SUPPLEMENT DATED JANUARY 1, 1998
TO
PROSPECTUS DATED MAY 1, 1994
AS SUPPLEMENTED MAY 1, 1997
WRL FREEDOM SP PLUS
Effective January 2, 1998, the Fund will offer a new investment option.
This new option is the Third Avenue Value Portfolio ("Portfolio"). The
investment objective and policy of the Portfolio are summarized below. There is
no assurance that the Portfolio will achieve its stated objective. Also,
effective January 2, 1998, the Short-to-Intermediate Government Portfolio is no
longer available as an investment option of the Fund; the Bond Portfolio will
have a change of Sub-Adviser from Janus Capital Corporation to AEGON USA
Investment Management, Inc.; and the Bond and C.A.S.E. Growth Portfolios will
each have a change to their investment objective. See the information below for
details. For more detailed information, including a description of risks, see
the prospectus for the Fund, which should be read carefully.
THE FOLLOWING INFORMATION MODIFIES AND SUPPLEMENTS INFORMATION PROVIDED ON PAGE
7, FIFTH PARAGRAPH OF THE PROSPECTUS UNDER THE HEADING "11. WHAT CHARGES ARE
ASSESSED IN CONNECTION WITH THE POLICY?"
PORTFOLIO RATE
--------- ----
Bond 0.45%*
Third Avenue Value 0.80%
*Effective January 1, 1998, the management fees for the Bond Portfolio will be
reduced from 0.50% to 0.45% of the Portfolio's average daily net assets. On
December 16, 1997, Western Reserve received an Order from the Securities and
Exchange Commission ("Commission") approving the substitution of shares of the
Bond Portfolio for shares of the Short-to-Intermediate Government Portfolio. On
or about December 16, 1997, the substitution was effected in accordance with the
Commission's Order. As a result of the substitution, investments in the former
Short-to-Intermediate Government Sub-Account were automatically transferred to
the Bond Sub-Account and the Short-to-Intermediate Government Sub-Account was
liquidated.
THE FOLLOWING INFORMATION IS ADDED TO PAGE 8 BEFORE THE SECTION ENTITLED
"INVESTMENT EXPERIENCE INFORMATION":
FUND ANNUAL EXPENSES* (as a % of Fund average net assets)
THIRD AVENUE
VALUE PORTFOLIO** BOND PORTFOLIO
---------------- --------------
Management Fees 0.80% 0.50%***
Other Expenses 0.13% 0.14%
(After Reimbursement)
Total Fund Annual Expenses 0.93% 0.64%
*Effective January 1, 1997, the Fund adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan") and
pursuant to the Plan, has entered into a Distribution Agreement with
InterSecurities, Inc. ("ISI"), principal underwriter for the Fund.
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 distribution of a Portfolio's
shares, amounts equal to actual expenses associated with distributing a
Portfolio's shares, up to a maximum rate of 0.15% (fifteen
one-hundredths of one percent) on an annualized basis of the average
daily net assets. This fee is measured and accrued daily and paid
monthly. ISI has determined that it will not seek payment by the Fund
of distribution expenses with respect to any Portfolio during the
fiscal year ending December 31, 1998. Prior to ISI seeking
reimbursement, Policyowners will be notified in advance.
**Because the Value Equity and Global Sector Portfolios commenced
operations on May 1, 1996, the percentages set forth as "Other
Expenses" and "Total Fund Annual Expenses" are annualized. Because the
International Equity and U.S. Equity Portfolios commenced operations on
January 2, 1997, and the Third Avenue Value Portfolio commenced
operations on January 2, 1998, the percentages set forth as "Other
Expenses" and "Total Fund Annual Expenses" are estimates.
***Effective January 1, 1998, the management fees for the Bond
Portfolio will be reduced from 0.50% to 0.45% of the Portfolio's
average daily net assets. On December 16, 1997, Western Reserve
received an Order from the Securities and Exchange Commission
("Commission") approving the substitution of shares of the Bond
Portfolio for shares of the Short-to-Intermediate Government Portfolio.
On or about December 16, 1997, the substitution was effected in
accordance with the Commission's Order. As a result of the
substitution, investments in the former Short-to-Intermediate
Government Sub-Account were automatically transferred to the Bond
Sub-Account and the Short-to-Intermediate Government Sub-Account was
liquidated.
<PAGE>
THE FOLLOWING INFORMATION MODIFIES AND REPLACES INFORMATION PROVIDED ON PAGES 22
AND 23 OF THE PROSPECTUS UNDER THE HEADING "INVESTMENTS OF THE SERIES ACCOUNT -
WRL SERIES FUND, INC.":
THIRD AVENUE VALUE PORTFOLIO: This Portfolio seeks long-term capital
appreciation by investing primarily in a portfolio of equity securities of
well-financed companies believed to be priced below their private market values
and debt securities providing strong protective covenants and high, effective
yields.
EQSF Advisers, Inc. ("EQSF"), is sub-adviser to the Third Avenue Value
Portfolio of the Fund. EQSF is a New York corporation organized in 1988 and is
controlled by Martin J. Whitman. WRL Management and EQSF will divide equally
monthly compensation at the current annual rate of 0.80% of the aggregate
average daily net assets of the Third Avenue Value Portfolio. EQSF's
compensation will be reduced by 50% of the amount paid by WRL Management on
behalf of the Third Avenue Value Portfolio pursuant to any expense limitation or
other reimbursement.
BOND PORTFOLIO: This Portfolio seeks the highest possible current income
within the confines of the primary goal of insuring the protection of capital by
investing at least 65% and usually a higher percentage of its assets in debt
securities issued by the U.S. Government and its agencies and instrumentalities
and in other medium to high-quality debt securities.
AEGON USA Investment Management, Inc. ("AIMI") serves as sub-adviser to the
Balanced and Bond Portfolios of the Fund. AIMI is a wholly-owned subsidiary of
AEGON USA. WRL Management and AIMI will divide equally monthly compensation at
the current rate of 0.80% of the aggregate average daily net assets of the
Balanced Portfolio. WRL Management will receive monthly compensation at the
current annual rate of 0.45% and AIMI will receive 0.20% of the aggregate
average daily net assets of the Bond Portfolio. AIMI's compensation will be
reduced by 50% of the amount paid by WRL Management on behalf of the Balanced
and Bond Portfolios pursuant to any expense limitation or other reimbursement.
C.A.S.E. GROWTH PORTFOLIO: This Portfolio seeks annual growth of capital
through investment in companies whose management, financial resources and
fundamentals appear attractive on a scale measured against each company's
present value.
On or about December 16, 1997, after receiving an Order from the
Commission, Western Reserve redeemed shares of the Short-to-Intermediate
Government Portfolio held by the Short-to-Intermediate Government Sub-Account
and purchased shares of the Bond Portfolio with the proceeds. Immediately
following the substitution of shares, the assets of the Short-to-Intermediate
Government Sub-Account were transferred to the Bond Sub-Account, thereby
consolidating the Short-to-Intermediate Government Sub-Account into the Bond
Sub-Account. The Portfolio substitution and Sub-Account consolidation took place
at net asset value with no change in the amount of any Owner's benefits or Cash
Value. Western Reserve and its affiliates did not receive any compensation or
remuneration as a result of this transaction.
THE FOLLOWING INFORMATION REPLACES THE THIRD SENTENCE THE FIRST PARAGRAPH ON
PAGE 41 OF THE PROSPECTUS UNDER THE HEADING "MINIMUM GUARANTEED AND CURRENT
INTEREST RATES":
Western Reserve has no specific formula for determining current interest
rates. Some of the factors that Western Reserve may consider, in its sole
discretion, in determining whether to credit interest in excess of the 4%
guaranteed rate are: general economic trends, rates of return currently
available and anticipated on the company's investments, regulatory and tax
requirements, and competitive factors. The Fixed Account Value will not share in
the investment performance of the company's general account or any portion
thereof.
