Aetna Life Insurance and Annuity Company Variable Life Account B
Statement of Assets and Liabilities -- December 31, 1999
ASSETS:
Investments, at net asset value: (Note 1)
<TABLE>
<CAPTION>
Total
Shares Cost Assets
--------- ------------ ------------
<S> <C> <C> <C>
Aetna Ascent VP 210,193 $ 3,021,614 $ 3,136,076
Aetna Balanced VP, Inc. 1,840,829 28,411,306 28,661,711
Aetna Bond VP 1,585,677 20,656,384 19,297,688
Aetna Crossroads VP 173,950 2,335,123 2,395,290
Aetna Growth and Income VP 5,612,663 185,527,276 172,252,616
Aetna Growth VP 3,353 52,285 58,067
Aetna Index Plus Large Cap VP 984,575 18,690,522 20,548,071
Aetna Legacy VP 89,319 1,115,863 1,115,594
Aetna Money Market VP 2,865,679 38,252,424 38,443,372
Aetna Small Company VP 38,381 525,384 634,048
Aetna Value Opportunity VP 8,229 130,042 135,120
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio 1,233,869 30,324,637 31,722,779
Growth Portfolio 370,659 16,510,133 20,360,310
High Income Portfolio 95,391 1,092,091 1,078,868
Overseas Portfolio 165,315 3,310,781 4,536,234
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio 92,841 1,602,587 1,733,346
Contrafund Portfolio 996,741 22,982,190 29,054,986
Janus Aspen Series:
Aggressive Growth Portfolio 962,665 45,420,154 57,461,476
Balanced Portfolio 800,621 18,485,162 22,353,327
Flexible Income Portfolio 5,978 69,472 68,267
Growth Portfolio 1,017,622 26,378,071 34,242,981
Worldwide Growth Portfolio 1,381,919 46,635,796 65,986,620
MFS Variable Insurance Trust:
Total Return Series 639 11,219 11,344
World Government Series 198 2,000 1,984
Oppenheimer Funds:
Aggressive Growth Fund 8,969 728,396 738,203
Global Securities Fund 19,315 516,931 645,319
Growth & Income Fund 12,694 303,537 312,661
Strategic Bond Fund 264,204 1,274,694 1,313,094
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio 419,434 28,129,870 34,741,713
PPI MFS Research Growth Portfolio 1,075,876 13,315,190 15,901,444
PPI MFS Value Equity Portfolio 53,473 2,451,631 2,928,730
PPI Scudder International Growth Portfolio 959,535 21,745,757 24,458,534
PPI T. Rowe Price Growth Equity Portfolio 36,443 1,968,414 2,405,261
------------ ------------
TOTAL ASSETS $581,976,936 $638,735,134
============ ============
Net assets represented by:
Policyholders' account values: (Notes 1 and 5)
Aetna Ascent VP
Policyholders' account values ......................................................... $ 3,136,076
Aetna Balanced VP, Inc.
Policyholders' account values ......................................................... 28,661,711
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Statement of Assets and Liabilities -- December 31, 1999 (continued):
<TABLE>
<S> <C>
Aetna Bond VP
Policyholders' account values ........................ $19,297,688
Aetna Crossroads VP
Policyholders' account values ........................ 2,395,290
Aetna Growth and Income VP
Policyholders' account values ........................ 172,252,616
Aetna Growth VP
Policyholders' account values ........................ 58,067
Aetna Index Plus Large Cap VP
Policyholders' account values ........................ 20,548,071
Aetna Legacy VP
Policyholders' account values ........................ 1,115,594
Aetna Money Market VP
Policyholders' account values ........................ 38,443,372
Aetna Small Company VP
Policyholders' account values ........................ 634,048
Aetna Value Opportunity VP
Policyholders' account values ........................ 135,120
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio
Policyholders' account values ....................... 31,722,779
Growth Portfolio
Policyholders' account values ....................... 20,360,310
High Income Portfolio
Policyholders' account values ....................... 1,078,868
Overseas Portfolio
Policyholders' account values ....................... 4,536,234
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio
Policyholders' account values ....................... 1,733,346
Contrafund Portfolio
Policyholders' account values ....................... 29,054,986
Janus Aspen Series:
Aggressive Growth Portfolio
Policyholders' account values ....................... 57,461,476
Balanced Portfolio
Policyholders' account values ....................... 22,353,327
Flexible Income Portfolio
Policyholders' account values ....................... 68,267
Growth Portfolio
Policyholders' account values ....................... 34,242,981
Worldwide Growth Portfolio
Policyholders' account values ....................... 65,986,620
MFS Variable Insurance Trust:
Total Return Series
Policyholders' account values ....................... 11,344
World Government Series
Policyholders' account values ....................... 1,984
Oppenheimer Funds:
Aggressive Growth Fund
Policyholders' account values ....................... 738,203
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Statement of Assets and Liabilities -- December 31, 1999 (continued):
<TABLE>
<S> <C>
Global Securities Fund
Policyholders' account values ......... $ 645,319
Growth & Income Fund
Policyholders' account values ......... 312,661
Strategic Bond Fund
Policyholders' account values ......... 1,313,094
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio
Policyholders' account values ......... 34,741,713
PPI MFS Research Growth Portfolio
Policyholders' account values ......... 15,901,444
PPI MFS Value Equity Portfolio
Policyholders' account values ......... 2,928,730
PPI Scudder International Growth Portfolio
Policyholders' account values ......... 24,458,534
PPI T. Rowe Price Growth Equity Portfolio
Policyholders' account values ......... 2,405,261
------------
$638,735,134
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Income: (Notes 1, 3 and 5)
Dividends ................................................... $ 48,867,068 $ 43,340,466 $ 35,222,623
Expenses: (Notes 2 and 5)
Valuation period deduction .................................. (5,991,275) (4,390,578) (2,713,203)
-------------- ------------- -------------
Net Investment Income ........................................ 42,875,793 38,949,888 32,509,420
-------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments: (Notes 1, 4 and 5)
Proceeds from sales ......................................... 874,382,151 481,590,756 260,329,704
Cost of investments sold .................................... 793,957,391 454,360,016 245,858,726
-------------- ------------- -------------
Net realized gain .......................................... 80,424,760 27,230,740 14,470,978
Net unrealized gain on investments: (Note 5)
Beginning of year ........................................... 29,609,254 16,987,228 14,132,669
End of year ................................................. 56,758,198 29,609,254 16,987,228
-------------- ------------- -------------
Net change in unrealized gain .............................. 27,148,944 12,622,026 2,854,559
-------------- ------------- -------------
Net realized and unrealized gain on investments .............. 107,573,704 39,852,766 17,325,537
-------------- ------------- -------------
Net increase in net assets resulting from operations ......... 150,449,497 78,802,654 49,834,957
-------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM UNIT TRANSACTIONS:
Variable life premium payments ............................... 135,305,924 171,088,399 127,736,110
Transfers to the Company for monthly deductions .............. (32,799,767) (29,899,398) (21,545,914)
Redemptions by policyholders ................................. (162,896,593) (15,359,273) (24,062,185)
Transfers on account of policy loans ......................... (4,913,122) (4,006,080) (2,875,077)
Other ........................................................ 779,888 (342,142) 263,373
-------------- ------------- -------------
Net increase (decrease) in net assets resulting from unit
transactions (Note 5) ....................................... (64,523,670) 121,481,506 79,516,307
-------------- ------------- -------------
Net changes in net assets .................................... 85,925,827 200,284,160 129,351,264
NET ASSETS:
Beginning of period .......................................... 552,809,307 352,525,147 223,173,883
-------------- ------------- -------------
End of period ................................................ $ 638,735,134 $ 552,809,307 $ 352,525,147
============== ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999
1. Summary of Significant Accounting Policies & Account Information
Variable Life Account B (the "Account") is a separate account established
by Aetna Life Insurance and Annuity Company (the "Company") and is
registered under the Investment Company Act of 1940 as a unit investment
trust. The Account is sold exclusively for use with variable life insurance
product contracts as defined under the Internal Revenue Code of 1986, as
amended. The Variable Account consists of eight products which are listed
below.
