---------------------------------------
ANNUAL REPORT
DECEMBER 31, 1996
---------------------------------------
WRL SERIES
LIFE ACCOUNT
WESTERN RESERVE LIFE
ASSURANCE CO.
OF OHIO
February 1997
ACC00003 (2/97)
<PAGE>
- -------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Accountants .......................................... 1
WRL SERIES LIFE ACCOUNT
Statements of Assets, Liabilities and Equity Accounts ................... 2
Statements of Operations ................................................. 2
Statements of Changes in Equity Accounts ................................. 4
Selected Per Unit Data and Ratios ........................................ 6
Notes to Financial Statements ............................................ 9
</TABLE>
<PAGE>
WRL SERIES LIFE ACCOUNT
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and
Policyholders of the WRL Series Life Account
In our opinion, the accompanying statements of assets, liabilities and equity
accounts and the related statements of operations and of changes in equity
accounts and the selected per unit data and ratios present fairly, in all
material respects, the financial position of each of the Sub-Accounts
constituting the WRL Series Life Account (a separate account of Western Reserve
Life Assurance Co. of Ohio, hereafter referred to as the "Life Account") at
December 31, 1996, the results of each of their operations, the changes in each
of their equity accounts and the selected per unit data and ratios for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and selected per unit data and ratios
(hereafter referred to as "financial statements") are the responsibility of the
Life Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 31, 1997
1
<PAGE>
WRL SERIES LIFE ACCOUNT
STATEMENTS OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series
Fund, Inc.:
Shares ....................... 12,430,543.580 1,081,304.989 9,980,909.027
============== ============== ================
Cost ......................... $ 12,430,544 $ 11,856,263 $ 268,315,218
============== ============== ================
Investments, at net
asset value ................. $ 12,430,544 $ 11,577,785 $ 349,344,591
Accrued transfers from
(to) depositor - net......... 309,485 6,763 146,685
-------------- -------------- ----------------
Total assets ................. 12,740,029 11,584,548 349,491,276
-------------- -------------- ----------------
LIABILITIES: .................... 0 0 0
-------------- -------------- ----------------
Total net assets ............. $ 12,740,029 $ 11,584,548 $ 349,491,276
============== ============== ================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ........................ 824,579.964824 593,289.952352 7,208,481.980640
============== ============== ================
Unit value ................... $ 15.450326 $ 19.525946 $ 48.483339
============== ============== ================
Policy Owners' equity ........ $ 12,740,029 $ 11,584,548 $ 349,491,276
-------------- -------------- ----------------
Depositor's equity:
Units ........................ N/A N/A N/A
============== ============== ================
Unit value ................... $ N/A $ N/A $ N/A
============== ============== ================
Depositor's equity ........... $ N/A $ N/A $ N/A
-------------- -------------- ----------------
Total equity ................. $ 12,740,029 $ 11,584,548 $ 349,491,276
============== ============== ================
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHORT-TO-
INTERMEDIATE
GOVERNMENT GLOBAL EQUITY-INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series
Fund, Inc.:
Shares ........................... 166,836.195 4,589,097.306 3,994,063.092
============== ================== ==================
Cost ............................. $ 1,727,550 $ 74,042,621 $ 48,072,935
============== ================== ==================
Investments, at net
asset value ..................... $ 1,709,208 $ 83,132,258 $ 55,805,919
Accrued transfers from
(to) depositor - net ............ 629 26,825 93,808
-------------- ------------------ ------------------
Total assets ..................... 1,709,837 83,159,083 55,899,727
-------------- ------------------ ------------------
LIABILITIES: ........................ 0 0 0
-------------- ------------------ ------------------
Total net assets ................. $ 1,709,837 $ 83,159,083 $ 55,899,727
============== ================== ==================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ............................ 144,300.578938 5,497,026.869725 3,569,906.038362
============== ================== ==================
