MUTUAL OF AMERICA
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
DECEMBER 31, 1999
This report is not to be construed as an offering for sale of any Variable
Product. No offering is made except in conjunction with a prospectus which must
precede or accompany this report.
<PAGE>
MUTUAL OF AMERICA
Separate Account No. 2
Annual Report
December 31, 1999
Dear Participant:
We are pleased to send you the 1999 Annual Report of Mutual of America's
Separate Account No. 2. This Account is an investment vehicle for participants
in our Tax-Deferred Annuity, Voluntary Employee Contributions, and Individual
Retirement Annuity programs, Thrift and Section 457 Deferred Compensation Plans,
as well as for Flexible Premium Annuity policyholders. Separate Account No. 2
consists of seventeen distinct funds. Each invests in shares of one of nine
funds of Mutual of America Investment Corporation (the "Investment Company"):
the Money Market, All America, Equity Index, Mid-Cap Equity Index (commenced
operations on May 3, 1999), Bond, Short-Term Bond, Mid-Term Bond, Composite and
Aggressive Equity Funds; three portfolios of Scudder Variable Life Investment
Fund ("Scudder"): the Bond, Capital Growth and International Portfolios; the VP
Capital Appreciation Fund of American Century Variable Portfolios, Inc.
("American Century"); the Calvert Social Balanced Portfolio of Calvert Variable
Series, Inc. ("Calvert"); the Equity-Income Portfolio of Fidelity Investments
Variable Insurance Products Fund ("Fidelity VIP"); and the Contrafund Portfolio
and Asset Manager Portfolio of Fidelity Investments Variable Insurance Products
Fund II ("Fidelity VIP II").
Each of the funds of Separate Account No. 2 owns shares in a similarly
named fund of the Investment Company, portfolio of Scudder, fund of American
Century, portfolio of Calvert, portfolio of Fidelity VIP and portfolio of
Fidelity VIP II. The investment results of each of the funds of Separate Account
No. 2 are based on the performance of the corresponding funds or portfolios of
the Investment Company, Scudder, American Century, Calvert, Fidelity VIP and
Fidelity VIP II.
The investment objectives and primary investments of the funds and
portfolios in which the Separate Account Funds invested in 1999 are summarized
as follows:
Investment Company Money Market Fund: This Fund seeks to realize high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital through investments in money market
instruments and other short-term debt securities.
Investment Company All America Fund: This Fund seeks to outperform the
Standard & Poor's Composite Index of 500 Stocks (the "S&P 500 Index") by
investing in a diversified portfolio of primarily common stocks. The Fund
invests approximately 60% of its assets (the "Indexed Assets") to provide
investment results that correspond to the performance of the S&P 500 Index. The
remaining approximately 40% of its assets (the "Active Assets") seek to achieve
a high level of total return, through both appreciation of capital and, to a
lesser extent, current income, by means of a diversified portfolio of primarily
common stocks with a broad exposure to the market. ("Standard & Poor's",
"S&P"and "S&P 500" are trademarks of The McGraw-Hill Companies, Inc.)
Investment Company Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P 500 Index by
investing primarily in the common stocks that comprise the S&P 500 Index.
Investment Company Mid-Cap Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P MidCap 400
Index by investing primarily in the common stocks that comprise the S&P MidCap
400 Index. ("S&P MidCap 400" is a trademark of The McGraw-Hill Companies, Inc.)
Investment Company Bond Fund: This Fund seeks to provide as high a level
of current income over time as is believed consistent with prudent investment
risk, with preservation of capital a secondary objective, by investing primarily
in publicly-traded, investment grade debt securities.
Investment Company Short-Term Bond Fund: This Fund seeks to provide as
high a level of current income over time as is believed consistent with prudent
investment risk, with preservation of capital a secondary objective, by
investing primarily in publicly-traded, investment grade debt securities and
money market instruments. The average maturity of the Fund is between one and
three years.
1
<PAGE>
Investment Company Mid-Term Bond Fund: This Fund seeks as high a level of
current income over time as is believed consistent with prudent investment risk,
with preservation of capital a secondary objective, by investing primarily in
publicly-traded, investment grade debt securities. The average maturity of the
Fund is between three and seven years.
Investment Company Composite Fund: This Fund seeks to achieve, as high a
total rate of return, through both appreciation of capital and current income,
as is consistent with prudent investment risk, by investing in a diversified
portfolio of publicly-traded common stocks, bonds and money market instruments.
Investment Company Aggressive Equity Fund: This Fund's investment
objective is capital appreciation, by investing approximately half of its assets
in companies believed to possess above-average growth potential and the other
half of its assets in companies believed to possess valuable assets or whose
securities are believed to be undervalued in the marketplace.
At a special meeting of shareholders of the Investment Company scheduled
for February 28, 2000, Aggressive Equity Fund shareholders who owned shares as
of December 21, 1999 will vote on a proposal to amend the investment objective
of the Fund to read: "The investment objective of the Aggressive Equity Fund is
capital appreciation." If approved, the Fund will continue to invest in growth
and value stocks, but the Adviser will determine the percentage of Fund assets
to be invested in each type of stock, rather than investing Fund assets
approximately equally in each type.
Scudder Bond Portfolio: This Portfolio seeks a high level of income
consistent with a high quality portfolio of debt securities.
