505
-------------
SHIPBUILDING -- 0.5%
Newport News Shipbuilding Co.
2,000,000 8.625% due 12/01/06......... 2,070,000
-------------
TELECOMMUNICATIONS -- 2.4%
Bell Telephone Co. of
Pennsylvania
3,000,000 8.35% due 12/15/30.......... 3,485,442
Chesapeake & Potomac Telephone
Co. of MD
1,500,000 8.30% due 08/01/31.......... 1,671,021
Comcast Cellular*
5,250,000 9.50% due 05/01/07.......... 5,263,125
USW-1 A-2 1997*
1,360,000 0.00% due 02/01/17.......... 294,440
-------------
10,714,028
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
TRANSPORTATION -- 6.0%
Continental Airlines, Inc.
$ 900,000 9.50% due 12/15/01.......... $ 940,500
Continental Airlines, Inc.
1997-1*
12,000,000 7.461% due 10/01/16......... 12,139,548
CSX Corp.*
4,000,000 7.25% due 05/01/04.......... 4,044,864
Norfolk Southern Corp.
2,650,000 7.80% due 05/15/27.......... 2,725,541
United Air Lines Inc.
6,400,000 9.75% due 08/15/21.......... 7,654,253
-------------
27,504,706
-------------
UTILITIES -- 4.6%
Cleveland Electric
Illuminating Co.
1,750,000 7.13% due 07/01/07.......... 1,776,250
CMS Energy Corp.
1,400,000 8.125% due 05/15/02......... 1,408,956
Long Island Lighting Co.
1,835,000 7.625% due 04/15/98......... 1,849,785
Long Island Lighting Co.
770,000 8.90% due 07/15/19.......... 820,277
Public Service Electric & Gas
Co. MBIA Insured
7,000,000 6.75% due 01/01/16.......... 6,586,566
Public Service Electric & Gas
Co. MBIA Insured
4,000,000 7.00% due 09/01/24.......... 3,763,824
Southern Investments UK PLC
5,000,000 6.80% due 12/01/06.......... 4,884,500
-------------
21,090,158
-------------
Total corporate bonds and
notes....................... $ 234,571,390
-------------
-------------
FOREIGN/YANKEE BONDS AND NOTES -- 6.8%
FOREIGN GOVERNMENTS
Banco Nacional de Comercio
Exterior SNC
1,000,000 7.25% due 02/02/04.......... $ 931,875
KFW International Finance Inc.
5,000,000 7.00% due 03/01/13.......... 4,920,110
Province of Manitoba
5,000,000 9.625% due 12/01/18......... 6,232,800
Province of Quebec
2,400,000 7.125% due 02/09/24......... 2,258,688
Province of Quebec (FSA
Insured)
4,000,000 9.125% due 03/01/00......... 4,263,244
Republica de Argentina Par
Bonds
8,250,000 5.50% due 03/31/23.......... 5,723,438
The Russian Federation*
2,000,000 10.00% due 06/26/07......... 1,993,000
United Mexican States Discount
Bond
4,750,000 6.84% due 12/31/19.......... 4,417,500
-------------
Total foreign/yankee bonds and
notes....................... $ 30,740,655
-------------
-------------
ASSET BACKED SECURITIES -- 3.0%
Chemical Master Credit Card
Trust
Series 96-1, Class A
11,400,000 5.55% due 09/15/03.......... $ 11,071,452
Oakwood Mortgage Investors,
Inc.
Series 94-A, Class B1
2,460,789 8.40% due 02/15/15.......... 2,511,875
-------------
Total asset-backed
securities.................. $ 13,583,327
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
93
<PAGE>
HARTFORD BOND FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------
<C> <S> <C>
COMMERCIAL MORTGAGE BACKED SECURITIES -- 2.0%
Nationsbank Corp. Series
97-CTL1,
Class A1
$ 9,090,851 7.421% due 06/22/24......... $ 9,272,668
-------------
-------------
SUPRANATIONAL -- 1.7%
Inter-American Development
Bank
7,400,000 8.50% due 05/01/01.......... $ 7,884,996
-------------
-------------
ENHANCED EQUIPMENT TRUST CERTIFICATES -- 1.7%
Norwest Airlines Trust Series
2
2,440,000 11.30% due 06/21/14......... $ 2,992,992
U.S. Air Inc. Series Class A
4,810,797 6.76% due 04/15/08.......... 4,686,914
-------------
$ 7,679,906
-------------
-------------
<CAPTION>
SHARES
-----------
<C> <S> <C>
PREFERRED STOCKS --2.1%
10,000 Home Ownership Funding Series
1997........................ $ 9,659,100
-------------
-------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 9.4%
COMMERCIAL PAPER -- 2.2%
Merrill Lynch & Co.
$ 5,000,000 5.56% due 07/17/97.......... $ 4,987,644
NYNEX Corp.
5,000,000 5.52% due 07/17/97.......... 4,987,733
-------------
9,975,377
-------------
REPURCHASE AGREEMENT -- 7.2%
32,590,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.90% and maturity
amount of $32,595,341....... 32,590,000
-------------
Total short-term securities... $ 42,565,377
-------------
-------------
<CAPTION>
MARKET
VALUE
-------------
<C> <S> <C>
Total U.S. treasuries & Federal agencies
(cost $98,234,691)......................... 21.7% $ 98,792,086
Total corporate bonds and notes (cost
$232,982,563).............................. 51.6 234,571,390
Total foreign/yankee bonds and notes (cost
$30,191,390)............................... 6.8 30,740,655
Total asset-backed securities (cost
$13,274,334)............................... 3.0 13,583,327
Total commercial mortgage backed securities
(cost $9,271,601).......................... 2.0 9,272,668
Total supranational (cost $7,899,616)........ 1.7 7,884,996
Total enhanced equipment trust certificates
(cost $7,558,012).......................... 1.7 7,679,906
Total preferred stocks (cost $10,000,000).... 2.1 9,659,100
Total short-term securities (cost
$42,565,377)............................... 9.4 42,565,377
------ ------------
Total investment in securities
(Identified cost $451,977,584)............. 100.0% $454,749,505
------ ------------
------ ------------
</TABLE>
* Security exempt from registration under rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
94
<PAGE>
HARTFORD STOCK FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------------ ---------------
<C> <S> <C>
COMMON STOCKS -- 96.2%
AEROSPACE & DEFENSE -- 3.6%
1,600,000 Boeing Co..................... $ 84,900,000
700,000 United Technologies Corp...... 58,100,000
---------------
143,000,000
---------------
BUSINESS SERVICES -- 1.0%
700,000 Fluor Corp.................... 38,631,250
---------------
COMMUNICATIONS EQUIPMENT --
4.5%
*750,000 Cisco Systems, Inc............ 50,343,750
350,000 Ericsson (L.M.) Telephone
ADR......................... 13,781,250
595,000 General Motors Corp. Class
H........................... 34,361,250
543,529 Lucent Technologies, Inc...... 39,168,059
555,000 Motorola, Inc................. 42,180,000
---------------
179,834,309
---------------
COMPUTERS & OFFICE
EQUIPMENT -- 4.8%
*630,000 Adaptec, Inc.................. 21,892,500
*541,800 EMC Corp...................... 21,130,200
880,000 International Business
Machines Corp............... 79,365,000
900,000 Xerox Corp.................... 70,987,500
---------------
193,375,200
---------------
CONSUMER DURABLES -- 0.3%
*287,500 Hertz Corp. Class A........... 10,350,000
---------------
CONSUMER NON-DURABLES -- 6.2%
520,000 Colgate Palmolive Co.......... 33,930,000
400,000 Estee Lauder Co. Class A...... 20,100,000
350,000 Gillette Co................... 33,162,500
1,125,000 Kimberly-Clark Corp........... 55,968,750
525,000 NIKE, Inc. Class B............ 30,646,875
550,000 Proctor & Gamble Co........... 77,687,500
---------------
251,495,625
---------------
CONSUMER SERVICES -- 1.5%
*374,548 Autotote (Unregistered
Shares)..................... 280,910
250,000 Eastman Kodak................. 19,187,500
*1,550,000 Mirage Resorts................ 39,137,500
---------------
58,605,910
---------------
ELECTRONICS -- 6.3%
*710,000 Analog Devices................ 18,859,375
2,600,000 General Electric Co........... 169,975,000
460,000 Intel Corp.................... 65,233,750
---------------
254,068,125
---------------
ENERGY & SERVICES -- 8.3%
530,000 Amoco Corp.................... 46,076,875
600,000 Chevron Corp.................. 44,362,500
850,000 Exxon Corp.................... 52,275,000
1,680,000 Royal Dutch Petroleum Co...... 91,350,000
550,000 Schlumberger Ltd.............. 68,750,000
628,778 Union Pacific Resources Group,
Inc......................... 15,640,853
440,000 Unocal Corp................... 17,077,500
---------------
335,532,728
---------------
<CAPTION>
SHARES MARKET
------------ VALUE
---------------
<C> <S> <C>
FINANCIAL SERVICES -- 16.1%
290,000 Ace Ltd....................... $ 21,423,750
940,000 Allstate Corp................. 68,620,000
950,000 American Express Co........... 70,775,000
300,000 American International Group,
Inc......................... 44,812,500
500,000 Associates First Capital
Corp........................ 27,750,000
620,000 Citicorp...................... 74,748,750
200,000 Federal National Mortgage
Association................. 8,725,000
285,000 First Bank System, Inc........ 24,331,875
100,000 First Union Corp.............. 9,250,000
1,000,000 Marsh & McLennan Cos., Inc.... 71,375,000
1,400,000 Merrill Lynch & Co., Inc...... 83,475,000
250,000 NationsBank Corp.............. 16,125,000
1,000,000 State Street Corp............. 46,250,000
1,420,000 Travelers Group, Inc. (The)... 89,548,750
---------------
657,210,625
---------------
FOOD, BEVERAGE & TOBACCO --
1.0%
950,000 Sara Lee Corp................. 39,543,750
---------------
HEALTH CARE -- 16.2%
900,000 Abbott Laboratories........... 60,075,000
825,000 American Home Products
Corp........................ 63,112,500
620,000 Bristol-Myers Squibb Co....... 50,220,000
1,000,000 Columbia/HCA Healthcare
Corp........................ 39,312,500
900,000 Johnson & Johnson............. 57,937,500
620,000 Merck & Co., Inc.............. 64,170,000
525,000 Pfizer, Inc................... 62,737,500
1,450,000 Pharmacia & Upjohn, Inc....... 50,387,500
460,000 Rhone-Poulenc S.A. ADR........ 19,147,500
565,000 SmithKline Beecham PLC ADR.... 51,768,125
*630,000 Tenet Healthcare Corp......... 18,624,375
550,000 United Healthcare Corp........ 28,600,000
*471,400 Vencor, Inc................... 19,916,650
375,000 Warner-Lambert Co............. 46,593,750
*400,000 Wellpoint Health Networks..... 18,350,000
---------------
650,952,900
---------------
INDUSTRIAL MATERIALS -- 3.9%
700,000 Crown Cork & Seal, Inc........ 37,406,250
800,000 du Pont (ei) de Nemours &
Co.......................... 50,300,000
645,000 Phelps Dodge Corp............. 54,945,938
*406,100 Santa Fe International
Corp........................ 13,807,400
---------------
156,459,588
---------------
MANUFACTURING -- 2.6%
375,000 Caterpillar, Inc.............. 40,265,625
455,000 Minnesota Mining &
Manufacturing Co............ 46,410,000
212,400 Perkin Elmer.................. 16,899,075
---------------
103,574,700
---------------
MEDIA & SERVICES -- 3.0%
*358,700 Clear Channel
Communications.............. 22,060,050
835,000 Gannett Co., Inc.............. 82,456,250
764,437 Gaylord Entertainment Class
A........................... 17,629,828
---------------
122,146,128
---------------
RETAIL -- 8.2%
750,000 CVS Corp...................... 38,437,500
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
95
<PAGE>
HARTFORD STOCK FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
------------ VALUE
---------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
RETAIL -- (CONTINUED)
635,000 Home Depot, Inc. (The)........ $ 43,775,313
1,710,000 McDonalds Corp................ 82,614,375
*355,000 Saks Holding, Inc............. 8,875,000
660,000 Sears, Roebuck & Co........... 35,475,000
*800,000 Toys "R" Us, Inc.............. 28,000,000
2,800,000 Wal-Mart Stores, Inc.......... 94,675,000
---------------
331,852,188
---------------
SOFTWARE & SERVICES -- 4.3%
350,000 Automatic Data Processing
Inc......................... 16,450,000
*450,000 Computer Sciences Corp........ 32,456,250
1,100,000 First Data Corp............... 48,331,250
*600,000 Microsoft Corp................ 75,825,000
---------------
173,062,500
---------------
TRANSPORTATION -- 2.3%
1,350,000 Southwest Airlines Co......... 34,931,250
800,000 Union Pacific Corp............ 56,400,000
---------------
91,331,250
---------------
UTILITIES -- 2.1%
1,350,000 SBC Communications, Inc....... 83,531,250
---------------
Total common stocks........... $ 3,874,558,026
---------------
---------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------------ ---------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 3.8%
REPURCHASE AGREEMENT
$152,805,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$152,830,224................ $ 152,805,000
---------------
---------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $2,557,448,890).... 96.2 % $3,874,558,026
Total short-term securities (cost
$152,805,000).............................. 3.8 152,805,000
------ --------------
Total investments (cost $2,710,253,890)...... 100.0% $4,027,363,026
------ --------------
------ --------------
</TABLE>
* Non-income producing during period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
96
<PAGE>
HVA MONEY MARKET FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
AMORTIZED
PRINCIPAL COST AND
AMOUNT VALUE
----------- --------------
<C> <S> <C>
SHORT-TERM SECURITIES -- 78.9%
CERTIFICATE OF DEPOSIT -- 2.5%
Bank Of Tokyo Mitsubishi
$14,700,000 5.66% due 08/29/97............... $ 14,700,000
--------------
COMMERCIAL PAPER -- 66.0%
Abbey National North America
10,000,000 5.42% due 07/11/97............... 9,984,944
American Home Food Products Corp.
10,000,000 5.65% due 07/28/97............... 9,957,625
American Home Products Corp.
10,000,000 5.66% due 07/24/97............... 9,963,839
ANZ (Delaware) Inc.
10,000,000 5.60% due 07/02/97............... 9,998,444
Aristar Inc.
10,000,000 5.67% due 09/15/97............... 9,880,300
Association Corp. of North America
20,000,000 5.55% due 09/17/97............... 19,759,500
Bank Of Montreal
10,000,000 5.38% due 07/03/97............... 9,997,011
Bradford & Bingley Building Society
5,000,000 5.40% due 07/14/97............... 4,990,250
Countrywide Home Loan
5,000,000 5.67% due 07/24/97............... 4,981,888
Countrywide Home Loan
10,000,000 5.60% due 08/27/97............... 9,911,333
CS First Boston Inc.
10,000,000 5.62% due 07/14/97............... 9,979,708
Daimler Benz N.A. Corp.
11,700,000 5.39% due 08/05/97............... 11,638,689
Finova Capital Corp.
4,700,000 5.42% due 07/11/97............... 4,692,924
General Electric Capital Corp.
9,500,000 5.56% due 08/28/97............... 9,414,901
General Signal Corp.
10,500,000 5.67% due 07/16/97............... 10,475,194
Goldman Sachs Group LP
10,000,000 5.60% due 09/04/97............... 9,898,889
Goldman Sachs Group LP
10,000,000 5.60% due 09/03/97............... 9,900,444
GTE Corp.
10,000,000 5.60% due 09/22/97............... 9,870,889
J.P. Morgan
10,000,000 5.55% due 09/23/97............... 9,870,500
MCI Communications
10,000,000 5.44% due 07/14/97............... 9,980,356
MCI Communications
5,000,000 5.53% due 07/07/97............... 4,995,392
Merrill Lynch & Co., Inc.
10,000,000 5.60% due 08/25/97............... 9,914,444
Merrill Lynch & Co., Inc.
10,000,000 5.65% due 07/23/97............... 9,965,472
Monsanto Co.
10,000,000 5.62% due 08/12/97............... 9,934,433
Morgan Stanley Group
10,000,000 5.55% due 08/21/97............... 9,921,375
National Rural Utilities
10,000,000 5.64% due 07/29/97............... 9,956,133
<CAPTION>
AMORTIZED
PRINCIPAL COST AND
AMOUNT VALUE
----------- --------------
<C> <S> <C>
COMMERCIAL PAPER -- (CONTINUED)
Nationwide Building Society
$15,000,000 5.38% due 07/11/97............... $ 14,977,584
Nordbanken North America
10,000,000 5.60% due 08/20/97............... 9,922,222
Nordbanken North America
10,000,000 5.62% due 07/01/97............... 10,000,000
Rubbermaid Inc.
6,500,000 5.58% due 08/04/97............... 6,465,745
Sanwa Business Credit Corp.
10,000,000 5.71% due 08/06/97............... 9,942,900
Sanwa Business Credit Corp.
5,000,000 5.71% due 08/14/97............... 4,965,106
Sharp Electronics Corp.
10,000,000 5.55% due 08/01/97............... 9,952,208
Stanley Works
7,400,000 5.62% due 08/14/97............... 7,349,170
Sumitomo Bank
15,000,000 5.78% due 08/12/97............... 14,898,850
Toronto-Dominion Holdings
10,000,000 5.45% due 10/01/97............... 9,860,722
Volkswagon of America
10,000,000 5.64% due 07/21/97............... 9,968,667
Westpac Capital Corp.
10,000,000 5.60% due 09/05/97............... 9,897,333
Zeneca Inc.
10,000,000 5.60% due 08/22/97............... 9,919,111
Zeneca Inc.
10,000,000 5.63% due 07/22/97............... 9,967,158
--------------
387,921,653
--------------
REPURCHASE AGREEMENT -- 10.4%
61,375,000 Interest in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9% and maturity amount
of $61,385,059................... 61,375,000
--------------
Total short-term securities........ $ 463,996,653
--------------
--------------
CORPORATE NOTES -- 21.1%
American Honda Finance Corp.
10,000,000 5.81% due 06/16/98............... $ 10,000,000
American Honda Finance Corp.**
5,000,000 5.53% due 08/15/97............... 5,000,000
Bear Stearns Companies, Inc.
5,000,000 6.74% due 03/09/98............... 5,016,964
Caterpillar Financial Services
10,000,000 5.76% due 04/13/98............... 10,000,000
Chrysler Financial Corp.
4,000,000 6.11% due 07/31/97............... 4,000,580
Chrysler Financial Corp.
10,000,000 5.76% 02/02/98................... 10,014,662
Finova Capital Corp.
15,000,000 6.50% due 03/06/98............... 15,027,710
General Motors Acceptance Corp.
5,000,000 5.50% due 04/17/98............... 5,000,911
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
97
<PAGE>
HVA MONEY MARKET FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
AMORTIZED
PRINCIPAL COST AND
AMOUNT VALUE
----------- --------------
<C> <S> <C>
CORPORATE NOTES -- (CONTINUED)
General Motors Acceptance Corp.
$ 9,000,000 5.85% due 04/17/98............... $ 9,001,991
IBM Credit Corp.
10,250,000 5.69% due 06/05/98............... 10,243,983
Morgan Stanley Group
10,000,000 5.76% due 05/18/98............... 10,000,000
Sears Roebuck Acceptance Corp.
10,500,000 5.62% due 10/02/97............... 10,498,910
Wells Fargo
10,200,000 5.63% due 09/05/97............... 10,201,432
Wells Fargo
10,000,000 5.82% due 07/01/98............... 10,010,690
--------------
Total corporate notes.............. $ 124,017,833
--------------
--------------
<CAPTION>
AMORTIZED
COST AND
VALUE
--------------
<C> <S> <C>
Total short-term securities (cost
$463,996,653)............................. 78.9 % $463,996,653
Total corporate notes (cost $124,017,833)... 21.1 124,017,833
------ ------------
Total investment in securities (Identified
cost $588,014,486)*....................... 100.0 % $588,014,486
------ ------------
------ ------------
</TABLE>
* Aggregate cost for Federal income tax purposes.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
98
<PAGE>
HARTFORD ADVISERS FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- ---------------
<C> <S> <C>
COMMON STOCKS -- 69.7%
AEROSPACE & DEFENSE -- 2.5%
2,000,000 Boeing Co..................... $ 106,125,000
908,000 United Technologies Corp...... 75,364,000
---------------
181,489,000
---------------
BUSINESS SERVICES -- 0.7%
900,000 Fluor Corp.................... 49,668,750
---------------
COMMUNICATIONS EQUIPMENT --
3.1%
*905,000 Cisco Systems, Inc............ 60,748,125
400,000 Ericsson (L.M.) Telephone
ADR......................... 15,750,000
780,000 General Motors Class H........ 45,045,000
712,746 Lucent Technologies Corp...... 51,362,259
675,000 Motorola, Inc................. 51,300,000
---------------
224,205,384
---------------
COMPUTERS & OFFICE
EQUIPMENT -- 3.5%
*860,000 Adaptec, Inc.................. 29,885,000
*706,500 EMC Corp...................... 27,553,500
1,100,000 International Business
Machines Corp............... 99,206,250
1,260,000 Xerox Corp.................... 99,382,500
---------------
256,027,250
---------------
CONSUMER DURABLES -- 0.1%
*327,500 Hertz Corp. Class A........... 11,790,000
---------------
CONSUMER NON-DURABLES -- 4.4%
730,000 Colgate Palmolive Co.......... 47,632,500
500,000 Estee Lauder Co. Class A...... 25,125,000
400,000 Gillette Co................... 37,900,000
1,350,000 Kimberly-Clark Corp........... 67,162,500
575,000 NIKE, Inc. Class B............ 33,565,625
700,000 Proctor & Gamble Co........... 98,875,000
---------------
310,260,625
---------------
CONSUMER SERVICES -- 2.5%
*561,821 Autotote (Unregistered
Shares)..................... 421,366
250,000 Eastman Kodak................. 19,187,500
2,260,000 McDonalds Corp................ 109,186,250
*2,050,000 Mirage Resorts................ 51,762,500
---------------
180,557,616
---------------
ELECTRONICS -- 4.6%
*990,000 Analog Devices................ 26,296,875
3,430,000 General Electric Corp......... 224,236,250
595,000 Intel Corp.................... 84,378,438
---------------
334,911,563
---------------
ENERGY & SERVICES -- 6.3%
750,000 Amoco Corp.................... 65,203,125
800,000 Chevron Corp.................. 59,150,000
1,245,000 Exxon Corp.................... 76,567,500
2,120,000 Royal Dutch Petroleum Co...... 115,275,000
710,000 Schlumberger Ltd.............. 88,750,000
880,000 Union Pacific Resources Group,
Inc......................... 21,890,000
570,000 Unocal Corp................... 22,123,125
---------------
448,958,750
---------------
FINANCIAL SERVICES -- 11.9%
420,000 Ace Ltd....................... 31,027,500
1,230,000 Allstate Corp................. 89,790,000
1,300,000 American Express Co........... 96,850,000
<CAPTION>
SHARES MARKET
----------- VALUE
---------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
415,000 American International Group,
Inc......................... $ 61,990,625
610,000 Associates First Capital Corp.
Class A..................... 33,855,000
800,000 Citicorp...................... 96,450,000
200,000 Federal National Mortgage
Association................. 8,725,000
365,000 First Bank System, Inc........ 31,161,875
125,000 First Union Corp.............. 11,562,500
1,180,000 Marsh & McLennan Cos., Inc.... 84,222,500
1,800,000 Merrill Lynch & Co., Inc...... 107,325,000
425,000 NationsBank Corp.............. 27,412,500
1,200,000 State Street Corp............. 55,500,000
1,900,000 Travelers Group, Inc. (The)... 119,818,750
---------------
855,691,250
---------------
FOOD, BEVERAGE & TOBACCO --
0.7%
1,300,000 Sara Lee Corp................. 54,112,500
---------------
HEALTH CARE -- 11.9%
1,200,000 Abbott Laboratories........... 80,100,000
1,075,000 American Home Products
Corp........................ 82,237,500
860,000 Bristol-Myers Squibb Co....... 69,660,000
1,200,000 Columbia/HCA Healthcare
Corp........................ 47,175,000
1,170,000 Johnson & Johnson............. 75,318,750
805,000 Merck & Co., Inc.............. 83,317,500
675,000 Pfizer, Inc................... 80,662,500
1,750,000 Pharmacia & Upjohn, Inc....... 60,812,500
650,000 Rhone-Poulenc S.A. ADR........ 27,056,250
775,000 SmithKline Beecham PLC ADR.... 71,009,375
*870,000 Tenet Healthcare Corp......... 25,719,375
650,000 United Healthcare Corp........ 33,800,000
*672,200 Vencor, Inc................... 28,400,450
575,000 Warner-Lambert Co............. 71,443,750
*600,000 Wellpoint Health Networks..... 27,525,000
---------------
864,237,950
---------------
INDUSTRIAL MATERIALS -- 2.7%
900,000 Crown Cork & Seal, Inc........ 48,093,750
1,020,000 du Pont (ei) de Nemours &
Co.......................... 64,132,500
800,000 Phelps Dodge Corp............. 68,150,000
*496,600 Santa Fe International
Corp........................ 16,884,400
---------------
197,260,650
---------------
MANUFACTURING -- 1.8%
475,000 Caterpillar, Inc.............. 51,003,125
585,000 Minnesota Mining &
Manufacturing Co............ 59,670,000
262,600 Perkin Elmer.................. 20,893,113
---------------
131,566,238
---------------
MEDIA & SERVICES -- 2.2%
*466,300 Clear Channel
Communications.............. 28,677,450
1,095,000 Gannett Co., Inc.............. 108,131,250
1,111,087 Gaylord Entertainment Co.
Class A..................... 25,624,444
---------------
162,433,144
---------------
RETAIL -- 4.6%
95,000 CVS Corp...................... 48,687,500
865,000 Home Depot, Inc. (The)........ 59,630,938
*475,000 Saks Holding Inc.............. 11,875,000
915,000 Sears, Roebuck & Co........... 49,181,250
*1,050,000 Toys "R" Us, Inc.............. 36,750,000
3,810,000 Wal-Mart Stores, Inc.......... 128,825,625
---------------
334,950,313
---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
99
<PAGE>
HARTFORD ADVISERS FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
---------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SOFTWARE & SERVICES -- 3.1%
400,000 Automatic Data Processing,
Inc......................... $ 18,800,000
*625,000 Computer Sciences Corp........ 45,078,125
1,450,000 First Data Corp............... 63,709,375
*780,000 Microsoft Corp................ 98,572,500
---------------
226,160,000
---------------
TRANSPORTATION -- 1.6%
1,750,000 Southwest Airlines Co......... 45,281,250
980,000 Union Pacific Corp............ 69,090,000
---------------
114,371,250
---------------
UTILITIES -- 1.5%
1,750,000 SBC Communications, Inc....... 108,281,250
---------------
Total common stocks........... $ 5,046,933,483
---------------
---------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 23.9%
FEDERAL HOME LOAN MORTGAGE
CORPORATION -- 1.6%
$121,033,944 6.50% due
08/01/25-05/01/26........... $ 116,032,494
---------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 2.2%
111,606,032 6.50% due
06/15/23-03/15/26........... 107,118,758
47,963,077 7.00% due
01/15/23-12/15/23........... 47,385,602
3,963,540 9.00% due
06/20/16-07/20/16........... 4,249,192
---------------
158,753,552
---------------
U.S. TREASURY BONDS -- 3.1%
214,000,000 7.25% due 05/15/16.......... 223,161,982
---------------
U.S. TREASURY NOTES -- 17.0%
100,000,000 5.75% due 08/15/03.......... 96,562,500
90,000,000 5.875% due 10/31/98......... 89,887,500
183,000,000 6.25% due 08/15/23.......... 169,332,279
200,000,000 6.25% due 05/31/00.......... 200,125,000
100,000,000 6.50% due 08/15/05.......... 99,750,000
125,000,000 6.50% due 10/15/06.......... 124,453,125
150,000,000 7.50% due 02/15/05.......... 158,718,750
175,000,000 7.50% due 11/15/01.......... 182,382,900
110,000,000 7.75% due 12/31/99.......... 113,918,750
---------------
1,235,130,804
---------------
Total U.S. treasuries &
Federal agencies............ $ 1,733,078,832
---------------
---------------
CORPORATE BONDS AND NOTES -- 4.5%
FINANCIAL SERVICES -- 3.0%
Associates Corp. N.A.