Unit value ....................... $ 11.849133 $ 15.128011 $ 15.658599
============== ================== ==================
Policy Owners' equity ............ $ 1,709,837 $ 83,159,083 $ 55,899,727
-------------- ------------------ ------------------
Depositor's equity:
Units ............................ N/A N/A N/A
============== ================== ==================
Unit value ....................... $ N/A $ N/A $ N/A
============== ================== ==================
Depositor's equity ............... $ N/A $ N/A $ N/A
-------------- ------------------ ------------------
Total equity ..................... $ 1,709,837 $ 83,159,083 $ 55,899,727
============== ================== ==================
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
EMERGING AGGRESSIVE
GROWTH GROWTH BALANCED UTILITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series
Fund, Inc.:
Shares ................. 5,847,526.379 3,834,189.958 560,844.519 467,360.223
================= ================= =============== ===============
Cost ................... $ 85,429,168 $ 50,800,484 $ 5,826,446 $ 5,161,533
================= ================= =============== ===============
Investments, at net
asset value ........... $ 107,952,036 $ 54,361,199 $ 6,390,648 $ 5,497,485
Accrued transfers from
(to) depositor - net .. (26,863) 47,041 27,266 3,225
----------------- ----------------- --------------- ---------------
Total assets ........... 107,925,173 54,408,240 6,417,914 5,500,710
----------------- ----------------- --------------- ---------------
LIABILITIES: .............. 0 0 0 0
----------------- ----------------- --------------- ---------------
Total net assets ....... $ 107,925,173 $ 54,408,240 $ 6,417,914 $ 5,500,710
================= ================= =============== ===============
EQUITY ACCOUNTS:
Policy Owners' equity:
Units .................. 5,531,857.748031 3,702,244.184822 525,703.773282 422,239.257570
================= ================= =============== ===============
Unit value ............. $ 19.509752 $ 14.696016 $ 12.208232 $ 13.027472
================= ================= =============== ===============
Policy Owners' equity .. $ 107,925,173 $ 54,408,240 $ 6,417,914 $ 5,500,710
----------------- ----------------- --------------- ---------------
Depositor's equity:
Units .................. N/A N/A N/A N/A
================= ================= =============== ===============
Unit value ............. $ N/A $ N/A $ N/A $ N/A
================= ================= =============== ===============
Depositor's equity ..... $ N/A $ N/A $ N/A $ N/A
----------------- ----------------- --------------- ---------------
Total equity ........... $ 107,925,173 $ 54,408,240 $ 6,417,914 $ 5,500,710
================= ================= =============== ===============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH VALUE EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series
Fund, Inc.:
Shares ............... 1,416,731.210 330,995.828 787,552.975
================== ================== ==================
Cost ................. $ 16,400,180 $ 4,219,207 $ 8,339,630
================== ================== ==================
Investments, at net
asset value .......... $ 17,865,991 $ 4,440,951 $ 8,872,975
Accrued transfers from
(to) depositor - net . 79,843 25,364 14,247
------------------ ------------------ ------------------
Total assets .......... 17,945,834 4,466,315 8,887,222
------------------ ------------------ ------------------
LIABILITIES: ............. 0 0 0
------------------ ------------------ ------------------
Total net assets ...... $ 17,945,834 $ 4,466,315 $ 8,887,222
================== ================== ==================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ................. 1,329,562.261984 410,689.701539 769,884.882222
================== ================== ==================
Unit value ............ $ 13.497551 $ 10.809358 $ 11.251288
================== ================== ==================
Policy Owners' equity . $ 17,945,834 $ 4,439,292 $ 8,662,196
------------------ ------------------ ------------------
Depositor's equity:
Units ................. N/A 2,500.000000 20,000.000000
================== ================== ==================
Unit value ............ $ N/A $ 10.809358 $ 11.251288
================== ================== ==================
Depositor's equity .... $ N/A $ 27,023 $ 225,026
------------------ ------------------ ------------------
Total equity .......... $ 17,945,834 $ 4,466,315 $ 8,887,222
================== ================== ==================
</TABLE>
2
<PAGE>