Scudder Capital Growth Portfolio: This Portfolio seeks to maximize
long-term capital growth through a broad and flexible investment program, by
investing in marketable securities, principally common stocks and, consistent
with its objective of long-term capital growth, preferred stocks.
Scudder International Portfolio: This Portfolio seeks long-term growth of
capital primarily through a diversified portfolio of foreign equity securities,
by investing primarily in established companies that do business principally
outside of the United States and that are listed on foreign exchanges.
American Century VP Capital Appreciation Fund: This Fund seeks capital
growth by investing primarily in common stocks that meet certain fundamental and
technical standards and are considered by the Fund's management to have
better-than-average prospects for appreciation.
Calvert Social Balanced Portfolio: This Portfolio seeks a competitive
total return through an actively managed, non-diversified portfolio of stocks,
bonds and money market instruments that offer income and growth opportunity and
satisfy the Portfolio's investment and social criteria.
Fidelity VIP Equity-Income Portfolio: This Portfolio seeks reasonable
income by investing primarily in income-producing equity securities, while
considering the potential for capital appreciation, and it also seeks to achieve
a yield that exceeds the composite yield on the securities comprising the S&P
500 Index.
Fidelity VIP II Contrafund Portfolio: This Portfolio seeks capital
appreciation over the long-term by investing primarily in securities of
companies whose value, the Portfolio's adviser believes, is not fully recognized
by the public. These securities may be issued by domestic or foreign companies
and many may not be well known. The Portfolio normally invests in common stocks.
Fidelity VIP II Asset Manager Portfolio: This Portfolio seeks high total
return with reduced risk over the long-term by allocating its assets among
domestic and foreign stocks, bonds and short-term/money market instruments, with
an expected "neutral mix" over the long-term of 10% in short-term/money market
instruments, 40% in bonds and 50% in stocks.
2
<PAGE>
For the year ended December 31, 1999, the following total returns were
experienced in these seventeen Separate Account Funds:
Investment Company Money Market Fund(1) ......................... + 3.5%
Investment Company All America Fund ............................. + 23.9%
Investment Company Equity Index Fund ............................ + 18.8%
Investment Company Mid-Cap Equity Index Fund(2) ................. + 10.6%
Investment Company Bond Fund .................................... - 3.3%
Investment Company Short-Term Bond Fund ......................... + 2.7%
Investment Company Mid-Term Bond Fund ........................... - 0.1%
Investment Company Composite Fund ............................... + 13.5%
Investment Company Aggressive Equity Fund ....................... + 41.2%
Scudder Bond Fund ............................................... - 2.4%
Scudder Capital Growth Fund ..................................... + 33.2%
Scudder International Fund ...................................... + 52.2%
American Century VP Capital Appreciation Fund ................... + 62.4%
Calvert Social Balanced Fund .................................... + 10.6%
Fidelity VIP Equity-Income Fund ................................. + 4.9%
Fidelity VIP II Contrafund ...................................... + 22.6%
Fidelity VIP II Asset Manager Fund .............................. + 9.6%
----------
(1) The seven-day net annualized effective yield as of 2/15/00 was 4.13%
and is not necessarily indicative of future actual yields.
(2) Commenced operations May 3, 1999; total return is from that date.
Total return is equal to the changes in the value of a unit of
participation in a Fund from the beginning to the end of the specified period.
It reflects investment income earned and reinvested plus the changes in the
market value (whether realized or unrealized) of the securities in the
respective fund or portfolio of the Investment Company, Scudder, American
Century, Calvert or Fidelity during the indicated period. Results are net of all
charges, including a monthly service charge (assessed against an average account
balance for all individually allocated contracts) based upon a hypothetical
$1,000 invested at the beginning of the period. These returns are not guaranteed
and are not necessarily indicative of the future investment performance of the
particular Fund. Withdrawals and contributions made within a period would
experience different rates of return based on the respective unit values on the
dates of such transactions.
This report includes financial statements for each Fund of Separate
Account No. 2. Accompanying this report are the financial statements for each
similarly named fund of the Investment Company, portfolio of Scudder, fund of
American Century, portfolio of Calvert and portfolios of Fidelity VIP and
Fidelity VIP II.
Total Return Separate Account Performance Notes for extended time periods
and other services are available by calling 1-800-468-3785.
I hope you will find this report helpful and informative.
