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[GRAPHIC OMITTED]
W E S T E R N R E S E R V E L I F E
A S S U R A N C E C O. O F O H I O
August 1997
ACC00008 (8/97)
<PAGE>
- --------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Chairman's Letter ............................................. 1
WRL SERIES FUND, INC.
Portfolio Manager's Commentary:
C.A.S.E. Growth Portfolio ................................. 2
C.A.S.E. Growth & Income Portfolio ........................ 3
C.A.S.E. Quality Growth Portfolio ........................ 4
Schedules of Investments:
C.A.S.E. Growth Portfolio ................................. 5
C.A.S.E. Growth & Income Portfolio ........................ 7
C.A.S.E. Quality Growth Portfolio ........................ 9
Statements of Assets and Liabilities ........................ 11
Statements of Operations .................................... 12
Statements of Changes in Net Assets ........................ 13
Financial Highlights ....................................... 14
Notes to Financial Statements .............................. 16
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
Statements Of Assets, Liabilities And Equity Accounts ...... 20
Statements of Operations .................................... 20
Statements of Changes in Equity Accounts .................. 21
Selected Per Unit Data and Ratios ........................... 22
Notes to Financial Statements .............................. 23
</TABLE>
THE PORTFOLIOS OF THE WRL SERIES FUND, INC. ARE MADE AVAILABLE THROUGH
VARIABLE LIFE INSURANCE, VARIABLE ANNUITY, AND GROUP ANNUITY PRODUCTS ISSUED
BY WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO AND ITS AFFILIATES. THE
AVAILABILITY OF CERTAIN PORTFOLIOS MAY VARY FROM PRODUCT TO PRODUCT.
<PAGE>
FELLOW CONTRACT OWNERS:
[GRAPHIC OMITTED]
JOHN R. KENNEY
CHAIRMAN OF THE BOARD
RATIONAL EXUBERANCE?
IT WAS JUST OVER SIX MONTHS AGO--THE DOW JONES INDUSTRIAL AVERAGE WAS AROUND
6400-WHEN ALAN GREENSPAN WONDERED ALOUD ABOUT ESCALATED ASSET VALUES AND THE
POSSIBILITY OF PROLONGED CONTRACTIONS. HE WAS SOMEWHAT BOTHERED, IT SEEMED,
THAT STOCKS HAD BECOME OVERVALUED AND WERE RIPE FOR A FALL.
OF COURSE, WHEN THE CHAIRMAN OF THE FEDERAL RESERVE BOARD OFFERS UP AN OPINION
ON THE FINANCIAL MARKETS, IT'S MUCH MORE THAN JUST A CASUAL OBSERVATION. HE
HAS, AFTER ALL, THE LARGEST ECONOMIC RESEARCH STAFF IN THE WORLD AT HIS
DISPOSAL. HE HAS ALSO, BY VIRTUE OF HIS POSITION, A NEAR SINGULAR ABILITY TO
MAKE SELF-FULFILLING PROPHESIES. BUT MR. GREENSPAN, EVEN WITH THE ENORMOUS
WEIGHT OF HIS OFFICE BEHIND HIM, STILL COULD NOT CALL THE STOCK MARKET. BY THE
END OF JUNE, THE DOW HAD CLIMBED TO 7672.79--ALMOST 1300 POINTS HIGHER THAN
WHEN THE FED CHIEF ISSUED HIS OMINOUS COMMENTS.
THE POINT IS, MAKING SHORT-TERM CALLS ON THE STOCK MARKET IS A TOUGH GAME, EVEN
FOR THE MOST GIFTED. FOR MOST OF US, WORRYING ABOUT MARKET SWINGS IS, AT BEST,
PROBLEMATIC; AT WORST, IT'S A WASTE OF TIME AND PROBABLY MONEY.
WE CANNOT FORGET, HOWEVER, THAT EQUITY PRICES CAN MOVE BOTH WAYS. AND GIVEN THE
POTENTIAL VOLATILITY OF A MARKET THAT HAS DOUBLED IN JUST THREE YEARS, THIS IS
ONE OF THOSE TIMES WE SHOULD BE THINKING A LOT ABOUT LONG-TERM CONCEPTS AND
DECIDING JUST HOW THEY SHOULD BE TAI-LORED TO OUR INDIVIDUAL SITUATIONS. AN
INVESTOR WITH REALISTIC EXPECTATIONS ABOUT RESULTS WILL BE PREPARED FOR THE
MARKET'S INEVITABLE VOLATILITY AND WILL BE LESS LIKELY TO PANIC WHEN IT DOES
TUMBLE. AS A RESULT, HE OR SHE IS MUCH MORE LIKELY TO STICK WITH AN APPROPRIATE
INVESTMENT PLAN OVER THE LONG HAUL.
SINCE THE MARKETS ARE PARTIALLY DRIVEN BY HUMAN EMOTIONS, THEY CAN OFTEN GO TO
INCREDIBLE EXTREMES. THAT'S WHY, THROUGHOUT IT ALL, A PROFESSIONAL MONEY
MANAGER'S DISCIPLINE IS TO BE PRIZED BY THE INVESTOR SEEKING TO DEFEND AGAINST
VOLATILITY. ON THE FOLLOWING PAGES, YOU WILL FIND A DISCUSSION ON THE THREE
C.A.S.E. PORTFOLIOS. WE ENCOURAGE YOU TO REVIEW THESE REPORTS TO BETTER
UNDERSTAND YOUR INVESTMENT AND ITS PAST PERFORMANCE.
AS WE LOOK FORWARD TO THE REST OF THIS YEAR, THERE ARE GOOD AND COMPELLING
REASONS TO BE OPTIMISTIC ABOUT THE FINANCIAL MARKETS. THIS IS STILL THE
GREATEST INVESTMENT STORY EVER TOLD. BUT NO MATTER WHAT THE MARKET DOES, OR
WHEN, WE WILL DO OUR BEST TO PROVIDE YOU WITH SOLID, WELL-MANAGED PRODUCTS AND
SUPERIOR SERVICE. WE RESPECT YOUR PERSONAL TASK OF FINANCIAL PLANNING AND
GENUINELY APPRECIATE THE OPPORTUNITY TO ASSIST.
SINCERELY YOURS,
[Insert Kenney Sig.]
JOHN R. KENNEY
CHAIRMAN OF THE BOARD CHAIRMAN OF THE BOARD,
WRL SERIES FUND, INC. CHIEF EXECUTIVE OFFICER
AND PRESIDENT
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
1
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
PORTFOLIO MANAGER'S COMMENTARY
For the six months ended June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC.
C.A.S.E. GROWTH PORTFOLIO, AND THE WILSHIRE 5000 INDEX
[INSERT GRAPH]
OVER THE PAST SEVERAL QUARTERS, THE MARKET BREADTH IN GENERAL HAS BEEN
"NARROWLY" CONFINED TO THE LARGEST 25 NEW YORK STOCK EXCHANGE COMPONENTS. AS A
CONSEQUENCE, FEWER INVESTMENT MANAGERS HAVE PERFORMED IN LINE WITH THE MARKET
AVERAGES.
GIVEN THAT THE OBJECTIVE OF THE C.A.S.E. GROWTH PORTFOLIO IS CAPITAL GROWTH
THROUGH INVESTMENTS IN COMMON STOCKS OF SMALL TO MEDIUM-SIZED COMPANIES, THE
PORTFOLIO HAS UNDERPERFORMED ITS BENCHMARK YEAR TO DATE. THE PORTFOLIO DID,
HOWEVER, OUTPERFORM THE BROAD MARKET AVERAGES OVER THE PAST QUARTER IN BOTH
UPSIDE AND DOWNSIDE ENVIRONMENTS. FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1997,
THE PORTFOLIO RETURNED 5.19%. BY COMPARISON, THE STANDARD & POOR'S INDEX OF 500
COMMON STOCKS GAINED 20.61%, AND THE WILSHIRE 5000 INDEX GAINED 16.65% FOR THE
SAME PERIOD. PRESENTLY, WE THINK THE PORTFOLIO HAS A RISK PROFILE WHICH IS
LOWER THAN THE MARKET AVERAGES. WE WILL CONTINUE TO USE THE PROVEN, PATIENT
STYLE THAT HAS SERVED US SO WELL OVER THE PAST SEVERAL YEARS.
FORTUNATELY, IT APPEARS TO US THAT STOCK MARKET APPETITES ARE BEGINNING TO
SPREAD OUT TO INCLUDE THE UPPER TIER OF THE RANGE OF THE NEW YORK STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, AND TO A LESSER EXTENT, OVER-THE-COUNTER
MARKETS. AT THE SAME TIME, THOUGH, INVESTORS CONTINUE TO "POUNCE" ON STOCKS
WITH NEGATIVE EARNINGS SURPRISES. INTEL, THE BELLWETHER TECHNOLOGICAL LEADER,
DID REPORT LOWER EARNINGS, BUT THEY WERE HIGHER THAN THE "WHISPER VALUE"
EXPECTED BY MOST ANALYSTS.