15,000,000 6.50% due 10/15/02......... $ 14,723,970
Bank of Boston Corp.
10,000,000 6.625% due 02/01/04......... 9,780,630
Banponce Corp.
14,825,000 6.750% due 12/15/05......... 14,359,539
Bayerische Landesbank NY
15,000,000 5.625% due 02/26/01......... 14,536,110
Chase Manhattan Corp.
10,000,000 8.500% due 02/15/02......... 10,651,620
CIT Group Holdings
20,000,000 6.750% due 05/14/01......... 20,080,980
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- ---------------
<C> <S> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
FINANCIAL SERVICES --
(CONTINUED)
Credit National Euro
$20,000,000 7.000% due 11/14/05......... $ 19,175,000
Fairfax Financial Holdings
10,000,000 7.750% due 12/15/03......... 10,182,040
First Interstate Bank
12,000,000 9.000% due 11/15/04......... 12,648,156
Ford Motor Credit Co.
10,000,000 5.625% due 12/15/98......... 9,918,040
General Motors Acceptance
Corp.
15,000,000 5.625% due 02/01/99......... 14,852,820
Great Western Financial
10,000,000 8.625% due 12/01/98......... 10,281,160
Home Savings America
15,000,000 6.000% due 11/01/00......... 14,688,990
London Insurance Group
20,500,000 6.875% due 09/15/05......... 20,154,104
Travelers Group, Inc. (The)
10,000,000 6.250% due 12/01/05......... 9,458,560
Travelers/Aetna P&C
10,000,000 6.750% due 04/15/01......... 9,980,380
---------------
215,472,099
---------------
INDUSTRIAL MATERIALS -- 0.8%
Browning-Ferris Industries
15,000,000 6.100% due 01/15/03......... 14,474,775
Honeywell Inc.
13,135,000 6.600% due 04/15/01......... 13,088,344
Phillips Electronics
15,000,000 7.200% due 06/01/26......... 15,076,815
Postal Square LP
7,385,849 8.950% due 06/15/22......... 8,603,583
Zeneca Wilmington
10,000,000 6.300% due 06/15/03......... 9,718,360
---------------
60,961,877
---------------
UTILITIES -- 0.7%
Husky Oil Ltd.
15,000,000 6.875% due 11/15/03......... 14,805,195
Hydro Quebec
15,000,000 7.375% due 02/01/03......... 15,303,150
Pacific Gas & Electric
11,000,000 7.875% due 03/01/02......... 11,462,132
Southern California Gas Co.
10,000,000 5.750% due 11/15/03......... 9,378,600
---------------
50,949,077
---------------
Total corporate bonds and
notes....................... $ 327,383,053
---------------
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.3%
ASC 97-D4 A-1D
18,000,000 7.490% due 04/14/29......... $ 18,565,313
---------------
---------------
FOREIGN GOVERNMENT BONDS -- 0.4%
City Of Naples Italy
19,000,000 7.520% due 07/15/06......... $ 19,651,890
Thailand Kingdom
10,000,000 5.880% due 09/30/00......... 9,765,060
---------------
Total foreign government
bonds....................... $ 29,416,950
---------------
---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
100
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- ---------------
<C> <S> <C>
MUNICIPAL BONDS -- 0.4%
Miami Beach Florida
$ 7,000,000 8.800% due 12/01/15......... $ 7,440,090
Mount Sinai School of Medicine
NY
20,000,000 6.000% due 07/01/03......... 19,403,440
---------------
Total municipal bonds......... $ 26,843,530
---------------
---------------
SHORT-TERM SECURITIES -- 0.8%
REPURCHASE AGREEMENT
55,767,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$55,776,206................. $ 55,767,000
---------------
---------------
<CAPTION>
MARKET
VALUE
---------------
<C> <S> <C>
Total common stocks (cost
$3,244,679,668).......................... 69.7 % $ 5,046,933,483
Total U.S. treasuries & Federal agencies
(cost $1,712,965,508).................... 23.9 1,733,078,832
Total corporate bonds and notes (cost
$329,380,024)............................ 4.5 327,383,053
Total collateralized mortgage obligationns
(cost $18,185,253)....................... 0.3 18,565,313
Total foreign government bonds (cost
$29,000,000)............................. 0.4 29,416,950
Total municipal bonds (cost $26,965,409)... 0.4 26,843,530
Total short-term securities (cost
$55,767,000)............................. 0.8 55,767,000
------ ---------------
Total investment (cost $5,416,942,862)..... 100.0 % $ 7,237,988,161
------ ---------------
------ ---------------
</TABLE>
* Non-income producing during period.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
101
<PAGE>
HARTFORD CAPITAL APPRECIATION FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- 87.4%
AEROSPACE & DEFENSE -- 3.5%
682,200 Boeing Co..................... $ 36,199,238
*1,312,900 Loral Space &
Communications.............. 19,693,500
380,500 Northrop Grumman Corp......... 27,090,156
801,500 Precision Castparts Corp...... 47,789,438
*154,328 SPS Technologies, Inc......... 10,918,706
*141,000 Wyman-Gordon Co............... 3,807,000
--------------
145,498,038
--------------
BUSINESS SERVICES -- 2.0%
*423,100 Ionics, Inc................... 19,251,050
801,400 Manpower, Inc................. 35,662,300
*904,200 U.S. Office Products Co....... 27,634,613
--------------
82,547,963
--------------
COMMUNICATIONS EQUIPMENT --
5.4%
*462,800 Cisco Systems, Inc............ 31,065,450
1,270,000 ECI Telecommunication Ord..... 37,782,500
*200,000 Elsag Bailey Process Auto
N.V......................... 3,675,000
*631,300 General Cable Corp............ 16,177,063
856,100 Lucent Technologies, Inc...... 61,692,706
*175,000 Mosaix Inc.................... 2,384,375
*930,000 Oak Industries, Inc........... 26,737,500
*313,600 Plantronics, Inc.............. 15,719,200
*515,000 Proxim, Inc................... 12,488,750
*64,700 Qwest Communications
International............... 1,763,075
*992,900 Scitex Corp. Ord.............. 8,749,931
*200,000 3 Com Corp.................... 9,000,000
--------------
227,235,550
--------------
COMPUTERS & OFFICE
EQUIPMENT -- 4.0%
*1,180,000 Adaptec, Inc.................. 41,005,000
*650,000 Creative Technologies......... 11,050,000
*1,780,500 EMC Corp...................... 69,439,500
*1,000,000 Komag Inc..................... 16,375,000
*145,000 Stratus Computer.............. 7,250,000
637,500 Symbol Technologies, Inc...... 21,435,938
--------------
166,555,438
--------------
CONSUMER DURABLES -- 0.4%
*289,200 Ugly Duckling Corp............ 4,482,600
*646,400 United Auto Group Inc......... 12,806,800
--------------
17,289,400
--------------
CONSUMER NON-DURABLES -- 0.9%
*677,600 Quiksilver Inc................ 21,683,200
*419,400 Tommy Hilfiger Corp........... 16,854,638
--------------
38,537,838
--------------
CONSUMER SERVICES -- 3.2%
*486,100 Berg Electronics Corp......... 17,469,219
*715,500 Cheesecake Factory............ 15,067,500
741,300 Harman International.......... 31,227,263
1,600,000 International Game
Technology.................. 28,400,000
*1,550,000 Mirage Resorts................ 39,137,500
60,800 Peapod Inc.................... 684,000
--------------
131,985,482
--------------
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
ELECTRONICS -- 7.2%
*883,333 Analog Devices, Inc........... $ 23,463,533
*170,800 Clare Corp.................... 2,690,100
*800,000 Credence Systems Corp......... 23,950,000
*714,600 DSP Communications, Inc....... 7,860,600
822,687 Molex, Inc.................... 28,691,209
747,100 Philips N.V. ADR.............. 53,697,813
*800,000 Silicon Valley Group.......... 21,100,000
*794,700 Solectron Corp................ 55,629,000
800,001 Thomas & Betts Corp........... 42,050,053
*855,435 Vishay Intertechnology........ 24,754,150
*645,000 VLSI Technology Inc........... 15,238,125
--------------
299,124,583
--------------
ENERGY & SERVICES -- 4.9%
660,600 Ashland, Inc.................. 30,635,325
509,900 Eni ADS....................... 29,000,563
*1,200,000 Input Output Inc.............. 21,750,000
*700,000 J Ray McDermott S.A........... 18,900,000
520,300 Repsol S.A. ADR............... 22,080,231
*586,000 Rowan Cos..................... 16,517,875
598,935 Transocean Offshore........... 43,497,654
720,000 YPF S.A. Sponsored ADR........ 22,140,000
--------------
204,521,648
--------------
FINANCIAL SERVICES -- 14.8%
730,000 Ace Ltd....................... 53,928,750
400,000 Aetna Inc..................... 40,950,000
616,000 Allstate Corp................. 44,968,000
556,000 Ambac, Inc.................... 42,464,500
350,000 BankBoston Corp............... 25,221,907
324,600 Cullen/Frost Bankers Inc...... 13,754,925
1,040,400 Dime Bancorp, Inc............. 18,207,000
350,000 Federal National Mortgage
Association................. 15,268,750
752,800 First USA Inc................. 42,567,934
*625,800 Firstplus Financial Group..... 21,277,200
900,000 Greenpoint Financial Corp..... 59,906,250
*910,000 Imperial Credit Industries.... 18,711,875
570,900 Legg Mason, Inc............... 30,721,556
400,070 Long Island Bancorp........... 14,527,542
399,300 MMI Companies Inc............. 10,431,713
1,320,000 Morgan Stanley Sean Witter
Discover.................... 56,842,500
85,000 NAC Re Corp................... 4,111,875
*468,400 Providian Financial Corp...... 15,047,350
1,100,000 The Money Store............... 31,556,250
*628,500 Unibanco GDR.................. 23,333,063
500,000 United Companies Financial
Corp........................ 14,125,000
370,000 Washington Mutual............. 22,107,500
--------------
620,031,440
--------------
FOOD, BEVERAGE & TOBACCO --
1.5%
193,000 Archer-Daniels-Midland........ 4,535,500
*400,000 General Cigar Holdings Inc.... 11,775,000
975,400 H.J. Heinz Co................. 44,990,325
--------------
61,300,825
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
102
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FOREIGN SECURITIES -- 2.2%
663,000 Banyu Pharmaceutical Co....... $ 11,645,807
*1,149,665 Corporation Geo S.A. B........ 6,581,111
1,900,000 Eisai Co. Ltd................. 36,030,752
1,121,000 Sankyo Co., Ltd............... 37,716,061
--------------
91,973,731
--------------
HEALTH CARE -- 13.1%
800,000 Abbott Laboratories........... 53,400,000
1,100,000 Columbia/HCA Healthcare
Corp........................ 43,243,750
*1,169,800 Depuy, Inc.................... 26,905,400
*1,004,300 Genzyme Corp.................. 27,869,325
*635,600 Idexx Laboratories............ 7,905,275
*620,000 IDX Systems Corp.............. 21,390,000
*1,100,000 Magellan Health Services,
Inc......................... 32,450,000
420,700 McKesson Corp................. 32,604,250
*1,248,600 Multicare Cos., Inc........... 34,180,425
*1,050,000 Perrigo....................... 13,125,000
*640,700 PerSeptive Biosystems, Inc.... 3,924,288
1,354,300 Pharmacia & Upjohn............ 47,061,925
533,200 Rhone-Poulenc Rorer........... 48,454,550
800,000 Rhone-Poulenc S.A............. 33,300,000
*970,500 Tenet Healthcare Corp......... 28,690,406
*859,700 Vencor, Inc................... 36,322,325
*1,000,000 Wellpoint Health Networks..... 45,875,000
*417,500 Xomed Surgical................ 8,350,000
--------------
545,051,919
--------------
INDUSTRIAL MATERIALS -- 4.5%
623,000 Abitibi Price, Inc............ 11,136,125
1,100,000 IMC Global Inc................ 38,500,000
490,000 Owens Corning Fiberglass
Corp........................ 21,131,250
471,900 Phelps Dodge Corp............. 40,199,981
*1,050,000 Titanium Metals Corp.......... 33,206,250
*973,200 UCAR Intl. Corp............... 44,523,900
--------------
188,697,506
--------------
MANUFACTURING -- 1.6%
830,400 Chicago Bridge & Iron Co...... 18,372,600
*655,000 Cognex Corp................... 17,357,500
*460,000 Covance Inc................... 8,883,750
850,000 Stewart & Stevenson........... 22,100,000
--------------
66,713,850
--------------
MEDIA & SERVICES -- 1.1%
*559,600 APT Satellite Holdings ADR.... 7,064,950
*764,700 Omnipoint Corp................ 12,713,138
*864,440 TCI Satellite Entertainment
Class A..................... 6,807,465
*336,900 Univision Communication....... 13,181,213
*469,700 Western Wireless Corp. Class
A........................... 7,456,488
--------------
47,223,254
--------------
RETAIL -- 4.2%
*114,400 Barnes & Noble Inc............ 4,919,200
*598,000 Circuit City Stores Carmax.... 8,558,875
*769,000 CompUSA Inc................... 16,533,500
*1,273,500 CUC International............. 32,872,219
*200,000 Gadzooks Inc.................. 3,900,000
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
RETAIL -- (CONTINUED)
500,000 Home Depot, Inc. (The)........ $ 34,468,750
560,000 Mercantile Stores, Inc........ 35,245,000
*489,900 Micro Warehouse Inc........... 8,389,538
*701,000 Saks Holding, Inc............. 17,525,000
308,400 The Gap Inc................... 11,989,050
--------------
174,401,132
--------------
SOFTWARE & SERVICES -- 6.0%
*600,000 America Online Inc............ 33,375,000
*491,200 Avant Corp.................... 15,871,900
*50,000 BMC Software, Inc............. 2,768,750
*1,101,800 Cadence Design Systems Inc.... 36,910,300
*517,800 Cognos Corp................... 16,116,525
*900,000 Compuware Corp................ 42,975,000
530,218 First Data Corp............... 23,296,453
*450,000 Gartner Group Inc. Class A.... 16,171,875
*1,080,000 Integrated Systems Inc........ 12,690,000
*830,200 Macromedia, Inc............... 7,160,475
*615,000 Mercury Interactive Corp...... 9,148,125
*115,300 Parametric Technology Corp.... 4,907,456
*281,100 Policy Management Systems
Corp........................ 13,211,700
*957,500 Rational Software Corp........ 16,097,969
--------------
250,701,528
--------------
TRANSPORTATION -- 2.5%
1,000,000 America West Holdings Corp.
Class B..................... 14,500,000
*425,700 AMR Corp...................... 39,377,250
1,000,000 Canadian Pacific Ltd.......... 28,437,500
1,115,000 Werner Enterprises, Inc....... 21,603,125
--------------
103,917,875
--------------
UTILITIES -- 3.9%
600,000 AT&T Corp..................... 21,037,500
*1,550,000 Calpine Corp.................. 29,450,000
1,400,000 Empresa Nacional de
Electicidad................. 31,587,500
*2,500,000 Worldcom, Inc................. 80,000,000
--------------
162,075,000
--------------
WASTE MANAGEMENT -- 0.5%
*899,300 Republic Industries Inc....... 22,370,088
--------------
Total common stocks........... $3,647,754,088
--------------
--------------
CONVERTIBLE PREFERRED STOCKS -- 0.7%
MANUFACTURING
*1,228,000 Cooper Industries............. $ 28,244,000
--------------
--------------
PREFERRED STOCKS -- 0.9%
COMMUNICATIONS EQUIPMENT
502,200 Nokia PFD ADS................. $ 37,037,250
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
CORPORATE NOTES -- 0.4%
FOOD, BEVERAGE & TOBACCO
Unisys Corp.
$15,000,000 12.00% due 04/15/03......... $ 16,237,500
--------------
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
103
<PAGE>
HARTFORD CAPITAL APPRECIATION FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
WARRANTS -- 0.1%
TRANSPORTATION
*920,200 Nordic American Tanker........ $ 4,601,000
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 10.5%
REPURCHASE AGREEMENTS -- 10.4%
$434,823,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$434,894,778................ $ 434,823,000
--------------
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------------
U.S. TREASURY BILL -- 0.1%
$ 5,000,000 5.02% due 12/26/97.......... $ 4,875,894
--------------
Total short-term securities... $ 439,698,894
--------------
--------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $2,751,573,939).... 87.4 % $3,647,754,088
Total convertible preferred stocks (cost
$16,861,150)............................... 0.7 28,244,000
Total non-convertible preferred stocks (cost
$25,443,794)............................... 0.9 37,037,250
Total corporate notes (cost $15,293,984)..... 0.4 16,237,500
Total warrants (cost $4,586,075)............. 0.1 4,601,000
Total short-term securities (cost
$439,698,894).............................. 10.5 439,698,894
------ --------------
Total investment (cost $3,253,457,836)....... 100.0% $4,173,572,732
------ --------------
------ --------------
</TABLE>
* Non-income producing during period.
FUTURES CONTRACTS -- NOTE 2
The Fund had 1,100 Russell 2000 Index futures contracts open at June 30, 1997.
The contracts had a market value of $219,395,000.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
104
<PAGE>
HARTFORD MORTGAGE SECURITIES FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- --------------
<C> <S> <C>
U.S. TREASURIES & FEDERAL AGENCIES -- 63.0%
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 0.7%
FNMA Strip Series D, Class 2
$ 890,452 11.00% due 04/01/09......... $ 986,456
Federal Home Loan Mortgage
Corp. Series 1033, Class E
107,545 8.100% due 12/15/04......... 107,417
Federal National Mortgage
Association Series 90-108,
Class E
228,936 8.50% due 06/25/19......... 231,843
Federal National Mortgage
Association Series 91-134,
Class H
352,992 7.950% due 03/25/25......... 355,177
Federal National Mortgage
Association Series 91-G8,
Class D
854,530 8.500% due 03/25/19......... 856,325
--------------
2,537,218
--------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION -- 19.5%
16,641,687 6.50% due 02/01/09 -
06/01/26.................... 16,110,390
22,417,728 7.00% due 12/01/10 -
03/01/26.................... 22,126,611
10,768,130 7.50% due 01/01/24 -
08/14/27.................... 10,818,950
6,147,454 8.00% due 02/01/13 -
11/01/24.................... 6,308,899
4,994,111 8.50% due 07/01/01 -
05/01/25.................... 5,158,477
4,800,730 9.00% due 10/15/01 -
10/01/06.................... 4,971,975
5,537,780 9.50% due 11/01/08......... 5,797,779
3,107,677 10.00% due 09/01/05 -
11/01/20.................... 3,380,991
--------------
74,674,072
--------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION -- 21.6%
18,806,940 6.50% due 07/25/12 -
07/01/26.................... 18,095,063
25,876,119 7.00% due 05/01/09 -
07/25/97.................... 25,492,601
15,713,718 7.50% due 11/01/10 -
07/01/27.................... 15,799,607
10,985,185 8.00% due 04/01/22 -
07/25/27.................... 11,243,169
2,738,769 8.50% due 03/01/11 -
07/01/25.................... 2,847,092
7,452,261 9.00% due 05/01/21 -
06/01/25.................... 7,870,986
FNMA Multifamily Dus
1,971,643 6.200% due 01/01/06......... 1,887,099
--------------
83,235,617
--------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 20.8%
17,437,596 7.00% due 07/01/23 -
10/15/25.................... 17,133,430
29,485,372 7.50% due 11/15/09 -
07/15/27.................... 29,658,690
19,989,414 8.00% due 08/15/01 -
12/29/26.................... 20,462,513
3,186,959 8.50% due 06/15/27 -
02/15/25.................... 3,327,019
2,052,830 9.00% due 01/15/25 -
12/15/25.................... 2,171,895
3,590,127 9.50% due 10/15/09 -
11/15/09.................... 3,904,260
2,100,205 10.00% due 11/15/09 -
05/15/13.................... 2,296,011
606,428 11.00% due 02/15/10 -
09/15/10.................... 677,483
67,271 11.25% due 01/15/01......... 71,992
116,030 12.00% due 05/15/15......... 132,905
61,790 12.50% due 06/15/14 -
08/15/15.................... 72,389
26,077 13.00% due 11/15/14......... 30,987
8,599 13.50% due 07/15/14......... 10,342
--------------
79,949,916
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- --------------
<C> <S> <C>
U.S. TREASURY NOTE -- 0.4%
$ 1,500,000 5.25% due 12/31/97......... $ 1,497,657
--------------
Total U.S. treasuries &
Federal agencies............ $ 241,894,480
--------------
--------------
CORPORATE NOTES -- 0.8%
REAL ESTATE
Kimco Realty MTN
3,000,000 7.460% due 05/29/07......... $ 3,025,313
--------------
--------------
ASSET-BACKED SECURITIES -- 0.9%
Corestates Home Equity Trust
Series 94-1, Class A
3,259,905 6.650% due 05/15/09......... $ 3,272,847
--------------
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 12.0%
Bear Stearns Mortgage
Securities, Inc. Series 95-1,
Class 1A
3,986,835 6.476% due 05/25/10......... $ 3,886,845
Chase Mortgage Finance Corp.
Series 93-C2, Class 2A-3
3,152,989 8.250% due 01/25/24......... 3,185,812
CMC Securities Corp., Series
92-D, Class D-2L
158,714 7.200% due 12/25/08......... 158,284
Countrywide Mortgage Backed
Securities, Inc. Series 93-C,
Class A1
1,382,262 6.500% due 01/25/24......... 1,379,069
DLJ Mortgage Acceptance
Corporation Series 96-I, Class
B1
499,121 7.250% due 09/25/11......... 491,322
DLJ Mortgage Acceptance
Corporation Series 96-I, B2
166,374 7.250% due 09/25/11......... 162,370
DLJ Mortgage Acceptance
Corporation Series 96-TD,
Class A
1,100,719 6.881% due 09/29/23......... 1,050,155
GE Capital Mortgage Services,
Inc. Series 94-21, Class A
7,534,264 6.500% due 08/25/09......... 7,352,387
GE Capital Mortgage Services,
Inc. Series 94-26, Class A
7,529,331 6.996% due 07/25/09......... 7,468,268
GE Capital Mortgage Services,
Inc. Series 96-1, Class B2
592,430 6.750% due 02/25/11......... 562,708
GE Capital Mortgage Services,
Inc. Series 96-1, Class M
1,775,403 6.750% due 02/25/11......... 1,711,205
GE Capital Mortgage Services,
Inc. Series 96-10, Class B1
598,002 6.750% due 06/25/11......... 572,079
GE Capital Mortgage Services,
Inc. Series 96-10, Class B2
598,002 6.750% due 06/25/11......... 565,916
Housing Securities, Inc.
Series 93-E, Class E15
4,351,136 10.000% due 09/25/08........ 4,628,669
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
105
<PAGE>
HARTFORD MORTGAGE SECURITIES FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- --------------
<C> <S> <C>
COLLATERALIZED MORTGAGE
OBLIGATIONS -- (CONTINUED)
PNC Mortgage Securities Corp.
Series 96-2, Class B1
$ 612,287 6.600% due 02/25/11......... $ 590,092
PNC Mortgage Securities Corp.
Series 96-2, Class B2
204,096 6.600% due 02/25/11......... 195,231
PNC Mortgage Securities Corp.
Series 96-2, Class B3
326,553 6.600% due 02/25/11......... 309,307
Prudential Home Mortgage
Securities Co. Series 93-H,
Class 2B
4,741,569 6.759% due 09/28/08......... 4,704,525
Prudential Home Mortgage
Securities Co. Series 96-3,
Class B1
1,182,119 6.750% due 03/25/11......... 1,144,232
Prudential Home Mortgage
Securities Co. Series 96-3,
Class B2
590,586 6.750% due 03/25/11......... 566,520
Residential Funding Mortgage
Sec I Series 95-S15, Class M3
1,274,899 7.000% due 10/25/10......... 1,250,855
Residential Funding Mortgage
Sec I Series 95-S18, Class M3
724,448 7.000% due 11/25/10......... 710,365
Residential Funding Mortgage
Sec I Series 95-S19, Class M3
560,788 7.000% due 12/25/10......... 549,505
Residential Funding Mortgage
Sec I Series 96-S11, Class M3
274,686 7.000% due 04/25/11......... 269,005
Residential Funding Mortgage
Sec I Series 96-S17, Class M3
591,043 7.250% due 07/25/11......... 586,398
Residential Funding Mortgage
Sec I Series 96-S19, Class M3
509,786 7.500% due 09/25/11......... 512,411
Residential Funding Mortgage
Sec I Series 96-S5, Class M3
565,267 6.750% due 02/25/11......... 545,528
Residential Funding Mortgage
Sec I Series 96-S8, Class M3
542,090 6.750% due 03/25/11......... 523,599
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- --------------
<C> <S> <C>
Ryland Acceptance Corp. Series
82, Class 1
$ 335,429 10.250% due 09/13/11........ $ 336,582
--------------
Total collateralized mortgage
obligations................. $ 45,969,244
--------------
--------------
COMMERCIAL MORTGAGE BACKED SECURITIES -- 1.3%
Asset Securitization Series
97-MD7, Class A1B
5,000,000 7.410% due 01/13/30......... $ 5,134,375
--------------
--------------
<CAPTION>
SHARES
- -----------
<C> <S> <C>
PREFERRED STOCKS -- 2.5%
10,000 Home Ownership Funding Series
97.......................... $ 9,659,100
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 19.5%
COMMERCIAL PAPER -- 2.6%
$ 5,000,000 Merrill Lynch & Co.
5.560% due 07/17/97......... $ 4,987,644
5,000,000 Nynex Corp.