Sincerely,
/s/ Manfred Altstadt
----------------------------------------
Manfred Altstadt
Senior Executive Vice President
and Chief Financial Officer,
Mutual of America Life Insurance Company
3
<PAGE>
CONTENTS
Page
----
Annual Report of Mutual of America Separate Account No. 2 ............... 1
Statement of Assets and Liabilities ..................................... 5
Statement of Operations ................................................. 7
Statements of Changes in Net Assets ..................................... 9
Notes to Financial Statements ............................................ 12
Report of Independent Public Accountants ................................... 17
4
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Investment Company
-----------------------------------------------------------------------
Mid-Cap
Money Market All America Equity Index Equity Index Bond
Fund Fund Fund Fund Fund
-------------- --------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Mutual of America
Investment Corporation
at market value
(Cost:
Money Market Fund -- $44,801,491
All America Fund -- $345,309,677
Equity Index Fund -- $282,996,694
Mid-Cap Equity Index -- $3,542,725
Bond Fund -- $48,549,982)
(Notes 1 and 2) ...................................... $44,088,450 $485,044,971 $384,361,512 $3,786,860 $43,979,793
Due From (To) Mutual of America
General Account ...................................... (309,762) (2,434,787) 257,303 14,211 (78,718)
----------- ------------ ------------ ---------- -----------
NET ASSETS .............................................. $43,778,688 $482,610,184 $384,618,815 $3,801,071 $43,901,075
=========== ============ ============ ========== ===========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................ $ 2.11 $ 10.05 $ 3.41 $ 1.11 $ 3.07
=========== ============ ============ ========== ===========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ........................... 20,765,603 48,013,571 112,734,611 3,430,529 14,286,831
=========== ============ ============ ========== ============
<CAPTION>
Investment Company
-----------------------------------------------------------
Aggressive
Short-Term Mid-Term Composite Equity
Bond Fund Bond Fund Fund Fund
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Mutual of America Investment Corporation
at market value
(Cost:
Short-Term Bond Fund -- $4,891,585
Mid-Term Bond Fund -- $8,664,505
Composite Fund -- $283,283,242
Aggressive Equity Fund -- $125,799,408)
(Notes 1 and 2) ...................................... $4,643,095 $8,000,926 $316,191,235 $177,135,206
Due From (To) Mutual of America General Account ......... (26,162) (2,440) 55,735 94,575
---------- ---------- ------------ ------------
NET ASSETS .............................................. $4,616,933 $7,998,486 $316,246,970 $177,229,781
========== ========== ============ ============
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................ $ 1.28 $ 1.32 $ 5.61 $ 2.85
========== ========== ============ ============
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ............................ 3,603,865 6,036,785 56,403,559 62,123,089
========== ========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
--------------------------------------------- -------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Scudder Portfolios and American
Century VP Capital Appreciation at
market value
(Cost:
Scudder Bond Fund -- $20,914,832
Scudder Capital Growth Fund -- $321,652,581
Scudder International Fund -- $175,164,129
American Century VP Capital Appreciation
Fund -- $42,798,557
(Notes 1 and 2) ...................................... $19,849,517 $557,725,832 $219,166,649 $59,651,060
Due From (To) Mutual of America General
Account .............................................. (3,675) 242,170 (189) (610,345)
----------- ------------ ------------ -----------
NET ASSETS .............................................. $19,845,842 $557,968,002 $219,166,460 $59,040,715
=========== ============ ============ ===========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................ $ 12.73 $ 48.17 $ 25.83 $ 17.40
=========== ============ ============ ===========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ........................... 1,558,441 11,582,159 8,485,561 3,393,681
=========== ============ ============ ===========
<CAPTION>
Calvert Fidelity
------------ --------------------------------------------
Social VIP VIP II VIP II
Balanced Equity-Income Contra Asset Manager
Fund Fund Fund Fund
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Calvert Social Balanced
Portfolio and Fidelity Portfolios at market value
(Cost:
Calvert Social Balanced Portfilio -- $47,213,327
VIP Equity-Income Fund -- $115,137,489
VIP II Contra Fund -- $189,383,520
VIP II Asset Manager Fund -- $41,338,976)
(Notes 1 and 2) ...................................... $54,032,872 $135,720,237 $270,316,837 $46,268,457
Due From (To) Mutual of America General Account ......... 24,830 462 540,778 (148,844)
----------- ------------ ------------ -----------
Net Assets .............................................. $54,057,702 $135,720,699 $270,857,615 $46,119,613
=========== ============ ============ ===========
Unit Value at December 31, 1999 (Note 5) ................ $ 3.37 $ 32.21 $ 32.13 $ 26.40
=========== ============ ============ ===========
Number of Units Outstanding at
December 31, 1999 (Note 5) ........................... 16,040,885 4,212,969 8,430,355 1,746,745
=========== ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------
Money All Equity Mid-Cap
Market America Index Equity Index
Fund Fund Fund Fund*
---------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ...................................... $2,041,942 $36,538,690 $ 9,919,788 $ 29,590
---------- ----------- ----------- -----------
Expenses (Note 3):
Fees and administrative expenses ..................... 581,845 5,515,080 4,342,547 22,779
---------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) ............................ 1,460,097 31,023,610 5,577,241 6,811
---------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments .............. 77,005 11,573,648 11,274,282 (9,366)