ESSENTIALLY, WE CONTINUE TO SEE EVIDENCE OF A VERY ROBUST AND WELL-BEHAVED
ECONOMY, WITH LOW INFLATION AND LOW INTEREST RATES. WE BELIEVE CORPORATE
PROFITABILITY WILL CONTINUE TO RISE AND COMPANIES ARE, FOR THE MOST PART,
REPORTING HIGHER THAN EXPECTED EARNINGS IN SEVEN OF OUR EIGHT CORE ECONOMIC
SECTORS.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
WILLIAM E. LANGE
C.A.S.E. GROWTH PORTFOLIO
PORTFOLIO MANAGER
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S
CURRENT PROSPECTUS.
2
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
PORTFOLIO MANAGER'S COMMENTARY
For the six months ended June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. C.A.S.E. GROWTH & INCOME PORTFOLIO
AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
[INSERT GRAPH]
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997, THE C.A.S.E. GROWTH & INCOME
PORTFOLIO GAINED 14.36%. BY COMPARISON, THE STANDARD & POOR'S INDEX OF 500
COMMON STOCKS RETURNED 20.61% FOR THE SAME PERIOD. THE PORTFOLIO'S ALLOCATION
OF ASSETS AT PERIOD END WAS 92.6% IN COMMON STOCKS, COVERING 22 DIFFERENT
INDUSTRIES WITHIN EIGHT SECTORS, AND 7.4% IN INTEREST-BEARING CASH RESERVES. WE
HAVE REFRAINED FROM THE USE OF DERIVATIVES, OPTIONS, AND REPURCHASE AGREEMENTS.
THE MARKET'S BREADTH CONTINUES TO BE CENTERED ON THE UPPER ECHELON NEW YORK
STOCK EXCHANGE COMPANIES. CONSEQUENTLY, ONLY A SMALL NUMBER OF INVESTMENT
MANAGERS HAVE PERFORMED IN LINE WITH THE MARKET AVERAGES. ESSENTIALLY, WE THINK
THE ECONOMY CONTINUES TO BE ROBUST AND WELL BEHAVED WITH LOW INFLATION, LOW
INTEREST RATES, AND OTHER FAVORABLE CHARACTERISTICS. AS A RESULT, WE BELIEVE
CORPORATE PROFITABILITY WILL CONTINUE TO RISE AND COMPANIES WILL, FOR THE MOST
PART, REPORT HIGHER THAN EXPECTED EARNINGS.
ON THE FUNDAMENTAL SIDE OF THE MARKET EQUATION, THE AVERAGE YIELD ON THE STOCKS
IN THE S&P 500 HAS CONTINUED TO FALL. MANY MANAGERS TRADITIONALLY FEEL THAT ANY
YIELD BELOW 3% IS A CAUSE FOR ALARM. AT THE SAME TIME, THE AVERAGE MULTIPLE OF
THESE STOCKS HAS RISEN TO 5.18 TIMES BOOK VALUE AGAINST A HISTORICAL VALUE OF
1.85. MANEUVERING IN A FUNDAMENTALLY INFLATED MARKET LIKE THIS IS A BIT LIKE
ASKING A PHYSICIAN TO PERFORM SURGERY ON A BALLOON.
FOR ITS PART, THE C.A.S.E. GROWTH & INCOME PORTFOLIO CURRENTLY HAS
LOWER-THAN-MARKET PRICE-TO-EARNINGS AND BOOK VALUE MULTIPLES. MOREOVER, THE
EARNINGS GROWTH RATES OF THE STOCKS IN THE PORTFOLIO ARE CURRENTLY NEARLY TWICE
THE MARKETS, AND THEIR RETURNS ON EQUITY AVERAGE WELL ABOVE THE NORM. WE SEE
THE MARKET'S STOCK APPETITES ARE BEGINNING TO BROADEN AND WHEN THIS PATTERN
BECOMES MORE ORDERLY, OUR CONSERVATIVE STYLE OF MANAGEMENT SHOULD REGAIN ITS
LEADERSHIP PATTERN.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
WILLIAM E. LANGE
C.A.S.E. GROWTH & INCOME
PORTFOLIO
PORTFOLIO MANAGER
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
3
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
PORTFOLIO MANAGER'S COMMENTARY
For the six months ended June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. C.A.S.E. QUALITY GROWTH PORTFOLIO
AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
[INSERT GRAPH]
FOR THE SIX MONTHS ENDED JUNE 30, 1997, THE C.A.S.E. QUALITY GROWTH PORTFOLIO
REALIZED A TOTAL RETURN OF 16.45% WITHIN A MARKET THAT WAS UP 20.61%, AS
MEASURED BY THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS. THE PORTFOLIO'S
ALLOCATION OF ASSETS AT PERIOD END WAS 89.9% IN COMMON STOCKS COVERING 25
DIFFERENT INDUSTRIES WITHIN EIGHT SECTORS, AND 10.1% IN INTEREST-BEARING CASH
RESERVES. THE PORTFOLIO REFRAINED FROM THE USE OF DERIVATIVES, OPTIONS, AND
REPURCHASE AGREEMENTS.
THE MARKET'S BREADTH CONTINUES TO BE CENTERED ON THE UPPER ECHELON NEW YORK
STOCK EXCHANGE COMPANIES. CONSEQUENTLY, ONLY A SMALL NUMBER OF INVESTMENT
MANAGERS HAVE PERFORMED IN LINE WITH THE MARKET AVERAGES. ESSENTIALLY, WE THINK
THE ECONOMY CONTINUES TO BE ROBUST AND WELL BEHAVED WITH LOW INFLATION, LOW
INTEREST RATES, AND OTHER FAVORABLE CHARACTERISTICS. AS A RESULT, WE BELIEVE
CORPORATE PROFITABILITY WILL CONTINUE TO RISE AND COMPANIES WILL, FOR THE MOST
PART, REPORT HIGHER THAN EXPECTED EARNINGS.
ON THE FUNDAMENTAL SIDE OF THE MARKET EQUATION, THE AVERAGE YIELD ON THE STOCKS
IN THE S&P 500 HAS CONTINUED TO FALL. MANY MANAGERS TRADITIONALLY FEEL THAT ANY
YIELD BELOW 3% IS A CAUSE FOR ALARM. AT THE SAME TIME, THE AVERAGE MULTIPLE OF
THESE SAME STOCKS HAS RISEN TO 5.18 TIMES BOOK VALUE AGAINST A HISTORICAL VALUE
OF 1.85. MANEUVERING IN A FUNDAMENTALLY INFLATED MARKET LIKE THIS IS A BIT LIKE
ASKING A PHYSICIAN TO PERFORM SURGERY ON A BALLOON.