5.520% due 07/21/97......... 4,984,667
--------------
9,972,311
--------------
REPURCHASE AGREEMENT -- 16.9%
64,710,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9% and maturity
amount of $64,720,605....... 64,710,000
--------------
Total short-term securities... $ 74,683,311
--------------
--------------
</TABLE>
<TABLE>
<S> <C> <C>
Total U.S. treasuries & Federal agencies
(cost $239,728,159)........................ 63.0 % $241,894,480
Total corporate notes (cost $3,000,000)...... 0.8 3,025,313
Total asset-backed securities (cost
$3,218,687)................................ 0.9 3,272,847
Total collateralized mortgage obligations
(cost $45,964,783)......................... 12.0 45,969,244
Total commercial mortgage backed securities
(cost $5,047,565).......................... 1.3 5,134,375
Total preferred stocks (cost $10,000,000).... 2.5 9,659,100
Total short-term securities (cost
$74,682,311)............................... 19.5 74,682,311
-------- -------------
Total investment (cost $381,641,505)......... 100.0 % $383,637,670
-------- -------------
-------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
106
<PAGE>
HARTFORD INDEX FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- 97.4%
AEROSPACE & DEFENSE -- 2.3%
36,000 Allied Signal, Inc............ $ 3,024,000
91,198 Boeing Co..................... 4,839,194
8,000 General Dynamics Corp......... 600,000
24,500 Lockheed Martin Corp.......... 2,537,281
27,000 McDonnell Douglas Corp........ 1,849,500
7,300 Northrop Grumman Corp......... 641,031
30,000 Raytheon Co................... 1,530,000
27,900 Rockwell International
Corp........................ 1,646,100
21,000 Textron, Inc.................. 1,393,875
30,200 United Technologies Corp...... 2,056,600
-------------
20,567,581
-------------
BUSINESS SERVICES -- 0.8%
27,100 Browning Ferris Industries,
Inc......................... 901,075
10,500 DeLuxe Corp................... 358,313
19,200 Donnelley (R.R.) & Sons Co.... 703,200
4,800 Fleming Companies, Inc........ 86,400
10,700 Fluor Corp.................... 590,506
5,200 Foster Wheeler Corp........... 210,600
6,800 Grainger (W.W.), Inc.......... 531,675
17,100 Ikon Office Solutions......... 426,431
3,900 John H. Harland Co............ 88,969
11,200 Moore Corp. Ltd............... 220,500
5,800 National Service Industries,
Inc......................... 282,388
7,400 Safety Kleen Corp............. 124,875
8,500 Supervalu, Inc................ 293,250
22,500 Sysco Corp.................... 821,250
57,604 Waste Management Inc.......... 1,850,529
-------------
7,489,961
-------------
COMMUNICATIONS EQUIPMENT --
3.0%
*11,650 Andrew Corp................... 327,656
*25,100 Bay Networks, Inc............. 666,719
*19,800 Cabletron Systems, Inc........ 560,588
*83,600 Cisco Systems, Inc............ 5,611,650
*14,900 DSC Communications............ 331,525
*17,400 General Instrument............ 435,000
5,000 Harris Corp................... 420,000
81,200 Lucent Technologies........... 5,851,475
75,500 Motorola, Inc................. 5,738,000
32,900 Northern Telecom Ltd.......... 2,993,900
5,700 Raychem Corp.................. 423,938
9,800 Scientific Atlanta, Inc....... 214,375
22,800 Tellabs, Inc.................. 1,273,950
*42,100 3 Com Corp.................... 1,894,500
-------------
26,743,276
-------------
COMPUTERS & OFFICE
EQUIPMENT -- 4.2%
16,600 Adobe System Inc.............. 582,038
*15,400 Amdahl Corp................... 134,750
*15,900 Apple Computer, Inc........... 226,575
*10,200 Ceridian Corp................. 430,950
*34,500 Compaq Computer Corp.......... 3,424,125
*5,100 Data General Corp............. 132,600
*22,300 Dell Computer Corp............ 2,618,856
*20,000 Digital Equipment Corp........ 708,750
*31,300 EMC Corp. - Mass.............. 1,220,700
129,100 Hewlett-Packard Co............ 7,229,600
131,700 International Business
Machines Corp............... 11,877,638
26,700 Micron Technology Inc......... 1,066,331
18,900 Pitney Bowes, Inc............. 1,313,550
*31,500 Seagate Technology, Inc....... 1,108,406
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMPUTERS & OFFICE
EQUIPMENT -- (CONTINUED)
*46,800 Sun Microsystems, Inc......... $ 1,741,838
*15,100 Tandem Computers.............. 305,775
*22,200 Unisys Corp................... 169,275
41,300 Xerox Corp.................... 3,257,538
-------------
37,549,295
-------------
CONSUMER DURABLES -- 2.0%
89,400 Chrysler Corp................. 2,933,438
10,100 Cooper Tire & Rubber Co....... 222,200
7,900 Echlin, Inc................... 284,400
150,900 Ford Motor Co................. 5,696,475
96,200 General Motors Corp........... 5,357,138
23,050 Genuine Parts Co.............. 780,819
19,800 Goodyear Tire & Rubber Co..... 1,253,588
15,000 ITT Industries................ 386,250
16,200 TRW, Inc...................... 920,363
-------------
17,834,671
-------------
CONSUMER NON-DURABLES -- 4.2%
7,100 Alberto Culver Co............. 198,800
16,900 Avon Products, Inc............ 1,192,506
12,000 Black & Decker Corp........... 446,250
3,200 Briggs & Stratton............. 160,000
3,700 Centex Corp................... 150,313
6,600 Clorox Co..................... 871,200
37,400 Colgate Palmolive Co.......... 2,440,350
4,500 Fleetwood..................... 134,156
*9,800 Fruit of the Loom, Inc. Class
A........................... 303,800
70,600 Gillette Co................... 6,689,350
14,000 International Flavors &
Fragrances.................. 707,000
4,900 Kaufman & Broad Home Corp..... 86,056
71,900 Kimberly-Clark Corp........... 3,577,025
9,100 Liz Claiborne, Inc............ 424,288
20,400 Masco Corp.................... 851,700
12,700 Maytag Corp................... 331,788
20,200 Newell Co..................... 800,425
36,700 NIKE, Inc. Class B............ 2,142,363
86,500 Proctor & Gamble Co........... 12,218,125
*7,100 Reebok International Ltd...... 331,925
19,100 Rubbermaid, Inc............... 568,225
4,900 Russell Corp.................. 145,163
7,800 Snap-On, Inc.................. 307,125
2,600 Springs Industries, Inc....... 137,150
11,300 Stanley Works................. 452,000
6,300 Stride Rite Corp.............. 81,113
7,900 Tupperware Corp............... 288,350
8,100 V F Corp...................... 689,513
9,500 Whirlpool Corp................ 518,344
-------------
37,244,403
-------------
CONSUMER SERVICES -- 1.2%
12,500 Brunswick..................... 390,625
20,300 Darden Restaurants, Inc....... 183,969
42,400 Eastman Kodak................. 3,254,200
13,200 H & R Block, Inc.............. 425,700
*13,100 Harrah's Entertainment,
Inc......................... 239,075
16,550 Hasbro, Inc................... 469,606
*20,000 HFS, Inc...................... 1,160,000
31,400 Hilton Hotels Corp............ 834,063
*14,800 ITT Corp...................... 903,725
16,300 Marriott International,
Inc......................... 1,000,413
36,800 Mattel, Inc................... 1,246,600
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
107
<PAGE>
HARTFORD INDEX FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CONSUMER SERVICES --
(CONTINUED)
5,800 Polaroid Corp................. $ 321,900
16,500 Wendy's International, Inc.... 427,969
-------------
10,857,845
-------------
ELECTRONICS -- 6.2%
*17,400 Advanced Micro Devices,
Inc......................... 626,400
27,900 AMP, Inc...................... 1,164,825
*23,000 Applied Materials, Inc........ 1,628,688
6,000 E G & G, Inc.................. 135,000
56,900 Emerson Electric Co........... 3,133,056
419,000 General Electric.............. 27,392,125
6,300 General Signal Corp........... 274,838
104,400 Intel Corp.................... 14,805,225
10,600 Johnson Controls, Inc......... 435,263
*17,900 LSI Logic Corp................ 572,800
*17,800 National Semiconductor
Corp........................ 545,125
*22,400 Silicon Graphics, Inc......... 336,000
4,200 Tektronix, Inc................ 252,000
24,200 Texas Instruments, Inc........ 2,034,313
6,800 Thomas & Betts Corp........... 357,425
80,900 Westinghouse Electric Corp.... 1,870,813
-------------
55,563,896
-------------
ENERGY & SERVICES -- 8.7%
11,900 Amerada Hess Corp............. 661,194
63,300 Amoco Corp.................... 5,503,144
9,400 Ashland, Inc.................. 435,925
41,000 Atlantic Richfield Co......... 2,890,500
18,500 Baker Hughes, Inc............. 715,719
15,900 Burlington Resources, Inc..... 701,588
83,000 Chevron Corp.................. 6,136,813
13,400 Coastal Corp.................. 712,713
22,400 Dresser Industries, Inc....... 834,400
316,100 Exxon Corp.................... 19,440,150
15,900 Halliburton Co................ 1,260,075
3,200 Helmerich & Payne, Inc........ 184,400
6,200 Kerr-McGee Corp............... 392,925
4,300 Louisiana Land & Exploration
Co.......................... 245,638
7,000 McDermott International,
Inc......................... 204,313
100,200 Mobil Corp.................... 7,001,475
41,900 Occidental Petroleum Corp..... 1,050,119
*13,300 Oryx Energy Co................ 280,963
5,900 Pennzoil Co................... 452,825
33,500 Phillips Petroleum Co......... 1,465,625
*10,900 Rowan Cos., Inc............... 307,244
272,800 Royal Dutch Petroleum Co...... 14,833,500
*12,700 Santa Fe Energy Resources,
Inc......................... 186,531
31,300 Schlumberger Ltd.............. 3,912,500
9,300 Sun Company, Inc.............. 288,300
33,700 Texaco, Inc................... 3,664,875
31,800 Union Pacific Resources
Group....................... 791,025
31,900 Unocal Corp................... 1,238,119
36,600 USX-Marathon Group............ 1,056,825
*6,800 Western Atlas, Inc............ 498,100
-------------
77,347,523
-------------
FINANCIAL SERVICES -- 14.9%
5,474 Aegon N.V..................... 383,498
20,200 Aetna Life & Casualty Co...... 2,067,975
58,200 Allstate Corp................. 4,248,600
60,300 American Express Co........... 4,492,350
32,602 American General Corp......... 1,556,766
61,500 American International Group,
Inc......................... 9,186,563
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
FINANCIAL SERVICES --
(CONTINUED)
21,350 AON Corp...................... $ 1,104,863
72,600 Banc One Corp................. 3,516,563
91,400 BankAmerica Corp.............. 5,901,013
49,900 Bank of New York, Inc......... 2,170,650
19,500 BankBoston Corp............... 1,405,219
10,400 Bankers Trust NY Corp......... 904,800
26,600 Barnett Banks, Inc............ 1,396,500
6,900 Beneficial Corp............... 490,331
55,800 Chase Manhattan Corp.......... 5,416,088
22,700 Chubb Corp. (The)............. 1,518,063
9,900 CIGNA Corp.................... 1,757,250
58,900 Citicorp...................... 7,101,131
13,700 Comerica, Inc................. 931,600
25,800 Conseco Inc................... 954,600
28,500 Corestates Financial Corp..... 1,531,875
14,100 Countrywide Credit Industries
Inc......................... 439,744
19,600 Equifax Inc................... 728,875
91,000 Federal Home Loan Mortgage
Corp........................ 3,128,125
139,000 Federal National Mortgage
Association................. 6,063,875
13,500 Fifth Third Bancorp........... 1,107,844
17,100 First Bank System, Inc........ 1,459,913
40,600 First Chicago Corp............ 2,456,300
36,100 First Union Corp.............. 3,339,250
33,400 Fleet Financial Group, Inc.... 2,112,550
10,800 General Re Corp............... 1,965,600
7,300 Golden West Financial Corp.... 511,000
17,500 Great Western Financial
Corp........................ 940,625
17,500 Greentree Financial Corp...... 623,438
13,400 H.F. Ahmanson & Co............ 576,200
12,300 Household International
Corp........................ 1,444,481
23,600 J.P. Morgan................... 2,463,250
9,500 Jefferson Pilot Corp.......... 663,813
28,700 Keycorp....................... 1,603,613
14,100 Lincoln National Corp......... 907,688
21,400 March & McLennan Cos., Inc.... 1,527,425
5,700 MBIA, Inc..................... 643,031
42,500 MBNA Corp..................... 1,556,563
32,900 Mellon Bank Corp.............. 1,484,613
41,900 Merrill Lynch & Co., Inc...... 2,498,288
15,400 MGIC Investment............... 738,238
72,875 Morgan Stanley Dean Witter
Discover.................... 3,138,180
28,400 National City Corp............ 1,491,000
93,024 NationsBank Corp.............. 6,000,048
47,100 Norwest Corp.................. 2,649,375
42,700 PNC Bank Corp................. 1,777,388
12,600 Providian Corp................ 404,775
7,000 Republic New York Corp........ 752,500
16,500 Safeco Corp................... 770,344
13,900 Salomon Brothers, Inc......... 773,188
22,300 Schwab (Charles) Corp......... 907,331
10,900 St. Paul Cos., Inc............ 831,125
28,400 Sun Trust Banks, Inc.......... 1,563,775
9,300 Torchmark Corp................ 662,625
8,900 Transamerica Corp............. 832,706
81,300 Travelers Group, Inc. (The)... 5,126,981
19,100 UNUM Corp..................... 802,200
19,200 US Bancorp Oregon............. 1,231,200
15,100 USF&G Corp.................... 362,400
21,000 Wachovia Corp................. 1,224,563
11,800 Wells Fargo & Co.............. 3,180,100
-------------
133,502,444
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
108
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FOOD, BEVERAGE & TOBACCO --
8.4%
63,500 Anheuser Busch Cos., Inc...... $ 2,663,031
69,100 Archer-Daniels-Midland........ 1,623,850
8,800 Brown-Forman.................. 429,550
59,500 Campbell Soup Co.............. 2,975,000
316,600 Coca-Cola Co.................. 21,370,500
30,600 Conagra, Inc.................. 1,962,225
4,800 Coors Adolph Class B.......... 127,800
18,300 CPC International............. 1,689,319
21,700 Fortune Brands Inc............ 809,681
20,600 General Mills Co.............. 1,341,575
46,900 H.J. Heinz Co................. 2,163,263
19,500 Hershey Foods Corp............ 1,078,594
26,800 Kellogg Co.................... 2,294,750
197,700 Pepsico, Inc.................. 7,426,106
310,900 Philip Morris Cos., Inc....... 13,796,188
17,300 Quaker Oats Co................ 776,338
13,500 Ralston Purina Group.......... 1,109,531
61,200 Sara Lee Corp................. 2,547,450
47,200 Seagram....................... 1,899,800
20,400 Unilever NV................... 4,447,200
23,700 UST, Inc...................... 657,675
13,200 Whitman Corp.................. 334,125
14,800 Wrigley Wm Jr., Co............ 991,600
-------------
74,515,151
-------------
HEALTH CARE -- 11.7%
98,900 Abbott Laboratories........... 6,601,575
8,300 Allergan, Inc................. 264,044
*10,800 Alza Corp..................... 313,200
81,300 American Home Products
Corp........................ 6,219,450
*33,700 Amgen, Inc.................... 1,958,813
7,300 Bard (C.R.), Inc.............. 265,081
7,100 Bausch & Lomb, Inc............ 334,588
34,700 Baxter International, Inc..... 1,813,075
15,600 Becton, Dickinson & Co........ 789,750
*12,600 Beverly Enterprises, Inc...... 204,750
14,600 Biomet, Inc. ADR.............. 271,925
*24,700 Boston Scientific Corp........ 1,517,506
127,500 Bristol-Myers Squibb Co....... 10,327,500
13,900 Cardinal Health Inc........... 795,775
85,400 Columbia/HCA Healthcare
Corp........................ 3,357,288
9,400 Guidant Corp.................. 799,000
*43,700 Healthsouth Corp.............. 1,089,769
*20,700 Humana, Inc................... 478,688
169,500 Johnson & Johnson............. 10,911,563
70,200 Lilly Eli & Co................ 7,673,738
15,000 Loews Corp.................... 1,501,875
9,400 Mallinckrodt Group, Inc....... 357,200
8,000 Manor Care, Inc............... 261,000
30,500 Medtronic, Inc................ 2,470,500
153,400 Merck & Co., Inc.............. 15,876,900
5,500 Millipore Corp................ 242,000
16,000 Pall Corp..................... 372,000
82,000 Pfizer, Inc................... 9,799,000
64,700 Pharmacia & Upjohn, Inc....... 2,248,325
10,500 Pioneer Hi-Bred
International............... 840,000
94,000 Schering-Plough Corp.......... 4,500,250
30,000 Service Corp. International... 986,250
3,000 Shared Medical Systems
Corp........................ 162,000
*11,600 St. Jude Medical, Inc......... 452,400
*38,300 Tenet Healthcare Corp......... 1,132,244
23,400 United Health Care Corp....... 1,216,800
8,900 U.S. Surgical Corp............ 331,525
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
HEALTH CARE -- (CONTINUED)
34,500 Warner-Lambert Co............. $ 4,286,625
-------------
103,023,972
-------------
INDUSTRIAL MATERIALS -- 5.2%
14,200 Air Products & Chemicals
Corp........................ 1,153,750
28,800 Alcan Aluminum Ltd............ 999,000
22,200 Allegheny Teledyne, Inc....... 599,400
22,100 Aluminum Company of America... 1,665,788
*13,600 Armco, Inc.................... 52,700
5,300 Armstrong World Industries,
Inc......................... 388,888
5,400 Asarco, Inc................... 165,375
45,500 Barrick Gold Corp............. 1,001,000
28,600 Battle Mountain Gold Co....... 162,663
6,700 Bemis, Inc.................... 289,775
*14,200 Bethlehem Steel Corp.......... 148,213
6,200 Boise Cascade Corp............ 218,938
12,200 Champion International
Corp........................ 674,050
16,300 Crown Cork & Seal, Inc........ 871,031
11,900 Cyprus Amax Minerals.......... 291,550
30,900 Dow Chemical Co............... 2,692,163
143,200 du Pont (ei) de Nemours &
Co.......................... 9,003,700
9,900 Eastman Chemical Co........... 628,650
*17,700 Echo Bay Mines Ltd............ 101,775
8,200 Ecolab, Inc................... 391,500
18,300 Englehard Corp................ 383,156
*4,700 FMC Corp...................... 373,356
24,600 Freeport-McMoran Copper &
Gold, Inc. Class B.......... 765,675
11,600 Georgia-Pacific Corp.......... 990,350
9,200 Grace (WR) & Co............... 507,150
7,700 Great Lakes Chemical Corp..... 403,288
13,000 Hercules, Inc................. 622,375
18,700 Homestake Mining Co........... 244,269
21,400 Inco Co. Ltd.................. 643,338
6,200 Inland Steel Industries,
Inc......................... 161,975
38,200 International Paper Co........ 1,855,088
11,000 James River Corp.............. 407,000
13,800 Louisiana-Pacific Corp........ 291,525
6,600 Mead Corp..................... 410,850
74,800 Monsanto Co................... 3,221,075
18,100 Morton International, Inc..... 546,394
8,600 Nalco Chemical Co............. 332,175
19,893 Newmont Mining Corp........... 775,827
11,200 Nucor Corp.................... 632,800
6,600 Owens Corning Fiberglass
Corp........................ 284,625
8,300 Phelps Dodge Corp............. 707,056
30,500 Placer Dome, Inc.............. 499,438
3,700 Potlatch Corp................. 167,425
23,300 PPG Industries, Inc........... 1,354,313
19,900 Praxair....................... 1,114,400
9,300 Reynolds Metal Co............. 662,625
8,100 Rohm & Haas Co................ 729,506
21,900 Sherwin Williams.............. 676,163
12,700 Sigma Aldrich Corp............ 445,294
12,600 Stone Container Corp.......... 180,338
7,100 Temple-Inland, Inc............ 383,400
6,800 The B.F. Goodrich Co.......... 294,525
8,900 Union Camp Corp............... 445,000
16,200 Union Carbide Corp............ 762,413
10,800 USX - U.S. Steel Group........ 378,675
13,000 Westvaco Corp................. 408,688
25,200 Weyerhaeuser Co............... 1,310,400
7,000 Willamette Industries, Inc.... 490,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
109
<PAGE>
HARTFORD INDEX FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
INDUSTRIAL MATERIALS --
(CONTINUED)
12,300 Worthington Industries,
Inc......................... $ 225,244
-------------
46,587,153
-------------
MANUFACTURING -- 2.9%
3,600 Aeroquip-Vickers.............. 170,100
13,300 Avery Dennison
International............... 533,663
3,900 Ball Corp..................... 117,244
9,300 Case Corp..................... 640,538
24,400 Caterpillar, Inc.............. 2,619,950
5,100 Cincinnati Milacron, Inc...... 132,281
15,000 Cooper Industries............. 746,250
29,100 Corning, Inc.................. 1,618,688
5,800 Crane Co...................... 242,513
5,000 Cummins Engine, Inc........... 352,813
13,000 Dana Corp..................... 494,000
32,600 Deere & Co.................... 1,788,925
14,300 Dover Corp.................... 879,450
9,800 Eaton Corp.................... 855,663
4,200 Giddings & Lewis.............. 87,675
6,300 Harnischfeger Industries,
Inc......................... 261,450
16,100 Honeywell, Inc................ 1,221,588
31,500 Illinois Tool Works, Inc...... 1,573,031
13,900 Ingersoll-Rand Co............. 858,325
53,200 Minnesota Mining &
Manufacturing Co............ 5,426,400
1,000 Nacco Industries.............. 56,438
*9,300 Navistar International
Corp........................ 160,425
9,900 PACCAR, Inc................... 459,731
9,500 Parker-Hannifin Corp.......... 576,531
5,600 Perkin Elmer.................. 445,550
21,700 Tenneco, Inc.................. 980,569
*19,000 Thermo Electron Corp.......... 646,000
8,000 Timken Co..................... 284,500
21,200 Tyco International Ltd........ 1,474,725
-------------
25,705,016
-------------
MEDIA & SERVICES -- 2.9%
*63,800 Airtouch Communications....... 1,746,525
21,700 Cognizant Corp................ 878,850
41,400 Comcast Corp. Class A......... 884,925
12,300 Dow Jones & Co................ 494,306
21,700 Dun & Bradstreet Corp......... 569,625
17,900 Gannett Co., Inc.............. 1,767,625
9,100 Harcourt General, Inc......... 433,388
10,300 Interpublic Group............. 631,519
4,800 King World Productions,
Inc......................... 168,000
11,900 Knight Ridder, Inc............ 583,844
12,700 McGraw-Hill Cos., Inc......... 746,919
6,800 Meredith Corp................. 197,200
12,300 New York Times Co. (The) Class
A........................... 608,850
*84,500 Tele-Communications, Inc.
Class A..................... 1,256,938
72,400 Time Warner, Inc.............. 3,493,300
11,900 Times Mirror Co. Class A...... 657,475
15,700 Tribune Co.................... 754,581
*79,500 U.S. West Media Group......... 1,609,875
44,900 Viacom, Inc. Class B.......... 1,347,000
85,900 Walt Disney Co................ 6,893,475
-------------
25,724,220
-------------
REAL ESTATE -- 0.1%
2,700 Pulte Corp.................... 99,319
-------------
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
RETAIL -- 5.1%
31,900 Albertson's, Inc.............. $ 1,164,350
9,500 American Greetings Corp. Class
A........................... 352,688
18,600 American Stores Co............ 918,375
*19,100 Autozone...................... 450,044
13,500 Charming Shoppes, Inc......... 70,453
12,500 Circuit City Stores, Inc...... 444,531
*26,700 Costco Cos., Inc.............. 877,763
*50,500 CUC International............. 1,303,531
21,200 CVS Corp...................... 1,086,500
27,600 Dayton Hudson Corp............ 1,467,975
14,500 Dillard Department Stores,
Inc. Class A................ 502,063
*26,500 Federated Department Stores... 920,875
7,600 Giant Food, Inc............... 247,950
4,900 Great Atlantic & Pacific Tea
Co.......................... 133,219
61,100 Home Depot, Inc. (The)........ 4,212,081
31,400 J.C. Penney................... 1,638,688
4,900 Jostens, Inc.................. 131,075
*61,600 K Mart Corp................... 754,600
*32,100 Kroger Co..................... 930,900
5,000 Longs Drug Store.............. 130,938
22,000 Lowe's Cos., Inc.............. 816,750
31,200 May Department Stores Co.
(The)....................... 1,474,200
88,800 McDonalds Corp................ 4,290,150
4,700 Mercantile Stores, Inc........ 295,806
10,200 Nordstrom, Inc................ 500,438
7,700 Pep Boys--Manny, Moe, Jack.... 262,281
15,600 Rite Aid Corp................. 778,050
49,800 Sears Roebuck & Co............ 2,676,750
6,900 Tandy Corp.................... 386,400
35,500 The Gap Inc................... 1,380,063
34,500 The Limited Inc............... 698,625
19,800 TJX Cos., Inc................. 522,225
*37,000 Toys "R" Us Inc............... 1,295,000
291,900 Wal-Mart Stores, Inc.......... 9,869,869
31,300 Walgreen Co................... 1,678,463
19,100 Winn Dixie Stores Inc......... 711,475
*17,100 Woolworth (F.W.) Co........... 410,400
-------------
45,785,544
-------------
SOFTWARE & SERVICES -- 3.6%
6,100 Autodesk, Inc................. 233,706
37,200 Automatic Data Processing..... 1,748,400
46,200 Computer Associates Corp...... 2,572,763
*9,700 Computer Sciences Corp........ 699,613
57,000 First Data Corp............... 2,504,438
*6,100 Intergraph Corp............... 51,850
*153,000 Microsoft Corp................ 19,335,375
*44,000 Novell, Inc................... 305,250
*85,900 Oracle Systems Corp........... 4,327,213
*16,200 Parametric Tech Corp.......... 689,513
-------------
32,468,121
-------------
TRANSPORTATION -- 1.3%
*11,600 AMR Corp...................... 1,073,000
19,500 Burlington Northern Santa Fe
Corp........................ 1,752,563
5,000 Caliber System, Inc........... 186,250
27,600 CSX Corp...................... 1,531,800
9,300 Delta Airlines, Inc........... 762,600
*14,500 Federal Express Corp.......... 837,375
40,000 Laidlaw, Inc. Class B......... 552,500
15,900 Norfolk Southern Corp......... 1,601,925
9,700 Ryder Systems, Inc............ 320,100
18,500 Southwest Air Lines Co........ 478,688
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
110
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- (CONTINUED)
31,200 Union Pacific Corp............ $ 2,199,600
*10,000 USAir Group................... 350,000
-------------
11,646,401
-------------
UTILITIES -- 8.7%
23,800 Alltel Corp................... 795,813
23,900 American Electric Power Co.,
Inc......................... 1,003,800
69,900 Ameritech Corp................ 4,748,831
206,200 AT&T Corp..................... 7,229,888
18,800 Baltimore Gas and Electric.... 501,725
55,700 Bell Atlantic Corp............ 4,226,238
126,100 BellSouth Corp................ 5,847,888
19,300 Carolina Power and Lighting
Co.......................... 692,388
26,800 Central & Southwest Corp...... 569,500
20,100 Cinergy Corp.................. 699,731
29,900 Consolidated Edison NY........ 880,181
12,100 Consolidated Natural Gas
Co.......................... 651,131
22,900 Dominion Resources, Inc....... 838,713
18,500 DTE Energy Co................. 511,063
45,752 Duke Power Co................. 2,193,260
2,600 Eastern Enterprises........... 90,188
52,100 Edison International.......... 1,295,988
32,400 Enron Corp.................... 1,322,325
8,900 Enserch Corp.................. 198,025
29,400 Entergy Corp.................. 804,825
23,300 FPL Group, Inc................ 1,073,256
20,800 Frontier Corp................. 414,700
15,300 GPU, Inc...................... 548,888
122,400 GTE Corp...................... 5,370,300
29,800 Houston Industries, Inc....... 638,838
87,200 MCI Communications Corp....... 3,338,125
*18,400 Niagara Mohawk Power Corp..... 157,550
6,300 Nicor, Inc.................... 226,013
17,500 Noram Energy Corp............. 266,875
8,800 Northern States Power Co...... 455,400
56,000 NYNEX Corp.................... 3,227,000
19,400 Ohio Edison Co................ 423,163
3,500 Oneok, Inc.................... 112,656
10,800 Pacific Enterprises........... 363,150
37,500 Pacificorp.................... 825,000
28,300 Peco Energy Company........... 594,300
4,500 Peoples Energy Corp........... 168,469
<CAPTION>
SHARES MARKET
----------- VALUE
-------------
<C> <S> <C>
UTILITIES -- (CONTINUED)
52,500 PG & E Corp................... $ 1,273,125
20,700 PP&L Resources, Inc........... 412,706
30,300 Public Service Enterprises.... 757,500
116,660 SBC Communications, Inc....... 7,218,338
11,000 Sonat, Inc.................... 563,750
54,800 Sprint Corp................... 2,883,850
28,600 Texas Utilities Co............ 984,913
7,000 The Columbia Gas System
Inc......................... 456,750
85,700 The Southern Co............... 1,874,688
20,000 The Williams Cos.............. 875,000
61,100 U.S. West Communications
Group....................... 2,302,706
27,400 Unicom Corp................... 609,650
13,000 Union Electric Co............. 489,938
*110,200 Worldcom, Inc................. 3,526,400
-------------
77,534,498
-------------
Total common stocks........... $ 867,784,290
-------------
-------------
PRINCIPAL
AMOUNT
-----------
SHORT-TERM SECURITIES -- 2.6%
U.S. TREASURY BILL -- 0.1%
$ 200,000 4.93% due 07/24/97.......... $ 199,370
300,000 4.93% due 09/04/97.......... 297,330
200,000 5.00% due 08/21/97.......... 198,583
150,000 5.08% due 08/21/97.......... 148,921
225,000 5.40% due 12/11/97.......... 219,662
-------------
1,063,866
-------------
REPURCHASE AGREEMENT -- 2.5%
21,768,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9% and maturity
amount of $21,771,568....... 21,768,000
-------------
Total short-term securities... $ 22,831,866
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $636,116,571)...... 97.4 % $867,784,290
Total short-term securities (cost
$22,831,865)............................... 2.6 22,831,866
------ ------------
Total investments (cost $658,948,436)........ 100.0% $890,616,156
------ ------------
------ ------------
</TABLE>
* Non-income producing during period.
FUTURES CONTRACTS -- NOTE 2
The Fund had 49 September S&P 500 Index futures contracts open at June 30, 1997.