WRL SERIES LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the year or period ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income .................... $ 599,024 $ 648,087 $ 3,365,272
Capital gain distributions ......... 0 0 18,714,436
----------- ----------- -----------
599,024 648,087 22,079,708
EXPENSES:
Mortality and expense risk ......... 107,839 95,075 2,769,209
----------- ----------- -----------
Net investment income
(loss) .......................... 491,185 553,012 19,310,499
----------- ----------- -----------
Net realized and unrealized
gain (loss) on
investments:
Net realized gain (loss)
from securities
transactions .................. 0 (182,715) 5,591,331
Change in unrealized
appreciation
(depreciation) .................. 0 (431,243) 21,327,329
----------- ----------- -----------
Net gain (loss) on
investments .................... 0 (613,958) 26,918,660
----------- ----------- -----------
Net increase (decrease)
in equity accounts
resulting from
operations ..................... $ 491,185 $ (60,946) $46,229,159
=========== =========== ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHORT-TO-
INTERMEDIATE
GOVERNMENT GLOBAL EQUITY-INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income .................... $ 81,747 $ 847,718 $ 1,181,014
Capital gain distributions ......... 0 6,217,741 1,886,627
----------- ----------- -----------
81,747 7,065,459 3,067,641
EXPENSES:
Mortality and expense risk ......... 13,774 541,245 421,973
----------- ----------- -----------
Net investment income
(loss) .......................... 67,973 6,524,214 2,645,668
----------- ----------- -----------
Net realized and unrealized
gain (loss) on
investments:
Net realized gain (loss)
from securities
transactions .................. 27,823 885,817 353,541
Change in unrealized
appreciation
(depreciation) .................. (56,871) 5,488,447 3,281,994
----------- ----------- -----------
Net gain (loss) on
investments .................... (29,048) 6,374,264 3,635,535
----------- ----------- -----------
Net increase (decrease)
in equity accounts
resulting from
operations ..................... $ 38,925 $12,898,478 $ 6,281,203
=========== =========== ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
EMERGING AGGRESSIVE
GROWTH GROWTH BALANCED UTILITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income .................... $ 3,998 $ 614,817 $ 143,613 $ 139,429
Capital gain distributions ......... 4,733,022 918,863 54,644 141,611
----------- ----------- ----------- -----------
4,737,020 1,533,680 198,257 281,040
EXPENSES:
Mortality and expense risk ......... 802,068 394,888 44,467 35,416
----------- ----------- ----------- -----------
Net investment income
(loss) .......................... 3,934,952 1,138,792 153,790 245,624
----------- ----------- ----------- -----------
Net realized and unrealized
gain (loss) on
investments:
Net realized gain (loss)
from securities
transactions .................. 1,314,430 2,253,657 89,518 119,018
Change in unrealized
appreciation
(depreciation) .................. 7,969,623 543,490 251,603 90,989
----------- ----------- ----------- -----------
Net gain (loss) on
investments .................... 9,284,053 2,797,147 341,121 210,007
----------- ----------- ----------- -----------
Net increase (decrease)
in equity accounts
resulting from
operations ..................... $13,219,005 $ 3,935,939 $ 494,911 $ 455,631
=========== =========== =========== ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
TACTICAL ASSET
ALLOCATION C.A.S.E. GROWTH VALUE EQUITY
SUB-ACCOUNT SUB-ACCOUNT(a) SUB-ACCOUNT(a)
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income .................... $ 385,057 $ 14,793 $ 29,100
Capital gain distributions ......... 322,411 66,911 12,295
----------- ----------- -----------
707,468 81,704 41,395
EXPENSES:
Mortality and expense risk ......... 123,426 11,458 22,671
----------- ----------- -----------
Net investment income
(loss) .......................... 584,042 70,246 18,724
----------- ----------- -----------
Net realized and unrealized
gain (loss) on
investments:
Net realized gain (loss)
from securities
transactions .................. 328,835 6,058 70,390
Change in unrealized
appreciation
(depreciation) .................. 850,092 221,745 533,344
----------- ----------- -----------
Net gain (loss) on
investments .................... 1,178,927 227,803 603,734
----------- ----------- -----------
Net increase (decrease)
in equity accounts
resulting from
operations ..................... $ 1,762,969 $ 298,049 $ 622,458
=========== =========== ===========
(a) The inception date of this sub-account was May 1, 1996.
The notes to the financial statements are an integral part of this report.