THE FOLLOWING SENTENCE IS ADDED FOLLOWING THE FOURTH SENTENCE OF THE FIFTH
PARAGRAPH BEGINNING ON PAGE 52 OF THE PROSPECTUS UNDER THE HEADING "APPENDIX A -
ILLUSTRATION OF BENEFITS":
Also, in addition, because the Third Avenue Value Portfolio had not commenced
operations as of December 31, 1997, the estimated average annual Portfolio
expense level reflects estimated expenses for this Portfolio at 0.93% for 1998.
THE ATTACHED FINANCIALS SUPPLEMENT THE FINANCIAL STATEMENTS INCLUDED IN THE MAY
1, 1994 PROSPECTUS BOOKLET.
WRL00183-01/98
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Money Market Portfolio
(14,179,829.230 shares;
cost $14,179,829) ............ $14,179,829
Accrued transfers from (to)
depositor - net ............ 140,423
-----------
Total assets ............... 14,320,252
-----------
LIABILITIES: .................. 350
-----------
Total net assets ............ $14,319,902
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Money Market sub-account
(897,927.644465 units;
$15.947724 unit value) ...... $14,319,902
-----------
Total equity ............... $14,319,902
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $561,428
Capital gain distributions ......... 0
--------
561,428
EXPENSES:
Mortality and expense risk charges 97,772
--------
Net investment income (loss) ...... 463,656
--------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 0
Change in unrealized appreciation
(depreciation) ............... 0
--------
Net gain (loss) on investments ... 0
--------
Net increase (decrease) in
equity accounts resulting
from operations ..................... $463,656
========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 463,656 $ 491,185
Net gain (loss) on investments ....................................... 0 0
----------- -----------
Net increase (decrease) in equity accounts resulting from operations 463,656 491,185
----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ................................. 4,799,129 5,217,298
----------- -----------
Less cost of units redeemed:
Administrative charges ............................................. 2,318,360 2,639,279
Policy loans ......................................................... 634,328 285,757
Surrender benefits ................................................... 721,584 776,305
Death benefits ...................................................... 8,640 25,737
----------- -----------
3,682,912 3,727,078
----------- -----------
Increase (decrease) in equity accounts from capital unit transactions 1,116,217 1,490,220
----------- -----------
Net increase (decrease) in equity accounts ........................... 1,579,873 1,981,405
EQUITY ACCOUNTS:
Beginning of period ................................................... 12,740,029 10,758,624
----------- -----------
End of period ......................................................... $14,319,902 $12,740,029
=========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
1
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ----------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 15.45 $ 14.83 $ 14.19 $ 13.84 $ 13.63 $ 13.33
Income from operations:
Net investment income (loss) ............... .50 .62 .64 .35 .21 .30
Net realized and unrealized
gain (loss) on investments ............... .00 .00 .00 .00 .00 .00
--------- --------- --------- --------- --------- ---------
Total income (loss) from operations ...... .50 .62 .64 .35 .21 .30
--------- --------- --------- --------- --------- ---------
Accumulation unit value, end of period ...... $ 15.95 $ 15.45 $ 14.83 $ 14.19 $ 13.84 $ 13.63
========= ========= ========= ========= ========= =========
Total return(a) .............................. 3.22% 4.17% 4.49% 2.58% 1.52% 2.24%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 14,320 $ 12,740 $ 10,759 $ 9,706 $ 4,985 $ 4,619
Ratio of net investment income (loss) to
average net assets(b) ..................... 4.23% 4.07% 4.37% 2.66% 1.51% 2.12%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
2
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Bond Portfolio
(1,237,737.879 shares;
cost $13,361,933)............ $13,862,933
Accrued transfers from (to)
depositor - net ......... (3,514)
-----------
Total assets ............... 13,859,419
-----------
LIABILITIES: .................. 341
-----------
Total net assets ............ $13,859,078
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Bond sub-account
(675,824.385058 units;
$20.506922 unit value) ...... $13,859,078
-----------
Total equity ............... $13,859,078
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 135,261
Capital gain distributions ......... 0
----------
135,261
EXPENSES:
Mortality and expense risk charges 82,919
----------
Net investment income (loss) ...... 52,342
----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... (192,238)
Unrealized appreciation
(depreciation) ............... 779,508
----------
Net gain (loss) on investments ... 587,270
----------
Net increase (decrease) in
net assets resulting
from operations ..................... $ 639,612
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 52,342 $ 553,012
Net gain (loss) on investments ....................................... 587,270 (613,958)
----------- -----------
Net increase (decrease) in equity accounts resulting from operations 639,612 (60,946)
----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed): ................................. 3,389,659 3,451,573
----------- -----------
Less cost of units redeemed:
Administrative charges ............................................. 1,206,516 1,314,254
Policy loans ......................................................... 268,423 191,268
Surrender benefits ................................................... 278,383 338,599
Death benefits ...................................................... 1,419 28,090
----------- -----------
1,754,741 1,872,211
----------- -----------
Increase (decrease) in equity accounts from capital unit transactions 1,634,918 1,579,362
----------- -----------
Net increase (decrease) in equity accounts ........................... 2,274,530 1,518,416
EQUITY ACCOUNTS:
Beginning of period ................................................... 11,584,548 10,066,132
----------- -----------
End of period ......................................................... $13,859,078 $11,584,548
=========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
3
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ----------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- ------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 19.53 $ 19.67 $ 16.14 $ 17.50 $ 15.57 $ 14.68
Income from operations:
Net investment income (loss) ............... .09 .99 1.05 .89 2.11 1.00
Net realized and unrealized
gain (loss) on investments ............... .89 ( 1.13) 2.48 ( 2.25) ( .18) ( .11)
--------- -------- --------- -------- -------- --------
Total income (loss) from operations ...... .98 ( .14) 3.53 ( 1.36) .1.93 .89
--------- -------- --------- -------- -------- --------
Accumulation unit value, end of period ...... $ 20.51 $ 19.53 $ 19.67 $ 16.14 $ 17.50 $ 15.57
========= ======== ========= ======== ======== ========
Total return(a) .............................. 5.02% ( .75%) 21.89% ( 7.77%) 12.40% 6.08%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 13,859 $ 1,585 $ 10,066 $ 6,259 $ 6,985 $ 4,558
Ratio of net investment income (loss) to
average net assets(b) ..................... .6 % 5.34% 5.80% 5.57% 12.92% 6.69%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
4
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Growth Portfolio
(10,798,143.320 shares;
cost $303,973,822)............ $457,846,222
Accrued transfers from (to)
depositor - net ............ 79,810
------------
Total assets ............... 457,926,032
------------
LIABILITIES: .................. 11,322
------------
Total net assets ............ $457,914,710
============
EQUITY ACCOUNTS:
Policyowners' equity:
Growth sub-account
(7,786,258.715292 units;
$58.810621 unit value) ...... $457,914,710
------------
Total equity ............... $457,914,710
============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 495,370
Capital gain distributions ......... 2,782,833
-----------
3,278,203
EXPENSES:
Mortality and expense risk charges 2,633,824
-----------
Net investment income (loss) ...... 644,379
-----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 4,204,278
Unrealized appreciation
(depreciation) ............... 72,843,027
-----------
Net gain (loss) on investments ... 77,047,305
-----------
Net increase (decrease) in
net assets resulting
from operations ..................... $77,691,684
===========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 644,379 $ 19,310,499
Net gain (loss) on investments ....................................... 77,047,305 26,918,660
------------ ------------
Net increase (decrease) in equity accounts resulting from operations 77,691,684 46,229,159
------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 77,509,745 91,555,979
------------ ------------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 27,178,840 29,331,415
Policy loans ......................................................... 7,668,860 8,442,970
Surrender benefits ................................................... 11,506,754 12,385,662
Death benefits ...................................................... 423,541 600,920
------------ ------------
46,777,995 50,760,967
------------ ------------
Increase (decrease) in equity accounts from capital unit transactions 30,731,750 40,795,012
------------ ------------
Net increase (decrease) in equity accounts ........................... 108,423,434 87,024,171
EQUITY ACCOUNTS:
Beginning of period ................................................... 349,491,276 262,467,105
------------ ------------
End of period ......................................................... $457,914,710 $349,491,276
============ ============
</TABLE>
The notes to the financial statements are an integral part of this report.