The contracts had a market value of $21,811,125.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
111
<PAGE>
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- --------------
<C> <S> <C>
COMMON STOCKS -- 91.7%
ARGENTINA -- 0.9%
839,900 Banco De Galicia.............. $ 5,586,003
475,900 Quilmes Industrial ADR........ 5,532,338
--------------
11,118,341
--------------
AUSTRALIA -- 3.6%
814,035 Amcor Ltd..................... 5,366,506
2,999,152 Boral Ltd..................... 9,369,155
707,438 Broken Hill Proprietary Co.
Ltd......................... 10,325,474
*2,231,546 Crown Ltd..................... 3,560,831
5,176,839 Goodman Fielder Ltd........... 7,562,496
1,790,000 Pioneer International Ltd..... 6,865,764
--------------
43,050,226
--------------
AUSTRIA -- 0.7%
66,470 OMV AG........................ 8,516,242
--------------
BELGIUM -- 0.5%
*54,605 Credit Communal Holding....... 5,870,606
--------------
BRAZIL -- 2.6%
139,400 Aracruz Cellulose S.A. ADR.... 2,840,275
2,744,000 Banco Itau S.A................ 1,567,566
2,390,000 Centrais Electicas SA......... 1,336,475
42,838,000 CAI Energetica Minas.......... 2,156,726
372,981,600 Copel Pfd. B.................. 6,686,692
120,500 Electrobras On ADR............ 3,369,144
19,812,000 Petroleo Brasileiro........... 5,428,964
52,105,000 Telecommunic Brasileiras...... 7,051,890
--------------
30,437,732
--------------
CANADA -- 2.6%
121,800 Alcan Aluminum Ltd............ 4,202,563
182,800 Canadian Imperial Bank........ 4,604,591
620,000 Canadian Pacific Ltd.......... 17,631,250
289,000 Canwest Global Communication
Corp........................ 4,280,813
--------------
30,719,217
--------------
CHILE -- 1.0%
82,800 Embot Andina ADR Class A...... 1,775,025
165,600 Embot Andina ADR Class B...... 3,456,900
178,000 Enersis S.A. ADR.............. 6,330,125
--------------
11,562,050
--------------
DENMARK -- 2.1%
274,900 TeleDanmark B ADR............. 7,181,763
341,200 UniDanmark A Registered....... 17,674,806
--------------
24,856,569
--------------
FINLAND -- 1.6%
469,900 Kesko......................... 6,622,062
765,000 Metsa-Serla Oy B.............. 6,229,864
244,300 Rauma Oy...................... 5,596,895
--------------
18,448,821
--------------
FRANCE -- 7.9%
*99,600 Assurances Generales.......... 3,186,013
255,590 Assurances Generales de
France...................... 8,175,835
274,300 Banque Nationale de Paris..... 11,315,991
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
FRANCE -- (CONTINUED)
155,110 Credit Commerical de France... $ 6,578,575
132,432 Havas SA...................... 9,552,983
69,430 Peugeot SA.................... 6,717,198
175,315 Remy Cointreau................ 4,213,459
291,928 Rhone-Poulenc SA.............. 11,933,825
35,965 Saint Gobain.................. 5,249,930
99,204 Societe Generale.............. 11,084,744
66,000 Societe Nationale Elf
Acquitaine.................. 7,127,313
76,303 Total SA...................... 7,720,061
--------------
92,855,927
--------------
GERMANY -- 4.5%
231,000 Bayer AG...................... 8,908,406
108,500 Degussa AG.................... 5,740,892
384,700 Deutsche Lufthansa............ 7,406,848
77,110 Hombach Holding AG............ 6,438,615
27,700 Karstadt AG................... 10,014,726
10,509 Mannesmann AG................. 4,698,050
*492,200 Metallgesellschaft AG......... 10,182,763
--------------
53,390,300
--------------
HONG KONG -- 3.0%
1,090,000 Hutchison Whampoa Ltd......... 9,426,533
1,479,000 Hysan Development Co.......... 4,362,195
270,000 New World Development Co.
Ltd......................... 1,610,113
552,000 Sun Hung Kai Properties....... 6,644,137
1,125,000 Swire Pacific Ltd............. 10,128,553
11,350,000 Tingyi Holding Corp........... 2,827,508
--------------
34,999,039
--------------
INDIA -- 0.3%
68,100 Ranbaxy Lab GDR............... 1,600,350
75,800 State Bank of India........... 1,980,275
--------------
3,580,625
--------------
INDONESIA -- 1.3%
*4,634,000 Bank Negara Indonesa BNI...... 2,954,020
181,000 Indosat ADR................... 5,418,688
1,098,000 Jaya Real Property -
Foreign..................... 1,478,902
960,000 Jaya Real Property - Foreign
Registered D................ 1,293,029
2,874,000 Kalbe Farma - Foreign
Registered.................. 3,841,455
--------------
14,986,094
--------------
IRELAND -- 1.5%
316,706 Allied Irish Banks PLC........ 2,421,997
177,600 Bank Of Ireland............... 1,955,260
4,447,000 Smurfit Jefferson Group....... 12,952,003
--------------
17,329,260
--------------
ITALY -- 3.7%
690,800 Arnoldo Mondadori Editore
SPA......................... 3,986,868
3,897,000 Fiat SPA...................... 14,016,831
1,223,600 Istituto Banco San Paolo...... 8,910,022
2,190,000 Stet.......................... 12,742,286
1,530,000 Telecom Italia SPA............ 4,576,961
--------------
44,232,968
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
112
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- 22.1%
872,000 Aisin Seiki Co................ $ 13,335,660
357,000 Asahi Organic Chemicals
Industry Co................. 1,850,048
9,000 Chudenko Corp................. 241,458
280,000 Dai Nippon Printing Co........ 6,337,497
67,000 Daibiru Corp.................. 808,005
580,000 Eisai Co. Ltd................. 10,998,861
247,000 Exedy Corp.................... 3,151,445
334,000 Fuji Machine Manufacturing
Co.......................... 12,113,079
142,000 Fukuda Denshi................. 2,916,193
518,000 Hitachi Ltd................... 5,794,283
81,000 Japan Associated Finance
Co.......................... 6,370,705
957,000 JGC Corp...................... 6,606,920
231,000 Kyudenko Corp................. 1,950,065
193,000 Mabuchi Motor Co.............. 11,216,024
380,000 Maruichi Steel Tube........... 6,309,533
166,000 Matsumotokiyoshi.............. 7,050,247
662,000 Matsushita Electric Industrial
Co.......................... 13,363,800
*2,211,000 Mazda Motor Corp.............. 7,728,740
100,000 Meiwa Estate.................. 2,184,741
899,000 Mitsubishi Heavy Industries... 6,905,713
239,000 Murata Manufacturing Co....... 9,524,073
338,000 Namco Ltd..................... 13,055,664
902,000 NGK Spark Plug................ 9,853,183
1,054,000 Nikko Securities Co........... 6,493,663
1,267,000 Nippon Express Co............. 10,131,126
25,730 Nippon Television Network
Corp........................ 10,343,264
570,000 Okumura....................... 3,023,594
20,100 Royal Ltd..................... 423,324
1,666,000 Sakura Bank................... 12,782,903
305,000 Sanwa Bank Ltd................ 4,531,153
103,000 Sawako Corp................... 1,872,236
259,000 Shimachu...................... 7,786,068
274,000 Sony Music Entertainment...... 12,858,338
112,000 Square Co. Ltd................ 5,530,017
1,213,000 Sumitomo Rubber Industries.... 8,172,881
174,900 Tokyo Steel Manufacturing..... 1,956,410
1,468,000 Toyo Ink Manufacturing Co..... 5,875,591
984,000 Yamato Kogyo Co. Ltd.......... 9,717,030
--------------
261,163,535
--------------
MALAYSIA -- 1.2%
*20,570 Bumi Armada Berhad............ 30,154
1,870,000 Land & General Holdings
Berhad...................... 2,148,570
1,290,000 Renong Berhad................. 1,686,606
839,000 Resorts World Berhad.......... 2,526,303
1,671,400 Sime Darby Berhad............. 5,562,495
922,000 Sungei Way Holdings........... 1,738,793
--------------
13,692,921
--------------
MEXICO -- 2.4%
670,800 Cemex S.A. - CPO.............. 2,875,703
675,200 Cemex S.A. De C.V............. 2,890,309
*887,700 Corporation Geo S.A. B........ 5,081,526
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
MEXICO -- (CONTINUED)
845,000 FEMSA S.A. B.................. $ 5,039,528
6,322,000 Grupo Financiero Bancomer B... 3,060,961
194,000 Grupo Televisa S.A............ 2,945,102
1,015,000 Kimberly Clark Corp........... 4,031,333
87,100 Panamerican Beverages Inc.
A........................... 2,863,413
--------------
28,787,875
--------------
NETHERLANDS -- 2.8%
65,090 Akzo Nobel NV................. 8,936,362
272,859 Ing Groep NV.................. 12,603,206
209,000 Polygram NV................... 10,986,964
--------------
32,526,532
--------------
NEW ZEALAND -- 1.0%
957,680 Air New Zealand Ltd. B........ 2,920,716
2,972,000 Brieley Investments........... 2,900,465
2,387,000 Carter Holt Harvey Ltd........ 6,163,590
--------------
11,984,771
--------------
NORWAY -- 1.5%
622,501 Nycomed ASA A................. 9,183,444
432,500 Saga Petroleum AS A........... 8,211,881
--------------
17,395,325
--------------
PERU -- 0.3%
156,200 Minas Buenaventura ADR B...... 3,075,188
--------------
PHILIPPINES -- 0.5%
59,800 Philippine Long Distance
ADR......................... 3,842,150
4,350,000 Pilipino Telephone............ 2,185,224
--------------
6,027,374
--------------
SINGAPORE -- 2.0%
506,875 Development Bank of
Singapore................... 6,380,914
1,250,000 Keppel Corp................... 5,551,282
970,000 Keppel Fels Ltd............... 3,283,421
1,240,000 Keppel Land Limited........... 3,295,451
515,000 United Overseas Bank.......... 5,294,611
--------------
23,805,679
--------------
SOUTH KOREA -- 0.1%
55,000 Cho Sun Brewery Co............ 1,436,936
--------------
SPAIN -- 0.5%
42,200 Empresa Nacional de
Electricidad ADR............ 3,549,424
81,400 Telefonica de Espana SA....... 2,357,815
--------------
5,907,239
--------------
SWEDEN -- 2.0%
238,560 Nordbanken AB................. 8,021,542
385,000 Pharmacia & Upjohn DR......... 12,995,354
137,720 Swedbank AB................... 3,063,461
--------------
24,080,357
--------------
SWITZERLAND -- 2.2%
*1,850 CIBA Specialty Chemcials...... 171,314
4,997 Nestle SA..................... 6,601,654
*6,000 Sairgroup..................... 6,733,203
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
113
<PAGE>
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SWITZERLAND -- (CONTINUED)
14,870 Sulzer AG..................... $ 12,749,940
--------------
26,256,111
--------------
THAILAND -- 0.5%
1,402,000 Land & House Co. Ltd.......... 2,922,524
310,000 Siam City Cement Public Co.
Ltd......................... 969,311
570,000 Siam Commercial............... 2,332,368
--------------
6,224,203
--------------
UNITED KINGDOM -- 14.8%
106,700 Amersham International PLC.... 2,832,415
1,639,700 Associated British Foods...... 14,149,625
1,030,000 Bank of Scotland.............. 6,582,642
425,600 Bass PLC...................... 5,192,032
545,400 Boc Group PLC................. 9,485,565
865,500 Boots Company PLC............. 10,133,581
129,000 British Petroleum Co. PLC..... 1,603,770
1,032,000 British Telecommunications
PLC......................... 7,660,310
2,546,000 BTR........................... 8,707,671
564,700 Bumah Castrol PLC............. 9,562,776
1,274,000 Carlton Communications........ 10,760,619
*8,005,200 Centrica PLC.................. 9,759,141
2,629,615 Cookson Group PLC............. 9,256,234
972,407 CN de la Rue PLC.............. 5,971,813
1,430,000 Guinness PLC.................. 13,994,105
1,252,900 National Grid Group PLC....... 4,577,019
805,084 Powergen PLC.................. 9,580,298
1,600,000 Rank Group PLC................ 10,132,262
623,842 Reckitt & Colman PLC.......... 9,297,624
<CAPTION>
SHARES MARKET
----------- VALUE
--------------
<C> <S> <C>
UNITED KINGDOM -- (CONTINUED)
769,381 Royal & Sun Alliance
Insurance................... $ 5,672,532
1,590,304 Sainsbury (J) PLC............. 9,647,381
--------------
174,559,415
--------------
Total common stocks........... $1,082,877,478
--------------
--------------
PREFERRED STOCKS -- 0.7%
FINLAND
120,000 Nokia Pref. ADS............... $ 8,850,000
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 7.6%
U.S. TREASURY BILL -- 0.8%
$10,000,000 5.00% due 12/11/97.......... $ 9,763,876
--------------
REPURCHASE AGREEMENTS -- 6.8%
79,735,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$79,748,162................. 79,735,000
--------------
Total short-term securities... $ 89,498,876
--------------
--------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $946,552,293)...... 91.7 % $1,082,877,478
Total preferred stock (cost $4,148,173)...... 0.7 8,850,000
Total short term securities (cost
$89,498,876)............................... 7.6 89,498,876
------ ---------------
Total investment (cost $1,040,199,342)....... 100.0% $1,181,226,354
------ ---------------
------ ---------------
</TABLE>
* Non-income producing during period.
FORWARD FOREIGN CURRENCY CONTRACTS -- NOTE 2 -- OUTSTANDING AT JUNE 30, 1997
<TABLE>
<CAPTION>
UNREALIZED
TOTAL AGGREGATE DELIVERY APPRECIATION
DESCRIPTION VALUE FACE VALUE DATE (DEPRECIATION)
- ------------------------------ ---------- ---------- --------- -------------
<S> <C> <C> <C> <C>
Canadian Dollar (Buy) $6,826,615 $6,801,870 09/18/97 $ 24,745
German Deutschemark (Buy) 17,941,512 18,233,894 09/18/97 (292,382)
Italian Lira (Buy) 2,029,924 2,041,918 09/19/97 (11,994)
Italian Lira (Buy) 254,296 257,975 09/19/97 (3,679)
Swedish Krona (Buy) 12,172,239 12,102,392 07/25/97 69,847
Swedish Krona (Sell) 5,792,984 5,795,614 07/25/97 2,630
-------------
$(210,833)
-------------
-------------
</TABLE>
FUTURES CONTRACTS -- NOTE 2
The Fund had 54 September TSE 35 Index futures contracts, 401 July OMX Stock
Index futures contracts, 19 September MIB 30 Index futures contracts, and 84
September DTD DAX Index futures contracts open at June 30, 1997. The contracts
had a market value of $1,115,652.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
114
<PAGE>
HARTFORD DIVIDEND AND GROWTH FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
- ----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- 97.7%
AEROSPACE & DEFENSE -- 2.7%
222,900 Loral Space &
Communications.............. $ 11,089,275
145,500 Northrop Grumman Corp......... 12,776,719
180,900 United Technologies Corp...... 15,014,700
--------------
38,880,694
--------------
BUSINESS SERVICES -- 0.2%
81,500 Browning Ferris Industries,
Inc......................... 2,709,875
--------------
COMPUTERS & OFFICE EQUIPMENT -- 2.6%
471,400 Xerox Corp.................... 37,181,675
--------------
CONSUMER DURABLES -- 2.2%
246,700 Ford Motor Co................. 9,312,925
170,400 Genuine Parts Co.............. 5,772,300
174,500 Goodyear Tire & Rubber Co..... 11,048,031
188,800 ITT Industries................ 4,861,600
--------------
30,994,856
--------------
CONSUMER NON-DURABLES -- 4.5%
306,200 Avon Products, Inc............ 21,606,238
366,000 Colgate Palmolive Co.......... 23,881,500
390,400 Kimberly Clark Corp........... 19,422,400
--------------
64,910,138
--------------
CONSUMER SERVICES -- 0.9%
159,800 Eastman Kodak Co.............. 12,264,650
--------------
ELECTRONICS -- 4.7%
368,500 Amp Inc....................... 15,384,875
794,960 General Electric.............. 51,970,510
--------------
67,355,385
--------------
ENERGY & SERVICES -- 11.3%
364,500 Ashland, Inc.................. 16,903,688
463,700 Chevron Corp.................. 34,284,810
254,000 Exxon Corp.................... 15,621,000
299,600 Pennzoil Co................... 22,994,300
415,200 Phillips Petroleum Co......... 18,165,000
374,800 Royal Dutch Petroleum......... 20,379,750
507,500 Sun Company, Inc.............. 15,415,313
628,500 USX-Marathon Group............ 18,147,938
--------------
161,911,799
--------------
FINANCIAL SERVICES -- 17.1%
367,400 Allstate Corp................. 26,820,200
309,300 American Express Co........... 23,042,850
503,200 Citicorp...................... 60,667,050
446,600 Compass Bancshares Inc........ 15,016,925
558,800 First Bank System, Inc........ 47,707,550
147,500 First Union Corp.............. 13,643,750
301,200 Marsh & McLennan Cos., Inc.... 21,498,150
463,800 Pacific Century Financial
Corp........................ 21,450,750
215,000 Peoples Heritage Financial
Group....................... 8,143,125
291,400 Pinnacle West Capital Corp.... 8,760,213
--------------
246,750,563
--------------
FOOD, BEVERAGE & TOBACCO --
8.3%
1,312,575 Flowers Industries, Inc....... 22,067,667
<CAPTION>
SHARES MARKET
- ----------- VALUE
--------------
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO --
(CONTINUED)
310,400 General Mills Co.............. $ 20,214,800
268,200 Interstate Bakeries........... 15,907,613
516,400 McCormick & Co................ 13,039,100
1,088,200 Philip Morris Cos., Inc....... 48,288,875
--------------
119,518,055
--------------
HEALTH CARE -- 12.4%
250,800 Abbott Laboratories........... 16,740,900
327,400 American Home Products
Corp........................ 25,046,100
311,300 Bard (C.R.), Inc.............. 11,304,081
321,200 Bristol-Myers Squibb Co....... 26,017,200
272,000 Merck & Co., Inc.............. 28,152,000
841,700 Pharmacia & Upjohn............ 29,249,075
330,600 Warner-Lambert Co............. 41,077,050
--------------
177,586,406
--------------
INDUSTRIAL MATERIALS -- 5.8%
185,800 Calgon Carbon Corp............ 2,577,975
48,800 Crompton & Knowles Corp....... 1,085,800
46,600 Dow Chemical Co............... 4,060,025
205,700 du Pont (ei) de Nemours &
Co.......................... 12,933,388
83,200 Eastman Chemical Co........... 5,283,200
148,200 Geon Co....................... 3,001,050
61,300 Imperial Chemical ADR......... 3,486,438
369,300 International Paper Co........ 17,934,131
181,400 Nalco Chemical Co............. 7,006,575
249,400 Unocal Capital Trust 14,278,150
226,000 Weyerhaeuser Co............... 11,752,000
--------------
83,398,732
--------------
MANUFACTURING -- 2.2%
118,800 Cooper Industries............. 5,910,300
159,400 Dana Corp..................... 6,057,200
186,200 Minnesota Mining &
Manufacturing Corp.......... 18,992,400
--------------
30,959,900
--------------
MEDIA & SERVICES -- 2.8%
336,600 American Radio................ 18,849,600
93,200 Cognizant Corp................ 3,774,600
179,200 Gannett Co., Inc.............. 17,696,000
--------------
40,320,200
--------------
REAL ESTATE -- 1.1%
390,400 Liberty Property Trust........ 9,711,200
276,600 Nationwide Health Properties
Inc......................... 6,085,200
--------------
15,796,400
--------------
RETAIL -- 3.0%
358,600 Mercantile Stores, Inc........ 22,569,388
375,200 Sears, Roebuck & Co........... 20,167,000
--------------
42,736,388
--------------
SOFTWARE & SERVICES -- 0.3%
49,500 Microsoft Corp. Class A....... 4,306,500
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
115
<PAGE>
HARTFORD DIVIDEND AND GROWTH FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
- ----------- VALUE
--------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TRANSPORTATION -- 1.1%
227,800 Union Pacific Corp............ $ 16,059,900
--------------
UTILITIES -- 14.5%
170,200 Ameritech Corp................ 11,562,963
204,700 AT&T Corp..................... 7,177,294
470,100 BellSouth Corp................ 21,800,888
218,200 Cinergy Corp.................. 7,596,088
191,850 DGE, Inc...................... 5,419,763
260,000 DPL, Inc...................... 6,402,500
357,300 Duke Energy Corp.............. 17,128,069
284,300 Edison International.......... 7,071,963
252,000 GPU Inc....................... 9,040,500
196,400 Illinova Corp................. 4,320,800
100,000 MCN Energy Group Inc.......... 3,062,500
152,200 N E Electric System........... 5,631,400
192,200 NIPSCO Industries Inc......... 7,940,263
213,900 NYNEX Corp.................... 12,325,988
282,500 Pacific Enterprises........... 9,499,063
73,500 Powergen PLC SP ADR........... 3,564,750
95,700 Public Service Co. of
Colorado.................... 3,971,550
319,600 SBC Communications Inc........ 19,775,250
120,400 Scana Corp.................... 2,987,425
<CAPTION>
SHARES MARKET
- ----------- VALUE
--------------
<C> <S> <C>
UTILITIES -- (CONTINUED)
226,300 Sprint Corp................... $ 11,909,038
335,500 Texas Utilities............... 11,553,781
358,800 The Southern Co............... 7,848,750
271,600 U.S. West Communications
Group....................... 10,235,925
--------------
207,826,511
--------------
Total common stocks........... $1,401,468,627
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
SHORT-TERM SECURITIES -- 2.3%
REPURCHASE AGREEMENT
33,644,000 Interest in repurchase
agreements (U.S. Treasury
obligations), in a joint
trading account dated
06/30/97 due 07/01/97 with a
yield of 5.9427% and
maturity amount of
$33,649,554................. $ 33,644,000
--------------
Total common stocks (cost $1,117,531,094).... 97.7 % $1,401,468,627
Total short-term securities (cost
$33,644,000)............................... 2.3 33,644,000
------ --------------
Total investment (cost $1,151,175,094)....... 100.0 % $1,435,112,627
------ --------------
------ --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
116
<PAGE>
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS -- 54.6%
ARGENTINA -- 0.6%
69,000 Banco De Galicia........................ $ 458,906
39,800 Quilmes Industrial ADR.................. 462,675
-------------
921,581
-------------
AUSTRALIA -- 1.9%
63,750 Amcor Ltd............................... 420,270
221,433 Boral Ltd............................... 691,742
55,952 Broken Hill Proprietary Co. Ltd......... 816,654
*185,051 Crown Ltd............................... 295,282
329,367 Goodman Fielder Ltd..................... 481,150
134,000 Pioneer International Ltd............... 513,973
-------------
3,219,071
-------------
AUSTRIA -- 0.5%
6,190 OMV AG.................................. 793,073
-------------
BELGIUM -- 0.5%
7,686 Credit Communal Holding................. 826,325
-------------
BRAZIL -- 1.6%
10,000 Aracruz Cellulose S.A. ADR.............. 203,750
271,000 Banco Itau S.A. Pfd..................... 154,814
125,000 Centrais Eletricas S.A.................. 69,899
3,707,000 Cia Energetica Minas.................... 186,633
29,753,300 Copel Pfd. Class B...................... 533,408
6,875 Electrobras On ADR...................... 192,223
12,000 Minas Buenaventura ADR Class B.......... 236,250
1,881,000 Petrol Brasileiro....................... 515,439
3,610,000 Telecomunic Brasileiras................. 488,577
-------------
2,580,993
-------------
CANADA -- 1.5%
10,500 Alcan Aluminum Ltd...................... 362,290
15,800 Canadian Imperial Bank.................. 397,990
46,900 Canadian Pacific Ltd.................... 1,333,719
25,300 Canwest Global Communication Corp....... 374,756
-------------
2,468,755
-------------
CHILE -- 0.6%
6,100 Embot Andina ADR Class A................ 130,769
12,200 Embot Andina ADR Class B................ 254,675
16,400 Enersis S.A. ADR........................ 583,225
-------------
968,669
-------------
DENMARK -- 1.4%
22,000 Tele Danmark ADR Class B................ 574,750
30,100 UniDanmark A Registered................. 1,693,226
-------------
2,267,976
-------------
FINLAND -- 0.9%
40,000 Kesko................................... 563,700
59,000 Metsa-Serla Oy B........................ 480,473
18,000 Rauma Oy................................ 412,379
-------------
1,456,552
-------------
FRANCE -- 4.4%
*4,800 Assurances Generales.................... 153,543
23,290 Assurances Generales de France.......... 745,003
24,000 Banque Nationale de Paris............... 990,098
13,360 Credit Commercial de France............. 566,629
12,115 Havas S.A............................... 873,916
5,620 Peugeot S.A............................. 543,723
<CAPTION>
SHARES MARKET
- ------------ VALUE
-------------
<C> <S> <C>
FRANCE -- (CONTINUED)
18,516 Remy Cointreau.......................... $ 445,007
21,931 Rhone-Poulenc S.A....................... 896,525
8,467 Societe Generale........................ 946,076
4,200 Societe Nationale Elf Aquitaine......... 453,556
5,989 Total S.A............................... 605,945
-------------
7,220,021
-------------
GERMANY -- 2.9%
19,500 Bayer AG................................ 752,008
7,600 Degussa AG.............................. 402,127
32,000 Deutsche Lufthansa...................... 616,114
9,560 Hornbach Holdings Pref (Non-Vtg)........ 798,251
2,985 Karstadt AG............................. 1,079,204
870 Mannesmann AG........................... 388,934
*34,100 Metallgesellschaft AG................... 705,470
-------------
4,742,108
-------------
HONG KONG -- 1.7%
92,000 Hutchison Whampoa Ltd................... 795,634
123,000 Hysan Development Co.................... 362,779
28,000 New World Development Co. Ltd........... 166,975
39,000 Sun Hung Kai Properties................. 469,423
84,000 Swire Pacific Ltd....................... 756,265
1,268,000 Tingyi Holding Corp..................... 315,884
-------------
2,866,960
-------------
INDIA -- 0.2%
4,300 Ranbaxy Lab GDR......................... 101,050
8,600 State Bank of India GDR................. 224,675
-------------
325,725
-------------
INDONESIA -- 0.7%
*358,000 Bank Negara Indonesa BNI................ 228,213
12,000 Indosat ADR............................. 359,250
38,000 Jaya Real Property - Foreign............ 51,182
60,000 Jaya Real Property - Foreign Reg. D..... 80,814
314,000 Kalbe Farma - Foreign Registered........ 419,700
-------------
1,139,159
-------------
IRELAND -- 1.1%
41,923 Allied Irish Banks PLC.................. 320,605
20,000 Bank Of Ireland......................... 220,187
433,000 Smurfit Jefferson Group................. 1,261,124
-------------
1,801,916
-------------
ITALY -- 2.2%
83,800 Arnoldo Mondadori Editore SPA........... 483,641
354,000 Fiat SPA................................ 1,273,276
103,900 Istituto Banco San Paolo................ 756,580
158,500 Stet.................................... 922,216
62,000 Telecom Italia SPA...................... 185,472
-------------
3,621,185
-------------
JAPAN -- 13.4%
74,000 Aisin Seiki Co. Ltd..................... 1,131,696
16,000 Asahi Organic Chemicals Industry Co..... 82,915
22,000 Dai Nippon Printing Co.................. 497,946
3,000 Daibiru Corp............................ 36,179
49,000 Eisai Co., Ltd.......................... 929,214
24,000 Exedy Corp.............................. 306,213
37,000 Fuji Machine Mfg. Co.................... 1,341,868
12,000 Fukuda Denshi........................... 246,439
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
117
<PAGE>
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
- ------------ VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
43,000 Hitachi Ltd............................. $ 480,993
4,000 Japan Associated Finance Co............. 314,603
81,000 JGC Corp................................ 559,206
11,000 Kyudenko Corp........................... 92,860
24,000 Mabuchi Motor Co........................ 1,394,739
43,000 Maruichi Steel Tube..................... 713,973
14,000 Matsumotokiyoshi........................ 594,599
52,000 Matsushita Electric Co.................. 1,049,724
*192,000 Mazda Motor Corp........................ 671,152
6,000 Meiwa Estate............................ 131,084
83,000 Mitsubishi Heavy Industries............. 637,569
21,000 Murata Manufacturing Co................. 836,843
28,000 Namco Ltd............................... 1,081,534
71,000 NGK Spark Plug.......................... 775,583
84,000 Nikko Securities Co..................... 517,521
104,000 Nippon Express Co....................... 831,600
1,890 Nippon Television Network Corp.......... 759,766
41,000 Okumura................................. 217,487
1,600 Royal Ltd............................... 33,697
135,000 Sakura Bank............................. 1,035,829
33,000 Sanwa Bank Ltd.......................... 490,256
8,000 Sawako Corp............................. 145,416
23,000 Shimachu................................ 691,427
24,000 Sony Corp............................... 1,126,278
13,000 Square Co. Ltd.......................... 641,877
86,000 Sumitomo Rubber Industries.............. 579,446
11,100 Tokyo Steel Manufacurting Co............ 124,163
106,000 Toyo Ink Manufacturing Co............... 424,259
82,000 Yamato Kogyo Co......................... 809,752
-------------
22,335,706
-------------
MALAYSIA -- 0.7%
*1,683 Bumi Armada Berhad...................... 2,467
153,000 Land & General Holdings Berhad.......... 175,792
113,000 Renong Berhad........................... 147,741
69,000 Resort World Berhad..................... 207,765
153,000 Sime Darby Berhad....................... 509,191
76,000 Sungei Way Holdings..................... 143,328
-------------
1,186,284
-------------
MEXICO -- 1.6%
67,700 Cemex S.A. - CPO........................ 290,228
31,300 Cemex S.A. De C.V....................... 133,985
*66,100 Corporation Geo S.A. B.................. 378,381
73,000 FEMSA S.A. B............................ 435,368
613,000 Grupo Financiero Bancomer B............. 296,800
16,900 Grupo Televisa S.A...................... 256,558
136,000 Kimberly Clark Corp..................... 540,159
7,600 Panamerican Beverages Inc............... 249,850
-------------
2,581,329
-------------
NETHERLANDS -- 1.5%
4,960 Akzo Nobel NV........................... 680,970
19,477 Ing Groep NV............................ 899,632
16,700 Polygram NV............................. 877,906
-------------
2,458,508
-------------
NEW ZEALAND -- 0.6%
93,600 Air New Zealand Ltd. B.................. 285,460
247,000 Brierley Investments.................... 241,055
182,000 Carter Holt Harvey Ltd.................. 469,951
-------------
996,466
-------------
<CAPTION>
SHARES MARKET
- ------------ VALUE
-------------
<C> <S> <C>
NORWAY -- 1.0%
68,944 Nycomed ASA A........................... $ 1,017,096
32,000 Saga Petroleum AS A..................... 607,584
-------------
1,624,680
-------------
PHILIPPINES -- 0.2%
4,100 Philippine Long Distance ADR............ 263,425
260,000 Pilipino Telephone...................... 130,611
-------------
394,036
-------------
SINGAPORE -- 1.1%
47,000 Development Bank of Singapore........... 591,670
86,250 Keppel Corp............................. 383,038
60,000 Keppel Fels Ltd......................... 203,098
80,000 Keppel Land Limited..................... 212,610
37,000 United Overseas Bank.................... 380,390
-------------
1,770,806
-------------
SOUTH KOREA -- 0.2%
10,900 Cho Sun Brewery Co...................... 284,775
-------------
SPAIN -- 0.3%
3,550 Empresa Nacional de Electricidad........ 298,589
7,000 Telefonica de Espana S.A................ 202,761
-------------
501,350
-------------
SWEDEN -- 1.3%
20,250 Nordbanken AB........................... 680,903
36,500 Pharmacia & Upjohn DR................... 1,232,027
12,950 Swedbank AB............................. 288,061
-------------
2,200,991
-------------
SWITZERLAND -- 1.2%
*140 Ciba Specialty Chemicals................ 12,964
428 Nestle SA............................... 565,441
*400 Sairgroup............................... 448,880
1,065 Sulzer AG - Part Certified.............. 913,160
-------------
1,940,445
-------------
THAILAND -- 0.3%
128,200 Land & House Co. Ltd.................... 267,238
26,000 Siam City Cement Public Co. Ltd......... 81,297
40,000 Siam Commercial......................... 163,675
-------------
512,210
-------------
UNITED KINGDOM -- 8.5%
8,500 Amersham International PLC.............. 225,638
145,100 Associated British Foods................ 1,252,126
100,000 Bank of Scotland........................ 639,091
37,700 Bass PLC................................ 459,914
44,900 Boc Group PLC........................... 780,898
79,400 Boots Co. PLC........................... 929,643
11,900 British Gas PLC......................... 147,945
76,000 British Telecom Co. PLC................. 564,131
214,000 BTR..................................... 731,909
41,700 Burmah Castrol PLC...................... 706,159
78,000 Carlton Communications PLC.............. 658,813
*601,400 Centrica PLC............................ 733,167
93,801 CN de la Rue PLC........................ 576,057
186,169 Cookson Group PLC....................... 655,314
134,000 Guinness PLC............................ 1,311,336
60,300 National Grid Group PLC................. 220,284
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
118
<PAGE>
<TABLE>
<CAPTION>
SHARES MARKET
- ------------ VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UNITED KINGDOM -- (CONTINUED)
56,990 Powergen PLC............................ $ 678,167
144,000 Rank Group PLC.......................... 911,904
40,720 Reckitt & Colman PLC.................... 606,883
58,469 Royal & Sun Alliance Insurance.......... 431,080
140,104 Sainsbury (J) PLC....................... 849,923
-------------
14,070,382
-------------
Total common stocks..................... $ 90,078,037
-------------
-------------
PREFERRED STOCK -- 0.4%
FINLAND
9,700 Nokia Corp. Pref. ADS................... $ 715,375
-------------
-------------
<CAPTION>
PRINCIPAL
AMOUNT**
- ------------
<C> <S> <C>
FOREIGN CORPORATE BONDS -- 1.5%
AUSTRALIA -- 0.4%
FNMA-Global MTN
820,000 6.50% due 07/10/02.................... $ 613,525
-------------
CANADA -- 0.4%
Centra Gas Ontario
465,000 7.80% due 12/01/06.................... 361,859
Trans-Canada Pipelines
415,000 8.55% due 02/01/06.................... 340,289
-------------
702,148
-------------
FRANCE -- 0.4%
Credit National
1,650,000 7.25% due 05/14/03.................... 309,326
Electricite Defrance
32,000,000 4.75% due 12/05/01.................... 314,145
-------------
623,471
-------------
UNITED KINGDOM -- 0.3%
British Aero
210,000 11.88% due 12/29/08................... 456,258
-------------
Total foreign corporate bonds........... $ 2,395,402
-------------
-------------
FOREIGN GOVERNMENT BONDS -- 24.3%
AUSTRALIA -- 0.2%
Australia Commonwealth
385,000 9.50% due 08/15/03.................... $ 328,653
-------------
CANADA -- 0.2%
Quebec Province
1,660,000 6.88% due 04/22/04.................... 305,773
-------------
FRANCE -- 4.1%
France O.A.T.