FOR ITS PART, THE C.A.S.E. QUALITY GROWTH PORTFOLIO CURRENTLY HAS
LOWER-THAN-MARKET PRICE-TO-EARNINGS AND BOOK VALUE MULTIPLES. MOREOVER, THE
EARNINGS GROWTH RATES OF THE STOCKS IN THE PORTFOLIO ARE CURRENTLY NEARLY TWICE
THE MARKETS, AND THEIR RETURNS ON EQUITY AVERAGE WELL ABOVE THE NORM. WE SEE
THE MARKET'S STOCK APPETITES ARE BEGINNING TO BROADEN AND WHEN THIS PATTERN
BECOMES MORE ORDERLY, OUR CONSERVATIVE STYLE OF MANAGEMENT SHOULD REGAIN ITS
LEADERSHIP PATTERN.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
WILLIAM E. LANGE
C.A.S.E. QUALITY GROWTH PORTFOLIO
PORTFOLIO MANAGER
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
4
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (99.11%)
AEROSPACE (3.70%)
AAR Corporation .............................. 20,000 $ 646,250
Thiokol Corporation ........................... 11,000 770,000
AIR TRANSPORTATION (2.18%)
Airborne Freight Corporation .................. 20,000 837,500
APPAREL PRODUCTS (3.76%)
Nautica Enterprises, Inc. (a) ............... 31,000 819,563
U.S. Industries, Inc. (a) ..................... 17,400 619,875
APPAREL & ACCESSORY STORES (2.28%)
Claire's Stores, Inc. ........................ 50,000 875,000
AUTOMOTIVE (2.19%)
Carlisle Companies, Inc. ..................... 24,000 837,000
CHEMICALS & ALLIED PRODUCTS (1.92%)
Dexter Corporation ........................... 23,000 736,000
COMMERCIAL BANKS (5.33%)
City National Corporation ..................... 31,000 745,937
Magna Group, Inc. ........................... 24,000 834,000
Provident Bankshares Corporation ............ 1 22
Provident Financial Group, Inc. ............... 10,800 461,700
COMMUNICATIONS EQUIPMENT (6.29%)
Bay Networks, Inc. (a) ........................ 33,000 876,562
DSC Communications Corporation (a) . 30,000 667,500
Lucent Technologies, Inc. ..................... 12,000 864,750
COMPUTER & DATA PROCESSING SERVICE (6.44%)
Banyan Systems, Inc. (a) ..................... 33,100 74,475
Oracle Corporation (a) ........................ 22,000 1,108,250
S3 Incorporated (a) ........................... 45,600 501,600
Sun Microsystems, Inc. (a) .................. 21,000 781,593
COMPUTER & OFFICE EQUIPMENT (11.05%)
Applied Magnetics Corporation (a) ............ 26,000 588,250
Cisco Systems, Inc. (a) ..................... 4,500 302,062
Compaq Computer Corporation (a) ............... 7,500 744,375
Seagate Technology, Inc. (a) .................. 18,000 633,375
Storage Technology Corporation (a) ............ 20,000 890,000
Western Digital Corporation (a) ............... 28,000 885,500
Xircom, Inc. (a) .............................. 15,000 186,563
DEPARTMENT STORES (1.38%)
Woolworth Corporation (a) ..................... 22,000 528,000
NUMBER OF MARKET
SHARES VALUE
----------- ------------
COMMON STOCKS (CONTINUED)
ELECTRONIC COMPONENTS & ACCESSORIES (2.13%)
Read-Rite Corporation (a) ..................... 39,000 $ 814,125
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.19%)
Kuhlman Corporation ........................... 26,000 838,500
FOOD STORES (2.76%)
Ruddick Corporation ........................... 64,000 1,056,000
FOOD & KINDRED PRODUCTS (2.96%)
Lance, Inc. ................................. 20,000 382,500
Tasty Baking Company ........................ 43,000 752,500
GAS PRODUCTION & DISTRIBUTION (1.53%)
National Fuel Gas Company ..................... 14,000 587,125
HEALTH SERVICES (1.98%)
Express Scripts, Inc. - Class A (a) ......... 18,200 759,850
HOTELS & OTHER LODGING PLACES (1.96%)
Prime Hospitality Corporation (a) ............ 37,900 748,525
INDUSTRIAL MACHINERY & EQUIPMENT (8.63%)
Cincinnati Milacron, Inc. ..................... 23,000 596,563
Deere & Company .............................. 7,000 384,125
Manitowac Company ........................... 18,000 841,500
SPS Technologies, Inc. (a) .................. 13,000 919,750
U.S. Filter Corporation ..................... 20,550 559,987
INSTRUMENTS & RELATED PRODUCTS (1.54%)
GenRad, Inc. (a) .............................. 26,000 588,250
INSURANCE (5.03%)
CMAC Investment Corporation .................. 19,000 907,250
Selective Insurance Group ..................... 21,000 1,017,188
LIFE INSURANCE (1.53%)
SunAmerica, Inc. .............................. 12,000 585,000
MEDICAL INSTRUMENTS & SUPPLIES (3.31%)
Datascope Corporation (a) ..................... 29,000 569,125
Respironics, Inc. (a) ........................ 33,000 697,125
OIL & GAS EXTRACTION (2.11%)
Cross Timbers Oil Company ..................... 42,000 808,500
PAPER & ALLIED PRODUCTS (2.13%)
Republic Group, Inc. ........................ 40,600 817,075
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
5
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS (4.17%)
Perrigo Company (a) ............ 60,000 $ 750,000
Watson Pharmaceutical, Inc. (a) 20,000 845,000
PRINTING & PUBLISHING (1.79%)
New England Business Services,
Inc. ........................ 26,000 684,125
RETAIL TRADE (2.29%)
Toys "R" Us, Inc. (a) ............ 25,000 875,000
TEXTILE MILL PRODUCTS (2.32%)
Mohawk Industries, Inc. (a) ...... 39,000 887,250
WHOLESALE TRADE NONDURABLE GOODS (2.23%)
Richfood Holdings, Inc. ......... 32,900 855,400
-------------
Total Common Stocks
(cost: $ 34,705,837)........................ 37,943,040
-------------
Total Investment Securities
(cost: $ 34,705,837)........................ $ 37,943,040
=============
SUMMARY
Investments at market value ...... 99.11% $ 37,943,040
Other Assets in
Excess of Liabilities ......... 0.89% 339,896
------- -------------
Net Assets ..................... 100.00% $ 38,282,936
======= =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
6
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
NUMBER OR MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (90.24%)
AEROSPACE (1.89%)
AAR Corporation .................. 1,500 $ 48,469
CHEMICALS & ALLIED PRODUCTS (4.26%)
Dexter Corporation ............... 2,000 64,000
Ethyl Corporation ............... 4,900 45,325
COMMERCIAL BANKS (7.50%)
City National Corporation ...... 2,600 62,563
First Chicago NBD Corporation ... 1 27
Magna Group, Inc. ............... 1,900 66,025
Wachovia Corporation ............ 1,100 64,144
COMPUTER & DATA PROCESSING SERVICE (2.86%)
Deluxe Corporation ............... 2,150 73,369
DEPARTMENT STORES (3.11%)
Dayton Hudson Corporation ...... 1,500 79,781
ELECTRIC, GAS, & SANITARY SERVICES (1.68%)
Aquarion Company ............... 1,600 43,200
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (7.22%)
General Electric Company ......... 990 64,721
Kuhlman Corporation ............ 1,800 58,050
Maytag Corporation ............... 2,400 62,700
FABRICATED METAL PRODUCTS (2.45%)
Snap-On, Inc. .................. 1,600 63,000
FOOD STORES (2.76%)
Ruddick Corporation ............ 4,300 70,950
FOOD & KINDRED PRODUCTS (4.31%)
Lance, Inc. ..................... 2,400 45,900
Tasty Baking Company ............ 3,700 64,750
GAS PRODUCTION & DISTRIBUTION (3.40%)
National Fuel Gas Company ...... 1,100 46,131
People's Energy Corporation ...... 1,100 41,181
------------
INDUSTRIAL MACHINERY & EQUIPMENT (4.64%)
Deere & Company .................. 1,100 60,363
============
Harris Corporation ............... 700 58,800
INSTRUMENTS & RELATED PRODUCTS (4.80%)
Eastman Kodak Company ............ 785 60,249
Xerox Corporation ............... 800 63,100
NUMBER OR MARKET
SHARES VALUE
----------- ------------
COMMON STOCKS (CONTINUED)
INSURANCE (2.64%)
Selective Insurance Group ...... 1,400 $ 67,813
MANUFACTURING INDUSTRIES (2.50%)
Jostens, Inc. .................. 2,400 64,200
PAPER & ALLIED PRODUCTS (2.59%)
Republic Group, Inc. ............ 3,300 66,413
PETROLEUM REFINING (6.47%)
Chevron Corporation ............ 800 59,150
Mobil Corporation ............... 600 41,925
Sun Company, Inc. ............... 2,100 65,100
PETROLEUM & PETROLEUM PRODUCTS (3.29%)
Pennzoil Company ............... 1,100 84,425
PHARMACEUTICALS (4.54%)
Bristol-Myers Squibb Company ... 800 64,800
Merck & Co., Inc. ............... 500 51,750
PRIMARY METAL INDUSTRIES (2.46%)
USX-US Steel Group, Inc. ...... 1,800 63,113
PRINTING & PUBLISHING (1.84%)
New England Business
Services, Inc. ............... 1,800 47,363
TELECOMMUNICATIONS (8.73%)
360 Communications Company (a) ... 283 4,846
Ameritech Corporation ............ 600 40,763
GTE Corporation .................. 1,100 48,263
SBC Communications, Inc. ......... 1,100 68,062
Southern New England
Telecommunications Corporation 1,600 62,199
TOBACCO PRODUCTS (4.30%)
Philip Morris Companies Inc. ... 1,200 53,249
Universal Corporation ............ 1,800 57,149
------------
Total Common Stocks
(cost: $ 1,947,232)............... 2,317,381
------------
Total Investment Securities
(cost: $ 1,947,232)............... $ 2,317,381
============
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
7
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SUMMARY
Investments at market value 90.24% $ 2,317,381
Other Assets in
Excess of Liabilities 9.76% 250,631
--------- ------------
Net Assets .................. 100.00% $ 2,568,012
========= ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
8
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCKS (89.42%)
APPAREL PRODUCTS (2.44%)
U.S. Industries, Inc. (a) ......... 1,600 $ 57,000
BEVERAGES (1.74%)
Coca-Cola Company ............... 600 40,500
CHEMICALS & ALLIED PRODUCTS (6.32%)
Gillette Company .................. 500 47,375
Praxair, Inc. ..................... 900 50,400
W.R. Grace & Company ............ 900 49,612
COMMERCIAL BANKS (4.86%)
First Chicago NBD Corporation ... 1 41
MBNA Corporation .................. 1,500 54,938