5
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ----------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- ------------ ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 48.48 $ 41.47 $ 28.44 $ 31.30 $ 30.37 $ 29.95
Income from operations:
Net investment income (loss) ............... .09 2.88 3.89 .04 .46 1.09
Net realized and unrealized
gain (loss) on investments ............... 10.24 4.13 9.14 ( 2.90) .47 ( .67)
-------- -------- -------- -------- -------- --------
Total income (loss) from operations ...... 10.33 7.01 13.03 ( 2.86) .93 .42
-------- -------- -------- -------- -------- --------
Accumulation unit value, end of period ...... $ 58.81 $ 48.48 $ 41.47 $ 28.44 $ 31.30 $ 30.37
======== ======== ======== ======== ======== ========
Total return(a) .............................. 21.30% 16.91% 45.81% ( 9.13%) 3.06% 1.41%
Ratios and supplemental data:
Net assets at end of period (in thousands) $457,915 $349,491 $262,467 $161,490 $169,757 $146,053
Ratio of net investment income (loss) to
average net assets(b) ..................... 0.22% 6.41% 11.05% 0.16% 1.56% 3.84%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
6
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Short-to-Intermediate
Government Portfolio
(171,756.149 shares;
cost $1,784,332) ............ $1,823,871
Accrued transfers from (to)
depositor - net ............ (2,272)
----------
Total assets ............... 1,821,599
----------
LIABILITIES: .................. 45
----------
Total net assets ............ $1,821,554
==========
EQUITY ACCOUNTS:
Policyowners' equity:
Short-to-Intermediate
Government sub-account
(147,547.135527 units;
$12.345576 unit value) ...... $1,821,554
----------
Total equity ............... $1,821,554
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $22,511
Capital gain distributions ......... 0
-------
22,511
EXPENSES:
Mortality and expense risk charges 12,064
-------
Net investment income (loss) ...... 10,447
-------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 6,128
Unrealized appreciation
(depreciation) ............... 57,881
-------
Net gain (loss) on investments ... 64,009
-------
Net increase (decrease) in
net assets resulting
from operations ..................... $74,456
=======
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 10,447 $ 67,973
Net gain (loss) on investments ....................................... 64,009 (29,048)
---------- ----------
Net increase (decrease) in equity accounts resulting from operations 74,456 38,925
---------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 300,331 442,872
---------- ----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 144,502 178,533
Policy loans ......................................................... 70,410 33,708
Surrender benefits ................................................... 47,687 77,704
Death benefits ...................................................... 471 0
---------- ----------
263,070 289,945
---------- ----------
Increase (decrease) in equity accounts from capital unit transactions 37,261 152,927
---------- ----------
Net increase (decrease) in equity accounts ........................... 111,717 191,852
EQUITY ACCOUNTS:
Beginning of period ................................................... 1,709,837 1,517,985
---------- ----------
End of period ......................................................... $1,821,554 $1,709,837
========== ==========
</TABLE>
The notes to the financial statements are an integral part of this report.
7
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ----------------------------------------------------------------
1997 1996 1995 1994 1993 1992(c)
------------- ----------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 11.85 $ 11.55 $ 10.27 $ 10.40 $ 10.04 $ 10.00
Income from operations:
Net investment income (loss) ............... .07 .51 .61 .40 .14 .01
Net realized and unrealized
gain (loss) on investments ............... .43 ( .21) .67 ( .53) .22 .03
--------- -------- --------- -------- --------- ---------
Total income (loss) from operations ...... .50 .30 1.28 ( .13) .36 .04
--------- -------- --------- -------- --------- ---------
Accumulation unit value, end of period ...... $ 12.35 $ 11.85 $ 11.55 $ 10.27 $ 10.40 $ 10.04
========= ======== ========= ======== ========= =========
Total return(a) .............................. 4.19% 2.56% 12.53% ( 1.32%) 3.64% .38%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 1,822 $ 1,710 $ 1,517 $ 945 $ 1,408 $ 803
Ratio of net investment income (loss) to
average net assets (b) ..................... 0.77% 4.53% 5.53% 4.06% 1.39% 1.92%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
8
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Global Portfolio
(6,361,753.879 shares;
cost $110,370,618)............ $140,752,119
Accrued transfers from (to)
depositor - net ............ 244,321
------------
Total assets ............... 140,996,440
------------
LIABILITIES: .................. 3,435
------------
Total net assets ............ $140,993,005
============
EQUITY ACCOUNTS:
Policyowners' equity:
Global sub-account
(7,574,714.290770 units;
$18.613640 unit value) ...... $140,993,005
------------
Total equity ............... $140,993,005
============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 744,580
Capital gain distributions ......... 971,067
-----------
1,715,647
EXPENSES:
Mortality and expense risk charges 741,035
-----------
Net investment income (loss) ...... 974,612
-----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 675,993
Unrealized appreciation
(depreciation) ............... 21,291,865
-----------
Net gain (loss) on investments ... 21,967,858
-----------
Net increase (decrease) in
net assets resulting
from operations ..................... $22,942,470
===========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 974,612 $ 6,524,214
Net gain (loss) on investments ....................................... 21,967,858 6,374,264
------------ -----------
Net increase (decrease) in equity accounts resulting from operations 22,942,470 12,898,478
------------ -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 48,311,852 43,696,555
------------ -----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 8,732,359 6,463,101
Policy loans ......................................................... 2,114,496 1,465,510
Surrender benefits ................................................... 2,479,374 2,225,874
Death benefits ...................................................... 94,171 62,009
------------ -----------
13,420,400 10,216,494
------------ -----------
Increase (decrease) in equity accounts from capital unit transactions 34,891,452 33,480,061
------------ -----------
Net increase (decrease) in equity accounts ........................... 57,833,922 46,378,539
Depositors' equity contribution (redemption) ........................ 0 (268,153)
EQUITY ACCOUNTS:
Beginning of period ................................................... 83,159,083 37,048,697
------------ -----------
End of period ......................................................... $140,993,005 $83,159,083
============ ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
9
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ---------------------------------------
1997 1996 1995 1994(e)
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 15.13 $ 11.95 $ 9.80 $ 10.00
Income from operations:
Net investment income (loss) ............... .14 1.50 .45 .71
Net realized and unrealized
gain (loss) on investments ............... 3.34 1.68 1.70 ( .91)
-------- --------- --------- --------
Total income (loss) from operations ...... 3.48 3.18 2.15 ( .20)
-------- --------- --------- --------
Accumulation unit value, end of period ...... $ 18.61 $ 15.13 $ 11.95 $ 9.80
======== ========= ========= ========
Total return(a) .............................. 23.04% 26.60% 21.96% ( 2.02%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $140,993 $ 83,159 $ 37,049 $ 21,672
Ratio of net investment income (loss) to
average net assets(b) ..................... 1.17% 11.09% 4.25% 8.86%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
10
<PAGE>
WRL SERIES LIFE ACCOUNT
STRATEGIC TOTAL RETURN SUB-ACCOUNT (A)
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Strategic Total Return Portfolio
(4,576,916.538 shares;
cost $57,360,147).................. $76,849,078
Accrued transfers from (to)
depositor - net ............... 71,090
-----------
Total assets ..................... 76,920,168
-----------
LIABILITIES: ........................ 1,887
-----------
Total net assets .................. $76,918,281
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Strategic Total Return sub-account
(4,099,538.586476 units;
$18.762668 unit value) ............ $76,918,281
-----------
Total equity ..................... $76,918,281
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 103,034
Capital gain distributions ......... 158,508
-----------
261,542
EXPENSES:
Mortality and expense risk charges 437,700
-----------
Net investment income (loss) ...... (176,158)
-----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 395,148
Unrealized appreciation
(depreciation) ............... 11,755,948
-----------
Net gain (loss) on investments ... 12,151,096
-----------
Net increase (decrease) in
net assets resulting
from operations ..................... $11,974,938
===========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (176,158) $ 2,645,668
Net gain (loss) on investments ....................................... 12,151,096 3,635,535
----------- -----------
Net increase (decrease) in equity accounts resulting from operations 11,974,938 6,281,203
----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 16,083,143 16,832,424
----------- -----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 4,358,914 4,528,541
Policy loans ......................................................... 1,046,427 920,628
Surrender benefits ................................................... 1,534,861 1,300,527
Death benefits ...................................................... 99,325 112,479
----------- -----------
7,039,527 6,862,175
----------- -----------
Increase (decrease) in equity accounts from capital unit transactions 9,043,616 9,970,249
----------- -----------
Net increase (decrease) in equity accounts ........................... 21,018,554 16,251,452
EQUITY ACCOUNTS:
Beginning of period ................................................... 55,899,727 39,648,275
----------- -----------
End of period ......................................................... $76,918,281 $55,899,727
=========== ===========
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
The notes to the financial statements are an integral part of this report.