2,950,000 6.00% due 10/25/25.................... 469,111
9,700,000 8.50% due 11/25/02.................... 1,945,804
2,626,000 9.50% due 01/25/01.................... 524,222
France BTAN
22,500,000 4.75% due 03/12/02.................... 3,865,014
-------------
6,804,151
-------------
GERMANY -- 6.0%
German Federal Unity
2,425,000 6.25% due 01/04/24................... 1,353,938
2,500,000 6.25% due 04/26/06................... 1,501,692
9,515,000 6.875% due 05/12/05................... 5,962,799
<CAPTION>
PRINCIPAL MARKET
AMOUNT** VALUE
- ------------ -------------
<C> <S> <C>
FOREIGN GOVERNMENT BONDS -- (CONTINUED)
GERMANY -- (CONTINUED)
1,620,000 7.50% due 11/11/04.................... $ 1,052,398
-------------
9,870,827
-------------
ITALY -- 3.0%
Italy BTPS
335,000,000 8.50% due 01/01/99................... 203,048
260,000,000 8.50% due 04/01/99................... 158,246
360,000,000 8.50% due 08/01/99................... 830,867
100,000,000 9.00% due 10/01/03................... 1,379,348
850,000,000 9.50% due 02/01/01................... 550,714
200,000,000 9.50% due 05/01/01................... 781,781
275,000,000 10.50% due 07/15/00................... 180,694
225,000,000 12.00% due 06/01/01................... 856,672
-------------
4,941,370
-------------
JAPAN -- 1.1%
Austria Republic
75,000,000 5.00% due 01/22/01.................... 733,254
50,000,000 6.25% due 10/16/03.................... 540,997
Japan Government #33B
51,750,000 3.80% due 09/20/16.................... 494,209
-------------
1,768,460
-------------
NETHERLANDS -- 0.2%
Netherlands Government
705,000 7.00% due 06/15/05.................... 396,700
-------------
NEW ZEALAND -- 2.0%
New Zealand Government
4,400,000 10.00% due 03/15/02................... 3,364,300
-------------
PORTUGAL -- 0.5%
Portugal Republic
90,000,000 4.50% due 03/15/02................... 882,944
-------------
SPAIN -- 1.5%
Spanish Government
330,000,000 7.90% due 02/28/02................... 2,457,890
-------------
SWEDEN -- 4.8%
Sweden Kingdom
8,300,000 5.50% due 04/12/02................... 1,045,092
13,500,000 9.00% due 04/20/09................... 2,060,866
32,400,000 10.25% due 05/05/00................... 4,740,049
-------------
7,846,007
-------------
UNITED KINGDOM -- 0.7%
FFRESH MB 1-A2 144A
400,000 11.13% due 10/05/58................... 840,680
United Kingdom Treasury Gilt
225,000 7.75% due 09/08/06.................... 389,563
-------------
1,230,243
-------------
Total foreign government bonds.......... $ 40,197,318
-------------
-------------
<CAPTION>
SUPRANATIONAL -- 2.0%
<C> <S> <C>
Asian Development Bank
120,000,000 5.00% due 02/02/03.................... $ 1,212,531
Interamerican Development Bank
100,000,000 6.00% due 10/30/01.................... 1,029,013
International Bank for Recon &
Development
100,000,000 4.75% due 12/20/04.................... 1,021,913
-------------
Total supranational..................... $ 3,263,457
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
119
<PAGE>
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
U.S TREASURIES & FEDERAL AGENCIES -- 2.0%
U.S. TREASURY BONDS -- 0.8%
$ 870,000 6.25% due 08/15/23................... $ 805,022
360,000 12.00% due 08/15/13................... 506,925
-------------
1,311,947
-------------
U.S. TREASURY NOTE -- 1.2%
2,000,000 5.25% due 12/31/97................... 1,996,876
-------------
Total U.S. treasuries & Federal
agencies.............................. $ 3,308,823
-------------
-------------
SHORT-TERM SECURITIES -- 15.2%
COMMERCIAL PAPER -- 2.7%
GMAC Discount Note
1,500,000 5.68% due 12/02/97................... $ 1,463,553
KFW International Finance
1,500,000 5.64% due 11/26/97................... 1,465,220
Merrill Lynch & Co.
1,500,000 5.58% due 07/14/97................... 1,496,978
-------------
4,425,751
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
REPURCHASE AGREEMENT -- 12.5%
$ 20,741,000 Interest in repurchase agreements (U.S.
Treasury obligations), in a joint
trading account dated 06/30/97 due
07/01/97 with a yield of 5.9427% and
maturity amount of $20,744,424........ $ 20,741,000
-------------
Total short-term securities............. $ 25,166,751
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $81,539,457)....... 54.6 % $ 90,078,037
Total preferred stock (cost $411,148)........ 0.4 715,375
Total foreign corporate bonds (cost
$2,458,112)................................ 1.5 2,395,402
Total foreign government bonds (cost
$40,583,297)............................... 24.3 40,197,318
Total supranational (cost $3,342,445)........ 2.0 3,263,457
Total U.S. treasuries & Federal agencies
(cost $3,283,621).......................... 2.0 3,308,823
Total short-term securities (cost
$25,166,751)............................... 15.2 25,166,751
------ --------------
Total investments (cost $156,784,831)........ 100.0% $ 165,125,163
------ --------------
------ --------------
</TABLE>
* Non-income producing during period.
** Principal amount in currency of country indicated.
FORWARD FOREIGN CURRENCY CONTRACTS -- NOTE 2 -- OUTSTANDING AT JUNE 30, 1997
<TABLE>
<CAPTION>
UNREALIZED
AGGREGATE DELIVERY APPRECIATION
DESCRIPTION TOTAL VALUE FACE VALUE DATE (DEPRECIATION)
- ------------------------------ ----------- ----------- --------- -------------
<S> <C> <C> <C> <C>
Australian Dollars (Buy) $ 508,714 $ 505,449 09/30/97 $ 2,265
Australian Dollars (Sell) 891,134 888,001 07/31/97 (3,133)
Australian Dollars (Sell) 58,052 57,393 07/31/97 (659)
British Pounds (Sell) 1,668,772 1,669,652 07/31/97 880
Canadian Dollars (Buy) 505,675 503,842 09/18/97 1,833
Canadian Dollars (Buy) 1,743,299 1,736,362 08/20/97 6,937
Canadian Dollars (Buy) 1,598,024 1,587,302 08/20/97 10,722
Canadian Dollars (Sell) 711,021 703,518 07/31/97 (7,503)
Finnish Markkas (Buy) 1,674,844 1,689,811 08/12/97 (14,967)
French Franc (Sell) 7,396,838 7,469,890 07/31/97 73,052
German Deutschemarks (Buy) 1,067,947 1,085,351 09/18/97 (17,404)
German Deutschemarks (Sell) 9,827,586 9,934,179 07/31/97 106,593
Italian Lira (Buy) 427,352 429,877 09/19/97 (2,525)
Italian Lira (Buy) 53,536 54,310 09/19/97 (774)
Italian Lira (Sell) 4,929,627 4,965,389 07/31/97 35,762
Japanese Yen (Sell) 5,751,863 5,774,648 07/31/97 22,785
Netherlands Guilder (Sell) 396,323 401,241 07/31/97 4,918
New Zealand Dollar (Sell) 3,358,057 3,375,910 07/31/97 17,853
Spanish Pesetas (Sell) 2,459,751 2,489,447 07/31/97 29,696
Swedish Kronas (Buy) 849,932 845,055 07/25/97 4,877
Swedish Kronas (Buy) 303,139 303,276 07/25/97 137
Swedish Kronas (Sell) 7,858,005 7,885,573 07/31/97 27,568
Swiss Franc (Sell) 1,667,469 1,693,873 08/12/97 26,404
-------------
$ 325,317
-------------
-------------
</TABLE>
FUTURES CONTRACTS -- NOTE 2
The Fund had 4 September TSE 35 Index futures contracts, 10 Septrember ALL ORDS
Index futures contracts, 4 July Hang Seng Index futures contracts, 28 July OMX
Stock Index futures contracts, 4 September MIB 30 Index futures contracts, 5
September DTD DAX Index futures contracts, 19 DTB futures contracts and 19
September TSE 10 Y JGB futures contracts open at June 30, 1997. The contracts
had a market value of $261,621.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
120
<PAGE>
HARTFORD SMALL COMPANY FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS -- 79.7%
AEROSPACE & DEFENSE -- 1.9%
*37,300 Gulfstream Aerospace Corp............... $ 1,100,350
17,500 Precision Castparts Corp................ 1,043,438
-------------
2,143,788
-------------
BUSINESS SERVICES -- 3.7%
*19,900 American Residential Services........... 462,675
*37,600 Borg-Warner Security.................... 672,100
*27,100 Ingram Micro Inc. Class A............... 653,788
*22,000 Services Experts Inc.................... 539,000
*27,600 Tetra Technologies...................... 683,100
*35,000 U.S. Office Products Co................. 1,069,688
-------------
4,080,351
-------------
COMMUNICATION EQUIPMENT -- 4.6%
*48,100 Gilat Satellite Network................. 1,599,325
*30,300 Natural Microsystems Corp............... 1,090,800
*27,200 Oak Industries, Inc..................... 782,000
*131,300 Transwitch Corp......................... 1,116,050
*38,600 Videoserver, Inc........................ 511,450
-------------
5,099,625
-------------
CONSUMER SERVICES -- 3.3%
26,000 Callaway Golf Co........................ 923,000
*64,500 Golden Bear Golf, Inc................... 765,938
*59,900 Prime Hospitality Corp.................. 1,183,025
*30,000 WMS Industries Inc...................... 751,875
-------------
3,623,838
-------------
ENERGY & SERVICES -- 1.7%
*20,600 Falcon Drilling Co...................... 1,187,075
*41,600 Input Output Inc........................ 754,000
-------------
1,941,075
-------------
FINANCIAL SERVICES -- 19.5%
36,100 Compass Bancshares Inc.................. 1,213,856
28,200 Cullen/Frost Bankers Inc................ 1,194,975
13,200 Finova Group Inc........................ 1,009,800
*52,700 Firstplus Financial Group............... 1,791,800
*25,900 Frontier Insurance Group................ 1,677,025
*30,000 Hamilton Bancorp Inc.................... 802,500
*49,900 Investment Technology Group............. 1,341,063
*56,200 ITLA Capital Corp....................... 913,250
11,300 Jefferies Group Inc..................... 644,100
28,000 Legg Mason, Inc......................... 1,506,750
*20,700 MMI Companies, Inc...................... 540,788
18,500 Morgan Keegan........................... 367,688
42,530 Peoples Heritage Financial Group........ 1,610,824
29,000 Piper Jaffray Cos....................... 594,500
*22,700 Prepaid Legal Services.................. 479,538
32,800 Raymond James Financial Inc............. 897,900
23,900 Reinsurance Group of America............ 1,374,250
66,800 Resource Bancshares..................... 1,319,300
*35,000 UniBanco GDR............................ 1,299,375
21,100 Wilmington Trust Corp................... 965,325
-------------
21,544,607
-------------
<CAPTION>
SHARES MARKET
- ----------- VALUE
-------------
<C> <S> <C>
FOOD, BEVERAGE & TOBACCO -- 2.3%
*20,800 Consolidated Cigar Holdings Inc......... $ 577,200
*31,200 General Cigar Holdings Inc.............. 918,450
*23,600 Robert Mondavi Corp. Class B............ 1,115,100
-------------
2,610,750
-------------
HEALTH CARE -- 10.3%
*20,500 Genesis Health Ventures, Inc............ 691,875
*30,500 IDX Systems Corp........................ 1,052,250
*50,600 Magainin Pharmaceuticals, Inc........... 366,850
*49,900 Magellan Health Services, Inc........... 1,472,050
38,000 McKesson Corp........................... 2,945,000
*47,500 Medpartners, Inc........................ 1,027,188
*47,200 Multicare Cos........................... 1,292,100
*49,900 NABI, Inc............................... 330,588
*21,600 PerSepctive Biosystems Inc.............. 132,300
*51,600 Vencor, Inc............................. 2,180,100
-------------
11,490,301
-------------
INDUSTRIAL MATERIALS -- 2.5%
*52,000 Noble Drilling Corp..................... 1,173,250
26,000 Pittston Burlington Group............... 731,250
*20,000 UCAR International Inc.................. 915,000
-------------
2,819,500
-------------
MANUFACTURING -- 2.5%
*64,500 Ballantyne of Omaha..................... 1,161,000
*17,600 Doncasters PLC SP ADR................... 407,000
44,900 Memtec Ltd. ADR......................... 1,212,300
-------------
2,780,300
-------------
MEDIA & SERVICES -- 2.7%
28,000 McClatchy Newspapers Class A............ 822,500
*49,600 Pegasus Communications Corp............. 551,800
*80,000 Playboy Enterprises Class B............. 925,000
*46,700 Western Wireless Corp. Class A.......... 741,363
-------------
3,040,663
-------------
RETAIL -- 4.1%
*48,000 Gadzooks Inc............................ 936,000
*66,300 Golden Books Family Entertainment....... 828,750
*19,600 Hot Topic Inc........................... 441,000
*65,000 Saks Holding, Inc....................... 1,625,000
*55,200 Urban Outfitters, Inc................... 772,800
-------------
4,603,550
-------------
SOFTWARE & SERVICES -- 11.8%
*26,200 Bisys Group, Inc........................ 1,093,850
*38,750 Boole & Babbage, Inc.................... 823,438
*27,300 Cadence Design Systems Inc.............. 914,550
*122,300 Cayenne Software Inc.................... 405,119
*29,100 Ceridian Corp........................... 1,229,475
*40,600 DST Systems, Inc........................ 1,352,488
*39,700 IKOS Systems, Inc....................... 848,588
*49,900 Mercury Interactive Corp................ 742,263
*83,600 Optika Imaging Systems.................. 418,000
*40,600 Platinum Technology Inc................. 537,950
*23,700 Policy Management Systems Group......... 1,113,900
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
121
<PAGE>
HARTFORD SMALL COMPANY FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
- ----------- VALUE
-------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SOFTWARE & SERVICES -- (CONTINUED)
*55,800 Premenos Technology Corp................ $ 474,300
*57,300 Rational Software Corp.................. 963,356
*58,200 Simulation Services Inc................. 887,550
*43,500 Sterling Software, Inc.................. 1,359,375
-------------
13,164,202
-------------
TRANSPORTATION -- 6.2%
48,900 Air Express International............... 1,943,775
*39,500 Budget Group Inc........................ 1,362,750
*64,000 M.S. Carriers........................... 1,608,000
*33,000 Swift Transportation.................... 973,500
50,000 Werner Enterprises Inc.................. 968,750
-------------
6,856,775
-------------
UTILITIES -- 2.6%
*84,000 Calpine Corp............................ 1,596,000
*38,600 McLeod Inc. Class A..................... 1,302,750
*300 Peoples Telephone Co., Inc.............. 1,030
-------------
2,899,780
-------------
Total common stocks..................... $ 88,699,105
-------------
-------------
PREFERRED STOCKS -- 0.8%
CONSUMER SERVICES
27,800 AMC Entertainment....................... $ 882,650
-------------
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- -------------
<C> <S> <C>
CONVERTIBLE BONDS -- 0.8%
HEALTH CARE
Sunrise Assisted Living
$ 850,000 5.5% due 06/15/02..................... $ 945,625
-------------
-------------
SHORT-TERM SECURITIES -- 18.7%
U.S. TREASURY BILL -- 0.1%
$ 165,000 5.84% due 05/28/98...................... $ 156,633
-------------
REPURCHASE AGREEMENT -- 18.6%
20,603,000 Interest in repurchase agreements (U.S.
Treasury obligations), in a joint
trading account dated 06/30/97 due
07/01/97 with a yield of 5.9427% and
maturity amount of $20,606,401........ 20,603,000
-------------
Total short-term securities............. $ 20,759,633
-------------
-------------
</TABLE>
<TABLE>
<S> <C> <C>
Total common stocks (cost $77,393,871)....... 79.7 % $ 88,699,105
Total preferred stock (cost $907,694)........ 0.8 882,650
Total convertible bonds (cost $850,000)...... 0.8 945,625
Total short-term securities (cost
$20,759,633)............................... 18.7 20,759,633
------ --------------
Total investment (cost $99,911,198).......... 100.0% $ 111,287,013
------ --------------
------ --------------
* Non-income producing during period.
</TABLE>
FUTURES CONTRACTS -- NOTE 2
The Fund had 37 September Russell 2000 Index futures contracts open at June 30,
1997. The contracts had a market value of $7,379,650.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
122
<PAGE>
HARTFORD MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES,
STATEMENT OF OPERATIONS,
[STAG]
STATEMENTS OF CHANGES IN NET ASSETS
AND NOTES TO FINANCIAL STATEMENTS
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
HARTFORD HARTFORD HVA HARTFORD
BOND STOCK MONEY MARKET ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC.
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in
securities, at
value................ $ 454,749,505 $ 4,027,363,026 $ 588,014,486 $7,237,988,161
Cash................... 390 700 292 565
Receivables:
Investment securities
sold............... 9,271,755 -- -- --
Fund shares sold..... 584,430 4,503,637 -- 5,147,109
Dividends and
interest........... 6,966,472 3,298,941 927,556 32,878,717
Other assets........... 422,463 86,466 1,775 141,538
--------------- --------------- --------------- ---------------
TOTAL ASSETS............. 471,995,015 4,035,252,770 588,944,109 7,276,156,090
--------------- --------------- --------------- ---------------
LIABILITIES:
Payables:
Investment securities
purchased.......... 29,575,966 9,620,078 -- 17,182,664
Fund shares
redeemed........... -- -- 4,872,557 --
Accrued Expenses..... 19,720 -- 53,093 --
Other liabilities...... -- -- -- --
--------------- --------------- --------------- ---------------
TOTAL LIABILITIES........ 29,595,686 9,620,078 4,925,650 17,182,664
--------------- --------------- --------------- ---------------
NET ASSETS, AT VALUE..... $ 442,399,329 $ 4,025,632,692 $ 584,018,459 $7,258,973,426
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
Capital stock (par value
$0.10)................. $ 43,667,812 $ 84,025,334 $ 58,401,846 $ 303,879,175
Paid in surplus.......... 397,402,856 2,586,455,128 525,616,613 5,067,383,179
Accumulated
undistributed net
investment income
(loss)............... 5,049,911 8,159,715 -- 30,006,197
Accumulated
undistributed net
realized gain
(loss)............... (6,493,171) 29,872,728 -- 36,643,833
Unrealized appreciation
(depreciation) of
investments.......... 2,771,921 1,317,109,136 -- 1,821,045,299
Unrealized appreciation
(depreciation) on
futures contracts
(Note 2)............. -- -- -- --
Unrealized appreciation
(depreciation) on
forward currency
contracts (Note 2)... -- -- -- --
Unrealized appreciation
(depreciation) on
translation of
foreign currency..... -- 10,651 -- 15,743
--------------- --------------- --------------- ---------------
NET ASSETS, AT VALUE..... $ 442,399,329 $ 4,025,632,692 $ 584,018,459 $7,258,973,426
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Number of shares
outstanding............ 436,678,115 840,253,339 584,018,459 3,038,791,750
Net asset value.......... $1.01 $4.79 $1.00 $2.39
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
124
<PAGE>
<TABLE>
<CAPTION>
HARTFORD HARTFORD HARTFORD HARTFORD
CAPITAL MORTGAGE HARTFORD INTERNATIONAL DIVIDEND AND
APPRECIATION SECURITIES INDEX OPPORTUNITIES GROWTH
FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC.
--------------- ---------------- -------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in
securities, at
value................ $ 4,173,572,732 $ 383,637,670 $ 890,616,156 $ 1,181,226,354 $1,435,112,627
Cash................... 503 78 343 423 226
Receivables:
Investment securities
sold............... 15,292,971 -- -- 9,011,758 --
Fund shares sold..... 5,166,436 -- 2,120,792 1,606,217 4,664,589
Dividends and
interest........... 3,150,044 2,272,108 998,820 6,325,020 2,187,531
Other assets........... 826,499 -- -- -- 44,873
--------------- ---------------- -------------- ------------------- ---------------
TOTAL ASSETS............. 4,198,009,185 385,909,856 893,736,111 1,198,169,772 1,442,009,846
--------------- ---------------- -------------- ------------------- ---------------
LIABILITIES:
Payables:
Investment securities
purchased.......... 69,810,604 65,155,403 910,910 25,700,486 4,580,185
Fund shares
redeemed........... -- 104,382 -- 474,643 --
Accrued Expenses..... -- 29,842 18,791 121,499 --
Other liabilities...... -- 166,727 159,442 629,550 --
--------------- ---------------- -------------- ------------------- ---------------
TOTAL LIABILITIES........ 69,810,604 65,456,354 1,089,143 26,926,178 4,580,185
--------------- ---------------- -------------- ------------------- ---------------
NET ASSETS, AT VALUE..... $ 4,128,198,581 $ 320,453,502 $ 892,646,968 $ 1,171,243,594 $1,437,429,661
--------------- ---------------- -------------- ------------------- ---------------
--------------- ---------------- -------------- ------------------- ---------------
NET ASSETS CONSIST OF:
Capital stock (par value
$0.10)................. $ 99,653,421 $ 29,958,648 $ 33,940,631 $ 81,649,170 $ 80,427,100
Paid in surplus.......... 3,018,753,358 297,485,804 619,084,175 907,998,231 1,049,384,553
Accumulated
undistributed net
investment income
(loss)............... (95,479) 3,849,484 2,717,157 10,211,069 5,568,139
Accumulated
undistributed net
realized gain
(loss)............... 84,719,190 (12,836,599) 5,547,877 29,703,082 18,112,336
Unrealized appreciation
(depreciation) of
investments.......... 920,114,896 1,996,165 231,667,720 141,027,012 283,937,533
Unrealized appreciation
(depreciation) on
futures contracts
(Note 2)............. 5,050,177 -- (310,592) 880,326 --
Unrealized appreciation
(depreciation) on
forward currency
contracts (Note 2)... -- -- -- (210,833) --
Unrealized appreciation
(depreciation) on
translation of
foreign currency..... 3,018 -- -- (14,463) --
--------------- ---------------- -------------- ------------------- ---------------
NET ASSETS, AT VALUE..... $ 4,128,198,581 $ 320,453,502 $ 892,646,968 $ 1,171,243,594 $1,437,429,661
--------------- ---------------- -------------- ------------------- ---------------
--------------- ---------------- -------------- ------------------- ---------------
Number of shares
outstanding............ 996,534,206 299,586,481 339,406,307 816,491,704 804,270,995
Net asset value.......... $4.14 $1.07 $2.63 $1.43 $1.79
<CAPTION>
HARTFORD
INTERNATIONAL HARTFORD
ADVISERS FUND, SMALL COMPANY
INC. FUND, INC.