Net unrealized appreciation (depreciation) of
investments ........................................ (127,237) 52,913,881 41,365,894 244,135
---------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS .......................................... (50,232) 64,487,529 52,640,176 234,769
---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ......................................... $1,409,865 $95,511,139 $58,217,417 $ 241,580
========== =========== =========== ===========
<CAPTION>
Investment Company
------------------------------------------------------------------------
Aggressive
Bond Short-Term Mid-Term Composite Equity
Fund Bond Fund Bond Fund Fund Fund
----------- ---------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ..................................... $ 3,159,195 $373,499 $488,456 $22,165,909 $ 9,509
----------- -------- -------- ----------- ----------
Expenses (Note 3):
Fees and administrative expenses .................... 673,037 62,897 116,037 3,909,925 1,629,977
----------- -------- -------- ----------- -----------
NET INVESTMENT INCOME (LOSS) ........................... 2,486,158 310,602 372,419 18,255,984 (1,620,468)
----------- -------- -------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ............. (370,043) 117 (131,810) 2,253,148 291,748
Net unrealized appreciation (depreciation) of
investments ....................................... (3,710,131) (174,534) (245,448) 18,128,529 50,720,384
----------- -------- -------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ......................................... (4,080,174) (174,417) (377,258) 20,381,677 51,012,132
----------- -------- -------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $(1,594,016) $136,185 $ (4,839) $38,637,661 $49,391,664
=========== ======== ========= =========== ===========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
-------------------------------------------- -------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ...................................... $ 1,050,427 $ 44,257,354 $14,242,990 $ --
------------ ------------ ----------- -----------
Expenses (Note 3):
Fees and administrative expenses ..................... 299,487 5,754,587 1,941,273 421,225
------------ ------------ ----------- -----------
NET INVESTMENT INCOME (LOSS) ............................ 750,940 38,502,767 12,301,717 (421,225)
------------ ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments .............. (169,851) 8,660,945 33,106,709 3,487,749
Net unrealized appreciation (depreciation) of
investments ........................................ (1,081,398) 92,663,054 31,048,001 19,279,250
----------- ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS .......................................... (1,251,249) 101,323,999 64,154,710 22,766,999
----------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... $ (500,309) $139,826,766 $76,456,427 $22,345,774
=========== ============ =========== ===========
<CAPTION>
Calvert Fidelity
------------ --------------------------------------------
Social VIP VIP II VIP II
Balanced Equity-Income Contra Asset Manager
Fund Fund Fund Fund
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ...................................... $ 5,159,660 $ 5,815,790 $ 7,578,736 $ 2,737,257
----------- ------------ ----------- -----------
Expenses (Note 3):
Fees and administrative expenses ..................... 670,732 1,675,770 2,664,962 533,756
----------- ------------ ----------- -----------
NET INVESTMENT INCOME (LOSS) ............................ 4,488,928 4,140,020 4,913,774 2,203,501
----------- ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments .............. 487,674 1,910,304 14,562,051 141,270
Net unrealized appreciation (depreciation) of
investments ........................................ 57,735 (455,188) 27,752,872 1,530,660
----------- ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS .......................................... 545,409 1,455,116 42,314,923 1,671,930
----------- ------------ ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... $ 5,034,337 $ 5,595,136 $47,228,697 $ 3,875,431
=========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
Investment Company
----------------------------------------------------------------------------------------------
Money Market Fund All America Fund Equity Index Fund
----------------------------- ------------------------------ -------------------------------
1999 1998 1999 1998 1999 1998
------------- ------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .... $ 1,460,097 $ 1,241,369 $ 31,023,610 $ 42,592,167 $ 5,577,241 $ 17,958,857
Net realized gain (loss) on
investments ................... 77,005 94,044 11,573,648 10,190,529 11,274,282 3,546,239
Net unrealized appreciation
(depreciation) of investments . (127,237) (8,215) 52,913,881 12,779,143 41,365,894 26,951,145
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in net
assets resulting from
operations ...................... 1,409,865 1,327,198 95,511,139 65,561,839 58,217,417 48,456,241
------------- ------------- ------------- ------------- ------------- -------------
From Unit Transactions:
Contributions ................... 7,000,569 7,176,418 35,610,297 33,052,837 55,688,442 38,144,487
Withdrawals ..................... (7,125,494) (4,295,360) (33,534,302) (27,468,692) (30,127,569) (16,569,868)
Net transfers ................... 3,639,051 1,797,850 (13,672,151) (19,139,304) 31,554,304 44,795,692
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) from unit
transactions .................... 3,514,126 4,678,908 (11,596,156) (13,555,159) 57,115,177 66,370,311
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS .......................... 4,923,991 6,006,106 83,914,983 52,006,680 115,332,594 114,826,552
NET ASSETS:
Beginning of Year .................. 38,854,697 32,848,591 398,695,201 346,688,521 269,286,221 154,459,669
------------- ------------- ------------- ------------- ------------- -------------
End of Year ........................ $ 43,778,688 $ 38,854,697 $ 482,610,184 $ 398,695,201 $ 384,618,815 $ 269,286,221
============= ============= ============= ============= ============= =============
<CAPTION>
Investment Company