11
<PAGE>
WRL SERIES LIFE ACCOUNT
STRATEGIC TOTAL RETURN SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ----------------------------------------------------
1997 1996 1995 1994 1993(d)
------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 15.66 $ 13.74 $ 11.12 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss) ............... ( .04) .82 .68 .18 .19
Net realized and unrealized
gain (loss) on investments ............... 3.14 1.10 1.94 ( .34) 1.09
-------- --------- --------- -------- ---------
Total income (loss) from operations ...... 3.10 1.92 2.62 ( .16) 1.28
-------- --------- --------- -------- ---------
Accumulation unit value, end of period ...... $ 18.76 $ 15.66 $ 13.74 $ 11.12 $ 11.28
======== ========= ========= ======== =========
Total return(a) .............................. 19.82% 13.97% 23.55% ( 1.42%) 12.81%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 76,918 $ 55,900 $ 39,648 $ 23,649 $ 13,343
Ratio of net investment income (loss) to
average net assets(b) ..................... ( 0.36)% 5.76% 5.47% 1.93% 2.27%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
12
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Emerging Growth Portfolio
7,057,187.517 shares;
cost $110,794,080)............ $166,181,036
Accrued transfers from (to)
depositor - net ............ 66,132
------------
Total assets ............... 166,247,168
------------
LIABILITIES: .................. 4,081
------------
Total net assets ............ $166,243,087
============
EQUITY ACCOUNTS:
Policyowners' equity:
Emerging Growth sub-account
(6,686,647.961311 units;
$24.861947 unit value) ...... $166,243,087
------------
Total equity ............... $166,243,087
============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 0
Capital gain distributions ......... 749,646
-----------
749,646
EXPENSES:
Mortality and expense risk charges 849,777
-----------
Net investment income (loss) ...... (100,131)
-----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 1,318,955
Unrealized appreciation
(depreciation) ............... 32,864,088
-----------
Net gain (loss) on investments ... 34,183,043
-----------
Net increase (decrease) in
net assets resulting
from operations ..................... $34,082,912
===========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (100,131) $ 3,934,952
Net gain (loss) on investments ....................................... 34,183,043 9,284,053
------------ ------------
Net increase (decrease) in equity accounts resulting from operations 34,082,912 13,219,005
------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 40,143,911 40,944,477
------------ ------------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 10,374,194 9,201,102
Policy loans ......................................................... 2,574,981 2,095,860
Surrender benefits ................................................... 2,840,916 2,754,328
Death benefits ...................................................... 118,818 91,972
------------ ------------
15,908,909 14,143,262
------------ ------------
Increase (decrease) in equity accounts from capital unit transactions 24,235,002 26,801,215
------------ ------------
Net increase (decrease) in equity accounts ........................... 58,317,914 40,020,220
EQUITY ACCOUNTS:
Beginning of period ................................................... 107,925,173 67,904,953
------------ ------------
End of period ......................................................... $166,243,087 $107,925,173
============ ============
</TABLE>
The notes to the financial statements are an integral part of this report.
13
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 -----------------------------------------------------
1997 1996 1995 1994 1993(d)
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 19.51 $ 16.56 $ 11.38 $ 12.40 $ 10.00
Income from operations:
Net investment income (loss) ............... ( .02) .82 .65 ( .09) ( .09)
Net realized and unrealized
gain (loss) on investments ............... 5.37 2.13 4.53 ( .93) 2.49
-------- -------- --------- -------- --------
Total income (loss) from operations ...... 5.35 2.95 5.18 ( 1.02) 2.40
-------- -------- --------- -------- --------
Accumulation unit value, end of period ...... $ 24.86 $ 19.51 $ 16.56 $ 11.38 $ 12.40
======== ======== ========= ======== ========
Total return(a) .............................. 27.43% 17.82% 45.49% ( 8.18%) 23.96%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $166,243 $107,925 $ 67,905 $ 36,687 $ 18,620
Ratio of net investment income (loss) to
average net assets(b) ..................... ( 0.11%) 4.51% 4.66% ( 0.86%) ( 0.92%)
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
14
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Aggressive Growth Portfolio
(4,989,396.934 shares;
cost $69,928,239) ............ $90,571,430
Accrued transfers from (to)
depositor - net ............ 15,959
-----------
Total assets ............... 90,587,389
-----------
LIABILITIES: .................. 2,238
-----------
Total net assets ............ $90,585,151
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Aggressive Growth sub-account
(4,816,335.711588 units;
$18.807898 unit value) ...... $90,585,151
-----------
Total equity ............... $90,585,151
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 0
Capital gain distributions ......... 464,060
-----------
464,060
EXPENSES:
Mortality and expense risk charges 471,484
-----------
Net investment income (loss) ...... (7,424)
-----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 796,354
Unrealized appreciation
(depreciation) ............... 17,082,476
-----------
Net gain (loss) on investments ... 17,878,830
-----------
Net increase (decrease) in
net assets resulting
from operations ..................... $17,871,406
===========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (7,424) $ 1,138,792
Net gain (loss) on investments ....................................... 17,878,830 2,797,147
----------- -----------
Net increase (decrease) in equity accounts resulting from operations 17,871,406 3,935,939
----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 28,302,321 26,224,213
----------- -----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 7,032,417 6,412,799
Policy loans ......................................................... 1,290,409 863,340
Surrender benefits ................................................... 1,646,992 1,349,932
Death benefits ...................................................... 26,998 29,810
----------- -----------
9,996,816 8,655,881
----------- -----------
Increase (decrease) in equity accounts from capital unit transactions 18,305,505 17,568,332
----------- -----------
Net increase (decrease) in equity accounts ........................... 36,176,911 21,504,271
EQUITY ACCOUNTS:
Beginning of period ................................................... 54,408,240 32,903,969
----------- -----------
End of period ......................................................... $90,585,151 $54,408,240
=========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
15
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ---------------------------------------
1997 1996 1995 1994(e)
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 14.70 $ 13.43 $ 9.82 $ 10.00
Income from operations:
Net investment income (loss) ............... .00 .36 .37 ( .06)
Net realized and unrealized
gain (loss) on investments ............... 4.11 .91 3.24 ( .12)
-------- --------- --------- --------
Total income (loss) from operations ...... 4.11 1.27 3.61 ( .18)
-------- --------- --------- --------
Accumulation unit value, end of period ...... $ 18.81 $ 14.70 $ 13.43 $ 9.82
======== ========= ========= ========
Total return(a) .............................. 27.98% 9.46% 36.79% ( 1.85%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 90,585 $ 54,408 $ 32,904 $ 8,909
Ratio of net investment income (loss) to
average net assets(b) ..................... ( 0.01%) 2.65% 2.93% ( 0.72%)
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
16
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Balanced Portfolio
(739,683.639 shares;
cost $8,062,184) ............ $9,757,771
Accrued transfers from (to)
depositor - net ............ 8,936
----------
Total assets ............... 9,766,707
----------
LIABILITIES: .................. 239
----------
Total net assets ............ $9,766,468
==========
EQUITY ACCOUNTS:
Policyowners' equity:
Balanced sub-account
(687,514.514365 units;
$14.205471 unit value) ...... $9,766,468
----------
Total equity ............... $9,766,468
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 37,522
Capital gain distributions ......... 59,592
----------
97,114
----------
EXPENSES:
Mortality and expense risk charges 53,300
----------
Net investment income (loss) ...... 43,814
----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 68,447
Unrealized appreciation
(depreciation) ............... 1,131,384
----------
Net gain (loss) on investments ... 1,199,831
----------
Net increase (decrease) in net
assets
resulting from operations ............ $1,243,645
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 43,814 $ 153,790
Net gain (loss) on investments ....................................... 1,199,831 341,121
---------- ----------
Net increase (decrease) in equity accounts resulting from operations 1,243,645 494,911
---------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 3,017,187 3,089,782
---------- ----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 674,954 575,594
Policy loans ......................................................... 136,005 77,586