Wachovia Corporation ............ 1,000 58,313
COMMUNICATIONS EQUIPMENT (2.78%)
Lucent Technologies, Inc. ......... 900 64,856
COMPUTER & DATA PROCESSING SERVICE (5.51%)
Deluxe Corporation ............... 1,200 40,950
Oracle Corporation (a) ............ 1,000 50,313
Sun Microsystems, Inc. (a) ...... 1,000 37,219
COMPUTER & OFFICE EQUIPMENT (3.89%)
Cisco Systems, Inc. (a) ......... 500 33,563
Data General Corporation (a) ...... 2,200 57,200
DEPARTMENT STORES (2.51%)
Dayton Hudson Corporation ......... 1,100 58,506
ELECTRONIC COMPONENTS & ACCESSORIES (2.43%)
Intel Corporation ............... 400 56,625
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.46%)
Maytag Corporation ............... 2,200 57,475
GAS PRODUCTION & DISTRIBUTION (1.61%)
People's Energy Corporation ...... 1,000 37,438
HEALTH SERVICES (4.25%)
Beverly Enterprises (a) ......... 3,000 48,750
Tenet Healthcare Corporation (a) 1,700 50,256
INDUSTRIAL MACHINERY & EQUIPMENT (7.90%)
Baker Hughes, Inc. ............... 1,100 42,556
Cincinnati Milacron, Inc. ......... 2,300 59,656
============
Deere & Company .................. 1,000 54,875
U.S. Filter Corporation (a) ...... 1,000 27,250
NUMBER OF MARKET
SHARES VALUE
----------- ------------
COMMON STOCKS (CONTINUED)
INSTRUMENTS & RELATED PRODUCTS (5.00%)
Eastman Kodak Company ............ 800 $ 61,400
Xerox Corporation ............... 700 55,213
INSURANCE (4.99%)
MGIC Investment Corporation ...... 1,200 57,525
Travelers Group, Inc. ............ 933 58,837
LIFE INSURANCE (1.67%)
SunAmerica, Inc. .................. 800 39,000
MANUFACTURING INDUSTRIES (2.52%)
Jostens, Inc. ..................... 2,200 58,850
PETROLEUM REFINING (2.53%)
Sun Company, Inc. ............... 1,900 58,900
PETROLEUM & PETROLEUM PRODUCTS (3.29%)
Pennzoil Company .................. 1,000 76,750
PHARMACEUTICALS (5.00%)
Bristol-Myers Squibb Company ...... 800 64,800
Merck & Co., Inc. ............... 500 51,750
PRIMARY METAL INDUSTRIES (2.42%)
Nucor Corporation ............... 1,000 56,500
REAL ESTATE (0.08%)
Castle & Cooke, Inc. (a) ......... 110 1,822
RETAIL TRADE (3.93%)
Alberto-Culver Company ............ 1,400 39,200
Toys "R" Us, Inc. (a) ............ 1,500 52,500
TELECOMMUNICATIONS (4.53%)
GTE Corporation .................. 1,000 43,875
SBC Communications, Inc. ......... 1,000 61,875
TRANSPORTATION EQUIPMENT (2.55%)
Brunswick Corporation ............ 1,900 59,375
WHOLESALE TRADE DURABLE GOODS (2.21%)
Johnson & Johnson ............... 800 51,500
Total Common Stocks
(cost: $ 1,652,204)................................2,085,339
------------
Total Investment Securities
(cost: $ 1,652,204)............... $ 2,085,339
============
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
9
<PAGE>
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SUMMARY
Investments at market value 89.42% $ 2,085,339
Other Assets in
Excess of Liabilities ... 10.58% 246,676
--------- ------------
Net Assets ............... 100.00% $ 2,332,015
========= ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
10
<PAGE>
WRL SERIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
At June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. C.A.S.E.
C.A.S.E. GROWTH GROWTH & INCOME QUALITY GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
ASSETS:
Investments in securities, at cost ........................... $ 34,705,837 $ 1,947,232 $ 1,652,204
============== ============== ==============
Investments in securities, at market value .................. $ 37,943,040 $ 2,317,381 2,085,339
Short-term securities, at amortized cost ..................... 0 0 0
Cash ......................................................... 543,620 189,085 235,693
Cash collateral for securities on loan ..................... 0 0 0
Receivables:
Securities sold ............................................. 578,520 93,928 72,646
Interest ................................................... 13,197 2,669 1,307
Dividends ................................................... 21,927 6,125 2,823
Foreign receivable .......................................... 0 0 0
Foreign currency contracts ................................. 0 0 0
Other ...................................................... 0 0 0
-------------- -------------- --------------
Total assets ............................................. 39,100,304 2,609,188 2,397,808
-------------- -------------- --------------
LIABILITIES:
Securities purchased ....................................... 785,342 37,961 62,897
Accounts payable and accrued liabilities:
Investment advisory fees .................................... 25,621 1,715 1,545
Due to custodian .......................................... 0 0 0
Dividends to shareholders ................................. 0 0 0
Deposits for securities on loan ........................... 0 0 0
Foreign currency contracts ................................. 0 0 0
Other Fees ................................................ 6,405 1,500 1,351
-------------- -------------- --------------
Total liabilities .......................................... 817,368 41,176 65,793
-------------- -------------- --------------
Total net assets .......................................... $ 38,282,936 $ 2,568,012 2,332,015
============== ============== ==============
NET ASSETS:
Capital stock shares authorized .............................. 75,000,000 75,000,000 75,000,000
============== ============== ==============
Capital stock ($.01 par value) .............................. $ 27,280 $ 1,777 1,638
Additional paid-in-capital ................................. 34,742,209 1,999,209 1,793,089
Accumulated undistributed net investment income (loss) ...... 102,805 18,254 1,212
Accumulated undistributed net realized gain (loss) on:
Investment and foreign currency transactions ............... 173,439 178,623 102,941
Net unrealized appreciation (depreciation) on:
Investment securities ....................................... 3,237,203 370,149 433,135
Foreign currency transactions .............................. 0 0 0
Futures contracts .......................................... 0 0 0
-------------- -------------- --------------
Net assets applicable to outstanding shares of capital ...... $ 38,282,936 $ 2,568,012 2,332,015
============== ============== ==============
Shares outstanding at June 30, 1997 ........................ 2,727,978 177,687 163,847
============== ============== ==============
Net asset value per share .................................... $ 14.03 $ 14.45 14.23
============== ============== ==============
</TABLE>
The notes to the financial statements are an integral part of this report.
11
<PAGE>
WRL SERIES FUND, INC.
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. C.A.S.E.
C.A.S.E. GROWTH GROWTH & INCOME QUALITY GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................................ $ 148,591 $ 10,513 $ 4,127
Dividends ............................................................ 116,679 24,774 12,273
Foreign tax withheld ................................................ 0 0 0
------------ ------------ ------------
Total investment income ............................................. 265,270 35,287 16,400
------------ ------------ ------------
EXPENSES:
Investment advisory fees ............................................. 129,972 9,084 8,101
Printing and shareholder reports .................................... 11,694 99 114
Custody fees ......................................................... 17,592 15,666 16,218
Legal fees ............................................................ 999 8 8
Auditing and accounting fees .......................................... 2,121 2,121 2,121
Directors fees ...................................................... 205 2 2
Registration fees ................................................... 50 0 0
Other fees ............................................................ 6,962 56 56
------------ ------------ ------------
Total expenses ...................................................... 169,595 27,036 26,620
Less:
Advisory fee waiver and expense reimbursement ........................ 3,314 9,359 11,399
Fees paid indirectly ................................................ 3,816 644 32
------------ ------------ ------------
Net expenses ...................................................... 162,465 17,033 15,189
------------ ------------ ------------
Net investment income (loss) .......................................... 102,805 18,254 1,211
------------ ------------ ------------
Net realized gain (loss) on:
Investment securities ............................................. 173,441 178,623 102,942
Foreign currency transactions ....................................... 0 0 0
------------ ------------ ------------
Total net realized gain (loss) .................................... 173,441 178,623 102,942
------------ ------------ ------------
Change in unrealized appreciation (depreciation) on:
Investment securities ............................................. 1,676,045 118,479 217,741
Foreign currency transactions ....................................... 0 0 0
------------ ------------ ------------
Total change in unrealized appreciation (depreciation) ............ 1,676,045 118,479 217,741
------------ ------------ ------------
Net gain (loss) on investments ....................................... 1,849,486 297,102 320,683
------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations ... $ 1,952,291 $ 315,356 $ 321,894
============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of this report.