</TABLE>
3
<PAGE>
WRL SERIES LIFE ACCOUNT
STATEMENTS OF CHANGES IN EQUITY ACCOUNTS
For the year or period ended
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET BOND
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ....... $ 491,185 $ 397,410 $ 553,012 $ 459,977
Net gain (loss) on investments ..... 0 0 (613,958) 1,080,157
----------- ----------- ------------ -----------
Net increase (decrease) in equity
accounts resulting from operations 491,185 397,410 (60,946) 1,540,134
----------- ----------- ------------ -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) 5,217,298 3,139,280 3,451,573 3,749,029
----------- ----------- ------------ -----------
Less cost of units redeemed:
Administrative charges ............ 2,639,279 1,356,484 1,314,254 916,494
Policy loans ...................... 285,757 219,767 191,268 197,829
Surrender benefits ................ 776,305 899,893 338,599 357,384
Death benefits .................... 25,737 7,670 28,090 10,202
----------- ----------- ------------ -----------
3,727,078 2,483,814 1,872,211 1,481,909
----------- ----------- ------------ -----------
Increase (decrease) in equity
accounts from capital unit
transactions .................... 1,490,220 655,466 1,579,362 2,267,120
----------- ----------- ------------ -----------
Net increase (decrease) in
equity accounts ................. 1,981,405 1,052,876 1,518,416 3,807,254
Depositors' equity contribution
(redemption) ..................... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period ................ 10,758,624 9,705,748 10,066,132 6,258,878
----------- ----------- ------------ -----------
End of period ...................... $12,740,029 $10,758,624 $ 11,584,548 $10,066,132
=========== =========== ============ ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
GROWTH
SUB-ACCOUNT
DECEMBER 31
-----------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............... $ 19,310,499 $ 23,250,380
Net gain (loss) on investments ............. 26,918,660 54,801,782
------------ ------------
Net increase (decrease) in equity
accounts resulting from operations ....... 46,229,159 78,052,162
------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ........ 91,555,979 61,850,933
------------ ------------
Less cost of units redeemed:
Administrative charges .................... 29,331,415 23,714,204
Policy loans .............................. 8,442,970 5,518,596
Surrender benefits ........................ 12,385,662 8,982,170
Death benefits ............................ 600,920 711,078
------------ ------------
50,760,967 38,926,048
------------ ------------
Increase (decrease) in equity
accounts from capital unit
transactions ............................ 40,795,012 22,924,885
------------ ------------
Net increase (decrease) in
equity accounts ......................... 87,024,171 100,977,047
Depositors' equity contribution
(redemption) ............................. 0 0
EQUITY ACCOUNTS:
Beginning of period ........................ 262,467,105 161,490,058
------------ ------------
End of period .............................. $349,491,276 $262,467,105
============ ============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TO-INTERMEDIATE
GOVERNMENT GLOBAL EQUITY-INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31 DECEMBER 31
------------------------ -------------------------- -------------------------
1996 1995 1996 1995 1996 1995
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ....... $ 67,973 $ 62,086 $ 6,524,214 $ 1,187,745 $ 2,645,668 $ 1,756,089
Net gain (loss) on investments ..... (29,048) 68,387 6,374,264 4,626,003 3,635,535 4,992,475
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease) in equity
accounts resulting from operations 38,925 130,473 12,898,478 5,813,748 6,281,203 6,748,564
---------- ---------- ----------- ----------- ----------- -----------
QUITY TRANSACTIONS:
Proceeds from units sold (redeemed) 442,872 679,242 43,696,555 15,012,786 16,832,424 14,236,727
---------- ---------- ----------- ----------- ----------- -----------
Less cost of units redeemed:
Administrative charges ............ 178,533 141,954 6,463,101 4,017,781 4,528,541 3,380,854
Policy loans ...................... 33,708 52,521 1,465,510 666,264 920,628 657,750
Surrender benefits ................ 77,704 41,967 2,225,874 721,584 1,300,527 918,863
Death benefits .................... 0 144 62,009 44,234 112,479 28,153
---------- ---------- ----------- ----------- ----------- -----------
289,945 236,586 10,216,494 5,449,863 6,862,175 4,985,620
---------- ---------- ----------- ----------- ----------- -----------
Increase (decrease) in equity
accounts from capital unit
transactions .................... 152,927 442,656 33,480,061 9,562,923 9,970,249 9,251,107
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease) in
equity accounts ................. 191,852 573,129 46,378,539 15,376,671 16,251,452 15,999,671
Depositors' equity contribution
(redemption) ..................... 0 0 (268,153) 0 0 0
QUITY ACCOUNTS:
Beginning of period ................ 1,517,985 944,856 37,048,697 21,672,026 39,648,275 23,648,604
---------- ---------- ----------- ----------- ----------- -----------
End of period ...................... $1,709,837 $1,517,985 $83,159,083 $37,048,697 $55,899,727 $39,648,275
========== ========== =========== =========== =========== ===========
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
EMERGING GROWTH AGGRESSIVE GROWTH
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