-------------- ----------------
<S> <C> <C>
ASSETS:
Investments in
securities, at
value................ $165,125,163 $111,287,013
Cash................... 515 15
Receivables:
Investment securities
sold............... 1,408,082 7,531,704
Fund shares sold..... 594,246 699,464
Dividends and
interest........... 1,610,277 36,536
Other assets........... 417,420 35,150
-------------- ----------------
TOTAL ASSETS............. 169,155,703 119,589,882
-------------- ----------------
LIABILITIES:
Payables:
Investment securities
purchased.......... 3,528,127 15,944,945
Fund shares
redeemed........... -- --
Accrued Expenses..... 13,695 7,194
Other liabilities...... 182,322 --
-------------- ----------------
TOTAL LIABILITIES........ 3,724,144 15,952,139
-------------- ----------------
NET ASSETS, AT VALUE..... $165,431,559 $103,637,743
-------------- ----------------
-------------- ----------------
NET ASSETS CONSIST OF:
Capital stock (par value
$0.10)................. $ 13,760,980 $ 8,816,592
Paid in surplus.......... 142,163,120 84,917,224
Accumulated
undistributed net
investment income
(loss)............... (3,336,125) 47,876
Accumulated
undistributed net
realized gain
(loss)............... 3,930,793 (1,653,664)
Unrealized appreciation
(depreciation) of
investments.......... 8,340,332 11,375,815
Unrealized appreciation
(depreciation) on
futures contracts
(Note 2)............. 246,841 133,900
Unrealized appreciation
(depreciation) on
forward currency
contracts (Note 2)... 325,317 --
Unrealized appreciation
(depreciation) on
translation of
foreign currency..... 301 --
-------------- ----------------
NET ASSETS, AT VALUE..... $165,431,559 $103,637,743
-------------- ----------------
-------------- ----------------
Number of shares
outstanding............ 137,609,803 88,165,920
Net asset value.......... $1.20 $1.18
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
125
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
HARTFORD HARTFORD HVA HARTFORD
BOND STOCK MONEY MARKET ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC.
-------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 503,616 $ 23,512,218 $ -- $ 31,296,174
Interest............... 14,858,097 3,990,367 15,428,005 69,252,998
Less: Foreign tax
withheld............. -- (328,251) -- (482,342)
-------------- ------------- ------------ -------------
Total income......... 15,361,713 27,174,334 15,428,005 100,066,830
-------------- ------------- ------------ -------------
EXPENSES:
Investment advisory
fees (Note 3)........ 649,506 4,473,470 690,556 14,047,652
Administrative service
fees................. 360,799 2,979,561 483,389 5,605,660
Accounting services.... 18,094 86,624 17,476 184,971
Custodian fees......... 7,281 11,314 5,875 16,340
Board of directors
fees................. 1,245 8,007 1,638 17,240
Other expenses......... 19,077 129,099 25,154 285,569
-------------- ------------- ------------ -------------
Total expenses....... 1,056,002 7,688,075 1,224,088 20,157,432
-------------- ------------- ------------ -------------
Net investment
income............... 14,305,711 19,486,259 14,203,917 79,909,398
-------------- ------------- ------------ -------------
Net realized gain
(loss) on security
transactions......... 1,716,085 30,086,664 -- 39,310,845
Net realized gain
(loss) on futures
contracts............ -- -- -- (5,044)
Net realized gain
(loss) on forward
foreign currency
contracts............ -- -- -- --
Net realized gain
(loss) on foreign
currency
transactions......... -- (3,281) -- --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (548,808) 647,802,514 -- 855,736,217
Net unrealized
appreciation
(depreciation) on
futures contracts.... -- -- -- --
Net unrealized
appreciation
(depreciation) on
forward foreign
currency contracts... -- -- -- --
Net unrealized
appreciation
(depreciation) on
foreign currency
translation.......... -- 10,651 -- 15,743
-------------- ------------- ------------ -------------
Net realized and
unrealized gain
(loss) on
investments.......... 1,167,277 677,896,548 -- 895,057,761
-------------- ------------- ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations........... $ 15,472,988 $ 697,382,807 $14,203,917 $974,967,159
-------------- ------------- ------------ -------------
-------------- ------------- ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
126
<PAGE>
<TABLE>
<CAPTION>
HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD
CAPITAL MORTGAGE HARTFORD INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION SECURITIES INDEX OPPORTUNITIES GROWTH ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC.
------------- ------------- ------------ ------------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 13,386,788 $ 569,790 $ 6,579,681 $ 15,369,713 $ 16,046,208 $ 1,156,053
Interest............... 7,126,486 10,881,632 1,052,825 1,895,625 998,795 1,980,351
Less: Foreign tax
withheld............. (509,958) -- (39,064) (2,070,736) (42,670) (182,207)
------------- ------------- ------------ ------------------- --------------- -------------
Total income......... 20,003,316 11,451,422 7,593,442 15,194,602 17,002,333 2,954,197
------------- ------------- ------------ ------------------- --------------- -------------
EXPENSES:
Investment advisory
fees (Note 3)........ 8,053,929 396,138 739,508 2,637,384 2,790,460 373,491
Administrative service
fees................. 3,137,657 277,297 647,069 907,426 971,742 113,671
Accounting services.... 91,053 26,460 16,345 50,665 19,754 7,174
Custodian fees......... 19,267 9,849 13,298 364,197 8,275 57,923
Board of directors
fees................. 8,400 1,242 1,495 2,968 1,772 234
Other expenses......... 137,364 18,105 27,039 46,100 31,943 5,282
------------- ------------- ------------ ------------------- --------------- -------------
Total expenses....... 11,447,670 729,091 1,444,754 4,008,740 3,823,946 557,775
------------- ------------- ------------ ------------------- --------------- -------------
Net investment
income............... 8,555,646 10,722,331 6,148,688 11,185,862 13,178,387 2,396,422
------------- ------------- ------------ ------------------- --------------- -------------
Net realized gain
(loss) on security
transactions......... 73,546,684 (235,094) 273,456 24,054,417 18,228,720 2,088,488
Net realized gain
(loss) on futures
contracts............ 4,899,171 44,983 5,383,349 10,445,497 -- 1,121,772
Net realized gain
(loss) on forward
foreign currency
contracts............ 6,958,743 -- -- (4,797,879) -- 2,716,536
Net realized gain
(loss) on foreign
currency
transactions......... 1,985 -- -- 31,098 -- (1,980,452)
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 417,288,118 707,849 127,501,660 67,174,394 176,899,852 4,634,389
Net unrealized
appreciation
(depreciation) on
futures contracts.... 5,372,619 -- (199,958) 175,962 -- 124,281
Net unrealized
appreciation
(depreciation) on
forward foreign
currency contracts... (1,053,529) -- -- (310,633) -- 301,535
Net unrealized
appreciation
(depreciation) on
foreign currency
translation.......... (3,814) -- -- (47,837) -- 11,086
------------- ------------- ------------ ------------------- --------------- -------------
Net realized and
unrealized gain
(loss) on
investments.......... 507,009,977 517,738 132,958,507 96,725,019 195,128,572 9,017,635
------------- ------------- ------------ ------------------- --------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... $515,565,623 $ 11,240,069 $139,107,195 $107,910,881 $208,306,959 $11,414,057
------------- ------------- ------------ ------------------- --------------- -------------
------------- ------------- ------------ ------------------- --------------- -------------
<CAPTION>
HARTFORD
SMALL COMPANY
FUND, INC.
--------------
<S> <C>
INVESTMENT INCOME:
Dividends.............. $ 129,668
Interest............... 186,906
Less: Foreign tax
withheld............. --
--------------
Total income......... 316,574
--------------
EXPENSES:
Investment advisory
fees (Note 3)........ 193,329
Administrative service
fees................. 58,839
Accounting services.... 1,820
Custodian fees......... 10,789
Board of directors
fees................. 162
Other expenses......... 3,159
--------------
Total expenses....... 268,098
--------------
Net investment
income............... 48,476
--------------
Net realized gain
(loss) on security
transactions......... (1,720,100)
Net realized gain
(loss) on futures
contracts............ 155,184
Net realized gain
(loss) on forward
foreign currency
contracts............ --
Net realized gain
(loss) on foreign
currency
transactions......... --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 11,069,921
Net unrealized
appreciation
(depreciation) on
futures contracts.... 133,900
Net unrealized
appreciation
(depreciation) on
forward foreign
currency contracts... --
Net unrealized
appreciation
(depreciation) on
foreign currency
translation.......... --
--------------
Net realized and
unrealized gain
(loss) on
investments.......... 9,638,905
--------------
Net increase (decrease)
in net assets
resulting from
operations........... $9,687,381
--------------
--------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
127
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
HARTFORD HARTFORD HVA HARTFORD
BOND STOCK MONEY MARKET ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC.
--------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 14,305,711 $ 19,486,259 $ 14,203,917 $ 79,909,398
Net realized gain
(loss) on security
transactions and
foreign currency
transactions......... 1,716,085 30,083,383 -- 39,305,801
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
translation.......... (548,808) 647,813,165 -- 855,751,960
--------------- --------------- ------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations.... 15,472,988 697,382,807 14,203,917 974,967,159
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (9,261,988) (11,523,775) (14,203,917) (50,430,318)
Net realized gain on
security
transactions......... -- (161,851,967) -- (270,771,078)
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 46,318,439 573,266,491 942,052,035 462,158,937
Reinvested dividends
and distributions.... 9,261,988 173,375,742 14,203,917 321,201,396
Cost of shares
repurchased.......... (21,939,898) (239,225,197) (914,823,069) (57,681,838)
--------------- --------------- ------------- ---------------
Net increase
(decrease) from
capital share
transactions....... 33,640,529 507,417,036 41,432,883 725,678,495
--------------- --------------- ------------- ---------------
Total increase
(decrease) in net
assets............. 39,851,529 1,031,424,101 41,432,883 1,379,444,258
NET ASSETS:
Beginning of period.... 402,547,800 2,994,208,591 542,585,576 5,879,529,168
--------------- --------------- ------------- ---------------
End of period.......... $ 442,399,329 $ 4,025,632,692 $584,018,459 $7,258,973,426
--------------- --------------- ------------- ---------------
--------------- --------------- ------------- ---------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 46,471,755 131,094,585 942,052,608 206,428,221
Reinvested
distributions........ 9,352,373 41,278,668 14,203,344 148,191,490
Shares repurchased..... (22,020,222) (54,885,496) (914,823,069) (25,878,190)
--------------- --------------- ------------- ---------------
Net increase (decrease)
in shares
outstanding.......... 33,803,906 117,487,757 41,432,883 328,741,521
--------------- --------------- ------------- ---------------
--------------- --------------- ------------- ---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
128
<PAGE>
<TABLE>
<CAPTION>
HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD
CAPITAL MORTGAGE HARTFORD INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION SECURITIES INDEX OPPORTUNITIES GROWTH ADVISERS FUND,
FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. INC.
--------------- -------------- ------------ ------------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 8,555,646 $ 10,722,331 $ 6,148,688 $ 11,185,862 $ 13,178,387 $ 2,396,422
Net realized gain
(loss) on security
transactions and
foreign currency
transactions......... 85,406,583 (190,111) 5,656,805 29,733,133 18,228,720 3,946,344
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
translation.......... 421,603,394 707,849 127,301,702 66,991,886 176,899,852 5,071,291
--------------- -------------- ------------ ------------------- --------------- --------------
Net increase
(decrease) in net
assets resulting
from operations.... 515,565,623 11,240,069 139,107,195 107,910,881 208,306,959 11,414,057
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (7,623,631) (7,052,133) (3,504,152) (1,009,042) (7,856,829) (5,624,995)
Net realized gain on
security
transactions......... (262,285,067) -- (54,414,034) (75,709,860) (27,905,705) (383,508)
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 654,530,043 14,090,998 422,179,374 94,276,298 354,581,069 51,100,046
Reinvested dividends
and distributions.... 269,908,698 7,052,133 57,918,186 76,718,902 35,762,534 6,008,503
Cost of shares
repurchased.......... (428,566,873) (30,372,748) (289,704,162) (27,486,616) (5,438,808) (1,568,286)
--------------- -------------- ------------ ------------------- --------------- --------------
Net increase
(decrease) from
capital share
transactions....... 495,871,868 (9,229,617) 190,393,398 143,508,584 384,904,795 55,540,263
--------------- -------------- ------------ ------------------- --------------- --------------
Total increase
(decrease) in net
assets............. 741,528,793 (5,041,681) 271,582,407 174,700,563 557,449,220 60,945,817
NET ASSETS:
Beginning of period.... 3,386,669,788 325,495,183 621,064,561 996,543,031 879,980,441 104,485,742
--------------- -------------- ------------ ------------------- --------------- --------------
End of period.......... $ 4,128,198,581 $ 320,453,502 $892,646,968 $ 1,171,243,594 $1,437,429,661 $165,431,559
--------------- -------------- ------------ ------------------- --------------- --------------
--------------- -------------- ------------ ------------------- --------------- --------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 170,069,460 13,345,650 173,429,261 69,430,981 216,647,377 44,100,778
Reinvested
distributions........ 73,195,649 6,718,831 24,697,622 59,271,106 22,356,833 5,312,136
Shares repurchased..... (111,929,335) (28,780,596) (119,477,848) (20,548,366) (3,408,343) (1,369,084)
--------------- -------------- ------------ ------------------- --------------- --------------
Net increase (decrease)
in shares
outstanding.......... 131,335,774 (8,716,115) 78,649,035 108,153,721 235,595,867 48,043,830
--------------- -------------- ------------ ------------------- --------------- --------------
--------------- -------------- ------------ ------------------- --------------- --------------
<CAPTION>
HARTFORD
SMALL COMPANY
FUND, INC.
----------------
<S> <C>
OPERATIONS:
Net investment
income............... $ 48,476
Net realized gain
(loss) on security
transactions and
foreign currency
transactions......... (1,564,916)
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
translation.......... 11,203,821
----------------
Net increase
(decrease) in net
assets resulting
from operations.... 9,687,381
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (756)
Net realized gain on
security
transactions......... (278,063)
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 51,794,529
Reinvested dividends
and distributions.... 263,914
Cost of shares
repurchased.......... (641,183)
----------------
Net increase
(decrease) from
capital share
transactions....... 51,417,260
----------------
Total increase
(decrease) in net
assets............. 60,825,822
NET ASSETS:
Beginning of period.... 42,811,921
----------------
End of period.......... $103,637,743
----------------
----------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 48,500,741
Reinvested
distributions........ 251,896
Shares repurchased..... (629,204)
----------------
Net increase (decrease)
in shares
outstanding.......... 48,123,433
----------------
----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
129
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
HARTFORD HARTFORD HVA HARTFORD
BOND STOCK MONEY MARKET ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC.
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 23,250,402 $ 38,483,030 $ 22,738,638 $ 147,050,773
Net realized gain on
security transactions
and foreign
currency............. 2,775,436 161,403,731 2,197 267,921,758
Net realized gain
(loss) on futures
contracts............ -- -- -- --
Net unrealized
appreciation
(depreciation) of
investments during
the period........... (12,099,332) 329,790,776 -- 373,870,758
---------------- --------------- --------------- ---------------
Net increase
(decrease) in net
assets resulting
from operations.... 13,926,506 529,677,537 22,740,835 788,843,289
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (23,252,299) (38,048,174) (22,738,638) (146,336,279)
Net realized gain on
security
transactions......... -- (80,821,138) (2,197) (97,284,143)
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 254,369,346 1,358,328,493 2,549,507,437 1,211,458,165
Reinvested dividends
and distributions.... 23,252,298 118,869,307 22,740,798 243,620,416
Cost of shares
redeemed............. (208,242,998) (770,681,048) (2,369,371,242) (383,541,029)
---------------- --------------- --------------- ---------------
Net increase
(decrease) from
capital share
transactions....... 69,378,646 706,516,752 202,876,993 1,071,537,552
---------------- --------------- --------------- ---------------
Total increase
(decrease) in net
assets............. 60,052,853 1,117,324,977 202,876,993 1,616,760,419
NET ASSETS:
Beginning of period.... 342,494,947 1,876,883,614 339,708,583 4,262,768,749
---------------- --------------- --------------- ---------------
End of period.......... $ 402,547,800 $ 2,994,208,591 $ 542,585,576 $5,879,529,168
---------------- --------------- --------------- ---------------
---------------- --------------- --------------- ---------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 254,649,109 360,788,240 2,549,507,437 597,537,609
Reinvested
distributions........ 23,512,053 33,332,051 22,740,798 122,083,331
Shares redeemed........ (208,369,007) (203,498,988) (2,369,371,242) (186,184,804)
---------------- --------------- --------------- ---------------
Net increase (decrease)
in shares
outstanding.......... 69,792,155 190,621,303 202,876,993 533,436,136
---------------- --------------- --------------- ---------------
---------------- --------------- --------------- ---------------
</TABLE>
* From inception, August 9, 1996, to December 31, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
130
<PAGE>
<TABLE>
<CAPTION>
HARTFORD HARTFORD HARTFORD HARTFORD
CAPITAL MORTGAGE HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL
APPRECIATION SECURITIES INDEX OPPORTUNITIES DIVIDEND AND GROWTH ADVISERS
FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC.
--------------- ------------- ------------- ------------- ------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 16,536,321 $ 21,509,830 $ 9,798,518 $ 14,944,153 $ 13,982,229 $ 2,226,486
Net realized gain on
security transactions
and foreign
currency............. 255,377,198 (507,548) 44,514,753 76,110,084 27,789,320 3,178,372
Net realized gain
(loss) on futures
contracts............ 6,073,616 (41,164) 9,782,117 1,237,540 -- 120,799
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 239,094,440 (5,189,787) 32,113,387 10,899,075 76,776,242 2,337,601
--------------- ------------- ------------- ------------- ------------------- -------------
Net increase
(decrease) in net
assets resulting
from operations.... 517,081,575 15,771,331 96,208,775 103,190,852 118,547,791 7,863,258
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (18,981,972) (20,576,313) (9,725,897) (16,566,894) (13,722,811) (3,160,906)
Net realized gain on
security
transactions......... (144,074,825) -- (6,503,101) (20,342,973) (6,559,586) (2,100,363)
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 1,992,482,669 60,478,861 909,101,858 271,959,848 514,924,406 80,121,321
Reinvested dividends
and distributions.... 163,056,776 20,576,314 16,228,997 36,909,865 20,282,403 5,081,390
Cost of shares
redeemed............. (1,280,786,138) (78,320,323) (702,498,963) (65,082,872) (18,562,229) (14,583,123)
--------------- ------------- ------------- ------------- ------------------- -------------
Net increase
(decrease) from
capital share
transactions....... 874,753,307 2,734,852 222,831,892 243,786,841 516,644,580 70,619,588
--------------- ------------- ------------- ------------- ------------------- -------------
Total increase
(decrease) in net
assets............. 1,228,778,085 (2,070,130) 302,811,669 310,067,826 614,909,974 73,221,577
NET ASSETS:
Beginning of period.... 2,157,891,703 327,565,313 318,252,892 686,475,205 265,070,467 31,264,165
--------------- ------------- ------------- ------------- ------------------- -------------
End of period.......... $ 3,386,669,788 $ 325,495,183 $ 621,064,561 $996,543,031 $879,980,441 $104,485,742
--------------- ------------- ------------- ------------- ------------------- -------------
--------------- ------------- ------------- ------------- ------------------- -------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 550,329,695 57,507,862 418,317,811 202,942,268 365,817,586 69,719,902
Reinvested
distributions........ 48,709,013 19,671,794 7,617,074 27,910,095 14,561,833 4,382,000
Shares redeemed........ (352,206,856) (74,651,995) (322,113,339) (48,271,571) (12,969,461) (12,726,579)
--------------- ------------- ------------- ------------- ------------------- -------------
Net increase (decrease)
in shares
outstanding.......... 246,831,852 2,527,661 103,821,546 182,580,792 367,409,958 61,375,323
--------------- ------------- ------------- ------------- ------------------- -------------
--------------- ------------- ------------- ------------- ------------------- -------------
<CAPTION>
HARTFORD
SMALL COMPANY
FUND, INC.*
-------------
<S> <C>
OPERATIONS:
Net investment
income............... $ 36,756
Net realized gain on
security transactions
and foreign
currency............. 176,416
Net realized gain
(loss) on futures
contracts............ 12,899
Net unrealized
appreciation
(depreciation) of
investments during
the period........... 305,895
-------------
Net increase
(decrease) in net
assets resulting
from operations.... 531,966
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment
income............... (36,601)
Net realized gain on
security
transactions......... --
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares............... 42,814,882
Reinvested dividends
and distributions.... 29,636
Cost of shares
redeemed............. (527,962)
-------------
Net increase
(decrease) from
capital share
transactions....... 42,316,556
-------------
Total increase
(decrease) in net
assets............. 42,811,921
NET ASSETS:
Beginning of period.... --
-------------
End of period.......... $42,811,921
-------------
-------------
CHANGE IN CAPITAL SHARES
OUTSTANDING:
Shares sold............ 40,509,778
Reinvested
distributions........ 27,965
Shares redeemed........ (495,256)
-------------
Net increase (decrease)
in shares
outstanding.......... 40,042,487
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
131
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., HVA Money Market Fund,
Inc., Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund,
Inc., Hartford Mortgage Securities Fund, Inc., Hartford Index Fund, Inc.,
Hartford International Opportunities Fund, Inc., Hartford Dividend and
Growth Fund, Inc. Hartford International Advisers Fund, Inc. and Hartford
Small Company Fund, Inc. (the Funds) are organized under the laws of the
State of Maryland and are registered with the Securities and Exchange
Commission (SEC) under the Investment Company Act of 1940, as amended, as
diversified open-ended management investment companies.
Fund shares are made available to serve as the underlying investment options
of the variable annuity, variable life insurance and group pension contracts
issued by the affiliated life insurance company Separate Accounts of the ITT
Hartford Life Insurance Companies (Hartford Life Insurance Company and ITT
Hartford Life and Annuity Insurance Company). The Fund's objectives are as
follows:
<TABLE>
<S> <C>
Hartford Bond Fund, Inc. Seeks a high level of current income while preserving capital through
investing primarily in high-grade government and corporate bonds and
other debt securities.
Hartford Stock Fund, Inc. Seeks long-term capital growth through a diversified portfolio of equity
securities.
HVA Money Market Fund, Inc. Seeks a high level of current income consistent with liquidity and the
need for preservation of capital through high-quality money-market
securities.
Hartford Advisers Fund, Inc. Seeks a high, long-term total rate of return (capital growth and current
income) through a varying mix of stocks, bonds and money market
instruments.
Hartford Capital Appreciation Seeks growth of capital through investment in equity securities of
Fund, Inc. companies with high growth potential, including small emerging
companies.
Hartford Mortgage Securities Seeks a high level of current income by investing primarily in
Fund, Inc. mortgage-backed securities, including securities issued by Government
National Mortgage Association.
Hartford Index Fund, Inc. Seeks to approximate the price and yield performance represented by the
Standard & Poor's 500 Composite Stock Price Index through investments in
common stocks.
Hartford International Seeks a long-term total return consistent with that of international
Opportunities Fund, Inc. equity markets through investment primarily in foreign equity securities
issues.
Hartford Dividend and Growth Seeks a high level of current income consistent with growth of capital
Fund, Inc. and moderate investment risk. Primary investments are equity securities
and securities convertible into equity securities that typically have
above average yield.
Hartford International Seeks a long-term total rate of return consistent with moderate risk.
Advisers Fund, Inc. Investments include a mix of debt, equity and money market instruments
primarily with foreign issuers.
Hartford Small Company Fund, Seeks growth of capital by investing primarily in equity securities
Inc. selected on the basis of potential for capital appreciation.
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Funds,
which are in accordance with generally accepted accounting principles in the
investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Security gains and
losses are determined on the basis of identified cost, which is also used
for Federal income tax purposes.
b) SECURITY VALUATION--Debt securities (other than short-term obligations)
are valued on the basis of valuations furnished by an unaffiliated
pricing service which determines valuations for normal institutional size
trading units of debt securities. Mortgage securities are valued at the
bid price. Short-term securities held in the HVA Money Market
132
<PAGE>
Fund, Inc. are valued at amortized cost or original cost plus accrued
interest receivable, both of which approximate market value. In Hartford
Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford
Index Fund, Inc., Hartford Stock Fund, Inc., Hartford Bond Fund, Inc.,
Hartford Mortgage Securities Fund, Inc., Hartford International
Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford International Advisers Fund, Inc., and Hartford Small Company
Fund, Inc. short-term investments with a maturity of 60 days or less when
purchased are valued at amortized cost, which approximates market value.
Short-term investments with a maturity of more than 60 days when
purchased are valued based on market quotations until the remaining days
to maturity become less than 61 days. From that time until maturity, the
investments are valued at amortized cost.
Equity securities are valued at the last sales price reported on principal
securities exchanges (domestic or foreign). If no sale took place on a
given day and in the case of certain equity securities traded
over-the-counter, then such securities are valued at the mean between the
bid and asked prices. Securities quoted in foreign currencies are
translated into U.S. dollars at the exchange rate at the end of the
reporting period. Options are valued at the last sales price; if no sale
took place on such day, then options are valued at the mean between the
bid and asked prices. Securities for which market quotations are not
readily available and all other assets are valued in good faith at fair
value by a person designated by the Funds' Board of Directors.
c) FOREIGN CURRENCY TRANSACTIONS--The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at
prevailing exchange rates. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the
rates of exchange prevailing on the respective dates of such
transactions.
The Funds do not isolate that portion of the results of operations
resulting from changes in the foreign currency exchange rates on
investments from the fluctuations arising from changes in the market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss on investments in the accompanying
Statement of Operations.
Net realized foreign currency exchange gains or losses arise from sales of
portfolio securities, sales of foreign currencies, and the difference
between asset and liability amounts initially stated in foreign currencies
and the U.S. dollar value of the amounts actually received or paid. Net
unrealized foreign currency exchange gains or losses arise from changes in
the value of portfolio securities and other assets and liabilities at the
end of the reporting period, resulting from changes in the exchange rates.
d) JOINT TRADING ACCOUNT--Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Funds may transfer uninvested
cash balances into a Joint Trading account managed by The Hartford
Investment Management Company or Wellington Management Company, LLP.
These balances may be invested in one or more repurchase agreements
and/or short-term money market instruments that are collateralized by
U.S. Treasury or Agency Obligations.
e) REPURCHASE TRANSACTIONS--A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a
mutually agreed upon time and price. At the time the Funds enter into a
repurchase agreement, the value of the underlying collateral
security(ies), including accrued interest, will be at least 102% of the
resale price at the time of purchase. Securities which serve to
collateralize the repurchase agreement are held by each Fund's custodian
in book entry or physical form in the custodial account of the Fund.