Surrender benefits ................................................... 99,888 84,857
Death benefits ...................................................... 1,431 3,961
---------- ----------
912,278 741,998
---------- ----------
Increase (decrease) in equity accounts from capital unit transactions 2,104,909 2,347,784
---------- ----------
Net increase (decrease) in equity accounts ........................... 3,348,554 2,842,695
Depositor's equity contribution (redemption) ........................ 0 (220,175)
EQUITY ACCOUNTS:
Beginning of period ................................................... 6,417,914 3,795,394
---------- ----------
End of period ......................................................... $9,766,468 $6,417,914
========== ==========
</TABLE>
The notes to the financial statements are an integral part of this report.
17
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ---------------------------------------
1997 1996 1995 1994(e)
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 12.21 $ 11.13 $ 9.37 $ 10.00
Income from operations:
Net investment income (loss) ............... .07 .36 .37 .22
Net realized and unrealized
gain (loss) on investments ............... 1.93 .72 1.39 ( .85)
--------- --------- --------- --------
Total income (loss) from operations ...... 2.00 1.08 1.76 ( .63)
--------- --------- --------- --------
Accumulation unit value, end of period ...... $ 14.21 $ 12.21 $ 11.13 $ 9.37
========= ========= ========= ========
Total return(a) .............................. 16.36% 9.73% 18.73% ( 6.29%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 9,766 $ 6,418 $ 3,795 $ 2,145
Ratio of net investment income (loss) to
average net assets(b) ..................... 0.73% 3.18% 3.59% 3.06%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
18
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH & INCOME SUB-ACCOUNT (A)
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Growth & Income Portfolio
(546,958.391 shares;
cost $6,281,297) ............ $7,222,213
Accrued transfers from (to)
depositor - net ............ 10,061
----------
Total assets ............... 7,232,274
----------
LIABILITIES: .................. 177
----------
Total net assets ............ $7,232,097
==========
EQUITY ACCOUNTS:
Policyowners' equity:
Growth & Income sub-account
(490,659.777004 units;
$14.739536 unit value) ...... $7,232,097
----------
Total equity ............... $7,232,097
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 14,590
Capital gain distributions ......... 79,136
--------
93,726
EXPENSES:
Mortality and expense risk charges 40,984
--------
Net investment income (loss) ...... 52,742
--------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 117,474
Unrealized appreciation
(depreciation) ............... 604,963
--------
Net gain (loss) on investments ... 722,437
--------
Net increase (decrease) in
net assets resulting
from operations ..................... $775,179
========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 52,742 $ 245,624
Net gain (loss) on investments ....................................... 722,437 210,007
---------- ----------
Net increase (decrease) in equity accounts resulting from operations 775,179 455,631
---------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased): ..............................
Net payments (redemptions) .......................................... 1,781,142 3,245,136
---------- ----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 513,495 439,973
Policy loans ......................................................... 115,491 72,641
Surrender benefits ................................................... 187,862 82,531
Death benefits ...................................................... 8,086 3,350
---------- ----------
824,934 598,495
---------- ----------
Increase (decrease) in equity accounts from capital unit transactions 956,208 2,646,641
---------- ----------
Net increase (decrease) in equity accounts ........................... 1,731,387 3,102,272
Depositor's equity contribution (redemption) ........................ 0 (232,644)
EQUITY ACCOUNTS:
Beginning of period ................................................... 5,500,710 2,631,082
---------- ----------
End of period ......................................................... 7,232,097 $5,500,710
========== ==========
</TABLE>
(a) Prior to May 1, 1997, this sub-account was known as Utility.
The notes to the financial statements are an integral part of this report.
19
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH & INCOME SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 ---------------------------------------
1997 1996 1995 1994(e)
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 13.03 $ 11.77 $ 9.49 $ 10.00
Income from operations:
Net investment income (loss) ............... .12 .76 .49 .29
Net realized and unrealized
gain (loss) on investments ............... 1.59 .50 1.79 ( .80)
--------- --------- --------- --------
Total income (loss) from operations ...... 1.71 1.26 2.28 ( .51)
--------- --------- --------- --------
Accumulation unit value, end of period ...... $ 14.74 $ 13.03 $ 11.77 $ 9.49
========= ========= ========= ========
Total return(a) .............................. 13.14% 10.64% 24.14% ( 5.15%)
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 7,232 $ 5,501 $ 2,361 $ 1,215
Ratio of net investment income (loss) to
average net assets(b) ..................... 1.15% 6.38% 4.57% 3.71%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
20
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Tactical Asset Allocation Portfolio
(1,844,591.450 shares;
cost $22,442,581) .................. $26,845,304
Accrued transfers from (to)
depositor - net .................. 56,095
-----------
Total assets ..................... 26,901,399
-----------
LIABILITIES: ........................ 659
-----------
Total net assets .................. $26,900,740
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Tactical Asset Allocation
sub-account (1,723,712.692606
units; $15.606278unit value) ...... $26,900,740
-----------
Total equity ..................... $26,900,740
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 52,773
Capital gain distributions ......... 143,908
----------
196,681
EXPENSES:
Mortality and expense risk charges 147,533
----------
Net investment income (loss) ...... 49,148
----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 283,787
Change in unrealized appreciation
(depreciation) ............... 2,936,912
----------
Net gain (loss) on investments ... 3,220,699
----------
Net increase (decrease) in
equity accounts resulting
from operations ..................... $3,269,847
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ 49,148 $ 584,042
Net gain (loss) on investments ....................................... 3,220,699 1,178,927
----------- -----------
Net increase (decrease) in equity accounts resulting from operations 3,269,847 1,762,969
----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ................................. 8,116,988 9,061,824
----------- -----------
Less cost of units redeemed:
Administrative charges ............................................. 1,543,003 1,134,737
Policy loans ......................................................... 332,772 306,304
Surrender benefits ................................................... 516,512 865,689
Death benefits ...................................................... 39,642 18,086
----------- -----------
2,431,929 2,324,816
----------- -----------
Increase (decrease) in equity accounts from capital unit transactions 5,685,059 6,737,008
----------- -----------
Net increase (decrease) in equity accounts ........................... 8,954,906 8,499,977
EQUITY ACCOUNTS:
Beginning of period ................................................... 17,945,834 9,445,857
----------- -----------
End of period ......................................................... $26,900,740 $17,945,834
=========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
21
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
December 31
September 30 -------------------------
1997 1996 1995(f)
------------- ------------ ------------
<S> <C> <C> <C>
Accumulation unit value, beginning of period $ 13.50 $ 11.90 $ 10.00
Income from operations:
Net investment income (loss) ............... .04 .53 .61
Net realized and unrealized
gain (loss) on investments ............... 2.07 1.07 1.29
--------- --------- ---------
Total income (loss) from operations ...... 2.11 1.60 1.90
--------- --------- ---------
Accumulation unit value, end of period ...... $ 15.61 $ 13.50 $ 11.90
========= ========= =========
Total return(a) .............................. 15.62% 13.40% 19.03%
Ratios and supplemental data:
Net assets at end of period (in thousands) $ 26,901 $ 17,946 $ 9,446
Ratio of net investment income (loss) to
average net assets(b) ..................... 0.30% 4.35% 5.47%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
22
<PAGE>
WRL SERIES LIFE ACCOUNT
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth Portfolio
(630,714.519 shares;
cost $8,639,769) ............ $10,428,435
Accrued transfers from (to)
depositor - net ............ 46,584
-----------
Total assets ............... 10,475,019
-----------
LIABILITIES: .................. 259
-----------
Total net assets ............ $10,474,760
===========
EQUITY ACCOUNTS:
Policyowners' equity:
C.A.S.E. Growth sub-account
(787,147.241092 units;
$13.307244 unit value) ...... $10,474,760
-----------
Total equity ............... $10,474,760
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 2,199