o Aetna Vest
o Aetna Vest II
o Aetna Vest Plus
o Aetna Vest Estate Protector
o Aetna Vest Estate Protector II
o Corporate Specialty Market
o Corporate Specialty Market II
o NYSUT Individual Life
Effective October 1, 1998, Aetna Life Insurance Company and Aetna Life
Insurance & Annuity Company contracted the administrative servicing
obligations to its individual variable life business to The Lincoln
National Life Insurance Company (Lincoln Life) and Lincoln Life & Annuity
Company of New York (LLANY). Although the Company is responsible for all
policy terms and conditions, Lincoln Life and LLANY are responsible for
servicing the individual life contracts, including the payment of benefits,
oversight of investment management and contract administration. The assets
of the Variable Account are owned by Lincoln Life. The portion of the
Variable Account's assets supporting the variable life policies may not be
used to satisfy liabilities arising out of any other business of Lincoln
Life.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Although actual results
could differ from these estimates, any such differences are expected to be
immaterial to the net assets of the Account.
a. Valuation of Investments
Investments in the following funds are stated at the closing net asset
value per share as determined by each fund on December 31, 1999:
<TABLE>
<S> <C>
Aetna Ascent VP Janus Aspen Series:
Aetna Balanced VP, Inc. o Aggressive Growth Portfolio
Aetna Bond VP o Balanced Portfolio
Aetna Crossroads VP o Flexible Income Portfolio
Aetna Growth and Income VP o Growth Portfolio
Aetna Growth VP o Worldwide Growth Portfolio
Aetna Index Plus Large Cap VP MFS Variable Insurance Trust:
Aetna Legacy VP o Total Return Series
Aetna Money Market VP o World Government Series
Aetna Small Company VP Oppenheimer Funds:
Aetna Value Opportunity VP o Aggressive Growth Fund
Fidelity Investments o Global Securities Fund
Insurance Products Fund: o Growth & Income Fund
o Equity-Income Portfolio o Strategic Bond Fund
o Growth Portfolio Portfolio Partners Inc. (PPI):
o High Income Portfolio o PPI MFS Emerging Equities Portfolio
o Overseas Portfolio o PPI MFS Research Growth Portfolio
Fidelity Investments Variable Insurance o PPI MFS Value Equity Portfolio
Products Fund II: o PPI Scudder International Growth Portfolio
o Asset Manager Portfolio o PPI T. Rowe Price Growth Equity Portfolio
o Contrafund Portfolio
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
b. Other
Investment transactions are accounted for on a trade date basis and
dividend income is recorded on the ex-dividend date. The cost of
investments sold is determined by specific identification.
c. Federal Income Taxes
The operation of the Account form a part of, and are taxed with, the total
operations of the Company which is taxed as a life insurance company under
the Internal Revenue Code of 1986, as amended. The Account will not be
taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code. Under current federal income tax law, no federal income taxes
are payable with respect to the Variable Account's net investment income
and the net realized gain on investments.
2. Mortality & Expense Guarantees & Other Transactions with Affiliates
The Company charges each variable sub-account for mortality and expense
risk. The amount charged is deducted daily at rates per year specified in
each policy.
The Company deducts a premium load from each premium payment to cover
administration expenses, state taxes, and Federal income tax liabilities.
The percentage deducted from each premium payment is specified in each
policy.
The Company charges monthly administrative fees for items such as
underwriting and issuance, premium billing and collection, policy value
calculation, confirmations and periodic reports. The amount of the monthly
administrative fees are specified in each policy.
The Company charges a monthly deduction for the cost of insurance and any
charges for supplemental riders. The cost of insurance charge is equal to
the amount at risk multiplied by a monthly cost of insurance rate. The cost
of insurance rate is variable and is based on the insured's issue age, sex
(where permitted by law), number of policy years elapsed and premium class.
Under certain circumstances, the Company reserves the right to charge a
transfer fee between sub-accounts. The amount of the transfer fee is
specified in each policy.
The Company, upon full surrender of a policy, may charge a surrender
charge. This charge is in part a deferred sales charge and in part a
recovery of certain first year administrative costs. The amount of the
surrender charge, if any, will depend on the specified amount, insured's
age, risk class and sex (where permitted by law). The maximum surrender
charges are included in each policy and are in compliance with each state's
nonforfeiture law.
3. Dividend Income
On an annual basis, the underlying mutual funds in which the Account
invests distribute substantially all of their taxable income and realized
capital gains to their shareholders. Distributions paid to the Account are
automatically reinvested in shares of the underlying mutual funds. The
Account's proportionate share of each underlying mutual fund's
undistributed net investment income and accumulated net realized gain
(loss) on investments is included in net unrealized gain (loss) on
investments in the Statements of Operations and Changes in Net Assets of
the Account.
4. Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments other than
short-term investments for the years ended December 31, 1999, 1998 and 1997
aggregated $852,734,274 and $874,382,151, $642,022,151 and $481,590,756,
and $372,335,431 and $260,329,704, respectively.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Valuation Proceeds
Period from
Dividends Deductions Sales
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP: $ 207,334 ($27,423) $ 797,996
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc. 4,927,154 (362,224) 24,237,521
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Bond VP 1,443,656 (280,638) 18,417,017
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 150,412 (21,636) 728,894
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP 30,198,699 (1,580,938) 32,617,948
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Growth VP(1) 3,015 (34,261) 5,715,725
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 881,321 (196,915) 14,299,931
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Legacy VP 62,497 (9,474) 227,116
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Money Market VP 1,696,087 (398,471) 240,430,804
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Small Company VP 8,993 (28,237) 4,384,995
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 6,310 (991) 96,462
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio 1,764,504 (369,449) 17,136,392
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Growth Portfolio 2,197,635 (205,229) 16,307,193
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
High Income Portfolio 62,986 (7,432) 326,086
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Overseas Portfolio 125,931 (32,249) 1,315,907
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio 232,267 (29,020) 2,871,385
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Contrafund Portfolio 1,565,873 (381,504) 26,236,688
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio 1,087,970 (302,514) 130,280,210
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Balanced Portfolio 550,807 (265,810) 17,853,236
Policyholders' account values
=========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Net Unrealized
Gain (Loss)
Cost of Net -----------
Investments Realized Beginning End
Sold Gain (Loss) of Period of Period
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Ascent VP: $ 774,178 $ 23,818 ($53,438) $ 114,462
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc. 25,666,801 (1,429,280) (88,169) 250,405
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP 18,670,143 (253,126) (21,056) (1,358,696)
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 729,509 (615) (13,664) 60,167
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP 29,355,401 3,262,547 (6,059,944) (13,274,660)
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP(1) 5,103,503 612,222 - 5,782
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 11,770,545 2,529,386 1,027,911 1,857,549
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 226,972 144 (9,107) (269)
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP 240,018,029 412,775 267,256 190,948
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 3,960,970 424,025 (23,492) 108,664
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 76,961 19,501 12,485 5,078
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio 15,738,454 1,397,938 2,106,941 1,398,142
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Growth Portfolio 12,435,135 3,872,058 3,937,336 3,850,177
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
High Income Portfolio 352,715 (26,629) (22,754) (13,223)
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio 1,200,968 114,939 190,775 1,225,453
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio 2,692,023 179,362 266,952 130,759
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio 20,796,590 5,440,098 5,961,343 6,072,796
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio 109,911,278 20,368,932 3,818,015 12,041,322
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio 12,910,893 4,942,343 3,434,432 3,868,165
Policyholders' account values
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Net Net Increase Net Assets
Change in (Decrease) in ------------------------------
Unrealized Net Assets Resulting Beginning End
Gain (Loss) From Unit Transactions of Period of Period
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Ascent VP: $ 167,900 ($13,121)
Policyholders' account values $ 2,777,568 $ 3,136,076
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc. 338,574 (8,902,224)
Policyholders' account values 34,089,711 28,661,711
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP (1,337,640) (10,250,586)
Policyholders' account values 29,976,022 19,297,688
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 73,831 137,429
Policyholders' account values 2,055,869 2,395,290
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP (7,214,716) (9,143,942)
Policyholders' account values 156,730,966 172,252,616
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP(1) 5,782 (528,691)
Policyholders' account values - 58,067
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 829,638 3,159,014
Policyholders' account values 13,345,627 20,548,071
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 8,838 45,676
Policyholders' account values 1,007,913 1,115,594
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP (76,308) 143,868
Policyholders' account values 36,665,421 38,443,372
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 132,156 (890,290)
Policyholders' account values 987,401 634,048
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP (7,407) 61,807
Policyholders' account values 55,900 135,120
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio (708,799) (7,091,968)
Policyholders' account values 36,730,553 31,722,779
- -----------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio (87,159) (4,688,720)
Policyholders' account values 19,271,725 20,360,310
- -----------------------------------------------------------------------------------------------------------------------------------
High Income Portfolio 9,531 804,059
Policyholders' account values 236,353 1,078,868
- -----------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio 1,034,678 178,105
Policyholders' account values 3,114,830 4,536,234
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio (136,193) (1,643,684)
Policyholders' account values 3,130,614 1,733,346
- -----------------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio 111,453 (16,110,899)
Policyholders' account values 38,429,965 29,054,986
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio 8,223,307 4,654,782
Policyholders' account values 23,428,999 57,461,476
- -----------------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio 433,733 (4,727,822)
Policyholders' account values 21,420,076 22,353,327
===================================================================================================================================
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets (continued):
- ----------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Valuation Proceeds
Period from
Dividends Deductions Sales
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Flexible Income Portfolio (2) $ 5,337 ($658) $ 122,746
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Growth Portfolio 202,497 (257,076) 21,130,544
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Worldwide Growth Portfolio 96,897 (512,954) 56,371,577
Policyholders' account values
- ----------------------------------------------------------------------------------------------
MFS Variable Insurance Trust:
Total Return Series (3) 26 (6) 1,588
Policyholders' account values
- ----------------------------------------------------------------------------------------------
World Government Series (4) -- (1) --
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Oppenheimer Funds:
Aggressive Growth Fund (5) -- (45) 22
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Global Securities Fund 12,736 (3,636) 751,030
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Growth & Income Fund 1,424 (2,052) 710,579
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Strategic Bond Fund 40,196 (11,335) 1,349,254
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio 329,059 (312,763) 92,317,033
Policyholders' account values
- ----------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 26,665 (127,616) 11,385,569
Policyholders' account values
- ----------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio 39,629 (11,919) 1,177,567
Policyholders' account values
- ----------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 885,006 (199,531) 134,290,559
Policyholders' account values
- ----------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 54,145 (17,268) 492,577
Policyholders' account values
- ----------------------------------------------------------------------------------------------
Total Variable Life Account B $48,867,068 ($5,991,275) $874,382,151
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Net Unrealized
Gain (Loss) Net
Cost of Net ----------- Change in
Investments Realized Beginning End Unrealized
Sold Gain (Loss) of Period of Period Gain (Loss)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Flexible Income Portfolio (2) $ 124,997 ($2,251) $ - ($1,205) ($1,205)
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Growth Portfolio 15,320,528 5,810,016 3,730,121 7,864,910 4,134,789
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio 42,528,486 13,843,091 5,492,542 19,350,824 13,858,282
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust:
Total Return Series (3) 1,601 (13) -- 125 125
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
World Government Series (4) -- -- -- (16) (16)
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Aggressive Growth Fund (5) 20 2 -- 9,807 9,807
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Global Securities Fund 654,790 96,240 19,272 128,388 109,116
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Growth & Income Fund 654,333 56,246 11,048 9,124 (1,924)
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Strategic Bond Fund 1,342,562 6,692 16,740 38,400 21,660
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio 82,923,450 9,393,583 3,702,269 6,611,843 2,909,574
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 10,005,001 1,380,568 974,898 2,586,254 1,611,356
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio 900,465 277,102 82,622 477,099 394,477
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 126,685,605 7,604,954 698,227 2,712,777 2,014,550
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 424,485 68,092 149,693 436,847 287,154
Policyholders' account values
- ------------------------------------------------------------------------------------------------------------------------
Total Variable Life Account B $793,957,391 $80,424,760 $29,609,254 $56,758,198 $27,148,944
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Net Increase Net Assets
(Decrease) in ----------
Net Assets Resulting Beginning End
From Unit Transactions of Period of Period
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Flexible Income Portfolio (2) $ 67,044
Policyholders' account values $ - $ 68,267
- ---------------------------------------------------------------------------------------------------
Growth Portfolio 950,511
Policyholders' account values 23,402,244 34,242,981
- ---------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio (4,853,866)
Policyholders' account values 43,555,170 65,986,620
- ---------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust:
Total Return Series (3) 11,212
Policyholders' account values -- 11,344
- ---------------------------------------------------------------------------------------------------
World Government Series (4) 2,001
Policyholders' account values -- 1,984
- ---------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Aggressive Growth Fund (5) 728,439
Policyholders' account values -- 738,203
- ---------------------------------------------------------------------------------------------------
Global Securities Fund 113,811
Policyholders' account values 317,052 645,319
- ---------------------------------------------------------------------------------------------------
Growth & Income Fund 183,796
Policyholders' account values 75,171 312,661
- ---------------------------------------------------------------------------------------------------
Strategic Bond Fund 544,409
Policyholders' account values 711,472 1,313,094
- ---------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio (8,310,862)
Policyholders' account values 30,733,122 34,741,713
- ---------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 1,275,501
Policyholders' account values 11,734,970 15,901,444
- ---------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio 1,424,018
Policyholders' account values 805,423 2,928,730
- ---------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio (2,509,255)
Policyholders' account values 16,662,810 24,458,534
- ---------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 656,778
Policyholders' account values 1,356,360 2,405,261
- ---------------------------------------------------------------------------------------------------
Total Variable Life Account B ($ 64,523,670) $552,809,307 $638,735,134
===================================================================================================
</TABLE>
(1) - Reflects less than a full year of activity. Funds were first received in
this option during January 1999.