12
<PAGE>
WRL SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the year or period ended
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. GROWTH
PORTFOLIO
June 30 December 31
1997 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .................. $ 102,805 $ 102,508
Net realized gain (loss) on investments
and foreign currency transactions ............ 173,441 629,925
Change in unrealized appreciation
(depreciation) on investments and
foreign currency transactions .................. 1,676,045 1,514,389
------------ ------------
Net increase (decrease) in net assets
resulting from operations ..................... 1,952,291 2,246,822
------------ ------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (12,212) (95,636)
In excess of net investment income ............ 0 0
Net realized gains ........................... (200,000) (429,926)
In excess of net realized gains ............... 0 0
------------ ------------
Total distributions ........................ (212,212) (525,562)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 13,855,145 23,037,532
Dividends and distributions reinvested ......... 212,212 525,562
Cost of shares repurchased ..................... (4,084,032) (1,303,064)
------------ ------------
Increase (decrease) in net assets from
capital share transactions .................. 9,983,325 22,260,030
------------ ------------
Net increase (decrease) in net assets ......... 11,723,404 23,981,290
NET ASSETS:
Beginning of period ........................... 26,559,532 2,578,242
------------ ------------
End of period ................................. $ 38,282,936 $ 26,559,532
============ ============
Undistributed net investment income ......... $ 102,805 $ 12,212
============ ============
SHARE ACTIVITY:
Shares outstanding - beginning of period ...... 1,979,552 221,168
------------ ------------
Shares issued ................................. 1,039,844 1,821,039
Shares issued - reinvestment of dividends
and distributions .............................. 15,351 39,166
Shares redeemed .............................. (306,769) (101,821)
------------ ------------
Increase (decrease) in shares
outstanding .................................... 748,426 1,758,384
------------ ------------
Shares outstanding - end of period ............ 2,727,978 1,979,552
============ ============
<CAPTION>
C.A.S.E. GROWTH & INCOME C.A.S.E. QUALITY GROWTH
PORTFOLIO PORTFOLIO
June 30 December 31 June 30 December 31
1997 1996 1997 1996
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) .................. $ 18,254 $ 27,844 $ 1,211 $ 9,514
Net realized gain (loss) on investments
and foreign currency transactions ............ 178,623 102,838 102,942 66,177
Change in unrealized appreciation
(depreciation) on investments and
foreign currency transactions .................. 118,479 175,723 217,741 189,665
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ..................... 315,356 306,405 321,894 265,356
----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (10,157) (18,112) (2,307) (9,535)
In excess of net investment income ............ 0 0 0 (3,925)
Net realized gains ........................... (20,000) (82,838) (10,001) (52,944)
In excess of net realized gains ............... 0 0 0 0
----------- ----------- ----------- -----------
Total distributions ........................ (30,157) (100,950) (12,308) (66,404)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 246,175 894,348 207,517 690,792
Dividends and distributions reinvested ......... 30,157 100,950 12,308 66,404
Cost of shares repurchased ..................... (37,922) (239,812) (50,211) (253,304)
----------- ----------- ----------- -----------
Increase (decrease) in net assets from
capital share transactions .................. 238,410 755,486 169,614 503,892
----------- ----------- ----------- -----------
Net increase (decrease) in net assets ......... 523,609 960,941 479,200 702,844
NET ASSETS:
Beginning of period ........................... 2,044,403 1,083,462 1,852,815 1,149,971
----------- ----------- ----------- -----------
End of period ................................. $ 2,568,012 $ 2,044,403 $ 2,332,015 $ 1,852,815
=========== =========== =========== ===========
Undistributed net investment income ......... $ 18,254 $ 10,157 $ 1,212 $ 2,308
=========== =========== =========== ===========
SHARE ACTIVITY:
Shares outstanding - beginning of period ...... 159,855 96,056 150,802 106,076
----------- ----------- ----------- -----------
Shares issued ................................. 18,538 74,668 16,012 61,432
Shares issued - reinvestment of dividends
and distributions .............................. 2,101 7,803 868 5,367
Shares redeemed .............................. (2,807) (18,672) (3,835) (22,073)
----------- ----------- ----------- -----------
Increase (decrease) in shares
outstanding .................................... 17,832 63,799 13,045 44,726
----------- ----------- ----------- -----------
Shares outstanding - end of period ............ 177,687 159,855 163,847 150,802
=========== =========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
13
<PAGE>
WRL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS*
For the year or period ended
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. C.A.S.E.
GROWTH PORTFOLIO GROWTH & INCOME PORTFOLIO
June 30 December 31 June 30 December 31
----------- -------------------------- ---------- --------------------------
1997 1996 1995 (c) 1997 1996 1995 (c)
----------- ----------- -------------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 13.42 $ 11.66 $ 10.00 $ 12.79 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss) .................. 0.04 0.12 0.12 0.11 0.20 0.21
Net realized and unrealized gain (loss)
on investments ................................. 0.65 1.92 2.49 1.72 1.98 1.38
-------- -------- ----------- ------- -------- -----------
Total income (loss) from operations ............ 0.69 2.04 2.61 1.83 2.18 1.59
-------- -------- ----------- ------- -------- -----------
Distributions:
Dividends from net investment income ............ (0.01) (0.05) (0.12) (0.06) (0.12) (0.21)
Dividends in excess of net investment income ... 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gains
on investments ................................. (0.07) (0.23) (0.83) (0.11) (0.55) (0.10)
Distributions in excess of net realized gains
on investments ................................. 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- ----------- ------- -------- -----------
Total distributions ........................... (0.08) (0.28) (0.95) (0.17) (0.67) (0.31)
-------- -------- ----------- ------- -------- -----------
Net asset value, end of period .................. $ 14.03 $ 13.42 $ 11.66 $ 14.45 $ 12.79 $ 11.28
======== ======== =========== ======= ======== ===========
Total return (a) ................................. 5.19% 17.50% 20.65% 14.36% 19.22% 14.80%
Ratios and supplemental data:
Net assets at end of period (in thousands) ...... $ 38,283 $ 26,560 $ 2,578 $ 2,568 $ 2,044 $ 1,083
Ratio of expenses to average net assets (b) ... 1.00% 1.00% 1.00% 1.50% 1.50% 1.00%
Ratio of net investment income (loss)
to average net assets (b) ..................... 0.63% 0.94% 1.02% 1.59% 1.62% 1.94%
Average commission rate paid per share ......... $ 0.0600 $ 0.0604 N/A $0.0601 $ 0.0615 N/A
Portfolio turnover rate (a) ..................... 110.17% 160.27% 121.62% 68.75% 189.22% 72.73%
</TABLE>
* See notes to the Financial Highlights on Page 15.
(c) The inception date of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
14
<PAGE>
WRL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS*
For the year or period ended
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E.
QUALITY GROWTH PORTFOLIO
June 30 December 31
----------- --------------------------
1997 1996 1995 (c)
----------- ----------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period ............ $ 12.29 $ 10.84 $ 10.00
Income from operations:
Net investment income (loss) .................. 0.01 0.07 0.14
Net realized and unrealized gain (loss)
on investments ................................. 2.00 1.83 1.50
------- --------- ------------
Total income (loss) from operations ............ 2.01 1.90 1.64
------- --------- ------------
Distributions:
Dividends from net investment income ............ (0.01) (0.06) (0.14)
Dividends in excess of net investment income ... 0.00 (0.03) 0.00
Distributions from net realized gains
on investments ................................. (0.06) (0.36) (0.66)
Distributions in excess of net realized gains
on investments ................................. 0.00 0.00 0.00
------- --------- ------------
Total distributions ........................... (0.07) (0.45) (0.80)
------- --------- ------------
Net asset value, end of period .................. $ 14.23 $ 12.29 $ 10.84
======= ========= ============
Total return (a) ................................. 16.45% 17.54% 13.61%
Ratios and supplemental data: ..................
Net assets at end of period (in thousands) ...... $ 2,332 $ 1,853 $ 1,150
Ratio of expenses to average net assets (b) ... 1.50% 1.50% 1.00%
Ratio of net investment income (loss)
to average net assets (b) ..................... 0.12% 0.61% 1.28%
Average commission rate paid per share ......... $0.0602 $ 0.0618 N/A
Portfolio turnover rate (a) ..................... 64.64% 185.87% 119.63%
NOTES TO FINANCIAL HIGHLIGHTS
* The above tables illustrate the change for a share outstanding computed
using average shares outstanding throughout each period. See Note 5.