Repurchase agreements are valued at cost plus accrued interest
receivable.
f) FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS--The Funds enter
into futures contracts to retain their cash balances and yet be exposed
to the market thereby providing the liquidity necessary to accommodate
redemptions while at the same time providing shareholders the investment
return of a fully invested portfolio. A futures contract is an agreement
between two parties to buy and sell a security for a set price on a
future date. When the funds enter into such contracts, they are required
to deposit with their custodian an amount of "initial margin" of cash or
U.S. Treasury bills. Subsequent payments, called maintenance margin, to
and from the broker, are made on a daily basis as the price of the
underlying debt security fluctuates, making the long and short positions
in the futures contract more or less valuable (i.e., mark-to-market),
which results in an unrealized gain or loss to the Funds. The market
value of a
133
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
traded futures contract is the last sale price or, in the absence of a
last sale price, the last offering price or, in the absence of either of
these prices, fair value is determined according to procedures
established by the Funds' Board of Directors.
At any time prior to expiration of the futures contract, the Funds may
close the position by taking an opposite position which would serve to
terminate the position in the futures contract. A final determination of
maintenance margin is then made, additional cash is required to be paid by
or released to the Funds and the Funds realize a gain or loss.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's Statement of Net Assets as an investment and
subsequently "marked to market" to reflect the current market value of the
option purchased as of the end of the reporting period. If an option which
the Fund has purchased expires on its stipulated expiration date, the Fund
realizes a loss in the amount of the cost of the option. If the Fund
enters into a closing transaction, it realizes a gain or loss, depending
on whether the proceeds from the sale are greater or less than the cost of
the option. If the Fund exercises a put option, it realizes a gain or loss
from the sale of the underlying security and the proceeds from such sale
will be decreased by the premium originally paid. If the Fund exercises a
call option, the cost of the security which the Fund purchases upon
exercise will be increased by the premium originally paid.
g) FEDERAL INCOME TAXES--For Federal income tax purposes, the Funds intend
to continue to qualify as regulated investment companies under Subchapter
M of the Internal Revenue Code by distributing substantially all of their
taxable income to their shareholders or otherwise complying with the
requirements for regulated investment companies. Accordingly, no
provision for Federal income taxes has been made.
h) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTIONS TO SHAREHOLDERS--Orders
for the Fund's shares are executed in accordance with the investment
instructions of the contract owners. Dividend income is accrued as of the
ex-dividend date. Interest income and expenses are accrued on a daily
basis. The net asset value of the Fund's shares is determined as of the
close of each business day of the New York Stock Exchange (the Exchange).
Orders for the purchase of the Funds' shares received prior to the close
of the Exchange on any day on which the fund is open for business are
priced at the per-share net asset value determined as of the close of the
Exchange. Orders received after the close of the Exchange, or on a day on
which the Exchange and/or the Fund is not open for business, are priced
at the per-share net asset value next determined.
Dividends are declared by the Funds' Board of Directors based upon the
investment performance of the respective Funds. The policy with respect to
the Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., Hartford Advisers
Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford Mortgage
Securities Fund, Inc., Hartford Index Fund, Inc., Hartford International
Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford International Advisers Fund, Inc., and Hartford Small Company
Fund, Inc. is to pay dividends from net investment income and distribute
realized capital gains, if any, annually.
The HVA Money Market Fund, Inc. seeks to maintain a stable net asset value
per share of $1.00 by declaring a daily dividend from net investment
income, including net short-term capital gains and losses, and by valuing
its investments using the amortized cost method. Dividends are distributed
monthly.
i) FORWARD FOREIGN CURRENCY CONTRACTS--As of June 30, 1997, Hartford
International Opportunities Fund, Inc., Hartford Capital Appreciation
Fund, Inc. and Hartford International Advisers Fund, Inc., have entered
into forward foreign currency exchange contracts that obligate the Funds
to repurchase currencies at specified future dates. The Funds enter into
forward foreign currency contracts to manage currency exchange rate risk.
Forward contracts involve elements of market risk in excess of the amount
reflected in the Statement of Net Assets. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward
contract.
j) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Actual results could
differ from those amounts.
134
<PAGE>
3. EXPENSES:
a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS--HL Investment Advisors,
Inc. (HL Advisors) a majority-owned indirect subsidiary of The Hartford
Financial Services Group, Inc. (The Hartford), is the investment manager
of the Hartford Bond Fund Inc., HVA Money Market Fund, Inc., Hartford
Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford Capital
Appreciation Fund, Inc., Hartford Mortgage Securities Fund, Inc. Hartford
Index Fund, Inc. Hartford International Opportunities Fund, Inc.,
Hartford Dividend and Growth Fund, Inc., Hartford International Advisers,
Fund, Inc. and Hartford Small Company Fund, Inc. pursuant to Investment
Management Agreements approved by each Fund's Board of Directors and
shareholders.
The schedule below reflects the rates of compensation paid to HL Advisors
for services rendered:
<TABLE>
<CAPTION>
HARTFORD INDEX FUND
NET ASSET VALUE ANNUAL RATE
- ------------------------------------ -----------
<S> <C>
All Assets 0.200%
<CAPTION>
HARTFORD MORTGAGE SECURITIES FUND, INC.
AND HVA MONEY MARKET FUND, INC.
NET ASSET VALUE ANNUAL RATE
- ------------------------------------ -----------
<S> <C>
All Assets 0.250%
<CAPTION>
HARTFORD BOND FUND, INC.
AND HARTFORD STOCK FUND, INC.
NET ASSET VALUE ANNUAL RATE
- ------------------------------------ -----------
<S> <C>
On first $250 million .325%
On next $250 million .300
On next $500 million .275
Over $1 billion .250
<CAPTION>
HARTFORD ADVISERS FUND, INC.,
HARTFORD CAPITAL APPRECIATION FUND, INC.,
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.,
HARTFORD DIVIDEND AND GROWTH FUND, INC.
HARTFORD INTERNATIONAL ADVISERS FUND, INC.
AND HARTFORD SMALL COMPANY FUND, INC.
NET ASSET VALUE ANNUAL RATE
- ------------------------------------ -----------
<S> <C>
On first $250 million .575%
On next $250 million .525
On next $500 million .475
Over $1 billion .425
</TABLE>
Pursuant to investment services agreements between HL Advisors and The
Hartford Investment Management Company (HIMCO), HIMCO provides the day to
day investment management services for the Hartford Bond Fund Inc., HVA
Money Market Fund, Inc., Hartford Mortgage Securities Fund, Inc. and
Hartford Index Fund, Inc. HIMCO is a wholly owned subsidiary of The
Hartford.
Pursuant to sub-investment advisory agreements between HL Advisors and
Wellington Management Company (Wellington), Wellington provides the day to
day investment management services for the Hartford Stock Fund, Inc.,
Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc.,
Hartford International Opportunities Fund, Inc., Hartford Dividend and
Growth Fund, Inc., Hartford International Advisers Fund, Inc. and Hartford
Small Company Fund, Inc. Wellington and HIMCO determine the purchase and
sale of portfolio securities and place such
135
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
orders for execution, in the name of the respective Fund. In conjunction
with their investment activity, Wellington and HIMCO regularly furnishes
reports to the Funds' Board of Directors concerning economic forecasts,
investment strategy, portfolio activity and performance of the Funds.
b) ADMINISTRATIVE SERVICES AGREEMENT--Under the Administrative Services
Agreement between Hartford Life Insurance Company (HL) and each of the
Funds, HL provides administrative services to the Funds and receives
monthly compensation at the annual rate of .175% of each Fund's average
daily net assets. The Funds assume and pay certain other expenses
(including, but not limited to, shareholder accounting, state taxes and
directors' fees). Directors' fees represent remuneration paid or accrued
to directors not affiliated with HL or any other related company.
c) OPERATING EXPENSES--Expenses of the Funds are charged to each fund based
on the ratio of the net assets of each fund to the combined net assets of
the Funds. Nonallocable expenses are charged to each fund based on
specific identification.
4. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS:
The aggregate gross unrealized appreciation on all investments where there
was an excess of value over tax cost, the aggregate gross unrealized
depreciation of investments where there was an excess of tax cost over value
and the net unrealized appreciation (depreciation) of investments as of June
30, 1997, were as follows:
<TABLE>
<CAPTION>
AGGREGATE GROSS AGGREGATE GROSS
UNREALIZED UNREALIZED NET UNREALIZED
TAX COST APPRECIATION DEPRECIATION APPRECIATION
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Bond Fund............................................ $ 452,189,693 $ 5,810,779 $ (3,250,966) $ 2,559,813
Stock Fund........................................... 2,710,253,890 1,335,327,250 (18,218,114) 1,317,109,136
Advisers Fund........................................ 5,419,974,294 1,857,745,649 (39,731,781) 1,818,013,868
Capital Appreciation................................. 3,255,714,417 1,004,220,239 (86,361,901) 917,858,338
Mortgage Securities.................................. 381,641,504 3,889,976 (1,896,641) 1,993,335
Index Fund........................................... 659,322,999 242,232,534 (10,939,376) 231,293,158
International Opportunities.......................... 1,040,199,342 190,002,744 (48,975,741) 141,027,003
Dividend & Growth.................................... 1,151,527,635 290,509,268 (6,924,275) 283,584,993
International Advisers............................... 157,027,444 12,864,380 (4,766,670) 8,097,710
Small Company........................................ 99,945,614 13,138,788 (7,797,389) 11,341,399
</TABLE>
5. EQUITY OF AFFILIATES:
a) HARTFORD SMALL COMPANY FUND, INC.--HL Investment Advisers, Inc. has
ownership of 3,000,000 shares of Hartford Small Company Fund, Inc.
representing 3.4% of the total outstanding shares of the Fund as of June
30, 1997.
b) As of June 30, 1997, certain HL group pension contracts held direct
interest in shares as follows:
<TABLE>
<CAPTION>
PERCENT OF
SHARES TOTAL SHARES
------------ ------------
<S> <C> <C>
Hartford Bond Fund, Inc........................................................................... 1,473,510 0.34%
HVA Money Market Fund Inc......................................................................... 2,732,995 0.47
Hartford Stock Fund, Inc.......................................................................... 1,219,850 0.15
Hartford Advisers Fund, Inc....................................................................... 25,047,369 1.00
Hartford Capital Appreciation Fund, Inc........................................................... 19,870,856 2.00
Hartford Mortgage Securities Fund, Inc............................................................ 17,696,804 5.90
Hartford Index Fund, Inc.......................................................................... 20,198,638 6.00
Hartford International Opportunities Fund, Inc.................................................... 9,585,278 1.17
Hartford Dividend & Growth Fund, Inc.............................................................. 2,554,362 0.32
Hartford International Advisers Fund, Inc......................................................... 273,415 0.20
Hartford Small Company Fund, Inc.................................................................. 291,931 0.33
</TABLE>
136
<PAGE>
6. INVESTMENT TRANSACTIONS:
Investment transactions (excluding short-term investments) for the six
months ended June 30, 1997, were as follows:
<TABLE>
<CAPTION>
PURCHASES AT SALES AT
COST PROCEEDS
---------------- ----------------
<S> <C> <C>
Hartford Bond Fund, Inc................................................................. $ 371,043,738 $ 350,121,433
Hartford Stock Fund, Inc................................................................ 753,002,542 399,919,449
Hartford Advisers, Fund, Inc............................................................ 1,289,874,011 689,230,585
Hartford Capital Appreciation Fund, Inc................................................. 1,378,014,451 1,233,063,218
Hartford Mortgage Securities Fund, Inc.................................................. 257,435,277 228,402,888
Hartford Index Fund, Inc................................................................ 128,310,104 3,999,407
Hartford International Opportunities Fund, Inc.......................................... 416,376,453 331,617,586
Hartford Dividend and Growth Fund, Inc.................................................. 545,411,304 194,429,670
Hartford International Advisers, Fund, Inc.............................................. 120,978,806 81,194,736
Hartford Small Company Fund, Inc........................................................ 84,126,653 40,593,764
</TABLE>
7.
In accordance with AICPA statement of position 93-2, DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN,
AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES, the Funds have
recorded several reclassifications in their capital accounts. These
reclassifications have no impact on the net asset value of the Funds and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder. As
of December 31, 1996 the Funds recorded the following reclassifications to
increase (decrease) the accounts listed below.
<TABLE>
<CAPTION>
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED CAPITAL
INCOME (LOSS) GAINS (LOSS) SURPLUS
-------------- ------------- -----------
<S> <C> <C> <C>
Hartford Bond Fund, Inc.......................................................... $ 8,085 $ 30,403 $ (38,488)
Hartford Stock Fund, Inc......................................................... (237,625) 237,625
Hartford Advisers, Fund, Inc..................................................... (187,377) 187,377
Hartford Capital Appreciation Fund, Inc.......................................... 1,418,157 (1,418,157)
Hartford Mortgage Securities Fund, Inc........................................... (754,232) 754,232
Hartford International Opportunities Fund, Inc................................... 1,662,153 (1,731,747) 69,594
Hartford Dividend and Growth Fund, Inc........................................... (12,837) 12,837
Hartford International Advisers, Fund, Inc....................................... 826,948 (826,948)
</TABLE>
8. CAPITAL GAINS DISTRIBUTION:
The Board of Directors declared a distribution from Capital Gains as follows
in the respective Funds:
<TABLE>
<CAPTION>
RECORD DATE PAYABLE DATE PER SHARE AMOUNT
-------------------- -------------------- -----------------
<S> <C> <C> <C>
Hartford Stock Fund, Inc...................................... February 27, 1997 February 28, 1997 $ 0.145092
Hartford Advisers, Fund, Inc.................................. February 27, 1997 February 28, 1997 0.068200
Hartford Capital Appreciation Fund, Inc....................... February 27, 1997 February 28, 1997 0.183585
Hartford Index Fund, Inc...................................... February 27, 1997 February 28, 1997 0.178996
Hartford International Opportunities Fund, Inc................ February 27, 1997 February 28, 1997 0.067382
Hartford Dividend and Growth Fund, Inc........................ February 27, 1997 February 28, 1997 0.020531
</TABLE>
137
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
9. MERGER OF HARTFORD U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC. WITH
HVA MONEY MARKET FUND, INC.:
On June 27, 1997, HVA Money Market Fund, Inc. (HVAMMF) acquired the net
assets of the Hartford U.S. Government Securities Money Market Fund, Inc.
(HUSGSMMF), pursuant to a plan of reorganization adopted by the Board of
Directors, April 22, 1997 and approved by HUSGSMMF's shareholders, June 19,
1997. The reorganization was accomplished by a tax free exchange of
10,575,168 (NAV $1.00) shares of HUSGSMMF for 10,575,168 (NAV $1.00) of
HVAMMF outstanding.
10. AUTHORIZED SHARES:
The authorized shares for each fund are as follows:
<TABLE>
<CAPTION>
FUND SHARES
- ------------------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Hartford Bond Fund, Inc...................................................................................... 800,000,000
Hartford Stock Fund, Inc..................................................................................... 2,000,000,000
HVA Money Market Fund, Inc................................................................................... 1,300,000,000
Hartford Advisers Fund, Inc.................................................................................. 5,000,000,000
Hartford Capital Appreciation Fund, Inc...................................................................... 2,000,000,000
Hartford Mortgage Securities Fund, Inc....................................................................... 800,000,000
Hartford Index Fund, Inc..................................................................................... 1,000,000,000
Hartford International Opportunities Fund, Inc............................................................... 1,500,000,000
Hartford Dividend and Growth Fund, Inc....................................................................... 2,000,000,000
Hartford International Advisers Fund, Inc.................................................................... 750,000,000
Hartford Small Company Fund, Inc............................................................................. 750,000,000
</TABLE>
11. RESULTS OF APRIL 22, 1997 SHAREHOLDER MEETING
An annual meeting of shareholders of the Funds was held on April 22, 1997.
At the meeting, each of the nominees for Board members was elected as
follows:
<TABLE>
<CAPTION>
HARTFORD BOND FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 399,803,067 6,318,672
Winifred E. Coleman......................................................................... 400,027,785 6,093,954
Joseph H. Gareau............................................................................ 400,138,872 5,982,867
Gov. William A. O'Neill..................................................................... 399,539,273 6,582,466
Millard H. Pryor, Jr........................................................................ 400,054,262 6,067,477
Lowndes A. Smith............................................................................ 400,109,668 6,012,071
John K. Springer............................................................................ 399,965,716 6,156,023
<CAPTION>
HARTFORD STOCK FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 725,643,669 11,494,849
Winifred E. Coleman......................................................................... 725,931,028 11,207,491
Joseph H. Gareau............................................................................ 726,287,065 10,851,453
Gov. William A. O'Neill..................................................................... 723,896,695 13,241,823
Millard H. Pryor, Jr........................................................................ 726,188,564 10,949,955
Lowndes A. Smith............................................................................ 726,159,639 10,978,879
John K. Springer............................................................................ 725,983,598 11,154,921
</TABLE>
138
<PAGE>
<TABLE>
<CAPTION>
HVA MONEY MARKET FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
Joseph A. Biernat........................................................................... 507,787,273 15,403,961
<S> <C> <C>
Winifred E. Coleman......................................................................... 507,650,064 15,541,170
Joseph H. Gareau............................................................................ 507,846,367 15,344,867
Gov. William A. O'Neill..................................................................... 505,717,626 17,473,608
Millard H. Pryor, Jr........................................................................ 507,709,159 15,482,076
Lowndes A. Smith............................................................................ 507,779,028 15,412,206
John K. Springer............................................................................ 507,755,887 15,435,347
<CAPTION>
HARTFORD ADVISERS FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 2,706,196,128 44,224,377
Winifred E. Coleman......................................................................... 2,706,708,057 43,712,448
Joseph H. Gareau............................................................................ 2,708,208,182 42,212,323
Gov. William A. O'Neill..................................................................... 2,699,621,811 50,798,694
Millard H. Pryor, Jr........................................................................ 2,707,965,249 42,455,256
Lowndes A. Smith............................................................................ 2,708,396,182 42,024,323
John K. Springer............................................................................ 2,707,002,272 43,418,233
<CAPTION>
HARTFORD CAPITAL APPRECIATION FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 862,198,192 17,015,051
Winifred E. Coleman......................................................................... 862,721,535 16,491,708
Joseph H. Gareau............................................................................ 862,985,151 16,228,091
Gov. William A. O'Neill..................................................................... 858,831,660 20,381,583
Millard H. Pryor, Jr........................................................................ 863,125,981 16,087,262
Lowndes A. Smith............................................................................ 862,993,762 16,219,481
John K. Springer............................................................................ 862,786,578 16,426,664
<CAPTION>
HARTFORD MORTGAGE SECURITIES FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 298,434,346 6,014,419
Winifred E. Coleman......................................................................... 298,985,819 5,462,945
Joseph H. Gareau............................................................................ 298,933,018 5,515,747
Gov. William A. O'Neill..................................................................... 298,308,725 6,140,040
Millard H. Pryor, Jr........................................................................ 299,022,062 5,426,702
Lowndes A. Smith............................................................................ 299,092,803 5,355,962
John K. Springer............................................................................ 298,966,694 5,482,071
<CAPTION>
HARTFORD INDEX FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 267,688,344 4,941,125
Winifred E. Coleman......................................................................... 267,740,002 4,889,467
Joseph H. Gareau............................................................................ 267,914,074 4,715,395
Gov. William A. O'Neill..................................................................... 267,048,401 5,581,067
Millard H. Pryor, Jr........................................................................ 267,985,568 4,643,901
Lowndes A. Smith............................................................................ 267,751,719 4,877,750
John K. Springer............................................................................ 267,926,306 4,703,162
</TABLE>
139
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
Joseph A. Biernat........................................................................... 706,904,414 13,500,737
<S> <C> <C>
Winifred E. Coleman......................................................................... 707,259,448 13,145,703
Joseph H. Gareau............................................................................ 707,356,116 13,049,035
Gov. William A. O'Neill..................................................................... 705,404,620 15,000,531
Millard H. Pryor, Jr........................................................................ 707,520,968 12,884,182
Lowndes A. Smith............................................................................ 707,459,919 12,945,232
John K. Springer............................................................................ 707,261,679 13,143,472
<CAPTION>
HARTFORD DIVIDEND AND GROWTH FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 606,019,324 9,969,266
Winifred E. Coleman......................................................................... 605,951,060 10,037,529
Joseph H. Gareau............................................................................ 606,290,059 9,698,531
Gov. William A. O'Neill..................................................................... 604,390,779 11,597,811
Millard H. Pryor, Jr........................................................................ 606,595,529 9,393,061
Lowndes A. Smith............................................................................ 606,494,021 9,494,569
John K. Springer............................................................................ 606,218,002 9,770,588
<CAPTION>
HARTFORD INTERNATIONAL ADVISERS FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 98,358,269 1,596,521
Winifred E. Coleman......................................................................... 98,395,846 1,558,944
Joseph H. Gareau............................................................................ 98,505,462 1,449,327
Gov. William A. O'Neill..................................................................... 97,974,519 1,980,271
Millard H. Pryor, Jr........................................................................ 98,418,560 1,536,230
Lowndes A. Smith............................................................................ 98,499,951 1,454,838
John K. Springer............................................................................ 98,363,240 1,591,550
<CAPTION>
HARTFORD SMALL COMPANY FUND, INC. VOTES FOR VOTES WITHHELD
- -------------------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Joseph A. Biernat........................................................................... 48,481,163 813,172
Winifred E. Coleman......................................................................... 48,471,224 823,111
Joseph H. Gareau............................................................................ 48,487,868 806,467
Gov. William A. O'Neill..................................................................... 48,384,396 909,939
Millard H. Pryor, Jr........................................................................ 48,495,531 798,804
Lowndes A. Smith............................................................................ 48,495,531 798,804
John K. Springer............................................................................ 48,495,531 798,804
</TABLE>
A proposal to ratify the selection of Arthur Andersen LLP as the auditors
for the Funds was approved as follows; 6,963,962,150 votes for, and
140,345,366 votes against, with 161,172,883 abstentations and broker
non-votes.
140
<PAGE>
<TABLE>
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD BOND FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 375,009,566 15,985,917 15,126,256
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 375,511,990 15,169,620 15,440,129
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 364,388,548 27,251,449 14,481,742
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 360,572,736 30,665,336 14,883,666
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 381,082,149 10,312,455 14,727,135
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 358,874,445 32,291,779 14,955,515
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD STOCK FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 682,945,899 28,199,774 25,992,845
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 683,661,735 27,242,568 26,234,216
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 646,474,530 65,605,648 25,058,341
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 634,576,929 76,651,259 25,910,331
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 692,162,458 18,711,539 26,264,522
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 647,304,654 63,417,319 26,416,545
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HVA MONEY MARKET FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 469,404,626 30,272,445 23,514,163
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 468,916,594 29,158,193 25,116,447
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 464,520,377 35,743,090 22,927,768
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 455,315,111 43,882,027 23,994,096
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 474,752,415 23,824,671 24,614,148
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 457,423,336 42,929,428 22,838,470
</TABLE>
141
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD ADVISERS FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 2,541,262,363 106,047,373 103,110,769
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 2,544,591,896 98,543,640 107,284,969
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 2,506,801,740 14,406,946 101,211,819
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 2,470,629,761 176,859,646 102,931,098
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 2,578,482,996 66,520,561 105,416,949
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 2,462,849,412 180,478,208 107,092,885
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD CAPITAL APPRECIATION FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 805,210,420 40,622,352 33,380,471
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 806,138,971 39,639,280 33,434,992
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 778,192,717 68,842,970 32,177,556
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 763,260,624 83,120,185 32,832,434
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 816,733,912 28,906,710 33,572,620
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 770,530,464 74,824,880 33,857,899
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD MORTGAGE SECURITIES FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 278,377,741 12,291,781 13,779,243
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 278,976,766 11,586,207 13,885,791
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 271,455,370 19,338,656 13,654,739
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 269,199,630 21,036,116 14,213,019
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 280,872,361 9,498,981 14,077,423
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 271,687,709 18,141,665 14,619,390
</TABLE>
142
<PAGE>
<TABLE>
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD INDEX FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 250,319,439 11,362,935 10,947,635
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 250,415,532 11,113,200 11,100,738
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 241,559,699 20,296,290 10,773,480
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 236,388,664 25,039,648 11,201,156
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 251,814,817 9,579,876 11,234,776
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 239,032,071 21,919,574 11,677,823
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 666,123,699 29,050,130 25,231,322
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 667,131,901 28,268,506 25,004,745
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 648,240,192 48,034,324 24,130,635
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 640,415,601 55,219,786 24,769,764
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 674,814,383 19,740,414 25,850,354
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 639,840,764 54,526,722 26,037,665
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD DIVIDEND AND GROWTH FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 568,580,683 25,628,423 21,779,484
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 569,043,768 24,067,096 22,877,725
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 566,889,829 28,284,141 20,814,620
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 557,088,133 37,544,679 21,355,778
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 577,379,042 16,828,309 21,781,240
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 555,922,994 37,995,940 22,069,656
</TABLE>
143
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD INTERNATIONAL ADVISERS FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 92,040,985 3,881,404 4,032,401
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 91,806,106 4,247,343 3,901,340
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 93,421,184 2,550,742 3,982,863
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 92,554,678 3,486,237 3,913,874
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 93,328,804 2,551,098 4,074,888
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 91,980,603 4,014,087 3,960,099
<CAPTION>
ABSENTIONS
VOTES AND BROKERS
HARTFORD SMALL COMPANY FUND, INC. VOTES FOR WITHHELD NON-VOTES
- ------------------------------------------------------------------------------ --------------- ------------- -------------
<S> <C> <C> <C>
A proposal to amend the Fund's fundamental investment restriction regarding
the making of loans.......................................................... 44,257,196 3,359,743 1,677,396
A proposal to amend the Fund's fundamental investment restriction regarding
borrowing.................................................................... 44,640,772 2,906,981 1,746,582
A proposal to amend the Fund's fundamental investment restriction regarding
diversification.............................................................. 45,409,627 2,149,033 1,735,675
A proposal to amend the Fund's fundamental investment restriction regarding
real estate.................................................................. 44,664,446 2,916,374 1,713,515
A proposal to amend the Fund's fundamental investment restriction regarding
senior securities............................................................ 45,258,212 2,197,514 1,838,609
A proposal to amend the Fund's fundamental investment restriction regarding
commodities.................................................................. 44,091,494 3,247,068 1,955,773
</TABLE>
144
<PAGE>
HARTFORD MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
[STAG]
<PAGE>
HARTFORD MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (UNAUDITED)
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET UNREALIZED
VALUE AT NET GAIN TOTAL FROM
BEGINNING INVESTMENT (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
--------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
HARTFORD BOND FUND, INC.
For the Six Months
Ended June 30,
1997................. $1.000 $0.034 $ 0.002 $ 0.036
For the Year Ended
December 31,
1996................... 1.028 0.064 (0.029) 0.035
1995................... 0.926 0.064 0.102 0.166
1994................... 1.044 0.060 (0.100) (0.040)
1993................... 1.024 0.062 0.039 0.101
1992................... 1.061 0.074 (0.019) 0.055
HARTFORD STOCK FUND, INC.
For the Six Months
Ended June 30,
1997................. 4.143 0.024 0.856 0.880
For the Year Ended
December 31,
1996................... 3.527 0.060 0.763 0.823
1995................... 2.801 0.070 0.840 0.910
1994................... 3.099 0.061 (0.111) (0.050)
1993................... 2.965 0.053 0.339 0.392
1992................... 2.927 0.051 0.219 0.270
HVA MONEY MARKET FUND,
INC.
For the Six Months
Ended June 30,
1997................. 1.000 0.025 -- 0.025
For the Year Ended
December 31,
1996................... 1.000 0.500 -- 0.050
1995................... 1.000 0.056 -- 0.056
1994................... 1.000 0.039 -- 0.039
1993................... 1.000 0.029 -- 0.029
1992................... 1.000 0.036 -- 0.036
HARTFORD ADVISERS FUND,
INC.
For the Six Months
Ended June 30,
1997................. 2.169 0.027 0.309 0.336
For the Year Ended
December 31,
1996................... 1.958 0.059 0.255 0.314
1995................... 1.600 0.064 0.377 0.441
1994................... 1.752 0.054 (0.100) (0.046)
1993................... 1.676 0.050 0.145 0.195
1992................... 1.649 0.059 0.070 0.129
HARTFORD CAPITAL
APPRECIATION FUND, INC.