(2) - Reflects less than a full year of activity. Funds were first received in
this option during February 1999.
(3) - Reflects less than a full year of activity. Funds were first received in
this option during March 1999.
(4) - Reflects seed money. No funds have been received for this option.
(5) - Reflects less than a full year of activity. Funds were first received in
this option during December 1999.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets (continued):
- ---------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Valuation Proceeds
Period from
Dividends Deductions Sales
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP: (1) $ 129,523 ($22,620) $ 393,522
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.: (2) 5,079,318 (289,232) 8,936,646
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Bond VP: (3) 1,751,860 (257,828) 6,762,101
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Crossroads VP: (4) 77,190 (14,622) 473,877
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP: (5) 27,303,998 (1,392,329) 39,271,149
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP: (6) 591,905 (73,086) 3,515,589
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Legacy VP: (7) 44,001 (8,540) 377,983
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Money Market VP: (8) 940,509 (288,392) 130,650,119
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Small Company VP: (9) 8,723 (5,056) 362,699
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP: (10) 298 (130) 44,207
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 1,381,671 (281,139) 8,873,609
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Growth Portfolio: 1,011,596 (128,591) 2,784,250
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
High Income Portfolio: -- (1,531) 31,686
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Overseas Portfolio: 141,761 (22,734) 562,478
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 329,918 (29,778) 2,518,344
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 1,313,979 (283,258) 12,306,538
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: -- (142,378) 19,717,643
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Balanced Portfolio: 709,668 (145,407) 5,250,108
Policyholders' account values
- ---------------------------------------------------------------------------------------------------------
Growth Portfolio: 1,062,152 (162,916) 8,751,672
Policyholders' account values
=========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Net Unrealized
Gain (Loss)
Cost of Net -----------
Investments Realized Beginning End
Sold Gain (Loss) of Period of Period
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Ascent VP: (1) $ 353,120 $ 40,402 $ 27,927 ($53,438)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.: (2) 7,346,946 1,589,700 1,971,257 (88,169)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Bond VP: (3) 6,468,168 293,933 (12,114) (21,056)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP: (4) 453,989 19,888 5,069 (13,664)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP: (5) 34,639,034 4,632,115 6,207,999 (6,059,944)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP: (6) 3,029,008 486,581 (23,927) 1,027,911
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP: (7) 360,207 17,776 618 (9,107)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP: (8) 130,229,304 420,815 70,857 267,256
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP: (9) 395,417 (32,718) -- (23,492)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP: (10) 44,499 (292) -- 12,485
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 7,588,754 1,284,855 1,523,698 2,106,941
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 2,517,613 266,637 380,110 3,937,336
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
High Income Portfolio: 34,229 (2,543) -- (22,754)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Overseas Portfolio: 539,506 22,972 (8,270) 190,775
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 2,406,138 112,206 281,699 266,952
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 10,124,110 2,182,428 1,505,359 5,961,343
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 17,285,188 2,432,455 844,868 3,818,015
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Balanced Portfolio: 3,955,227 1,294,881 885,469 3,434,432
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 6,729,863 2,021,809 1,360,430 3,730,121
Policyholders' account values
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Net Net Increase Net Assets
Change in (Decrease) in ----------
Unrealized Net Assets Resulting Beginning End
Gain (Loss) From Unit Transactions of Period of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Ascent VP: (1) ($81,365) $ 909,075
Policyholders' account values $ 1,802,553 $ 2,777,568
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.: (2) (2,059,426) 5,433,280
Policyholders' account values 24,336,071 34,089,711
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP: (3) (8,942) 7,092,195
Policyholders' account values 21,104,804 29,976,022
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP: (4) (18,733) 1,281,854
Policyholders' account values 710,292 2,055,869
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP: (5) (12,267,943) 6,076,102
Policyholders' account values 132,379,023 156,730,966
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP: (6) 1,051,838 9,326,844
Policyholders' account values 1,961,545 13,345,627
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP: (7) (9,725) 314,262
Policyholders' account values 650,139 1,007,913
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP: (8) 196,399 15,075,889
Policyholders' account values 20,320,201 36,665,421
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP: (9) (23,492) 1,039,944
Policyholders' account values -- 987,401
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP: (10) 12,485 43,539
Policyholders' account values -- 55,900
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 583,243 13,578,473
Policyholders' account values 20,183,450 36,730,553
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 3,557,226 7,444,713
Policyholders' account values 7,120,144 19,271,725
- ------------------------------------------------------------------------------------------------------------------------------------
High Income Portfolio: (22,754) 263,181
Policyholders' account values -- 236,353
- ------------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio: 199,045 984,072
Policyholders' account values 1,789,714 3,114,830
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: (14,747) 198,288
Policyholders' account values 2,534,727 3,130,614
- ------------------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 4,455,984 10,540,804
Policyholders' account values 20,220,028 38,429,965
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 2,973,147 5,763,410
Policyholders' account values 12,402,365 23,428,999
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio: 2,548,963 8,806,330
Policyholders' account values 8,205,641 21,420,076
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 2,369,691 6,131,508
Policyholders' account values 11,980,000 23,402,244
====================================================================================================================================
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets (continued):
- -------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Valuation Proceeds
Period from
Dividends Deductions Sales
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Growth Portfolio: $ 1,360,015 ($344,460) $ 13,676,121
Policyholders' account values
- -------------------------------------------------------------------------------------------
Global Securities Fund -- (1,051) 10,993
Policyholders' account values
- -------------------------------------------------------------------------------------------
Growth & Income Fund -- (183) 65,110
Policyholders' account values
- -------------------------------------------------------------------------------------------
Strategic Bond Fund 104 (2,331) 315,681
Policyholders' account values
- -------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 68,284 (239,521) 100,307,103
Policyholders' account values
- -------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: 2,113 (88,033) 22,358,392
Policyholders' account values
- -------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio: 628 (2,334) 188,157
Policyholders' account values
- -------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: 27,896 (158,883) 92,935,246
Policyholders' account values
- -------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio: 3,356 (4,215) 149,733
Policyholders' account values
- -------------------------------------------------------------------------------------------
Total Variable Life Account B $43,340,466 ($4,390,578) $481,590,756
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Net Unrealized
Gain (Loss) Net
Cost of Net ----------- Change in
Investments Realized Beginning End Unrealized
Sold Gain (Loss) of Period of Period Gain (Loss)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Worldwide Growth Portfolio: $ 10,222,511 $ 3,453,610 $ 1,817,349 $ 5,492,542 $ 3,675,193
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
Global Securities Fund 12,018 (1,025) -- 19,272 19,272
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
Growth & Income Fund 66,180 (1,070) -- 11,048 11,048
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
Strategic Bond Fund 319,744 (4,063) -- 16,740 16,740
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 97,276,639 3,030,464 42,515 3,702,269 3,659,754
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: 21,336,998 1,021,394 (86,245) 974,898 1,061,143
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio: 215,959 (27,802) -- 82,622 82,622
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: 90,246,159 2,689,087 192,560 698,227 505,667
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio: 163,488 (13,755) -- 149,693 149,693
Policyholders' account values
- -------------------------------------------------------------------------------------------------------------------------
Total Variable Life Account B $454,360,016 $27,230,740 $16,987,228 $29,609,254 $12,622,026
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Net Increase Net Assets
(Decrease) in ----------
Net Assets Resulting Beginning End
From Unit Transactions of Period of Period
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Growth Portfolio: $ 11,107,525
Policyholders' account values $ 24,303,287 $ 43,555,170
- ---------------------------------------------------------------------------------------------------
Global Securities Fund 299,856
Policyholders' account values -- 317,052
- ---------------------------------------------------------------------------------------------------
Growth & Income Fund 65,376
Policyholders' account values -- 75,171
- ---------------------------------------------------------------------------------------------------
Strategic Bond Fund 701,022
Policyholders' account values -- 711,472
- ---------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 5,152,269
Policyholders' account values 19,061,872 30,733,122
- ---------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: 2,590,172
Policyholders' account values 7,148,181 11,734,970
- ---------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio: 752,309
Policyholders' account values -- 805,423
- ---------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: (712,067)
Policyholders' account values 14,311,110 16,662,810
- ---------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio: 1,221,281
Policyholders' account values -- 1,356,360
- ---------------------------------------------------------------------------------------------------
Total Variable Life Account B $121,481,506 $352,525,147 $552,809,307
===================================================================================================
</TABLE>
(1) - Effective May 1, 1998, Aetna Ascent Portfolio's name changed to Aetna
Ascent VP.