(a) For periods less than one year the total return and portfolio turnover rate
are not annualized.
(b) For periods less than one year the ratio of expenses to average net assets
and the ratio of net investment income to average net assets are
annualized.
(c) The inception date of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
15
<PAGE>
WRL SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1997
NOTE 1 -- ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
THE WRL SERIES FUND, INC. ("FUND") IS A DIVER-sified, open-end, investment
management company registered under the Investment Company Act of 1940, as
amended. The Fund was incorporated on August 21, 1985, as a Maryland
corporation and commenced operations on October 2, 1986.
The Fund consists of a series of investment Portfolios, including the
C.A.S.E. Growth Portfolio, the C.A.S.E. Growth & Income Portfolio, and the
C.A.S.E. Quality Growth Portfolio (the "Portfolios"). Shares of the Portfolios
are sold to the WRL Series Annuity Account (the "Annuity Account") of Western
Reserve Life Assurance Co. of Ohio ("WRL"), to fund benefits under the C.A.S.E.
Reserve Variable Annuity Contracts. The Separate Account contains three
investment options referred to as sub-accounts, each of which upon instructions
received from contract owners of C.A.S.E. Reserve Variable Annuity Contracts,
invests in a corres-ponding Portfolio.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates.
A. VALUATION OF INVESTMENTS
Securities held by the Portfolios are valued at market value, except for
short-term debt securities. Short-term debt securities maturing in 60
days or less are valued on the amortized cost basis, which approximates
market value. Stocks are valued at the latest sale price on the last
business day of the fiscal period as reported by the principal securities
exchange on which the issue is traded or, if no sale is reported for a
stock, the latest bid price is used. Bonds are valued using prices quoted
by a major dealer in bonds which offers a pricing service. Certain
pricing methodologies, such as matrix pricing of bonds, may involve the
use of estimates and actual sales prices may differ. Securities for which
quotations may not be readily available are valued as determined in good
faith in accordance with procedures established by and under the general
supervision of the Fund's Board of Directors.
The values of foreign securities are translated into U.S. dollars using
foreign exchange spot rates.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Security gains and
losses are calculated on the first-in, first-out basis for both tax and
financial reporting purposes. Dividend income is recorded on the
ex-dividend date, and interest income, including amortization of bond
premium and accretion of discount, is accrued daily. Dividend income on
foreign securities is recorded net of foreign tax expense.
The accounting records of the Fund are maintained in U.S. dollars. For
transactions denominated in a currency other than the U.S. dollar,
purchases and sales of securities, income received, and expenses paid are
translated into U.S. dollars at the foreign exchange spot rate on the
date the transaction is recorded. Currency gain and loss is also
calculated on payables and receivables that are denominated in foreign
currencies. The payables and receivables are generally related to
security transactions and income.
The unrealized gain or loss on forward foreign currency contracts is due
to the difference between the foreign exchange contract rate and the
foreign exchange forward rate applicable to that contract at the end of
the period. This gain or loss becomes realized when the contract is
closed or settled.
Futures contracts and options are valued based upon daily settlement
prices with the fluctuations in value recorded as unrealized gains and
losses. These gains and losses become realized when the position is
closed. The risks associated with the use of options and futures
contracts involve the possibilities of an illiquid market and an
imperfect correlation between the value of the instrument and the
underlying security.
C. FEDERAL INCOME TAXES
It is the Fund's policy to distribute substantially all of its taxable
income and capital gains to its shareholders and otherwise qualify as a
regulated investment company under the Internal Revenue Code.
16
<PAGE>
WRL SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 (CONTINUED)
Pursuant to Code Section 4982(f), regulated investment companies serving
as funding vehicles for life insurance company separate accounts are not
subject to excise tax distribution requirements. Accordingly, no
provision for Federal income taxes has been made.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for such items as wash sales, foreign currency
transactions, net operating losses and capital loss carryforwards.
D. DIVIDENDS AND DISTRIBUTIONS
Dividends of the Portfolios are typically declared and reinvested
semi-annually, while capital gain distributions are typically declared
and reinvested annually. Dividends and distributions of the Fund are
generally paid to and reinvested by the Separate Accounts on the next
business day after declaration.
E. ORGANIZATION COSTS
All costs incurred in connection with the formation of the Fund and its
Portfolios were paid by WRL.
F. EXPENSE OFFSET ARRANGEMENT
Fees paid indirectly, in the accompanying Statements of Operations,
represent reductions in custody expenses in lieu of interest income
earned on incidental uninvested cash balances. Such fees have been added
to custody fees to reflect total Fund expenses.
NOTE 2 -- INVESTMENT ADVISORY AND TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY
The Fund has entered into an annually renewable investment advisory
agreement for the Portfolios with WRL Investment Management, Inc. ("WRL
Management") as investment adviser. The Fund pays to WRL Management and
charges to each respective Portfolio, advisory fees each month at the
following annual rate expressed as a percentage of the average daily net
assets of the respective Portfolio:
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
- ------------------------------- ------------------
<S> <C>
C.A.S.E. Growth .80%
C.A.S.E. Growth & Income .80%
C.A.S.E. Quality Growth .80%
</TABLE>
WRL Management has entered into a sub-advisory agreement with C.A.S.E.
Management, Inc. Pursuant to the agreement, fifty percent of the advisory
fee paid to WRL Management is due to C.A.S.E. Management, Inc.
WRL Management currently has voluntarily undertaken to pay expenses on
behalf of a Portfolio to the extent a Portfolio's normal operating
expenses exceed the percentage of average daily net assets on an
annualized basis of the Portfolio as listed below:
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
- ------------------------------- ------------------
<S> <C>
C.A.S.E. Growth 1.00%
C.A.S.E. Growth & Income 1.50%
C.A.S.E. Quality Growth 1.50%
</TABLE>
The Portfolios are charged for expenses that specifically relate to their
individual operations. All other operating expenses of the Fund that are
not attributable to a specific Portfolio are allocated based upon the
proportionate number of policy and contract owners of the underlying
sub-accounts. WRL Investment Services, Inc. ("WRL Services") directly
incurs and pays these operating expenses relating to the Fund, which
subsequently reimburses WRL Services. All normal operating expenses that
exceed the established expense limit set forth above will be borne by WRL
Services.
B. AFFILIATES
WRL Management, WRL Services and WRL are indirect wholly-owned
subsidiaries of AEGON USA, Inc., which is an indirect wholly-owned
subsidiary of AEGON nv, a Netherlands corporation.
C. PLAN OF DISTRIBUTION
Effective January 1, 1997, the Fund adopted a Plan of Distribution
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended,
17
<PAGE>
WRL SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 2 (CONTINUED)
("Distribution Plan") and pursuant to the Plan, has entered into a
Distribution Agreement with InterSecurities, Inc. ("ISI").
Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for
expenses incurred in connection with the dis-
tribution of a Portfolio's shares, amounts equal to actual expenses
associated with distributing such Portfolio's shares, up to a maximum
rate of 0.15% on an annualized basis of the average daily net assets.
ISI has determined that it will not seek payment by the Fund of
distribution expenses incurred with respect to any Portfolio during the
fiscal year ending December 31, 1997. Prior to ISI seeking reimbursement
of future expenses, Contract Owners will be notified in advance.
D. DEFERRED COMPENSATION PLAN
Each eligible Director of the Fund who is not an officer or affiliated
person as defined under the Investment Company Act of 1940, as amended,
may elect to participate in the Deferred Compensation Plan for Directors
of the Fund (the "Plan"). Under the Plan, such Directors may elect to
defer payment of a percentage of their total fees earned as a Director of
the Fund. These deferred amounts may be invested in any Portfolio of the
IDEX Series Fund. It is not anticipated that this Plan will affect the
Fund. Invested plan amounts are included in other assets. The total
liability for deferred compensation to Directors under the Plan at June
30, 1997, is included in other liabilities in the accompanying Statement
of Assets and Liabilities.
NOTE 3 -- SECURITIES TRANSACTIONS
Securities transactions are summarized as follows:
<TABLE>
<CAPTION>
C.A.S.E. GROWTH C.A.S.E. QUALITY
C.A.S.E. GROWTH & INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------------- -----------------
<S> <C> <C> <C>
For the period ended June 30, 1997:
Purchases of securities:
Long-term excluding U.S. Government $ 44,796,762 $ 1,469,344 $ 1,207,966
U.S. Government securities ......... 0 0 0
Proceeds from maturities and sales
of securities:
Long-term excluding U.S. Government 30,049,793 1,328,364 1,287,223
U.S. Government securities ......... 0 0 0
</TABLE>
18
<PAGE>
WRL SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 4 -- FEDERAL INCOME TAX MATTERS
The income, expenses, gains and losses on security transactions attributed
to each Portfolio for accounting purposes are also attributed to that Portfolio
for Federal income tax purposes. Gains and losses on forward currency
contracts, if applicable, are treated as ordinary income for Federal income tax
purposes pursuant to Section 988 of the Internal Revenue Code.