Capital gain distributions ......... 36,019
----------
38,218
EXPENSES:
Mortality and expense risk charges 44,833
----------
Net investment income (loss) ...... (6,615)
----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 53,462
Unrealized appreciation
(depreciation) ............... 1,566,921
----------
Net gain (loss) on investments ... 1,620,383
----------
Net increase (decrease) in
net assets resulting
from operations ..................... $1,613,768
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996*
-------------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (6,615) $ 70,246
Net gain (loss) on investments ....................................... 1,620,383 227,803
----------- ----------
Net increase (decrease) in equity accounts resulting from operations 1,613,768 298,049
----------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed): ................................. 5,241,571 4,302,715
----------- ----------
Less cost of units redeemed:
Administrative charges ............................................. 606,696 140,145
Policy loans ......................................................... 105,418 7,028
Surrender benefits ................................................... 109,755 12,276
Death benefits ...................................................... 79 0
----------- ----------
821,948 159,449
----------- ----------
Increase (decrease) in equity accounts from capital unit transactions 4,419,623 4,143,266
----------- ----------
Net increase (decrease) in equity accounts ........................... 6,033,391 4,441,315
Depositors' equity contribution (redemption) ........................ (24,946) 25,000
EQUITY ACCOUNTS:
Beginning of period ................................................... 4,466,315 0
----------- ----------
End of period ......................................................... $10,474,760 $4,466,315
=========== ==========
</TABLE>
* The inception date of this sub-account was May 1, 1996.
The notes to the financial statements are an integral part of this report.
23
<PAGE>
WRL SERIES LIFE ACCOUNT
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
September 30 December 31
1997 1996(g)
-------------- ------------
<S> <C> <C>
Accumulation unit value, beginning of period $ 10.81 $ 10.00
Income from operations:
Net investment income (loss) ............... ( .01) .37
Net realized and unrealized
gain (loss) on investments ............... 2.51 .44
-------- ---------
Total income (loss) from operations ...... 2.50 .81
-------- ---------
Accumulation unit value, end of period ...... $ 13.31 $ 10.81
======== =========
Total return(a) .............................. 23.11% 8.09%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 10,475 $ 4,466
Ratio of net investment income (loss) to
average net assets(b) ..................... ( 0.13%) 6.11%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
24
<PAGE>
WRL SERIES LIFE ACCOUNT
VALUE EQUITY SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
Value Equity Portfolio
(1,578,236.709 shares;
cost $18,570,376) ............ $22,268,655
Accrued transfers from (to)
depositor - net ............ 69,917
-----------
Total assets ............... 22,338,572
-----------
LIABILITIES: .................. 548
-----------
Total net assets ............ $22,338,024
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Value Equity sub-account
(1,595,234.009808 units;
$14.002976 unit value) ...... $22,338,024
-----------
Total equity ............... $22,338,024
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 7,477
Capital gain distributions ......... 0
----------
7,477
----------
EXPENSES:
Mortality and expense risk charges 99,998
----------
Net investment income (loss) ...... (92,521)
----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 235,523
Unrealized appreciation
(depreciation) ............... 3,164,935
----------
Net gain (loss) on investments ... 3,400,458
----------
Net increase (decrease) in
net assets resulting
from operations ..................... $3,307,937
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended Period Ended
September 30, 1997 December 31, 1996*
-------------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (92,521) $ 18,724
Net gain (loss) on investments ....................................... 3,400,458 603,734
----------- ----------
Net increase (decrease) in equity accounts resulting from operations 3,307,937 622,458
----------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 11,819,354 8,292,350
----------- ----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 767,914 152,948
Policy loans ......................................................... 375,925 36,190
Surrender benefits ................................................... 302,774 38,448
Death benefits ...................................................... 254 0
----------- ----------
1,446,867 227,586
----------- ----------
Increase (decrease) in equity accounts from capital unit transactions 10,372,487 8,064,764
----------- ----------
Net increase (decrease) in equity accounts ........................... 13,680,424 8,687,222
Depositors' equity contribution (redemption) ........................ (229,622) 200,000
EQUITY ACCOUNTS:
Beginning of period ................................................... 8,887,222 0
----------- ----------
End of period ......................................................... $22,338,024 $8,887,222
=========== ==========
</TABLE>
* The inception date of this sub-account was May 1, 1996.
The notes to the financial statements are an integral part of this report.
25
<PAGE>
WRL SERIES LIFE ACCOUNT
VALUE EQUITY SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
September 30 December 31
1997 1996(g)
-------------- ------------
<S> <C> <C>
Accumulation unit value, beginning of period $ 11.25 $ 10.00
Income from operations:
Net investment income (loss) ............... ( .07) .05
Net realized and unrealized
gain (loss) on investments ............... 2.82 1.20
-------- ---------
Total income (loss) from operations ...... 2.75 1.25
-------- ---------
Accumulation unit value, end of period ...... $ 14.00 $ 11.25
======== =========
Total return (a) .............................. 24.46% 12.51%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 22,338 $ 8,887
Ratio of net investment income to
average net assets (b) ..................... ( 0.82%) 0.77%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
26
<PAGE>
WRL SERIES LIFE ACCOUNT
INTERNATIONAL EQUITY SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
International Equity Portfolio
(shares 165,252.213;
cost $1,840,097) ............... $1,900,165
Accrued transfers from (to)
depositor - net ............... 5,194
----------
Total assets .................. 1,905,359
----------
LIABILITIES: ..................... 46
----------
Total net assets ............... $1,905,313
==========
EQUITY ACCOUNTS:
Policyowners' equity:
International Equity sub-account
(166,809.516700 units;
$11.422091 unit value) ......... $1,905,313
----------
Total equity .................. $1,905,313
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 0
Capital gain distributions ......... 0
--------
0
EXPENSES:
Mortality and expense risk charges 8,940
--------
Net investment income (loss) ...... (8,940)
--------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 119,248
Unrealized appreciation
(depreciation) ............... 60,068
--------
Net gain (loss) on investments ... 179,316
--------
Net increase (decrease) in
net assets resulting
from operations ..................... $170,376
========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997*
--------------------
<S> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (8,940)
Net gain (loss) on investments ....................................... 179,316
----------
Net increase (decrease) in equity accounts resulting from operations 170,376
----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 1,864,196
----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 61,373
Policy loans ......................................................... 48,746
Surrender benefits ................................................... 12,841
Death benefits ...................................................... 0
----------
122,960
----------
Increase (decrease) in equity accounts from capital unit transactions 1,741,236
----------
Net increase (decrease) in equity accounts ........................... 1,911,612
Depositor's equity contribution (redemption) ........................ (6,299)
EQUITY ACCOUNTS:
Beginning of period ................................................... 0
----------
End of period ......................................................... $1,905,313
==========
</TABLE>
* The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
27
<PAGE>
WRL SERIES LIFE ACCOUNT
INTERNATIONAL EQUITY SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
September 30
1997(h)
-------------
<S> <C>
Accumulation unit value, beginning of period $ 10.00
Income from operations:
Net investment income (loss) ............... ( .07)
Net realized and unrealized
gain (loss) on investments ............... 1.49
--------
Total income (loss) from operations ...... 1.42
--------
Accumulation unit value, end of period ...... $ 11.42
========
Total return (a) .............................. 14.22%
Ratios and supplemental data:
Net assets at end of period (in thousands) ... $ 1,905
Ratio of net investment income to
average net assets (b) ..................... ( 0.89%)
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
See Notes to Selected Per Unit Data and Ratios on page 30.