(2) - Effective May 1, 1998, Aetna Investment Advisors Fund's name changed to
Aetna Balanced Fund VP.
(3) - Effective May 1, 1998, Aetna Income Shares' name changed to Aetna Bond
Fund VP.
(4) - Effective May 1, 1998, Aetna Crossroads Variable Portfolio's name changed
to Aetna Crossroads VP.
(5) - Effective May 1, 1998, Aetna Variable Funds' name changed to Aetna Growth
and Income VP.
(6) - Effective May 1, 1998, Aetna Variable Index Plus Portfolio's name changed
to Aetna Index Plus Large Cap VP.
(7) - Effective May 1, 1998, Aetna Legacy Variable Portfolio's name changed to
Aetna Legacy VP.
(8) - Effective May 1, 1998, Aetna Variable Encore Funds' name changed to Aetna
Money Market VP.
(9) - Effective May 1, 1998, Aetna Variable Small Company Portfolio's name
changed to Aetna Small Company VP.
(10)- Effective May 1, 1998, Aetna Variable Capital Appreciation Portfolio's
name changed to Aetna Value Opportunity VP.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets (continued):
- --------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Valuation Proceeds
Period from
Dividends Deductions Sales
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Variable Fund: $26,573,304 ($1,085,553) $11,219,896
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Income Shares: 1,087,150 (148,230) 2,358,910
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund: 372,968 (144,720) 74,201,538
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.: 2,876,287 (185,443) 1,960,106
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio: 112,004 (11,360) 1,279,898
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Crossroads Varible Portfolio: 45,840 (3,290) 198,099
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Legacy Varible Portfolio: 38,169 (3,596) 225,894
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Aetna Variable Index Plus Portfolio: 77,848 (4,920) 143,972
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Alger American Small Capitalization Portfolio: (1) 576,583 (128,523) 53,957,227
Policyholders' account values
- --------------------------------------------------------------------------------------------------
American Century VP Capital Apprecition Fund: (2) 132,455 (57,820) 15,197,338
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 1,485,715 (163,582) 14,420,981
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Growth Portfolio: 192,233 (54,856) 6,814,876
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Overseas Portfolio: 46,706 (8,253) 359,668
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 175,953 (18,257) 244,742
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Contrafund Portfolio: 235,708 (110,146) 4,519,164
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: -- (95,697) 18,445,996
Policyholders' account values
- --------------------------------------------------------------------------------------------------
Balanced Portfolio: 192,757 (52,872) 1,238,408
Policyholders' account values
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Net Unrealized
Gain (Loss) Net
Cost of Net ----------- Change in
Investments Realized Beginning End Unrealized
Sold Gain (Loss) of Period of Period Gain (Loss)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund: $ 7,857,508 $3,362,388 $7,294,643 $6,207,999 ($1,086,644)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Income Shares: 2,406,924 (48,014) (190,180) (12,114) 178,066
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund: 73,731,940 469,598 106,394 70,857 (35,537)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.: 1,561,449 398,657 1,383,931 1,971,257 587,326
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio: 1,184,906 94,992 15,645 27,927 12,282
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Varible Portfolio: 193,283 4,816 (191) 5,069 5,260
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Varible Portfolio: 207,391 18,503 20 618 598
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Variable Index Plus Portfolio: 131,418 12,554 -- (23,927) (23,927)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Alger American Small Capitalization Portfolio: (1) 53,285,312 671,915 172,057 -- (172,057)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Apprecition Fund: (2) 15,512,673 (315,335) (146,911) -- 146,911
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 11,843,310 2,577,671 1,096,283 1,523,698 427,415
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 5,870,796 944,080 294,867 380,110 85,243
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio: 322,274 37,394 37,941 (8,270) (46,211)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 220,690 24,052 134,978 281,699 146,721
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 3,602,586 916,578 730,883 1,505,359 774,476
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 17,632,824 813,172 249,074 844,868 595,794
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio: 1,021,789 216,619 243,163 885,469 642,306
Policyholders' account values
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Net Increase Net Assets
(Decrease) in ----------
Net Assets Resulting Beginning End
From Unit Transactions of Period of Period
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Variable Fund: $ 11,743,902
Policyholders' account values $92,871,626 $132,379,023
- ----------------------------------------------------------------------------------------------------------
Aetna Income Shares: 6,856,045
Policyholders' account values 13,179,787 21,104,804
- ----------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund: 10,565,707
Policyholders' account values 9,092,185 20,320,201
- ----------------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.: 4,867,703
Policyholders' account values 15,791,541 24,336,071
- ----------------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio: 1,049,257
Policyholders' account values 545,378 1,802,553
- ----------------------------------------------------------------------------------------------------------
Aetna Crossroads Varible Portfolio: 533,974
Policyholders' account values 123,692 710,292
- ----------------------------------------------------------------------------------------------------------
Aetna Legacy Varible Portfolio: 582,502
Policyholders' account values 13,963 650,139
- ----------------------------------------------------------------------------------------------------------
Aetna Variable Index Plus Portfolio: 1,899,990
Policyholders' account values -- 1,961,545
- ----------------------------------------------------------------------------------------------------------
Alger American Small Capitalization Portfolio: (1) (14,034,001)
Policyholders' account values 13,086,083 --
- ----------------------------------------------------------------------------------------------------------
American Century VP Capital Apprecition Fund: (2) (6,388,736)
Policyholders' account values 6,482,525 --
- ----------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity--Income Portfolio: 2,546,018
Policyholders' account values 13,310,213 20,183,450
- ----------------------------------------------------------------------------------------------------------
Growth Portfolio: 900,915
Policyholders' account values 5,052,529 7,120,144