Each Portfolio has and will continue to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies, and
accordingly, has made or intends to make sufficient distributions of net
investment income and net realized gains, if any, to relieve it from all
federal and state income taxes and federal excise taxes.
The net capital loss carryforwards noted below as of December 31, 1996, if
applicable, are available to offset future realized capital gains through the
periods listed. Each Portfolio will elect to treat the net capital losses
incurred in the two month period ended December 31, 1996, (Post-October
Losses), if applicable, as having been incurred in the following fiscal year.
The aggregate cost of investments and composition of unrealized appreciation
and depreciation for Federal income tax purposes as of June 30, 1997 are as
follows:
<TABLE>
<CAPTION>
PRIOR YEAR
POST-OCTOBER DECEMBER 31, 1996 NET CAPITAL LOSS
LOSSES NET CAPITAL LOSS CARRYFORWARD
PORTFOLIO RECOGNIZED CARRYFORWARD AVAILABLE THROUGH
- -------------------------------- -------------- ------------------- ------------------
<S> <C> <C> <C>
C.A.S.E. Growth ............... $ 0 $ 0 N/A
C.A.S.E. Growth & Income ...... 0 0 N/A
C.A.S.E. Quality Growth ...... (3,081) 0 N/A
</TABLE>
<TABLE>
<CAPTION>
NET UNREALIZED
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST BASIS APPRECIATION DEPRECIATION (DEPRECIATION)
- -------------------------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
C.A.S.E. Growth ............... $ 34,714,605 $ 4,101,733 $ (873,298) $ 3,228,435
C.A.S.E. Growth & Income ...... 1,947,232 373,630 (3,481) 370,149
C.A.S.E. Quality Growth ...... 1,652,204 434,894 (1,759) 433,135
</TABLE>
NOTE 5 -- FINANCIAL HIGHLIGHTS
The total return reflects the advisory fee and all other Portfolio
expenses and includes reinvestment of dividends and capital gains; it does not
reflect the charges against the corresponding sub-accounts or the charges and
deductions under the applicable annuity contracts.
The ratio of expenses to average net assets in the Financial Highlights is
net of the advisory fee waiver (see Note 2). Without the advisory fee waived by
WRL the ratio would be as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- -----------------
PORTFOLIO 1997 1996 1995 *
- -------------------------------- --------- ------- -------
<S> <C> <C> <C>
C.A.S.E. Growth ............... 1.02% 1.64% 4.15%
C.A.S.E. Growth & Income ...... 2.31% 3.34% 6.17%
C.A.S.E. Quality Growth ...... 2.60% 3.56% 5.91%
</TABLE>
* The inception date of these Portfolios was May 1, 1995.
19
<PAGE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. GROWTH C.A.S.E. QUALITY
C.A.S.E. GROWTH & INCOME GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments:
Investment in WRL Series Fund, Inc.:
Shares .......................................... 356,520.793 177,686.927 163,846.532
================ ================ ================
Cost ............................................. $ 4,433,838 $ 2,064,139 $ 1,839,406
================ ================ ================
Investments at net asset value .................. $ 5,003,216 $ 2,568,012 $ 2,331,863
Accrued transfers from (to) depositor - net ...... 17,480 4,360 2,330
---------------- ---------------- ----------------
Total assets .................................... 5,020,696 2,572,372 2,334,193
---------------- ---------------- ----------------
LIABILITIES: ....................................... 508 262 240
---------------- ---------------- ----------------
Total net assets ................................. $ 5,020,188 $ 2,572,110 $ 2,333,953
================ ================ ================
EQUITY ACCOUNTS:
Contract Owners' equity:
Units .......................................... 345,909.338587 118,844.076546 104,208.250329
================ ================ ================
Unit value ....................................... $ 14.513018 $ 15.233638 $ 15.135070
================ ================ ================
Contract Owners' equity ........................ $ 5,020,188 $ 1,810,428 $ 1,577,199
---------------- ---------------- ----------------
Depositor's equity:
Units .......................................... N/A 50,000.000000 50,000.000000
================ ================ ================
Unit value ....................................... $ N/A $ 15.233638 $ 15.135070
================ ================ ================
Depositor's equity .............................. N/A 761,682 756,754
---------------- ---------------- ----------------
Total equity .................................... $ 5,020,188 $ 2,572,110 $ 2,333,953
================ ================ ================
</TABLE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. GROWTH C.A.S.E. QUALITY
C.A.S.E. GROWTH & INCOME GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend Income ............................................. $ 1,607 $ 10,157 $ 2,307
Capital gain distributions ................................. 26,312 20,000 10,001
------------ ------------- ------------
27,919 30,157 12,308
EXPENSES:
Mortality and expense risk ................................. (34,021) (14,202) (12,663)
------------ ------------- ------------
Net investment income (loss) .............................. (6,102) 15,955 (355)
------------ ------------- ------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities transactions ...... 210,556 9,856 11,850
Change in unrealized appreciation (depreciation) ............ (47,268) 275,324 297,585
------------ ------------- ------------
Net gain (loss) on investments ........................... 163,288 285,180 309,435
------------ ------------- ------------
Net increase (decrease) in equity accounts resulting
from operations .......................................... $ 157,186 $ 301,135 $ 309,080
============ ============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
20
<PAGE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year or period ended
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. GROWTH
C.A.S.E. GROWTH & INCOME
SUB-ACCOUNT SUB-ACCOUNT
June 30 December 31 June 30 December 31
1997 1996 1997 1996
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ..................... $ (6,102) $ 65,081 $ 15,955 $ 79,284
Net gain (loss) on investments ..................... 163,288 625,485 285,180 205,454
----------- ------------ ------------ ------------
Net increase (decrease) in equity accounts
resulting from operations ........................ 157,186 690,566 301,135 284,738
----------- ------------ ------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ............... 568,154 2,791,028 258,664 880,018
----------- ------------ ------------ ------------
Less cost of units redeemed:
Administrative charges ........................... 1,855 2,649 342 513
Policy loans .................................... 0 0 0 0
Surrender benefits .............................. 956,615 163,812 31,750 203,303
Death benefits .................................... 0 0 0 0
----------- ------------ ------------ ------------
958,470 166,461 32,092 203,816
----------- ------------ ------------ ------------
Increase (decrease) in equity accounts
from capital unit transactions .................. (390,316) 2,624,567 226,572 676,202
----------- ------------ ------------ ------------
Net increase (decrease) in equity accounts ...... (233,130) 3,315,133 527,707 960,940
Depositor's equity contribution (redemption) ...... (640,060) 0 0 0
EQUITY ACCOUNTS:
Beginning of period .............................. 5,893,378 2,578,245 2,044,403 1,083,463
----------- ------------ ------------ ------------
End of period .................................... $ 5,020,188 $ 5,893,378 $ 2,572,110 $ 2,044,403
=========== ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. QUALITY
GROWTH SUB-ACCOUNT
June 30 December 31
1997 1996
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ..................... $ (355) $ 46,660
Net gain (loss) on investments ..................... 309,435 198,952
----------- ------------
Net increase (decrease) in equity accounts
resulting from operations ........................ 309,080 245,612
----------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ............... 220,843 532,594
----------- ------------
Less cost of units redeemed:
Administrative charges ........................... 397 691
Policy loans .................................... 0 0
Surrender benefits .............................. 48,388 74,671
Death benefits .................................... 0 0
----------- ------------
48,785 75,362
----------- ------------
Increase (decrease) in equity accounts
from capital unit transactions .................. 172,058 457,232
----------- ------------
Net increase (decrease) in equity accounts ...... 481,138 702,844
Depositor's equity contribution (redemption) ...... 0 0
EQUITY ACCOUNTS:
Beginning of period .............................. 1,852,815 1,149,971
----------- ------------
End of period .................................... $ 2,333,953 $ 1,852,815
=========== ============
</TABLE>
The notes to the financial statements are an integral part of this report.