---------------------------------------------------------------------------
Mid-Cap Equity
Index Fund* All America Fund Equity Index Fund
---------------- ---------------------------- ---------------------------
1999 1999 1998 1999 1998
---------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ......................... $ 6,811 $ 2,486,158 $ 3,203,532 $ 310,602 $ 129,166
Net realized gain (loss) on investments .............. (9,366) (370,043) 196,930 117 3,822
Net unrealized appreciation (depreciation)
of investment ...................................... 244,135 (3,710,131) (981,434) (174,534) (6,616)
---------- ----------- ----------- ---------- ----------
Net Increase (Decrease) in net assets resulting
from operations ...................................... 241,580 (1,594,016) 2,419,028 136,185 126,372
---------- ----------- ----------- ---------- ----------
From Unit Transactions:
Contributions ........................................ 353,431 7,241,958 7,033,074 1,048,219 734,187
Withdrawals .......................................... (49,137) (5,979,743) (4,982,221) (901,800) (427,168)
Net transfers ........................................ 3,255,197 (12,049,318) 13,841,212 396,691 696,139
---------- ----------- ----------- ---------- ----------
Net Increase (Decrease) from unit transactions .......... 3,559,491 (10,787,103) 15,892,065 543,110 1,003,158
---------- ----------- ----------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ................... 3,801,071 (12,381,119) 18,311,093 679,295 1,129,530
NET ASSETS:
Beginning of Period/Year ................................ -- 56,282,194 37,971,101 3,937,638 2,808,108
---------- ----------- ----------- ---------- ----------
End of Year ............................................. $3,801,071 $43,901,075 $56,282,194 $4,616,933 $3,937,638
========== =========== =========== ========== ==========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------------------------------------
Mid-Term Bond Fund Composite Fund Aggressive Equity Fund
----------------------------- ----------------------------- -----------------------------
1999 1998 1999 1998 1999 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income .......... $ 372,419 $ 404,186 $ 18,255,984 $ 8,561,297 $ (1,620,468) $ (616,621)
Net realized gain (loss) on
investments .................. (131,810) (28,267) 2,253,148 554,735 291,748 (632,431)
Net unrealized appreciation
(depreciation) of
investments .................. (245,448) (46,309) 18,128,529 24,996,236 50,720,384 (8,050,244)
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in net
assets resulting from
operations ..................... (4,839) 329,610 38,637,661 34,112,268 49,391,664 (9,299,296)
------------- ------------- ------------- ------------- ------------- -------------
From Unit Transactions:
Contributions .................. 1,468,498 1,120,290 24,264,832 25,635,215 23,951,530 28,696,822
Withdrawals .................... (1,830,214) (627,755) (26,391,103) (23,076,061) (15,330,684) (12,588,115)
Net transfers .................. (1,329,517) 3,231,316 (15,156,928) (9,295,063) (8,152,611) (33,256,371)
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) from unit
transactions ................... (1,691,233) 3,723,851 (17,283,199) (6,735,909) 468,235 (17,147,664)
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS ......................... (1,696,072) 4,053,461 21,354,462 27,376,359 49,859,899 (26,446,960)
NET ASSETS:
Beginning of Year ................. 9,694,558 5,641,097 294,892,508 267,516,149 127,369,882 153,816,842
------------- ------------- ------------- ------------- ------------- -------------
End of Year ....................... $ 7,998,486 $ 9,694,558 $ 316,246,970 $ 294,892,508 $ 177,229,781 $ 127,369,882
============= ============= ============= ============= ============= =============
<CAPTION>
Scudder
---------------------------------------------------------------------------------------------
Bond Fund Capital Growth Fund International Fund
----------------------------- ----------------------------- -----------------------------
1999 1998 1999 1998 1999 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income .......... $ 750,940 $ 933,704 $ 38,502,767 $ 16,281,461 $ 12,301,717 $ 14,005,911
Net realized gain (loss) on
investments .................. (169,851) (12,188) 8,660,945 7,179,053 33,106,709 7,712,372
Net unrealized appreciation
(depreciation) of
investments .................. (1,081,398) 56,186 92,663,054 46,681,634 31,048,001 (2,792,240)
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in net
assets resulting from
operations ..................... (500,309) 977,702 139,826,766 70,142,148 76,456,427 18,926,043
------------- ------------- ------------- ------------- ------------- -------------
From Unit Transactions:
Contributions .................. 3,439,002 3,111,360 48,772,338 45,075,165 16,775,667 15,352,696
Withdrawls ..................... (2,836,834) (1,812,991) (38,675,885) (27,386,892) (15,785,700) (11,406,891)
Net Transfers .................. (3,133,893) 2,253,912 (5,410,060) (3,209,197) 6,239,113 (6,070,868)
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) from unit
transactions ................... (2,531,725) 3,552,281 4,686,393 14,479,076 7,229,080 (2,125,063)
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS ......................... (3,032,034) 4,529,983 144,513,159 84,621,224 83,685,507 16,800,980
NET ASSETS:
Beginning of Year ................. 22,877,876 18,347,893 413,454,843 328,833,619 135,480,953 118,679,973
------------- ------------- ------------- ------------- ------------- -------------
End of Year ....................... $ 19,845,842 $ 22,877,876 $ 557,968,002 $ 413,454,843 $ 219,166,460 $ 135,480,953
============= ============= ============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
American Century Calvert
------------------------------ ----------------------------
VP Capital Appreciation Fund Social Balanced Fund
------------------------------ ----------------------------
1999 1998 1999 1998
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ............................... $ (421,225) $ 1,754,036 $ 4,488,928 $ 2,596,096