- ----------------------------------------------------------------------------------------------------------
Overseas Portfolio: 1,227,751
Policyholders' account values 532,327 1,789,714
- ----------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 796,072
Policyholders' account values 1,410,186 2,534,727
- ----------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 11,491,722
Policyholders' account values 6,911,690 20,220,028
- ----------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 1,426,169
Policyholders' account values 9,662,927 12,402,365
- ----------------------------------------------------------------------------------------------------------
Balanced Portfolio: 3,632,486
Policyholders' account values 3,574,345 8,205,641
==========================================================================================================
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
<TABLE>
<CAPTION>
5. Supplemental Information to Statements of Operations and Changes in Net Assets (continued):
- --------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Valuation Proceeds
Period from
Dividends Deductions Sales
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio: $ 309,334 ($90,076) $ 3,312,122
Policyholders' account values
- --------------------------------------------------------------------------------------------
Short-Term Bond Portfolio: (3) 101,542 (32,381) 9,071,413
Policyholders' account values
- --------------------------------------------------------------------------------------------
Worldwide Growth Portfolio: 325,821 (167,065) 7,022,675
Policyholders' account values
- --------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: -- (17,086) 9,834,242
Policyholders' account values
- --------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: -- (6,128) 1,889,839
Policyholders' account values
- --------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: -- (12,927) 1,858,258
Policyholders' account values
- --------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund:
International Portfolio: (4) 264,246 (110,422) 20,554,442
Policyholders' account values
- --------------------------------------------------------------------------------------------
Total Variable Life Account B $35,222,623 ($2,713,203) $260,329,704
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Net Unrealized
Gain (Loss) Net
Cost of Net ----------- Change in
Investments Realized Beginning End Unrealized
Sold Gain (Loss) of Period of Period Gain (Loss)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Portfolio: $ 2,585,617 $ 726,505 $ 566,478 $ 1,360,430 $ 793,952
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio: (3) 8,891,967 179,446 26,773 -- (26,773)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio: 5,257,711 1,764,964 872,277 1,817,349 945,072
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 9,998,952 (164,710) -- 42,515 42,515
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: 1,891,124 (1,285) -- (86,245) (86,245)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: 1,827,173 31,085 -- 192,560 192,560
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund:
International Portfolio: (4) 18,819,109 1,735,333 1,244,544 -- (1,244,544)
Policyholders' account values
- ----------------------------------------------------------------------------------------------------------------------------
Total Variable Life Account B $245,858,726 $14,470,978 $14,132,669 $16,987,228 $ 2,854,559
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Net Increase Net Assets
(Decrease) in ----------
Net Assets Resulting Beginning End
From Unit Transactions of Period of Period
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio: $ 3,065,638
Policyholders' account values 7,174,647 11,980,000
- ----------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio: (3) (4,049,682)
Policyholders' account values 3,827,848 --
- ----------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio: 11,519,359
Policyholders' account values 9,915,136 24,303,287
- ----------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 19,201,153
Policyholders' account values -- 19,061,872
- ----------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio: 7,241,839
Policyholders' account values -- 7,148,181
- ----------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio: 14,100,392
Policyholders' account values -- 14,311,110
- ----------------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund:
International Portfolio: (4) (11,259,868)
Policyholders' account values 10,615,255 --
- ----------------------------------------------------------------------------------------------------
Total Variable Life Account B $ 79,516,307 $223,173,883 $352,525,147
====================================================================================================
</TABLE>
(1) - Effective November 28, 1997, assets from this fund were transferred into
the PPI MFS Emerging Equity Portfolio.
(2) - Effective November 28, 1997, assets from this fund were transferred into
the PPI MFS Research Growth Portfolio.
(3) - Effective November 28, 1997, assets from this fund were transferred into
the Aetna Variable Encore Fund.
(4) - Effective November 28, 1997, assets from this fund were transferred into
the PPI Scudder International Growth Portfolio.
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
6. Condensed Financial Information
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units Policyholders'
-------- in Value of Outstanding Account Values
Beginning End of Accumulation at End at End
of Period Period Unit Period of Period
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP:
Aetna Vest $ 14.535 $ 16.480 13.38% 8,108.4 $ 133,629
Aetna Vest II 14.499 16.415 13.21% 4,820.1 79,120
Aetna Vest Plus 14.499 16.415 13.21% 152,300.6 2,499,946
Aetna Vest Estate Protector 14.559 16.507 13.38% 19,644.4 324,275
Aetna Vest Estate Protector II 10.038 11.404 13.61% 8,690.6 99,106
- -------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Aetna Vest 24.655 27.745 12.53% 101,885.7 2,826,794
Aetna Vest II 24.909 28.016 12.47% 204,589.9 5,731,870
Aetna Vest Plus 20.890 23.496 12.47% 506,450.0 11,899,396
Aetna Vest Estate Protector 15.716 17.703 12.64% 27,963.4 495,026
Aetna Vest Estate Protector II 11.233 12.678 12.87% 72,757.6 922,452
Corporate Specialty Market 18.186 20.455 12.47% 330,977.4 6,770,020
Corporate Specialty Market II - 12.667 - 81.2 (1) 1,028
NYSUT Individual Life 13.516 15.225 12.64% 993.4 15,125
- -------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP:
Aetna Vest 25.084 24.650 (1.73%) 238,723.8 5,884,656
Aetna Vest II 16.865 16.573 (1.73%) 62,569.1 1,036,982
Aetna Vest Plus 13.505 13.271 (1.73%) 318,545.3 4,227,550
Aetna Vest Estate Protector 12.035 11.845 (1.58%) 43,161.3 511,251
Aetna Vest Estate Protector II 10.614 10.470 (1.36%) 68,097.4 712,967
Corporate Specialty Market 13.035 12.810 (1.73%) 527,603.9 6,758,389
Corporate Specialty Market II - 10.457 - 15,480.3 (4) 161,885
NYSUT Individual Life 11.441 11.260 (1.58%) 355.9 4,008
- -------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP:
Aetna Vest 14.040 15.343 9.28% 3,856.3 59,167
Aetna Vest II 14.005 15.282 9.12% 3,676.4 56,182
Aetna Vest Plus 14.005 15.282 9.12% 142,144.1 2,172,206