-------------------------- -------------------------
1996 1995 1996 1995
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ........... $ 3,934,952 $ 2,356,904 $ 1,138,792 $ 663,994
Net gain (loss) on investments ......... 9,284,053 16,180,870 2,797,147 4,424,350
------------ ----------- ----------- -----------
Net increase (decrease) in equity
accounts resulting from operations ... 13,219,005 18,537,774 3,935,939 5,088,344
------------ ----------- ----------- -----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) .... 40,944,477 21,556,186 26,224,213 23,169,917
------------ ----------- ----------- -----------
Less cost of units redeemed:
Administrative charges ................ 9,201,102 5,846,452 6,412,799 2,568,298
Policy loans .......................... 2,095,860 1,387,434 863,340 627,821
Surrender benefits .................... 2,754,328 1,602,690 1,349,932 712,307
Death benefits ........................ 91,972 38,971 29,810 80,922
------------ ----------- ----------- -----------
14,143,262 8,875,547 8,655,881 3,989,348
------------ ----------- ----------- -----------
Increase (decrease) in equity
accounts from capital unit
transactions ........................ 26,801,215 12,680,639 17,568,332 19,180,569
------------ ----------- ----------- -----------
Net increase (decrease) in
equity accounts ..................... 40,020,220 31,218,413 21,504,271 24,268,913
Depositors' equity contribution
(redemption) ......................... 0 0 0 (274,290)
EQUITY ACCOUNTS:
Beginning of period .................... 67,904,953 36,686,540 32,903,969 8,909,346
------------ ----------- ----------- -----------
End of period .......................... $107,925,173 $67,904,953 $54,408,240 $32,903,969
============ =========== =========== ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
BALANCED
SUB-ACCOUNT
DECEMBER 31
------------------------
1996 1995
---------- ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ...................... $ 153,790 $ 102,635
Net gain (loss) on investments .................... 341,121 401,549
---------- ----------
Net increase (decrease) in equity
accounts resulting from operations ............... 494,911 504,184
---------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ............... 3,089,782 1,545,514
---------- ----------
Less cost of units redeemed:
Administrative charges ........................... 575,594 327,290
Policy loans ..................................... 77,586 29,025
Surrender benefits ............................... 84,857 27,726
Death benefits ................................... 3,961 14,811
---------- ----------
741,998 398,852
---------- ----------
Increase (decrease) in equity
accounts from capital unit
transactions .................................... 2,347,784 1,146,662
---------- ----------
Net increase (decrease) in
equity accounts ................................. 2,842,695 1,650,846
Depositors' equity contribution
(redemption) ..................................... (220,175) 0
EQUITY ACCOUNTS:
Beginning of period ............................... 3,795,394 2,144,548
---------- ----------
End of period ..................................... $6,417,914 $3,795,394
========== ==========
</TABLE>
<TABLE>
<CAPTION>
C.A.S.E. VALUE
UTILITY TACTICAL ASSET ALLOCATION GROWTH EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
-------------------------- --------------------------- ----------- -----------
1996 1995 1996 1995(a) 1996(b) 1996(b)
---------- ---------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ........ $ 245,624 $ 88,634 $ 584,042 $ 314,171 $ 70,246 $ 18,724
Net gain (loss) on investments ...... 210,007 336,528 1,178,927 733,874 227,803 603,734
---------- ---------- ----------- ---------- ---------- ----------
Net increase (decrease) in equity
accounts resulting from operations . 455,631 425,162 1,762,969 1,048,045 298,049 622,458
---------- ---------- ----------- ---------- ---------- ----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) . 3,245,136 1,368,262 9,061,824 9,081,189 4,302,715 8,292,350
---------- ---------- ----------- ---------- ---------- ----------
Less cost of units redeemed:
Administrative charges ............. 439,973 221,419 1,134,737 434,848 140,145 152,948
Policy loans ....................... 72,641 26,862 306,304 145,685 7,028 36,190
Surrender benefits ................. 82,531 126,576 865,689 70,630 12,276 38,448
Death benefits ..................... 3,350 2,896 18,086 22,440 0 0
---------- ---------- ----------- ---------- ---------- ----------
598,495 377,753 2,324,816 673,603 159,449 227,586
---------- ---------- ----------- ---------- ---------- ----------
Increase (decrease) in equity
accounts from capital unit
transactions ...................... 2,646,641 990,509 6,737,008 8,407,586 4,143,266 8,064,764
---------- ---------- ----------- ---------- ---------- ----------
Net increase (decrease) in
equity accounts ................... 3,102,272 1,415,671 8,499,977 9,455,631 4,441,315 8,687,222
Depositors' equity contribution
(redemption) ....................... (232,644) 0 0 (9,774) 25,000 200,000
EQUITY ACCOUNTS:
Beginning of period ................. 2,631,082 1,215,411 9,445,857 0 0 0
---------- ---------- ----------- ---------- ---------- ----------
End of period ....................... $5,500,710 $2,631,082 $17,945,834 $9,445,857 $4,466,315 $8,887,222
========== ========== =========== ========== ========== ==========
<FN>
(a) The inception date of this sub-account was January 3, 1995.