The notes to the financial statements are an integral part of this report.
28
<PAGE>
WRL SERIES LIFE ACCOUNT
U.S. EQUITY SUB-ACCOUNT
(UNAUDITED)
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY ACCOUNTS
<TABLE>
<CAPTION>
September 30, 1997
-------------------
<S> <C>
ASSETS:
Investments at net asset value:
WRL Series Fund, Inc.:
U.S. Equity Portfolio
(shares 160,804.390;
cost $1,837,148) ............ $1,996,870
Accrued transfers from (to)
depositor - net ............ 27,434
----------
Total assets ............... 2,024,304
----------
LIABILITIES: .................. 49
----------
Total net assets ............ $2,024,255
==========
EQUITY ACCOUNTS:
Policyowners' equity:
U.S. Equity sub-account
(164,100.336032 units;
$12.335473 unit value) ...... $2,024,255
----------
Total equity ............... $2,024,255
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
-------------------
<S> <C>
INVESTMENT INCOME:
Dividend income ..................... $ 0
Capital gain distributions ......... 0
--------
0
EXPENSES:
Mortality and expense risk charges 5,637
--------
Net investment income (loss) ...... (5,637)
--------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) from
securities transactions ...... 8,890
Unrealized appreciation
(depreciation) ............... 159,722
--------
Net gain (loss) on investments ... 168,612
--------
Net increase (decrease) in
net assets resulting
from operations ..................... $162,975
========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997*
--------------------
<S> <C>
OPERATIONS:
Net investment income (loss) .......................................... $ (5,637)
Net gain (loss) on investments ....................................... 168,612
----------
Net increase (decrease) in equity accounts resulting from operations 162,975
----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) .......................................... 1,954,362
----------
Less cost of units redeemed:
Cost of insurance and administrative charges ........................ 40,925
Policy loans ......................................................... 49,335
Surrender benefits ................................................... 5,296
Death benefits ...................................................... 36
----------
95,592
----------
Increase (decrease) in equity accounts from capital unit transactions 1,858,770
----------
Net increase (decrease) in equity accounts ........................... 2,021,745
Depositor's equity contribution (redemption) ........................ 2,510
EQUITY ACCOUNTS:
Beginning of period ................................................... 0
----------
End of period ......................................................... $2,024,255
==========
</TABLE>
* The inception date of this sub-account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
29
<PAGE>
WRL SERIES LIFE ACCOUNT
U.S. EQUITY SUB-ACCOUNT
(UNAUDITED)
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
September 30
1997(h)
-------------
<S> <C>
Accumulation unit value, beginning of period $ 10.00
Income from operations:
Net investment income (loss) ............ ( .08)
Net realized and unrealized
gain (loss) on investments ............ 2.42
--------
Total income (loss) from operations ...... 2.34
--------
Accumulation unit value, end of period ...... $ 12.34
========
Total return .............................. 23.35%
Ratios and supplemental data:
Net assets at end of period (in thousands) $ 2,024
Ratio of net investment income to
average net assets ..................... ( 0.89%)
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding through each period.
NOTES TO SELECTED PER UNIT DATA AND RATIOS
(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 December 3, 1992.
(d) The inception date of this Sub-Account was March 1, 1993.
(e) The inception date of this Sub-Account was March 1, 1994.
(f) The inception date of this Sub-Account was January 3, 1995.
(g) The inception date of this Sub-Account was May 1, 1996.
(h) The inception date of this Sub-Account was January 2, 1997.
The notes to the financial statements are an integral part of this report.
30
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
WRL Series Life Account (the "Life Account") was established as a variable life
insurance 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 Life Account contains fifteen
investment options referred to as sub-accounts. Each sub-account invests in the
corresponding portfolio of the WRL Series Fund, Inc. (the "Fund"), a registered
management investment company under the Investment Company Act of 1940, as
amended. These portfolios and their respective investment management
organizations are as follows:
<TABLE>
<CAPTION>
Portfolio Investment Manager
- ------------------------ ------------------------------
<S> <C>
Money Market J.P. Morgan Investment
Management Inc.
Bond Janus Capital Corporation
("JCC")
Growth JCC
Short-to-Intermediate AEGON USA Investment
Government Management, Inc.
("AIMI")
Global JCC
Strategic Total Return Luther King Capital
Management Corporation
Emerging Growth Van Kampen American
Capital Asset
Management, Inc.
Aggressive Growth Fred Alger Management, Inc.
Balanced AIMI
Growth & Income Federated Investment
Counseling
Tactical Asset Dean Investment
Allocation Associates
C.A.S.E. Growth C.A.S.E. Management, Inc.
Value Equity NWQ Investment
Management
Company, Inc.
International Equity Scottish Equitable Investment
Management, Ltd. and
GE Investment
Management, Inc.
U.S. Equity GE Investment
Management, Inc.
</TABLE>
WRL and AIMI are indirectly wholly-owned subsidiaries of AEGON USA, Inc., which
is an indirect wholly-owned subsidiary of AEGON nv, a Netherlands corporation.
On January 2, 1997, WRL made an initial contribution of $400,000 to the Life
Account, International Equity Sub-Account, for which WRL received 40,000.000000
units. On April 28, 1997, WRL redeemed the initial contribution in the Life
Account, International Equity Sub-Account, for $406,299.
On January 2, 1997, WRL made an initial contribution of $200,000 to the Life
Account, U.S. Equity Sub-Account, for which WRL received 20,000.000000 units.
On April 28, 1997, WRL redeemed the initial contribution in the Life Account,
U.S. Equity Sub-Account, for $197,490.
The Life Account holds assets to support the benefits under flexible premium
variable universal life insurance policies (the "Policies") issued by WRL,
which issued the first of such Policies on October 3, 1986. The Life Account's
equity transactions are accounted for using the appropriate effective date at
the corresponding accumulation unit value.
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 those 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 September 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 Life 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 Code.
Under current law, the investment income of the Life Account, including
realized and unrealized capital
31
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997--(CONTINUED)
NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
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 Policies.
A. POLICY CHARGES
Under some forms of the Policies, sales and other administrative charges
are deducted by WRL prior to allocation of policyowner payments to the
sub-accounts. Thereafter, monthly administrative charges are deducted
from the Sub-Accounts, some of which continue only during the first
policy year. Contingent surrender charges may also apply.