Aetna Vest Estate Protector 14.063 15.368 9.28% 419.3 6,444
Aetna Vest Estate Protector II 10.244 11.217 9.50% 9,029.9 101,291
- -------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Aetna Vest 50.962 59.274 16.31% 1,158,596.7 68,674,147
Aetna Vest II 28.434 33.055 16.25% 739,037.9 24,428,941
Aetna Vest Plus 23.889 27.772 16.25% 2,074,042.4 57,600,081
Aetna Vest Estate Protector 17.070 19.874 16.42% 126,208.8 2,508,237
Aetna Vest Estate Protector II 10.966 12.793 16.66% 150,942.3 1,930,981
Corporate Specialty Market 21.581 25.089 16.25% 679,447.2 17,046,334
Corporate Specialty Market II - 12.781 - 2,764.0 (4) 35,327
NYSUT Individual Life 13.623 15.860 16.43% 1,801.2 28,568
- -------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP:
Corporate Specialty Market - 17.615 - 3,234.8 (2) 56,983
Corporate Specialty Market II - 17.226 - 62.9 (1) 1,084
- -------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Aetna Vest 17.044 20.975 23.06% 91,316.0 1,915,309
Aetna Vest II 17.044 20.975 23.06% 32,056.5 672,369
Aetna Vest Plus 17.044 20.975 23.06% 412,230.7 8,646,340
Aetna Vest Estate Protector 17.096 21.071 23.25% 74,181.7 1,563,077
Aetna Vest Estate Protector II 12.397 15.310 23.50% 190,679.2 2,919,241
Corporate Specialty Market 17.044 20.975 23.06% 210,675.0 4,418,818
Corporate Specialty Market II - 15.295 - 22,261.8 (4) 340,501
NYSUT Individual Life 15.850 19.535 23.25% 3,707.1 72,416
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
6. Condensed Financial Information
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units Policyholders'
-------- in Value of Outstanding Account Values
Beginning End of Accumulation at End at End
of Period Period Unit of Period of Period
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Legacy VP:
Aetna Vest $ 13.378 $ 14.206 6.19% 854.8 $ 12,144
Aetna Vest II 13.345 14.150 6.03% 949.2 13,431
Aetna Vest Plus 13.345 14.150 6.03% 60,327.0 853,620
Aetna Vest Estate Protector 13.400 14.230 6.19% 3,283.5 46,723
Aetna Vest Estate Protector II 10.379 11.044 6.41% 17,050.0 188,297
NYSUT Individual Life 11.902 12.639 6.19% 109.1 1,379
- -------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP:
Aetna Vest 18.074 18.803 4.03% 142,725.6 2,683,604
Aetna Vest II 13.211 13.744 4.03% 42,777.2 587,924
Aetna Vest Plus 12.416 12.917 4.03% 1,113,716.2 14,385,720
Aetna Vest Estate Protector 11.301 11.774 4.18% 66,839.9 786,966
Aetna Vest Estate Protector II 10.413 10.871 4.40% 128,032.1 1,391,821
Corporate Specialty Market 11.878 12.357 4.04% 1,497,529.1 18,505,645
Corporate Specialty Market II - 10.861 - 6,736.3 (2) 73,160
NYSUT Individual Life 10.849 11.304 4.19% 2,524.2 28,532
- -------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP:
Corporate Specialty Market 10.085 13.065 29.55% 48,446.2 632,957
Corporate Specialty Market II - 12.420 - 87.8 (1) 1,091
- -------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Corporate Specialty Market 12.266 14.521 18.39% 9,236.5 134,125
Corporate Specialty Market II - 13.658 - 72.8 (1) 995
- -------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Aetna Vest 15.238 16.041 5.27% 16,109.0 258,402
Aetna Vest II 15.238 16.041 5.27% 17,559.9 281,675
Aetna Vest Plus 15.238 16.041 5.27% 721,177.1 11,568,312
Aetna Vest Estate Protector 15.301 16.132 5.43% 118,968.5 1,919,142
Aetna Vest Estate Protector II 10.733 11.338 5.64% 115,816.5 1,313,121
Corporate Specialty Market 17.538 18.462 5.27% 875,042.6 16,155,452
Corporate Specialty Market II - 11.327 - 18,694.6 (5) 211,759
NYSUT Individual Life 13.031 13.739 5.43% 1,085.7 14,916
- -------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Corporate Specialty Market 19.002 25.856 36.07% 787,399.8 20,359,247
Corporate Specialty Market II - 17.930 - 59.3 (1) 1,063
- -------------------------------------------------------------------------------------------------------------------------
High Income Portfolio:
Corporate Specialty Market 9.588 10.271 7.12% 104,943.0 1,077,856
Corporate Specialty Market II - 9.902 - 102.2 (1) 1,012
- -------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio:
Corporate Specialty Market 13.859 19.568 41.19% 231,765.2 4,535,149
Corporate Specialty Market II - 15.111 - 71.8 (1) 1,085
- -------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Corporate Specialty Market 16.358 17.991 9.98% 96,286.7 1,732,320
Corporate Specialty Market II - 12.223 - 83.9 (1) 1,026
- -------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio:
Aetna Vest 18.229 22.425 23.02% 50,642.2 1,135,635
Aetna Vest II 18.229 22.425 23.02% 20,952.5 469,853
Aetna Vest Plus 18.229 22.425 23.02% 630,388.5 14,136,214
Aetna Vest Estate Protector 18.305 22.551 23.20% 78,555.6 1,771,520
Aetna Vest Estate Protector II 12.417 15.329 23.45% 131,432.8 2,014,695
Corporate Specialty Market 19.607 24.119 23.01% 385,619.2 9,300,909
Corporate Specialty Market II - 15.314 - 13,049.1 (4) 199,838
NYSUT Individual Life 15.355 18.918 23.20% 1,391.4 26,322
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
6. Condensed Financial Information
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units Policyholders'
-------- in Value of Outstanding Account Values
Beginning End of Accumulation at End at End
of Period Period Unit of Period of Period
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Janus Aspen Series:
Aggressive Growth Portfolio:
Aetna Vest $ 23.949 $ 53.447 123.17% 78,595.7 $ 4,200,721
Aetna Vest II 23.949 53.447 123.17% 36,544.0 1,953,171
Aetna Vest Plus 23.949 53.447 123.17% 615,554.6 32,899,806
Aetna Vest Estate Protector 14.569 32.562 123.50% 115,022.2 3,745,343
Aetna Vest Estate Protector II 12.855 28.789 123.95% 92,599.5 2,665,841
Corporate Specialty Market 17.969 40.102 123.17% 292,816.6 11,742,518
Corporate Specialty Market II - 28.762 - 8,727.2 (4) 251,013
NYSUT Individual Life 15.506 34.657 123.50% 88.4 3,063
- ---------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio:
Aetna Vest 22.446 28.168 25.49% 20,837.1 586,949
Aetna Vest II 22.621 28.388 25.50% 7,862.9 223,214
Aetna Vest Plus 22.435 28.156 25.50% 463,856.2 13,060,229
Aetna Vest Estate Protector 17.895 22.491 25.68% 39,932.2 898,116
Aetna Vest Estate Protector II 12.622 15.896 25.94% 136,489.4 2,169,638
Corporate Specialty Market 19.675 24.691 25.50% 207,597.6 5,125,875
Corporate Specialty Market II - 15.881 - 17,176.7 (4) 272,785
NYSUT Individual Life 15.198 19.102 25.68% 864.9 16,521
- ---------------------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Corporate Specialty Market - 11.019 - 6,104.4 (3) 67,265
Corporate Specialty Market II - 10.678 - 93.8 (1) 1,002
- ---------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Aetna Vest 24.316 34.664 42.55% 45,552.7 1,579,018
Aetna Vest II 24.294 34.632 42.55% 66,432.0 2,300,676
Aetna Vest Plus 24.260 34.583 42.55% 670,451.6 23,186,343
Aetna Vest Estate Protector 17.775 25.376 42.76% 90,466.0 2,295,685
Aetna Vest Estate Protector II 12.564 17.973 43.05% 132,777.4 2,386,410
Corporate Specialty Market 19.965 28.461 42.55% 83,369.6 2,372,762
Corporate Specialty Market II - 17.956 - 5,674.5 (5) 101,893
NYSUT Individual Life 15.384 21.964 42.77% 919.4 20,194
- ---------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Aetna Vest 25.260 41.127 62.81% 111,800.0 4,597,968