21
<PAGE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. C.A.S.E. GROWTH
GROWTH SUB-ACCOUNT & INCOME SUB-ACCOUNT
December 31 December 31
June 30 -------------------------- June 30 ---------------------------
1997 1996 1995 (c) 1997 1996 1995 (c)
------------ ----------- -------------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 13.88 $ 11.96 $ 10.00 $ 13.40 $ 11.38 $ 10.00
Income from operations:
Net investment income (loss) ............... (0.02) 0.20 0.85 0.10 0.57 0.22
Net realized and unrealized gain (loss)
on investments .............................. 0.65 1.72 1.11 1.73 1.45 1.16
---------- -------- ----------- -------- -------- ------------
Total income (loss) from operations ...... 0.63 1.92 1.96 1.83 2.02 1.38
---------- -------- ----------- -------- -------- ------------
Accumulation unit value, end of period ...... $ 14.51 $ 13.88 $ 11.96 $ 15.23 $ 13.40 $ 11.38
========== ======== =========== ======== ======== ============
Total return (a) .............................. 4.54% 16.04% 19.64% 13.65% 17.74% 13.84%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 5,020 $ 5,893 $ 2,578 $ 2,572 $ 2,044 $ 1,083
Ratios of net invesment income (loss)
to average net assets (b) .................. (0.22%) 1.51% 11.12% 1.39% 4.57% 3.07%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
C.A.S.E. QUALITY
GROWTH SUB-ACCOUNT
December 31
June 30 --------------------------
1997 1996 1995 (c)
----------- ----------- --------------
<S> <C> <C> <C>
Accumulation unit value, beginning of period $ 13.08 $ 11.27 $ 10.00
Income from operations:
Net investment income (loss) ............... (0.01) 0.35 0.70
Net realized and unrealized gain (loss)
on investments .............................. 2.07 1.46 0.57
---------- -------- -----------
Total income (loss) from operations ...... 2.06 1.81 1.27
---------- -------- -----------
Accumulation unit value, end of period ...... $ 15.14 $ 13.08 $ 11.27
========== ======== ===========
Total return (a) .............................. 15.74% 16.08% 12.66%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 2,334 $ 1,853 $ 1,150
Ratios of net invesment income (loss)
to average net assets (b) .................. (0.03%) 2.95% 9.72%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
(a) For periods less than one year the total return is not annualized.
(b) For periods less than one year the ratio of net investment income to
average net assets is annualized.
(c) The inception date of this sub-account was May 1, 1995.
The notes to the financial statements are an integral part of this report.
22
<PAGE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1997
NOTE 1 -- ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
The WRL Series Annuity Account (the "Annuity Account") was established as
a variable accumulation deferred annuity separate account of Western Reserve
Life Assurance Co. of Ohio ("WRL") and is registered as a unit investment trust
("Trust") under the Investment Company Act of 1940, as amended.
The Annuity Account holds assets that support the benefits under flexible
payment variable accumulation deferred annuity contracts (the "Contracts")
issued by WRL, including the C.A.S.E. Reserve Variable Annuity. The Annuity
Account equity transactions are accounted for using the appropriate effective
date at the corresponding accumulation unit value.
The C.A.S.E. Reserve Variable Annuity investment options, referred to as
sub-accounts, are the C.A.S.E. Growth Sub-Account, the C.A.S.E. Growth & Income
Sub-Account, and the C.A.S.E. Quality Growth Sub-Account. Each sub-account
invests in the corresponding portfolio (the "Portfolio") of the WRL Series
Fund, Inc. (the "Fund"), a registered management investment company under the
Investment Company Act of 1940, as amended. The Sub-Advisor for these three
Portfolios is C.A.S.E. Management, Inc.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates.
The following significant accounting policies, which are in conformity
with generally accepted accounting principles for unit investment trusts, have
been consistently used in preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS
The investments in the Fund's shares are stated at the closing net asset
value ("NAV") per share as determined by the Fund on June 30, 1997.
Investment transactions are accounted for on the trade date, using the
Fund NAV next determined after receipt of sale or redemption order
without sales charges. Dividend income and capital gain distributions are
recorded on the ex-dividend date. The cost of investments sold is
determined on a first-in, first-out basis.
B. FEDERAL INCOME TAXES
The operations of the Annuity Account are a part of and are taxed with
the total operations of WRL, which is taxed as a life insurance company
under the Internal Revenue Code. Under current law, the investment income
of the Annuity Account, including realized and unrealized capital gains,
is not taxable to WRL. Accordingly, no provision for Federal income taxes
has been made.
NOTE 2 -- CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with issuance and
administration of the Contracts.
A. CONTRACT CHARGES
No deduction for sales expenses are made from the purchase payments. A
contingent deferred sales charge may, however, be assessed against
contract values when withdrawn or surrendered.
On each anniversary through maturity date, WRL will deduct an annual
contract charge as partial compensation for providing administrative
services under the Contracts.
B. SUB-ACCOUNT CHARGES
A daily charge equal to an annual rate of 1.25% of average daily net
assets is assessed to compensate WRL for assumption of mortality and
expense risks in connection with issuance and administration of the
Contracts. This charge (not assessed at the individual contract level)
effectively reduces the value of a unit outstanding during the year.
NOTE 3 -- DIVIDENDS AND DISTRIBUTIONS
Dividends of the Portfolios are typically declared and reinvested
semi-annually, while capital gain distributions are typically declared and
reinvested annually. Dividends and distributions of the Fund are generally
23
<PAGE>
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 3 (CONTINUED)
paid to and reinvested by the Annuity Account the next business day after
declaration.
NOTE 4 -- OTHER MATTERS
As of June 30, 1997, THE EQUITY ACCOUNTS INCLUDE net unrealized
appreciation on investments as follows:
<TABLE>
<CAPTION>
SUB-ACCOUNT
- --------------------------
<S> <C>
C.A.S.E. Growth $ 569,378
C.A.S.E. Growth & Income 503,873
C.A.S.E. Quality Growth 492,457
</TABLE>
24
<PAGE>
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25
<PAGE>
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26
<PAGE>
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27
<PAGE>
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28
<PAGE>
- --------------------------------------------------------------------------------
W R L S E R I E S F U N D , I N C .
- --------------------------------------------------------------------------------
WRL SERIES ANNUITY ACCOUNT
OFFICE OF THE WRL SERIES FUND, INC.
WRL SERIES ANNUITY ACCOUNT
201 HIGHLAND AVENUE
Largo, FL 33770-2597
1-800-851-9777
---------------------------
DISTRIBUTOR:
Intersecurities, Inc.
201 Highland Avenue
Largo, FL 33770-2597
---------------------------
FUND CUSTODIAN:
Investors Bank & Trust Company
200 Clarendon Street
16th Floor
Boston, MA 02116
---------------------------
INVESTMENT ADVISER:
WRL Investment Management, Inc.
201 Highland Avenue
Largo, FL 33770-2957
---------------------------
SUB-ADVISER:
C.A.S.E. Management, Inc.
2255 Glades Road
Suite 221-A
Boca Raton, FL 33431
---------------------------
INSURER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 33770-2597
---------------------------
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
<PAGE>
THIS MATERIAL IS FOR CONTRACT HOLDER'S
REPORTING PURPOSES ONLY AND SHALL NOT BE
USED IN CONNECTION WITH A SOLICITATION,
OFFER OR ANY PROPOSED SALE OR PURCHASE
OF SECURITIES. THIS MATERIAL MUST BE
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
[GRAPHIC OMITTED]
--------------------------------------------------
Western Reserve Life Assurance Co. of Ohio
Distributor: InterSecurities, Inc.
201 Highland Avenue /bullet/ Largo, Florida 33770-2597
August 1997
ACC00008 (8/97)
<PAGE>
APPENDIX A
Appendix to Electronic Format
WRL Series Fund, Inc.
C.A.S.E. Reserve Variable Annuity
Page 1 (Photo) Shown is John R. Kenney, Chairman of the Board
Page 2 (Graph) Mountain graph depicting the change in value of a $10,000
investment in the C.A.S.E. Growth Portfolio since inception
versus the Wilshire 5000 Index ("Wilshire") over the same
time frame.
Portfolio Wilshire Index
Inception 5/1/95 $10,000 $10,000
FYE 12/31/95 $12,065 $12,028
FYE 12/31/96 $14,176 $14,294
Period Ended 6/30/97 $14,910 $16,674
Page 3 (Graph) Mountain graph depicting the change in value of a $10,000
investment in the C.A.S.E. Growth & Income Portfolio since
inception versus the Standard & Poor's Index of 500 Common
Stocks ("S&P") over the same time frame.
Portfolio S & P Index
Inception 5/1/95 $10,000 $10,000
FYE 12/31/95 $11,480 $12,186
FYE 12/31/96 $13,686 $14,984
Period Ended 6/30/97 $15,650 $18,072
Page 4 (Graph) Mountain graph depicting the change in value of a $10,000
investment in the C.A.S.E. Quality Growth Portfolio since
inception versus the Standard & Poor's Index of 500 Common
Stocks ("S&P") Index over the same time frame.
Portfolio S & P Index
Inception 5/1/95 $10,000 $10,000
FYE 12/31/95 $11,361 $12,186
FYE 12/31/96 $13,353 $14,984
Period Ended 6/30/97 $15,550 $18,072