Net realized gain (loss) on investments ............. 3,487,749 (1,068,586) 487,674 276,019
Net unrealized appreciation (depreciation)
of investments ...................................... 19,279,250 (2,044,118) 57,735 2,332,229
----------- ------------ ------------ -----------
Net Increase (Decrease) in net assets resulting
from operations ....................................... 22,345,774 (1,358,668) 5,034,337 5,204,344
----------- ------------ ------------ -----------
From Unit Transactions:
Contributions ....................................... 4,529,867 5,340,709 10,122,717 7,547,920
Withdrawals ......................................... (4,671,049) (4,483,088) (4,719,017) (2,809,892)
Net transfers ....................................... 1,541,880 (13,981,957) 269,526 365,285
----------- ------------ ------------ -----------
Net Increase (Decrease) from unit transactions ......... 1,400,698 (13,124,336) 5,673,226 5,103,313
----------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS .................. 23,746,472 (14,483,004) 10,707,563 10,307,657
NET ASSETS:
Beginning of Year ...................................... 35,294,243 49,777,247 43,350,139 33,042,482
End of Year ............................................ $59,040,715 $ 35,294,243 $54,057,702 $43,350,139
=========== ============ ============ ===========
<CAPTION>
Fidelity
---------------------------------------------------------------------------------
VIP VIP II VIP II
Equity-Income Contra Asset Manager
Fund Fund Fund
-------------------------- -------------------------- -------------------------
1999 1998 1999 1998 1999 1998
-------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ....................... $ 4,140,020 $ 5,005,961 $ 4,913,774 $ 5,083,661 $ 2,203,501 $ 2,902,330
Net realized gain (loss) on investments ..... 1,910,304 853,854 14,562,051 2,644,396 141,270 (12,448)
Net unrealized appreciation (depreciation)
of investments ............................ (455,188) 4,356,202 27,752,872 27,595,754 1,530,660 895,986
------------ ------------ ------------ ------------ ------------ -----------
Net Increase (Decrease) in net assets resulting
from operations ............................. 5,595,136 10,216,017 47,228,697 35,323,811 3,875,431 3,7 85,868
------------ ------------ ------------ ------------ ------------ -----------
From Unit Transactions:
Contributions ............................... 23,738,000 22,499,025 38,205,139 25,700,149 10,251,230 8,419,597
Withdrawals ................................. (14,284,534) (9,180,957) (22,784,938) (11,133,735) (4,220,822) (2,785,815)
Net Transfers ............................... (2,481,069) 2,658,613 31,873,961 11,315,492 446,968 2,047,842
------------ ------------ ------------ ------------ ------------ -----------
Net Increase (Decrease) from unit transactions . 6,972,397 15,976,681 47,294,162 25,881,906 6,477,376 7,681,624
------------ ------------ ------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS .......... 12,567,533 26,192,698 94,522,859 61,205,717 10,352,807 11,467,492
NET ASSETS:
Beginning of Year .............................. 123,153,166 96,960,468 176,334,756 115,129,039 35,766,806 24,299,314
------------ ------------ ------------ ------------ ------------ -----------
End of Year .................................... $135,720,699 $123,153,166 $270,857,615 $176,334,756 $ 46,119,613 $35,766,806
============ ============ ============ ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Separate Account No. 2 of Mutual of America Life Insurance Company ("the
Company") was established in conformity with New York Insurance Law and
commenced operations on June 4, 1984. On October 31, 1986, Separate Account No.
2 was reorganized into a unit investment trust consisting of four Funds: the
Money Market Fund, the All America Fund, the Bond Fund and the Composite Fund.
These Funds invest in corresponding funds of Mutual of America Investment
Corporation ("Investment Company").
On January 3, 1989, the following funds became available to Separate
Account No. 2 as investment alternatives: Scudder Bond, Scudder Capital Growth,
Scudder International and VP Capital Appreciation. The Scudder Funds invest in
corresponding portfolios of Scudder Variable Life Investment Fund ("Scudder").
The VP Capital Appreciation Fund invests in a corresponding fund of American
Century Variable Portfolios Inc. ("American Century"). Effective May 13, 1991,
the Calvert Social Balanced Fund became available as an investment alternative.
The Calvert Social Balanced Fund invests in a corresponding portfolio of Calvert
Variable Series, Inc. ("Calvert").
On February 5, 1993 the Investment Company Equity Index, Short-Term Bond
and Mid-Term Bond Funds became available to Separate Account No. 2 as investment
alternatives. On May 2, 1994 the Aggressive Equity Fund of the Investment
Company became available. These funds invest in corresponding funds of the
Investment Company.
On May 1, 1995 Fidelity Investments Equity-Income, Contrafund and Asset
Manager portfolios became available to Separate Account No. 2. The Fidelity
Equity-Income Portfolio invests in a corresponding portfolio of Fidelity
Variable Insurance Products Fund ("Fidelity VIP") and the Contrafund Portfolio
and Asset Manager Portfolio invest in corresponding portfolios of Fidelity
Variable Insurance Products Fund II ("Fidelity VIP II") (collectively,
"Fidelity").
On May 3, 1999 the Mid-Cap Equity Index Fund of the Investment Company
became the 17th investment alternative available to Separate Account No. 2.
Separate Account No. 2 was formed by the Company to support the operations
of the Company's group and individual variable accumulation annuity contracts
("Contracts"). The assets of Separate Account No. 2 are the property of the
Company. The portion of Separate Account No. 2's assets applicable to the
Contracts will not be charged with liabilities arising out of any other business
the Company may conduct.
The significant accounting policies of Separate Account No. 2 are as
follows:
Investment Valuation -- Investments are made in shares of the Investment
Company, Scudder, American Century, Calvert and Fidelity and are valued at the
reported net asset values of the respective funds or portfolios.