(b) The inception date of this sub-account was May 1, 1996.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
5
<PAGE>
WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET
SUB-ACCOUNT
DECEMBER 31
------------------------------------------------
1996 1995 1994 1993 1992
-------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period .......................... $ 14.83 $ 14.19 $13.84 $13.63 $13.33
Income from operations:
Net investment income (loss) ....... 0.62 0.64 0.35 0.21 0.30
Net realized and unrealized gain
(loss) on investments ........... 0.00 0.00 0.00 0.00 0.00
------- ------- ------ ------ ------
Total income (loss) from
operations ..................... 0.62 0.64 0.35 0.21 0.30
------- ------- ------ ------ ------
Accumulation unit value,
end of period ...................... $ 15.45 $ 14.83 $14.19 $13.84 $13.63
======= ======= ====== ====== ======
Total return (a) ..................... 4.17% 4.49% 2.58% 1.52% 2.24%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................... $12,740 $10,759 $9,706 $4,985 $4,619
Ratio of net investment income (loss)
to average net assets (b) ......... 4.07% 4.37% 2.66% 1.51% 2.12%
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
BOND
SUB-ACCOUNT
DECEMBER 31
-----------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period .......................... $ 19.67 $ 16.14 $17.50 $15.57 $14.68
Income from operations:
Net investment income (loss) ....... 0.99 1.05 0.89 2.11 1.00
Net realized and unrealized gain
(loss) on investments ............ (1.13) 2.48 (2.25) (0.18) (0.11)
-------- -------- ------ ------ ------
Total income (loss) from
operations ..................... (0.14) 3.53 (1.36) 1.93 0.89
-------- -------- ------ ------ ------
Accumulation unit value,
end of period ...................... $ 19.53 $ 19.67 $16.14 $17.50 $15.57
======== ======== ====== ====== ======
Total return (a) ..................... (0.75%) 21.89% (7.77%) 12.40% 6.08%
Ratios and supplemental data:
Net assets at end of period
(in thousands) .................... $ 11,585 $ 10,066 $6,259 $6,985 $4,558
Ratio of net investment income (loss)
to average net assets (b) ......... 5.34% 5.80% 5.57% 12.92% 6.69%
</TABLE>
<TABLE>
<CAPTION>
GROWTH
SUB-ACCOUNT
DECEMBER 31
---------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ......................... $ 41.47 $ 28.44 $ 31.30 $ 30.37 $ 29.95
Income from operations:
Net investment income (loss) ...... 2.88 3.89 0.04 0.46 1.09
Net realized and unrealized gain
(loss) on investments ........... 4.13 9.14 (2.90) 0.47 (0.67)
-------- -------- -------- -------- --------
Total income (loss) from
operations .................... 7.01 13.03 (2.86) 0.93 0.42
-------- -------- -------- -------- --------
Accumulation unit value,
end of period ..................... $ 48.48 $ 41.47 $ 28.44 $ 31.30 $ 30.37
======== ======== ======== ======== ========
Total return (a) .................... 16.91% 45.81% (9.13%) 3.06% 1.41%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................... $349,491 $262,467 $161,490 $169,757 $146,053
Ratio of net investment income (loss)
to average bet assets (b) ........ 6.41% 11.05% 0.16% 1.56% 3.84%
</TABLE>
<TABLE>
<CAPTION>
SHORT-TO-INTERMEDIATE GOVERNMENT
SUB-ACCOUNT
DECEMBER 31
-------------------------------------------------
1996 1995 1994 1993 1992(C)
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ......................... $11.55 $10.27 $10.40 $10.04 $10.00
Income from operations:
Net investment income (loss) ...... 0.51 0.61 0.40 0.14 0.01
Net realized and unrealized gain
(loss) on investments ........... (0.21) 0.67 (0.53) 0.22 0.03
------ ------ ------ ------ ------
Total income (loss) from
operations .................... 0.30 1.28 (0.13) 0.36 0.04
------ ------ ------ ------ ------
Accumulation unit value,
end of period ..................... $11.85 $11.55 $10.27 $10.40 $10.04
====== ====== ====== ====== ======
Total return (a) .................... 2.56% 12.53% (1.32%) 3.64% 0.38%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................... $1,710 $1,517 $ 945 $1,408 $ 803
Ratio of net investment income (loss)
to average bet assets (b) ........ 4.53% 5.53% 4.06% 1.39% 1.92%
</TABLE>
<TABLE>
<CAPTION>
GLOBAL EQUITY-INCOME
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
-------------------------------- -----------------------------------------
1996 1995 1994(E) 1996 1995 1994 1993(D)
------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ................................. $ 11.95 $ 9.80 $ 10.00 $ 13.74 $ 11.12 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss) .............. 1.50 0.45 0.71 0.82 0.68 0.18 0.19