Under the other forms of the Policies, such "front-end" and other
administrative charges are deducted prior to allocation of the initial
premium payment but may reside as contingent surrender charges.
Under all forms of the Policy, monthly charges against policy cash values
are made to compensate WRL for costs of insurance provided.
B. LIFE-ACCOUNT CHARGES
A daily charge equal to an annual rate of 0.90% of average daily net
assets of the Life Account is assessed to compensate WRL for assumption
of mortality and expense risks in connection with issuance and
administration of the Policies. This charge (not assessed at the
individual policy level) effectively reduces the value of a unit
outstanding during the year.
NOTE 3 -- DIVIDENDS AND DISTRIBUTIONS
Dividends of the Fund's Money Market Portfolio are declared daily and
reinvested monthly. Dividends of the remaining 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 Life Account the next business
day after declaration.
NOTE 4 -- OTHER MATTERS
As of September 30, 1997, the equity accounts include net unrealized
appreciation (depreciation) on investments as follows:
<TABLE>
<CAPTION>
Sub-Account
- ----------------------------------
<S> <C>
Money Market $N/A
Bond 501,000
Growth 153,872,400
Short-to-Intermediate Government 39,539
Global 30,381,501
Strategic Total Return 19,488,931
Emerging Growth 55,386,956
Aggressive Growth 20,643,191
Balanced 1,695,587
Growth & Income 940,916
Tactical Asset Allocation 4,402,723
C.A.S.E. Growth 1,788,666
Value Equity 3,698,279
International Equity 60,068
U.S. Equity 159,722
</TABLE>
32
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
BALANCE SHEET - STATUTORY BASIS
AS OF SEPTEMBER 30, 1997
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<S> <C>
ADMITTED ASSETS
Cash and invested assets:
Cash (deficit) and short-term investments .................................... $ (6,237)
Bonds ........................................................................ 273,073
Common stock, at market ...................................................... 516
Mortgage loans on real estate ................................................ 4,853
Home office properties, at cost less accumulated depreciation ............... 14,365
Policy loans .................................................................. 69,712
-----------
Total cash and invested assets ................................................ 356,282
Premiums deferred and uncollected ............................................. 1,811
Accrued investment income ...................................................... 5,024
Receivable from affiliates ................................................... 7,676
Transfers from separate accounts ............................................. 268,684
Other assets .................................................................. 3,691
Separate account assets ...................................................... 4,815,635
-----------
Total admitted assets ......................................................... $5,458,803
===========
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate reserves for policies and contracts:
Life ........................................................................ $ 194,165
Annuity ..................................................................... 290,163
Policy and contract claim reserves .......................................... 8,680
Other policyholders' funds ................................................... 3,584
Remittances and items not allocated .......................................... 13,658
Federal income taxes payable ................................................ 611
Asset valuation reserve ...................................................... 4,552
Interest maintenance reserve ................................................ 8,544
Other liabilities ............................................................ 25,730
Separate account liabilities ................................................ 4,810,546
-----------
Total liabilities ............................................................ 5,360,233
Capital and surplus:
Common stock, $1.00 par value, 1,500 shares authorized, issued and outstanding 1,500
Paid-in surplus ............................................................... 68,015
Unassigned surplus ............................................................ 29,055
-----------
Total capital and surplus ...................................................... 98,570
-----------
Total liabilities and capital and surplus .................................... $5,458,803
===========
</TABLE>
See note to financial statements
33
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF OPERATIONS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<S> <C>
Revenues:
Premiums and other considerations, net of reinsurance
Life ........................................................................... $ 282,589
Annuity ........................................................................ 641,923
Net investment income ............................................................ 30,914
Amortization of interest maintenance reserve .................................... 1,176
Commissions and expense allowances on reinsurance ceded ........................... 8
Other income ..................................................................... 315
---------
956,925
Benefits and expenses:
Benefits paid or provided for:
Life ........................................................................... 18,591
Surrender benefits ............................................................... 327,116
Other benefits .................................................................. 21,980
Increase (decrease) in aggregate reserves for policies and contracts:
Life ........................................................................... 39,055
Annuity ........................................................................ (42,123)
Other ........................................................................... 493
---------
365,112
Insurance expenses:
Commissions ..................................................................... 131,631
General insurance expenses ...................................................... 50,000
Taxes, licenses and fees ...................................................... 9,543
Transfer to separate accounts ................................................... 402,754
Other expenses .................................................................. 14
---------
593,942
---------
959,054
---------
Loss from operations before federal income taxes and realized capital gains on (2,129)
investments
Federal income tax expense ...................................................... 1,407
---------
Loss from operations before realized capital gains on investments ............... (3,536)
Net realized capital gains on investments (net of related federal income taxes and
amounts transferred to
interest maintenance reserve) ................................................... 1,206
---------
Net loss ........................................................................ $ (2,330)
=========
</TABLE>
See note to financial statements
34
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CHANGES IN CAPITAL AND SURPLUS - STATUTORY BASIS
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
Total
Capital
Common Paid-in Unassigned and
Stock Surplus Surplus Surplus
-------- --------- ------------ -----------
<S> <C> <C> <C> <C>
Balance at January 1, 1997 ..................... $1,500 $68,015 $ 26,041 $ 95,556
Net (loss) .................................... 0 0 (2,330) (2,330)
Net unrealized gains (losses) .................. 0 0 (232) (232)
Decrease in non-admitted assets ............... 0 0 213 213
Increase in asset valuation reserve ............ 0 0 1,158 1,158
Increase in surplus in separate accounts ...... 0 0 457 457
Other adjustments .............................. 0 0 3,748 3,748
------ ------- -------- --------
Balance at September 30, 1997 .................. $1,500 $68,015 $ 29,055 $ 98,570
====== ======= ======== ========
</TABLE>
See note to financial statements
35
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CASH FLOWS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS)(UNAUDITED)
<TABLE>
<S> <C>
SOURCES OF CASH
Premiums and other considerations, net of reinsurance ............ $ 924,612
Net investment income .......................................... 32,836
Other income ................................................... 4,415
---------
961,863
Life claims ...................................................... (18,630)
Surrender benefits and other fund withdrawals .................. (327,116)
Other benefits to policyholders ................................. (21,847)
Commissions, other expenses and taxes ........................... (190,959)
Net transfers to separate accounts .............................. (466,844)
Dividends to policyholders ....................................... (25)
---------
Net cash used by operations .................................... (63,558)
Proceeds from investments sold, matured or repaid:
Bonds and redeemable preferred stock ........................... 108,115
Mortgage loans on real estate ................................. 2,088
---------
Total cash from investments .................................... 110,203
Other sources ................................................... 19,309
---------
Total sources of cash .......................................... 65,954
APPLICATIONS OF CASH
Cost of investments acquired:
Bonds and redeemable preferred stock ........................... 19,663
Common stocks ................................................... 150
Mortgage loans on real estate ................................. 892
Real estate ................................................... 6,403
Net increase in policy loans .................................... 17,108
---------
Total investments acquired ....................................... 44,216
Other applications, net .......................................... 30,455
---------
Total applications of cash ....................................... 74,671
---------
Net change in cash and short-term investments .................. (8,717)
Cash and short-term investments at beginning of year ............ 2,480
---------
Cash (deficit) and short-term investments at end of period ...... $ (6,237)
=========
</TABLE>
See note to financial statements
36
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTE TO FINANCIAL STATMENTS - STATUTURY BASIS
AS OF SEPTEMBER 30, 1997 (UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited statutory basis financial statements have been
prepared in accordance with statutory accounting principles for interim
financial information and the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all the information and notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjust
ments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine month period
ended September 30, 1997 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1997. For further information,
refer to the accompanying statutory basis financial statements and notes
thereto for the year ended December 31, 1996.
37