Investment Transactions -- Investment transactions are recorded on the
trade date. Realized gains and losses on sales of investments are determined
based on the average cost of the investment sold.
Federal Income Taxes -- Separate Account No. 2 will be treated as a part of
the Company and will not be taxed separately as a "regulated investment company"
under existing law. The Company is taxed as a life insurance company under the
life insurance tax provisions of the Internal Revenue Code of 1986. No provision
for income taxes is required in the accompanying financial statements.
2. INVESTMENTS
The number of shares owned by Separate Account No. 2 and their respective
net asset values (rounded to the nearest cent) per share at December 31, 1999
are as follows:
Number of Net Asset
Shares Value
--------- --------
Investment Company Funds:
Money Market Fund .................... 37,152,959 $1.19
All America Fund ..................... 144,019,191 3.37
Equity Index Fund .................... 133,417,570 2.88
Mid-Cap Equity Index Fund ............ 3,416,420 1.11
Bond Fund ............................ 33,904,967 1.30
Short-Term Bond Fund ................. 4,677,706 0.99
Mid-Term Bond Fund ................... 9,234,456 0.87
Composite Fund ....................... 165,953,180 1.91
Aggressive Equity Fund ............... 81,956,154 2.16
12
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
2. INVESTMENTS (Continued)
Number of Net Asset
Shares Value
--------- --------
Scudder Portfolios:
Bond Portfolio ...................... 3,058,477 $ 6.49
Capital Growth Portfolio--Class "A" . 19,146,098 29.13
International Portfolio--Class "A" .. 10,775,155 20.34
American Century VP Capital
Appreciation Fund ................... 4,019,613 14.84
Calvert Social Balanced Portfolio ...... 24,911,421 2.17
Fidelity Portfolios:
Equity-Income--"Initial" Class ...... 5,278,889 25.71
Contrafund--"Initial" Class ......... 9,273,305 29.15
Asset Manager--"Initial" Class ...... 2,478,225 18.67
3. EXPENSES
Administrative Charges -- In connection with its administrative functions,
the Company deducts daily, at an annual rate of .40%, an amount from the value
of the net assets of all funds except the American Century VP Capital
Appreciation Fund for which the annual rate is .20% and each Fidelity fund, for
which the annual rate is .30%.
In addition, a deduction of up to $2.00 may be made at the end of each
month from a participant's account, except that such charge shall not exceed
1/12 of 1% of the balance in such account in any month.
Distribution Expense Charge -- As principal underwriter, the Company
performs all distribution and sales functions and bears all distribution and
sales expenses relative to the Contracts. For providing these services, the
Company deducts daily, at an annual rate of .35%, an amount from the value of
the net assets of each fund to cover such expenses.
Mortality and Expense Risk Charge -- The Company assumes the risk to make
annuity payments in accordance with annuity tables provided in the Contracts
regardless of how long a participant lives and also assumes certain expense
risks associated with such annuity payments. For assuming this risk, the Company
deducts daily, at an annual rate of .50%, an amount from the value of the net
assets of each fund.
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective funds or portfolios at net asset value. On December 31, 1999 a
dividend distribution was made by the Investment Company to shareholders of
record as of December 30, 1999. Prior thereto, the Investment Company declared
and paid a dividend distribution on September 15, 1999.
The combined amount of these dividends was as follows:
Money Market Fund ........................................ $ 2,041,942
All America Fund ......................................... 36,538,690
Equity Index Fund ........................................ 9,919,788
Mid-Cap Equity Index Fund ................................ 29,590
Bond Fund ................................................ 3,159,195
Short-Term Bond Fund ..................................... 373,499
Mid-Term Bond Fund ....................................... 488,456
Composite Fund ........................................... 22,165,909
Aggressive Equity Fund ................................... 9,509
On January 27, 1999 and April 28, 1999, dividends were paid by the Scudder
Bond Portfolio. The combined amount of the dividends was $1,050,427.
On January 27, 1999, and April 28, 1999, dividends were paid by the
Scudder Capital Growth Portfolio. The combined amount of the dividends was
$44,257,354.
On April 28, 1999, a dividend was paid by the Scudder International
Portfolio. The amount of the dividend was $14,242,990.
On December 30, 1999, a dividend was paid by the Calvert Social Balanced
Portfolio. The amount of the dividend was $5,159,660.
13
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
4. DIVIDENDS (Continued)
On February 5, 1999, a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $5,815,790.
On February 5, 1999, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $7,578,736.
On February 5, 1999, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $2,737,257.
No dividend was paid by the American Century VP Capital Appreciation Fund
during 1999.