Net realized and unrealized gain
(loss) on investments ..................... 1.68 1.70 (0.91) 1.10 1.94 (0.34) 1.09
------- ------- ------- ------- ------- ------- -------
Total income (loss) from
operations ................................ 3.18 2.15 (0.20) 1.92 2.62 (0.16) 1.28
------- ------- ------- ------- ------- ------- -------
Accumulation unit value,
end of period ............................. $ 15.13 $ 11.95 $ 9.80 $ 15.66 $ 13.74 $ 11.12 $ 11.28
======= ======= ======= ======= ======= ======= =======
Total return (a) .......................... 26.60% 21.96% (2.02%) 13.97% 23.55% (1.42%) 12.81%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ............................ $83,159 $37,049 $21,672 $55,900 $39,648 $23,649 $13,343
Ratio of net investment income (loss)
to average net assets (b) ................. 11.09% 4.25% 8.86% 5.76% 5.47% 1.93% 2.27%
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
EMERGING GROWTH
SUB-ACCOUNT
DECEMBER 31
------------------------------------------
1996 1995 1994 1993(D)
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ......................... $ 16.56 $ 11.38 $ 12.40 $ 10.00
Income from operations:
Net investment income (loss) ...... 0.82 0.65 (0.09) (0.09)
Net realized and unrealized gain
(loss) on investments ........... 2.13 4.53 (0.93) 2.49
-------- ------- ------- -------
Total income (loss) from
operations .................... 2.95 5.18 (1.02) 2.40
-------- ------- ------- -------
Accumulation unit value,
end of period ..................... $ 19.51 $ 16.56 $ 11.38 $ 12.40
======== ======= ======= =======
Total return (a) .................... 17.82% 45.49% (8.18%) 23.96%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................... $107,925 $67,905 $36,687 $18,620
Ratio of net investment income (loss)
to average net assets (b) ........ 4.51% 4.66% (0.86%) (0.92%)
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
----------------------------- ---------------------------
1996 1995 1994(E) 1996 1995 1994(E)
------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ......................... $ 13.43 $ 9.82 $10.00 $11.13 $ 9.37 $10.00
Income from operations:
Net investment income (loss) ...... 0.36 0.37 (0.06) 0.36 0.37 0.22
Net realized and unrealized gain
(loss) on investments ........... 0.91 3.24 (0.12) 0.72 1.39 (0.85)
------- ------- ------ ------ ------ ------
Total income (loss) from
operations .................... 1.27 3.61 (0.18) 1.08 1.76 (0.63)
------- ------- ------ ------ ------ ------
Accumulation unit value,
end of period ..................... $ 14.70 $ 13.43 $ 9.82 $12.21 $11.13 $ 9.37
======= ======= ====== ====== ====== ======
Total return (a) .................... 9.46% 36.79% (1.85%) 9.73% 18.73% (6.29%)
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................... $54,408 $32,904 $8,909 $6,418 $3,795 $2,145
Ratio of net investment income (loss)
to average net assets (b) ........ 2.65% 2.93% (0.72%) 3.18% 3.59% 3.06%
<FN>
- ------------
* The above table illustrates the change for a unit outstanding computed
using average units outstanding throughout each period. See Notes to
Selected Per Unit Data and Ratios on page 8.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
7
<PAGE>
WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
For the period ended
<TABLE>
<CAPTION>
TACTICAL ASSET
UTILITY ALLOCATION
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
--------------------------- ------------------
1996 1995 1994(E) 1996 1995(F)
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning
of period ......................... $11.77 $ 9.49 $10.00 $ 11.90 $10.00
Income from operations:
Net investment income (loss) ... 0.76 0.49 0.29 0.53 0.61
Net realized and unrealized gain
(loss) on investments .......... 0.50 1.79 (0.80) 1.07 1.29
------ ------ ------ ------- ------
Total income (loss) from
operations .................... 1.26 2.28 (0.51) 1.60 1.90
------ ------ ------ ------- ------
Accumulation unit value,
end of period ..................... $13.03 $11.77 $ 9.49 $ 13.50 $11.90
====== ====== ====== ======= ======
Total return (a) .................... 10.64% 24.14% (5.15%) 13.40% 19.03%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ................. $5,501 $2,631 $1,215 $17,946 $9,446
Ratio of net investment income (loss)
to average net assets (b) ........ 6.38% 4.57% 3.71% 4.35% 5.47%
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
C.A.S.E.