For the Six Months
Ended June 30,
1997................. 3.914 0.009 0.523 0.532
For the Year Ended
December 31,
1996................... 3.490 0.022 0.655 0.677
1995................... 2.860 0.030 0.785 0.815
1994................... 3.052 0.011 0.070 0.081
1993................... 2.634 0.003 0.526 0.529
1992................... 2.607 0.008 0.388 0.396
HARTFORD MORTGAGE
SECURITIES FUND, INC.
For the Six Months
Ended June 30,
1997................. 1.056 0.036 0.001 0.037
For the Year Ended
December 31,
1996................... 1.071 0.069 (0.018) 0.051
1995................... 0.984 0.068 0.087 0.155
1994................... 1.075 0.068 (0.086) (0.018)
1993................... 1.079 0.071 (0.004) 0.067
1992................... 1.115 0.086 (0.036) 0.050
HARTFORD INDEX FUND, INC.
For the Six Months
Ended June 30,
1997................. 2.382 0.020 0.436 0.456
For the Year Ended
December 31,
1996................... 2.028 0.044 0.393 0.437
1995................... 1.522 0.044 0.507 0.551
1994................... 1.546 0.038 (0.024) 0.014
1993................... 1.450 0.035 0.096 0.131
1992................... 1.390 0.033 0.060 0.093
HARTFORD INTERNATIONAL
OPPORTUNITIES FUND,
INC.
For the Six Months
Ended June 30,
1997................. 1.407 0.014 0.119 0.133
For the Year Ended
December 31,
1996................... 1.306 0.023 0.140 0.163
1995................... 1.176 0.020 0.141 0.161
1994................... 1.215 0.016 (0.039) (0.023)
1993................... 0.917 0.009 0.298 0.307
1992................... 0.973 0.013 (0.056) (0.043)
HARTFORD DIVIDEND AND
GROWTH FUND, INC.
For the Six Months
Ended June 30,
1997................. 1.547 0.018 0.278 0.296
For the Year Ended
December 31,
1996................... 1.317 0.034 0.258 0.292
1995................... 0.994 0.033 0.323 0.356
From inception, March
8, 1994, through
December 31, 1994.... 1.000 0.024 (0.005) 0.019
HARTFORD INTERNATIONAL
ADVISERS FUND, INC.
For the Six Months
Ended June 30,
1997................. 1.167 0.027 0.062 0.089
For the Year Ended
December 31,
1996................... 1.109 0.040 0.093 0.133
From inception, March
1, 1995, through
December 31, 1995.... 1.000 0.030 0.126 0.156
HARTFORD SMALL COMPANY
FUND, INC.
For the Six Months
Ended June 30,
1997................. 1.069 0.001 0.110 0.111
From inception, August
9, 1996 through
December 31, 1996.... 1.000 0.002 0.069 0.071
</TABLE>
(1) Annualized.
(2) Not required prior to 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
146
<PAGE>
<TABLE>
<CAPTION>
DIVIDENDS NET ASSET NET ASSETS
FROM NET DISTRIBUTIONS NET INCREASE VALUE AT AT END OF
INVESTMENT FROM REALIZED (DECREASE) IN END TOTAL PERIOD
INCOME CAPITAL GAINS NET ASSETS OF PERIOD RETURN (IN THOUSANDS)
---------- ------------- ------------- --------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
HARTFORD BOND FUND, INC.
For the Six Months
Ended June 30,
1997................. $(0.022) $ -- $ 0.014 $1.014 3.71% $ 442,399
For the Year Ended
December 31,
1996................... (0.063) -- (0.028) 1.000 3.52 402,548
1995................... (0.064) -- 0.102 1.028 18.49 342,495
1994................... (0.060) (0.018) (0.118) 0.926 (3.95) 247,458
1993................... (0.062) (0.019) 0.020 1.044 10.24 239,602
1992................... (0.074) (0.018) (0.037) 1.024 5.53 128,538
HARTFORD STOCK FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.015) (0.217) 0.648 4.791 22.05 4,025,633
For the Year Ended
December 31,
1996................... (0.059) (0.148) 0.616 4.143 24.37 2,994,209
1995................... (0.070) (0.114) 0.726 3.527 34.10 1,876,884
1994................... (0.061) (0.187) (0.298) 2.801 (1.89) 1,163,158
1993................... (0.053) (0.205) 0.134 3.099 14.34 968,425
1992................... (0.051) (0.181) 0.038 2.965 10.04 569,903
HVA MONEY MARKET FUND,
INC.
For the Six Months
Ended June 30,
1997................. (0.025) -- -- 1.000 2.57 584,019
For the Year Ended
December 31,
1996................... (0.050) -- -- 1.000 5.19 542,586
1995................... (0.056) -- -- 1.000 5.74 339,709
1994................... (0.039) -- -- 1.000 3.95 321,465
1993................... (0.029) -- -- 1.000 2.94 234,088
1992................... (0.036) -- -- 1.000 3.63 190,246
HARTFORD ADVISERS FUND,
INC.
For the Six Months
Ended June 30,
1997................. (0.018) (0.098) 0.220 2.389 15.99 7,258,973
For the Year Ended
December 31,
1996................... (0.059) (0.044) 0.211 2.169 16.59 5,879,529
1995................... (0.064) (0.019) 0.358 1.958 28.34 4,262,769
1994................... (0.054) (0.052) (0.152) 1.600 (2.74) 3,034,034
1993................... (0.050) (0.069) 0.076 1.752 12.25 2,426,550
1992................... (0.059) (0.043) 0.027 1.676 8.30 985,747
HARTFORD CAPITAL
APPRECIATION FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.008) (0.296) 0.228 4.142 14.56 4,128,199
For the Year Ended
December 31,
1996................... (0.025) (0.228) 0.424 3.914 20.70 3,386,670
1995................... (0.030) (0.155) 0.630 3.490 30.25 2,157,892
1994................... (0.011) (0.262) (0.192) 2.860 2.50 1,158,644
1993................... (0.003) (0.108) 0.418 3.052 20.80 778,904
1992................... (0.008) (0.361) 0.027 2.634 16.98 300,373
HARTFORD MORTGAGE
SECURITIES FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.023) -- 0.014 1.070 3.59 320,453
For the Year Ended
December 31,
1996................... (0.066) -- (0.015) 1.056 5.07 325,495
1995................... (0.068) -- 0.087 1.071 16.17 327,565
1994................... (0.068) (0.005) (0.091) 0.984 (1.61) 304,147
1993................... (0.071) -- (0.004) 1.075 6.31 365,198
1992................... (0.086) -- (0.036) 1.079 4.64 258,711
HARTFORD INDEX FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.012) (0.196) 0.248 2.630 20.21 892,647
For the Year Ended
December 31,
1996................... (0.044) (0.039) 0.354 2.382 22.09 621,065
1995................... (0.044) (0.001) 0.506 2.028 36.55 318,253
1994................... (0.038) -- (0.024) 1.522 0.94 157,660
1993................... (0.035) -- 0.096 1.546 9.12 140,396
1992................... (0.033) -- 0.060 1.450 6.82 82,335
HARTFORD INTERNATIONAL
OPPORTUNITIES FUND,
INC.
For the Six Months
Ended June 30,
1997................. (0.001) (0.104) 0.028 1.435 10.27 1,171,244
For the Year Ended
December 31,
1996................... (0.025) (0.037) 0.101 1.407 12.93 996,543
1995................... (0.020) (0.011) 0.130 1.306 13.93 686,475
1994................... (0.016) -- (0.039) 1.176 (1.94) 563,765
1993................... (0.009) -- 0.298 1.215 33.73 281,608
1992................... (0.013) -- (0.056) 0.917 (4.43) 47,560
HARTFORD DIVIDEND AND
GROWTH FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.012) (0.044) 0.240 1.787 19.54 1,437,430
For the Year Ended
December 31,
1996................... (0.034) (0.028) 0.230 1.547 22.91 879,980
1995................... (0.033) -- 0.323 1.317 36.37 265,070
From inception, March
8, 1994, through
December 31, 1994.... (0.024) (0.001) (0.006) 0.994 1.96 55,066
HARTFORD INTERNATIONAL
ADVISERS FUND, INC.
For the Six Months
Ended June 30,
1997................. (0.050) (0.004) 0.035 1.202 7.97 165,432
For the Year Ended
December 31,
1996................... (0.051) (0.024) 0.058 1.167 11.79 104,486
From inception, March
1, 1995, through
December 31, 1995.... (0.030) (0.017) 0.109 1.109 15.84 31,264
HARTFORD SMALL COMPANY
FUND, INC.
For the Six Months
Ended June 30,
1997................. -- (0.005) 0.106 1.175 10.46 103,638
From inception, August
9, 1996 through
December 31, 1996.... (0.002) -- 0.069 1.069 7.15 42,812
<CAPTION>
RATIO OF
RATIO OF NET
OPERATING INVESTMENT AVERAGE
EXPENSES INCOME PORTFOLIO COMMISSION
TO AVERAGE TO AVERAGE TURNOVER RATE
NET ASSETS(1) NET ASSETS(1) RATE PAID(2)
------------- ------------- --------- ----------
<S> <C> <C> <C> <C>
HARTFORD BOND FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.51% 6.93% 87.6% --
For the Year Ended
December 31,
1996................... 0.52 6.37 212.0 --
1995................... 0.53 6.51 215.0 --
1994................... 0.55 6.23 328.8 --
1993................... 0.57 5.93 494.3 --
1992................... 0.64 7.21 434.1 --
HARTFORD STOCK FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.45 1.14 12.2 0.0492
For the Year Ended
December 31,
1996................... 0.46 1.59 42.3 0.0490
1995................... 0.48 2.23 52.9 --
1994................... 0.50 2.17 63.8 --
1993................... 0.53 1.86 69.0 --
1992................... 0.57 1.90 69.8 --
HVA MONEY MARKET FUND,
INC.
For the Six Months
Ended June 30,
1997................. 0.44 5.14 -- --
For the Year Ended
December 31,
1996................... 0.44 5.04 -- --
1995................... 0.45 5.57 -- --
1994................... 0.47 3.99 -- --
1993................... 0.48 2.91 -- --
1992................... 0.53 3.60 -- --
HARTFORD ADVISERS FUND,
INC.
For the Six Months
Ended June 30,
1997................. 0.63 2.49 10.9 0.0502
For the Year Ended
December 31,
1996................... 0.63 2.92 53.8 0.0487
1995................... 0.65 3.57 63.5 --
1994................... 0.65 3.34 60.0 --
1993................... 0.69 3.07 55.3 --
1992................... 0.78 3.55 72.8 --
HARTFORD CAPITAL
APPRECIATION FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.64 0.45 36.5 0.0544
For the Year Ended
December 31,
1996................... 0.65 0.60 85.4 0.0665
1995................... 0.68 0.95 78.6 --
1994................... 0.72 0.40 73.3 --
1993................... 0.76 0.12 91.4 --
1992................... 0.87 0.36 100.3 --
HARTFORD MORTGAGE
SECURITIES FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.46 6.77 73.61 --
For the Year Ended
December 31,
1996................... 0.45 6.67 201.0 --
1995................... 0.47 6.50 489.4 --
1994................... 0.48 6.65 365.7 --
1993................... 0.49 6.49 183.4 --
1992................... 0.56 7.96 277.2 --
HARTFORD INDEX FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.39 1.66 0.6 0.0492
For the Year Ended
December 31,
1996................... 0.39 2.07 19.3 0.0500
1995................... 0.39 2.46 1.5 --
1994................... 0.45 2.50 1.8 --
1993................... 0.49 2.36 0.8 --
1992................... 0.60 2.48 1.2 --
HARTFORD INTERNATIONAL
OPPORTUNITIES FUND,
INC.
For the Six Months
Ended June 30,
1997................. 0.77 2.18 33.9 0.0035
For the Year Ended
December 31,
1996................... 0.79 1.74 70.0 0.0045
1995................... 0.86 1.60 55.6 --
1994................... 0.85 1.42 46.4 --
1993................... 1.00 0.84 31.8 --
1992................... 1.23 1.40 25.1 --
HARTFORD DIVIDEND AND
GROWTH FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.68 2.36 17.8 0.0537
For the Year Ended
December 31,
1996................... 0.73 2.52 56.9 0.0715
1995................... 0.77 2.91 41.4 --
From inception, March
8, 1994, through
December 31, 1994.... 0.83 3.52 27.8 --
HARTFORD INTERNATIONAL
ADVISERS FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.85 3.68 71.2 0.0043
For the Year Ended
December 31,
1996................... 0.96 3.24 95.2 0.0064
From inception, March
1, 1995, through
December 31, 1995.... 0.65 3.36 47.2 --
HARTFORD SMALL COMPANY
FUND, INC.
For the Six Months
Ended June 30,
1997................. 0.79 0.14 65.5 0.0383
From inception, August
9, 1996 through
December 31, 1996.... 0.72 0.31 31.8 0.0290
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
147
<PAGE>
VARIABLE INSURANCE FUNDS
STATEMENT OF ASSETS AND LIABILITIES,
STATEMENT OF OPERATIONS,
[STAG]
STATEMENTS OF CHANGES IN NET ASSETS,
NOTES TO FINANCIAL STATEMENTS AND
FINANCIAL HIGHLIGHTS
<PAGE>
VARIABLE INSURANCE FUNDS
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------- -------------
<C> <S> <C>
COMMON STOCKS -- 94.2%
AIRCRAFT -- 2.8%
1,600 Lockheed Martin Corp.................... $ 165,700
-------------
APPAREL -- 1.9%
1,300 V F Corp................................ 110,663
-------------
BANKS -- 5.5%
1,400 JP Morgan & Co.......................... 146,125
3,000 Wachovia Corp........................... 174,938
-------------
321,063
-------------
BEVERAGES -- 3.2%
4,500 Anheuser-Busch Cos. Inc................. 188,719
-------------
BUSINESS EQUIPMENT & SERVICES -- 1.8%
1,500 Pitney Bowes, Inc....................... 106,875
-------------
CAPITAL EQUIPMENT -- 2.0%
1,900 Parker-Hannifin Corp. (b)............... 115,306
-------------
CHEMICALS - SPECIALTY -- 2.8%
2,100 Vulcan Materials Co..................... 164,850
-------------
COMMUNICATIONS EQUIPMENT -- 2.5%
1,700 Harris Corp............................. 142,800
-------------
COMPUTERS - MAIN & MINI -- 2.8%
2,900 Hewlett-Packard Co...................... 162,400
-------------
COMPUTER - PERIPHERALS -- 1.2%
2,000 Adobe Systems, Inc...................... 70,125
-------------
ELECTRICAL EQUIPMENT -- 2.6%
2,800 Emerson Electric Co..................... 154,175
-------------
ELECTRONIC COMPONENTS -- 1.6%
1,600 Avnet, Inc.............................. 92,000
-------------
ELECTRONIC INSTRUMENTS -- 1.8%
1,700 Tektronix, Inc.......................... 102,000
-------------
FOOD & RELATED -- 4.5%
2,600 Dean Foods Co........................... 104,975
4,500 SUPERVALU, Inc.......................... 155,250
-------------
260,225
-------------
FOREST & PAPER PRODUCTS -- 1.8%
2,000 Weyerhaeuser Co......................... 104,000
-------------
HEALTH CARE - DRUGS -- 5.8%
2,400 Abbott Laboratories..................... 160,200
1,600 Merck & Co.............................. 165,600
100 Rhone-Poulenc Rorer, Inc................ 9,087
-------------
334,887
-------------
HEALTH CARE - GENERAL -- 3.4%
5,000 Mallinckrodt Inc........................ 195,000
-------------
HOUSEHOLD - GENERAL
PRODUCTS -- 1.9%
2,900 American Greetings...................... 107,662
-------------
<CAPTION>
SHARES MARKET
- ------------- VALUE
-------------
<C> <S> <C>
HOUSEHOLD - MAJOR APPLIANCES -- 1.9%
2,000 Whirlpool Corp.......................... $ 109,125
-------------
INSURANCE - PROPERTY & CASUALTY -- 5.6%
2,500 Lincoln National Corp................... 160,937
3,500 SAFECO Corp............................. 163,406
-------------
324,343
-------------
LEISURE TIME INDUSTRY -- 1.7%
3,500 Hasbro, Inc............................. 99,313
-------------
METAL FABRICATION -- 1.8%
3,300 Trinity Industries, Inc................. 104,775
-------------
MINING -- 3.1%
1,200 Phelps Dodge Corp....................... 102,225
1,000 Potash Corp. of Saskatchewan, Inc....... 75,062
-------------
177,287
-------------
PETROLEUM - DOMESTIC -- 2.6%
3,500 Phillips Petroleum Co................... 153,125
-------------
PETROLEUM - INTERNATIONALS -- 5.4%
2,200 Chevron Corp............................ 162,663
600 Mobil Corp.............................. 41,925
2,000 Royal Dutch Petroleum................... 108,750
-------------
313,338
-------------
PUBLISHING -- 2.1%
3,300 Media General, Inc...................... 124,163
-------------
RAILROAD -- 1.7%
1,000 Norfolk Southern Corp................... 100,750
-------------
RETAIL - FOOD STORES -- 1.9%
3,000 Albertson's, Inc........................ 109,500
-------------
RETAIL - GENERAL MERCHANDISE -- 1.7%
2,100 May Department Stores Co................ 99,225
-------------
SECURITY & COMMISSION BROKERS -- 2.0%
2,700 A.G. Edwards, Inc....................... 116,438
-------------
TOBACCO -- 2.1%
4,500 UST, Inc................................ 124,875
-------------
UTILITIES - ELECTRIC -- 5.3%
3,700 Public Service Co. of Colorado.......... 153,550
4,700 Western Resources, Inc.................. 152,456
-------------
306,006
-------------
UTILITIES - GAS & PIPELINE -- 1.8%
2,900 Nicor, Inc.............................. 104,038
-------------
UTILITIES - TELEPHONE -- 3.6%
1,300 AT & T Corp............................. 45,581
2,600 SBC Communications, Inc................. 160,875
-------------
206,456
-------------
Total common stocks..................... $ 5,471,207
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-1
<PAGE>
VARIABLE INSURANCE FUNDS
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
- ------------- VALUE
-------------
<C> <S> <C>
INVESTMENT COMPANIES -- 7.1%
UTILITIES - TELEPHONE -- (CONTINUED)
149,762 Federated Short-Term U.S. Government
Trust Fund............................ $ 149,762
264,948 Provident Federal Fund.................. 264,948
-------------
Total investment companies.............. 414,710
-------------
Total (cost $5,681,025)(a).............. $ 5,885,917
-------------
-------------
</TABLE>
Percentages indicated are based on net assets of $5,809,794.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation (depreciation) of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................ $ 247,397
Unrealized depreciation............................ (42,505)
---------
Net unrealized appreciation........................ $ 204,892
---------
---------
</TABLE>
(b) Non-income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-2
<PAGE>
VARIABLE INSURANCE FUNDS
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $5,681,025)........................................................ $ 5,885,917
Interest and dividends receivable.............................................................. 7,322
Prepaid expenses and other assets.............................................................. 10,620
-------------
Total assets............................................................................... 5,903,859
-------------
LIABILITIES:
Dividends payable.............................................................................. 6,706
Payable for investments purchased.............................................................. 74,705
Accrued expenses and other payables:
Investment advisory fees..................................................................... 141
Administration fees.......................................................................... 31
Accounting fees.............................................................................. 330
Registration and filing fees................................................................. 4,984
Other........................................................................................ 7,168
-------------
Total liabilities.......................................................................... 94,065
-------------
NET ASSETS:
Capital........................................................................................ 5,604,902
Net unrealized appreciation from investments................................................... 204,892
-------------
Net assets................................................................................. $ 5,809,794
-------------
-------------
Outstanding units of beneficial interest (shares)................................................ 558,238
Net asset value -- offering and redemption price per share....................................... $10.41
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-3
<PAGE>
VARIABLE INSURANCE FUNDS
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD FROM JUNE 3, 1997 THROUGH JUNE 30, 1997(A)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income............................................................................. $ 2,049
Dividend income............................................................................. 9,894
-------------
Total income.............................................................................. 11,943
-------------
EXPENSES:
Investment advisory fees.................................................................... 2,944
Administration fees......................................................................... 796
Custodian fees.............................................................................. 588
Accounting fees............................................................................. 2,441
Legal fees.................................................................................. 532
Audit fees.................................................................................. 1,120
Organization costs.......................................................................... 924
Trustees' fees and expenses................................................................. 1,988
Transfer agent fees......................................................................... 812
Registration and filing fees................................................................ 4,984
Printing costs.............................................................................. 2,016
Other....................................................................................... 644
-------------
Total expenses before reimbursements and voluntary reductions............................. 19,789
-------------
Expenses reimbursed and voluntarily reduced............................................... (14,552)
-------------
Net expenses.............................................................................. 5,237
-------------
Net investment income......................................................................... 6,706
-------------
UNREALIZED GAINS FROM INVESTMENTS:
Net change in unrealized appreciation from investments...................................... 204,892
Net unrealized gains from investments....................................................... 204,892
-------------
Change in net assets resulting from operations................................................ $ 211,598
-------------
-------------
</TABLE>
(a) Period from commencement of operations.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-4
<PAGE>
VARIABLE INSURANCE FUNDS
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIOD FROM JUNE 3, 1997 THROUGH JUNE 30, 1997(A)
<TABLE>
<S> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income....................................................................... $ 6,706
Net change in unrealized appreciation from investments...................................... 204,892
-------------
Change in net assets resulting from operations............................................ 211,598
-------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income.................................................................. (6,706)
-------------
Change in net assets from shareholder distributions....................................... (6,706)
-------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued................................................................. 5,604,902
-------------
Change in net assets from capital transactions............................................ 5,604,902
-------------
Change in net assets...................................................................... 5,809,794
NET ASSETS:
Beginning of period......................................................................... --
-------------
End of period............................................................................... $ 5,809,794
-------------
-------------
SHARE TRANSACTIONS:
Issued...................................................................................... 558,238
-------------
Change in shares.......................................................................... 558,238
-------------
-------------
</TABLE>
(a) Period from commencement of operations.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-5
<PAGE>
Variable Insurance Funds
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION:
The Variable Insurance Funds (the "Trust") was organized on July 20, 1994
and is registered under the Investment Company Act of 1940 (the "Act") as an
open-end management investment company established as a Massachusetts
business trust.
The Trust is authorized to issue an unlimited number of shares which are
shares of beneficial interest without par value. The Trust presently offers
series of shares of the BB&T Growth & Income Fund (the "Fund"). Shares of
the Fund are offered to a separate account of Hartford Life Insurance
Company.
The Investment objective of the Fund is to seek to provide capital growth,
current income or both. Under normal market conditions, it seeks this
objective by investing primarily in stocks, which may include common stock,
preferred stock, warrants, or debt instruments that are convertible into
common stock.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses for the period. Actual results could differ from those estimates.
SECURITIES VALUATION--Listed securities are valued at the closing sales
price on that exchange on the day of computation, or, if there have been no
sales during such day, at the latest bid quotation. Unlisted securities are
valued at their latest bid quotation in their principal market. If no such
bid price is available, then such securities are valued in good faith at
their respective fair market values using methods determined by or under the
supervision of the Board of Trustees. Portfolio securities with a remaining
maturity of 60 days or less are valued either at amortized cost or original
cost plus accrued interest, which approximates current value.
All other assets and securities, including securities for which market
quotations are not readily available, are valued at their fair market value
as determined in good faith under the general supervision of the Board of
Trustees.
SECURITIES TRANSACTIONS AND RELATED INCOME--Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis and includes, where
applicable, the pro rata amortization of premium or discount. Dividend
income is recorded on the ex-dividend date. Gains or losses realized on
sales of securities are determined by comparing the identified cost of the
security lot sold with the net sales proceeds.
REPURCHASE AGREEMENTS--The Fund may acquire repurchase agreements from
member banks of the Federal Deposit Insurance Corporation and from
registered broker/dealers that Branch Banking and Trust Company ("BB&T")
deems creditworthy under guidelines approved by the Board of Trustees,
subject to the seller's agreement to repurchase such securities at a
mutually agreed-upon date and price. The repurchase price generally equals
the price paid by the Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
collateral. The seller, under a repurchase agreement, is required to
maintain the value of collateral held pursuant to the agreement at not less
than the repurchase price (including accrued interest). Securities subject
to repurchase agreements are held by the Fund's custodian or another
qualified custodian or in the Federal Reserve/ Treasury book-entry system.
Repurchase agreements may be considered to be loans by the Fund under the
Act.
DIVIDENDS TO SHAREHOLDERS--Dividends from net investment income are declared
and paid quarterly for the Fund. Distributable net realized capital gains,
if any, are declared and distributed at least annually.
Dividends from net investment income and net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principals. These differences are primarily
due to differing treatments of foreign currency transactions and deferrals
of certain losses.
FEDERAL INCOME TAXES--It is the intention of the Fund to continue to qualify
as a regulated investment company by complying with the provisions available
to certain investment companies, as defined in applicable sections of the
Internal
6
<PAGE>
Revenue Code, and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or substantially
all, federal income taxes.
OTHER--Expenses that are directly related to the Fund are charged directly
to the Fund.
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
period from June 3, 1997 (commencement of operations) through June 30, 1997
are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ -----
<S> <C> <C>
Growth & Income....................................................................................... $ 5,266,315 --
</TABLE>
4. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Fund by BB&T. Under the
terms of the investment advisory agreement, BB&T is entitled to receive fees
based on a percentage of the average daily net assets of the Fund.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
is an Ohio limited partnership. BISYS Fund Services Ohio, Inc. ("BISYS
Ohio"), and BISYS are subsidiaries of The BISYS Group, Inc.
BISYS, with whom certain officers and trustees of the Trust are affiliated,
serves the Trust as Administrator. Such affiliated officers and trustees are
paid no fees directly by the Trust for serving as officers and trustees of
the Trust. Under the terms of the Management and Administration Agreement
between BISYS and the Trust, BISYS's fees are computed daily as a percentage
of the average net assets of the Fund. BISYS also serves as Distributor to
the Fund. BISYS Ohio serves the Fund as transfer agent and mutual fund
accountant.
Fees may be voluntarily reduced to assist the Fund in maintaining
competitive expense ratios. Information regarding these transactions is as
follows for the period ended June 30, 1997:
<TABLE>
<S> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)....................................................... 0.74%
Voluntary fee reductions................................................................... $ 2,803
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)....................................................... 0.20%
Voluntary fee reductions................................................................... $ 554
Expenses reimbursed by BB&T................................................................ $ 11,195
Transfer agent and mutual fund accountant fees............................................. $ 3,253
</TABLE>
7
<PAGE>
Variable Insurance Funds
- --------------------------------------------------------------------------------
BB&T GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
FOR THE PERIOD JUNE 3, 1997 THROUGH JUNE 30, 1997(A)
<TABLE>
<CAPTION>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................................... $ 10.00
<S> <C>
-------------
INVESTMENT ACTIVITIES:
Net investment income....................................................................... 0.01
Net unrealized gains from investments....................................................... 0.41
-------------
Total from investment activities.......................................................... 0.42
-------------
DISTRIBUTIONS:
Net investment income....................................................................... (0.01)
-------------
Total distributions....................................................................... (0.01)
-------------
NET ASSET VALUE, END OF PERIOD................................................................ $ 10.41
-------------
-------------
Total return.................................................................................. 4.22%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets, at end of period (000).......................................................... $ 5,810
Ratio of expenses to average net assets..................................................... 1.27%(c)
Ratio of net investment income to average net assets........................................ 1.62%(c)
Ratio of expenses to average net assets*.................................................... 4.79%(c)
Ratio of net investment income to average net assets*....................................... (1.90)%(c)
Portfolio Turnover.......................................................................... 0.00%
Average commission rate paid (d)............................................................ $ 0.0622
</TABLE>
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Represents the dollar amount of commissions paid on portfolio transactions
divided by total number of shares purchased and sold by the Fund for which
commissions were charged.
* During the period certain fees were reimbursed and voluntarily reduced. If
such reimbursements and voluntary fee reductions has not occurred, the ratios
would have been as indicated.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
B-8
<PAGE>
- ------------------------------------------------------------------------------
Hartford Life Insurance Companies
P.O. Box 2999 BULK RATE
Hartford, CT 06104-2999 U.S. POSTAGE
PAID
PERMIT NO. 1
HARTFORD, CT