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding throughout
each of the five years ended December 31, 1999, or, if not in existence a full
year, the initial period ended December 31:
<TABLE>
<CAPTION>
Investment Company Money Market Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 2.03 $ 1.95 $ 1.87 $ 1.80 $ 1.72
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 2.11 $ 2.03 $ 1.95 $ 1.87 $ 1.80
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 20,766 19,121 16,831 17,511 17,502
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company All America Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 8.09 $ 6.76 $ 5.39 $ 4.52 $ 3.35
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 10.05 $ 8.09 $ 6.76 $ 5.39 $ 4.52
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 48,014 49,275 51,312 49,798 43,620
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company Equity Index Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 2.86 $ 2.26 $ 1.72 $ 1.42 $ 1.05
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 3.41 $ 2.86 $ 2.26 $ 1.72 $ 1.42
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 112,735 94,019 68,462 35,660 17,109
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company
Mid-Cap Equity Index Fund
--------------------------------------------------------------
1999*
----------
<S> <C>
Unit value, beginning of period ............. $ 1.00
==========
Unit value, end of year ..................... $ 1.11
==========
Thousands of units outstanding, end of year . 3,431
==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company Bond Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 3.17 $ 3.00 $ 2.75 $ 2.69 $ 2.28
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 3.07 $ 3.17 $ 3.00 $ 2.75 $ 2.69
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 14,287 17,746 12,671 12,548 12,083
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company Short-Term Bond Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 1.24 $ 1.19 $ 1.14 $ 1.10 $ 1.03
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 1.28 $ 1.24 $ 1.19 $ 1.14 $ 1.10
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 3,604 3,164 2,355 2,129 1,447
========== ========== ========== ========== ==========
</TABLE>
- -----------
* Commenced operations May 3, 1999.
14
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Investment Company Mid-Term Bond Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 1.32 $ 1.26 $ 1.19 $ 1.16 $ 1.01
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 1.32 $ 1.32 $ 1.26 $ 1.19 $ 1.16
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 6,037 7,325 4,478 3,828 2,848
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company Composite Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 4.93 $ 4.36 $ 3.75 $ 3.39 $ 2.82
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 5.61 $ 4.93 $ 4.36 $ 3.75 $ 3.39
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 56,404 59,833 61,359 66,715 70,558
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Investment Company Aggressive Equity Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 2.02 $ 2.15 $ 1.80 $ 1.43 $ 1.05
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 2.85 $ 2.02 $ 2.15 $ 1.80 $ 1.43
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 62,123 63,176 71,468 49,800 20,858
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Scudder Bond Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 13.02 $ 12.37 $ 11.48 $ 11.30 $ 9.69
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 12.73 $ 13.02 $ 12.37 $ 11.48 $ 11.30
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 1,558 1,757 1,484 1,362 1,269
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Scudder Capital Growth Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 36.07 $ 29.64 $ 22.11 $ 18.64 $ 14.67
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 48.17 $ 36.07 $ 29.64 $ 22.11 $ 18.64
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 11,582 11,462 11,094 9,266 8,556
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Scudder International Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 16.93 $ 14.46 $ 13.43 $ 11.85 $ 10.80
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 25.83 $ 16.93 $ 14.46 $ 13.43 $ 11.85
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 8,486 8,004 8,205 7,688 7,269
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
American Century
--------------------------------------------------------------
VP Capital Appreciation Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 10.69 $ 11.04 $ 11.53 $ 12.18 $ 9.39
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 17.40 $ 10.69 $ 11.04 $ 11.53 $ 12.18
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 3,394 3,303 4,510 7,264 8,061
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Calvert Social Balanced Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ............... $ 3.04 $ 2.65 $ 2.23 $ 2.01 $ 1.57
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 3.37 $ 3.04 $ 2.65 $ 2.23 $ 2.01
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 16,041 14,257 12,479 10,713 7,849
========== ========== ========== ========== ==========
</TABLE>
15
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Fidelity
--------------------------------------------------------------------------------
VIP Equity-Income Fund VIP II Contra Fund
--------------------------------------- --------------------------------------
1999 1998 1997 1996 1995* 1999 1998 1997 1996 1995*
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of year/period ........... $30.65 $27.77 $21.93 $19.43 $16.30 $26.16 $20.36 $16.59 $13.85 $11.43
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of year ........................ $32.21 $30.65 $27.77 $21.93 $19.43 $32.13 $26.16 $20.36 $16.59 $13.85
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of year .................................. 4,213 4,018 3,491 2,342 728 8,430 6,742 5,656 3,880 1,792
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Fidelity
--------------------------------------------------------------
VIP II Asset Manager Fund
--------------------------------------------------------------
1999 1998 1997 1996 1995*
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year/period ........ $ 24.04 $ 21.14 $ 17.72 $ 15.66 $ 14.04
========== ========== ========== ========== ==========
Unit value, end of year ..................... $ 26.40 $ 24.04 $ 21.14 $ 17.72 $ 15.66
========== ========== ========== ========== ==========
Thousands of units outstanding, end of year . 1,747 1,488 1,150 613 184
========== ========== ========== ========== ==========
</TABLE>
- ----------
* Commenced operations May 1, 1995.
16
<PAGE>
Report of Independent Public Accountants
To Mutual of America Life Insurance Company of New York:
We have audited the accompanying statement of assets and liabilities of
Mutual of America Separate Account No. 2 as of December 31, 1999, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Separate Account's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Mutual of America Separate Account No. 2 as of December 31, 1999, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ Arthur Anderson LLP
- --------------------------------
New York, New York
February 21, 2000
17
<PAGE>
MUTUAL OF AMERICA
LIFE INSURANCE COMPANY
320 PARK AVENUE
NEW YORK, NY 10022-6839
212-224-1600
www.mutualofamerica.com