GROWTH VALUE EQUITY
SUB-ACCOUNT SUB-ACCOUNT
DECEMBER 31 DECEMBER 31
----------- ------------
1996(G) 1996(G)
----------- ------------
<S> <C> <C>
Accumulation unit value, beginning
of period ............................ $10.00 $10.00
Income from operations:
Net investment income (loss) ...... 0.37 0.05
Net realized and unrealized gain
(loss) on investments .............. 0.44 1.20
------ ------
Total income (loss) from
operations ....................... 0.81 1.25
------ ------
Accumulation unit value,
end of period ....................... $10.81 $11.25
====== ======
Total return (a) ....................... 8.09% 12.51%
Ratios and supplemental data:
Net assets at end of period
(in thousands) ..................... $4,466 $8,887
Ratio of net investment income (loss)
to average net assets (b) ........... 6.11% 0.77%
</TABLE>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding throughout each period. See Notes to
Selected Per Unit Data and Ratios below.
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.
The notes to the financial statements are an integral part of this report.
8
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
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 thirteen
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 company under the Investment Company Act of 1940, as amended. These
portfolios and their respective investment management organizations are as
follows:
PORTFOLIO INVESTMENT MANAGER
- --------- ------------------
Money Market J.P. Morgan Investment
Management Inc.
Bond Janus Capital Corporation
("JCC")
Growth JCC
Short-to-Intermediate AEGON USA Investment
Government Management, Inc. ("AEGON
Management")
Global JCC
Equity-Income Luther King Capital Management
Corporation
Emerging Growth Van Kampen American Capital
Asset Management, Inc.
Aggressive Growth Fred Alger Management, Inc.
Balanced AEGON Management
Utility Federated Investment Counseling
Tactical Asset Allocation Dean Investment Associates
C.A.S.E. Growth C.A.S.E. Management, Inc.
Value Equity NWQ Investment Management
Company, Inc.
WRL and AEGON Management are indirect wholly-owned subsidiaries of AEGON
USA, Inc., which is an indirect wholly-owned subsidiary of AEGON nv, a
Netherlands Corporation.
On May 1, 1996 WRL made an initial contribution to the Life Account. The
amount of the contribution and units received from the corresponding
sub-accounts are as follows:
SUB-ACCOUNT CONTRIBUTION UNITS
- ----------- ------------ -----
C.A.S.E. Growth $ 25,000 2,500.000000
Value Equity $200,000 20,000.000000
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 December 31, 1996.
Investment transactions are accounted for on the trade date, using the
Fund NAV next determined after receipt of sale or redemption orders
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
Life Account, including realized and unrealized capital gains, is not
taxable to WRL. Accordingly, no provision for Federal income taxes has
been made.
9
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 December 31, 1996 the equity accounts include net unrealized
appreciation (depreciation) on investments as follows:
SUB-ACCOUNT
- -----------
Money Market $ N/A
Bond (278,478)
Growth 81,029,373
Short-to-Intermediate Government (18,342)
Global 9,089,637
Equity-Income 7,732,984
Emerging Growth 22,522,868
Aggressive Growth 3,560,715
Balanced 564,202
Utility 335,952
Tactical Asset Allocation 1,465,811
C.A.S.E Growth 221,744
Value Equity 533,345
10
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
11
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
12
<PAGE>
- --------------------------------------------------------------------------------
W R L S E R I E S L I F E A C C O U N T
- --------------------------------------------------------------------------------
OFFICE OF THE WRL SERIES LIFE ACCOUNT
201 Highland Avenue
Largo, FL 33770-2597
1-800-851-9777
----------------------
DISTRIBUTOR:
InterSecurities, Inc.
201 Highland Avenue
Largo, FL 33770-2597
----------------------
INSURER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 33770-2597
----------------------
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
<PAGE>
THIS MATERIAL IS FOR POLICYHOLDER'S REPORTING PURPOSES ONLY AND SHALL NOT BE
USED IN CONNECTION WITH A SOLICITATION, OFFER OR ANY PROPOSED SALE OR PURCHASE
OF SECURITIES. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
A HISTORY OF PERFORMANCE /Registered Trademark/
[LOGO]
----------
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
DISTRIBUTOR: INTERSECURITIES, INC.
201 HIGHLAND AVENUE
LARGO, FLORIDA 33770-2597
February 1997
ACC00003 (2/97)