Aetna Vest II 25.267 41.138 62.81% 54,942.3 2,260,212
Aetna Vest Plus 25.235 41.087 62.82% 866,585.5 35,605,247
Aetna Vest Estate Protector 18.286 29.817 63.06% 133,793.7 3,989,387
Aetna Vest Estate Protector II 12.017 19.634 63.39% 175,254.1 3,441,022
Corporate Specialty Market 20.776 33.827 62.82% 468,018.3 15,831,874
Corporate Specialty Market II - 19.616 - 12,499.1 (4) 245,183
NYSUT Individual Life 14.465 23.587 63.06% 666.8 15,727
- ---------------------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust
Total Return Series:
Corporate Specialty Market - 11.518 - 897.9 (7) 10,343
Corporate Specialty Market II - 11.167 - 89.7 (1) 1,001
- ---------------------------------------------------------------------------------------------------------------------------
World Government Series:
Corporate Specialty Market - 10.192 - 97.3 (1) 992
Corporate Specialty Market II - 10.272 - 96.5 (1) 992
- ---------------------------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Fund:
Corporate Specialty Market - 19.578 - 37,648.5 (7) 737,069
Corporate Specialty Market II - 19.458 - 58.3 (1) 1,134
- ---------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund:
Aetna Vest 10.828 16.991 56.91% 530.2 9,008
Aetna Vest II - 16.990 - 80.4 (1) 1,366
Aetna Vest Plus 10.828 16.991 56.91% 28,329.2 481,330
Aetna Vest Estate Protector 10.842 17.038 57.14% 1,533.3 26,124
Aetna Vest Estate Protector II 11.082 17.450 57.46% 7,181.2 125,309
Corporate Specialty Market 10.550 17.971 70.34% 60.7 1,091
Corporate Specialty Market II - 17.532 - 62.2 (1) 1,091
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
6. Condensed Financial Information
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units Policyholder
-------- in Value of Outstanding Account Value
Beginning End of Accumulation at End at End
of Period Period Unit of Period of Period
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Oppenheimer Growth & Income Fund:
Corporate Specialty Market $ - $ 12.711 - 16,095.7 (4) $ 204,601
Corporate Specialty Market II - 12.033 - 8,980.1 (5) 108,060
- ----------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund:
Aetna Vest 10.027 10.208 1.80% 4,611.8 47,076
Aetna Vest II - 10.207 - 100.3 (1) 1,024
Aetna Vest Plus 10.027 10.208 1.80% 62,229.8 635,239
Aetna Vest Estate Protector 10.040 10.236 1.95% 18,761.9 192,046
Aetna Vest Estate Protector II 10.036 10.253 2.16% 32,613.6 334,376
Corporate Specialty Market - 10.480 - 95.5 (1) 1,001
Corporate Specialty Market II - 10.262 - 9,903.4 (4) 101,626
NYSUT Individual Life 10.040 10.236 1.96% 69.0 706
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Partners Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Aetna Vest 22.283 33.285 49.37% 55,607.9 1,850,914
Aetna Vest II 22.285 33.288 49.37% 23,443.9 780,405
Aetna Vest Plus 22.273 33.270 49.37% 595,667.2 19,817,897
Aetna Vest Estate Protector 13.899 20.793 49.60% 70,939.0 1,475,019
Aetna Vest Estate Protector II 11.576 17.352 49.90% 33,469.0 580,761
Corporate Specialty Market 18.326 27.375 49.38% 373,848.2 10,234,094
Corporate Specialty Market II - 17.339 - 66.4 (1) 1,152
NYSUT Individual Life 14.396 21.537 49.60% 68.3 1,471
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Aetna Vest 14.665 18.009 22.80% 53,119.5 956,611
Aetna Vest II 14.730 18.089 22.81% 22,767.3 411,846
Aetna Vest Plus 14.529 17.843 22.81% 490,083.9 8,744,344
Aetna Vest Estate Protector 11.161 13.727 22.99% 21,110.1 289,781
Aetna Vest Estate Protector II 11.518 14.194 23.23% 51,498.0 730,964
Corporate Specialty Market 13.288 16.318 22.81% 292,084.8 4,766,382
Corporate Specialty Market II - 14.182 - 74.7 (1) 1,060
NYSUT Individual Life 12.394 15.243 22.99% 29.9 456
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Aetna Vest 11.408 16.805 47.31% 3,672.2 61,712
Aetna Vest II 11.408 16.805 47.31% 76.1 1,279
Aetna Vest Plus 11.408 16.805 47.31% 118,377.4 1,989,331
Aetna Vest Estate Protector 11.422 16.851 47.53% 13,787.2 232,334
Aetna Vest Estate Protector II 11.699 17.294 47.83% 36,907.3 638,291
Corporate Specialty Market - 18.361 - 59.6 (1) 1,094
Corporate Specialty Market II - 17.491 - 62.6 (1) 1,094
NYSUT Individual Life 11.422 16.851 47.53% 213.3 3,595
- ----------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Aetna Vest 18.503 29.019 56.83% 101,117.4 2,934,330
Aetna Vest II 18.389 28.840 56.83% 29,315.3 845,458
Aetna Vest Plus 18.286 28.679 56.84% 510,350.3 14,636,580
Aetna Vest Estate Protector 13.907 21.844 57.07% 44,976.9 982,475
Aetna Vest Estate Protector II 11.198 17.624 57.39% 11,999.5 211,482
Corporate Specialty Market 15.323 24.031 56.83% 191,821.0 4,609,695
Corporate Specialty Market II - 17.608 - 13,545.9 (6) 238,514
- ----------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Aetna Vest 11.539 13.975 21.11% 8,785.9 122,779
Aetna Vest II 11.539 13.974 21.10% 149.0 2,081
Aetna Vest Plus 11.539 13.975 21.11% 107,827.6 1,506,845
Aetna Vest Estate Protector 11.553 14.013 21.30% 4,053.9 56,808
Aetna Vest Estate Protector II 11.839 14.388 21.53% 47,493.8 683,338
Corporate Specialty Market - 15.481 - 2,040.5 (6) 31,590
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Aetna Life Insurance and Annuity Company Variable Life Account B
Notes to Financial Statements -- December 31, 1999 (continued):
6. Condensed Financial Information
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units Policyholders'
-------- in Value of Outstanding Account Values
Beginning End of Accumulation at End at End
of Period Period Unit of Period of Period
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Corporate Specialty Market II $ - $ 14.536 - 72.3 (1) $1,052
NYSUT Individual Life 11.553 14.013 21.29% 54.8 768
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) - Reflects seed money. No funds have been received for this option.
(2) - Reflects less than a full year of activity. Funds were first received in
this option during January 1999.
(3) - Reflects less than a full year of activity. Funds were first received in
this option during February 1999.
(4) - Reflects less than a full year of activity. Funds were first received in
this option during March 1999.
(5) - Reflects less than a full year of activity. Funds were first received in
this option during April 1999.
(6) - Reflects less than a full year of activity. Funds were first received in
this option during October 1999.
(7) - Reflects less than a full year of activity. Funds were first received in
this option during December 1999.
<PAGE>
Report of Ernst & Young LLP. Independent Auditors
Board of Directors of The Lincoln National Life Insurance Company
and
Contract Owners of Aetna Life Insurance and Annuity Company Variable Life
Account B
We have audited the accompanying statement of assets and liabilities of Aetna
Life Insurance and Annuity Company Variable Life Account B (the "Account")
(comprised of the Aetna Ascent VP, Aetna Balanced VP, Inc., Aetna Bond VP,
Aetna Crossroads VP, Aetna Growth and Income VP, Aetna Growth VP, Aetna Index
Plus Large Cap VP, Aetna Legacy VP, Aetna Money Market VP, Aetna Small Company
VP, Aetna Value Opportunity VP, Fidelity Investments Variable Insurance
Products Fund Equity-Income Portfolio, Fidelity Investments Variable Insurance
Products Fund Growth Portfolio, Fidelity Investments Variable Insurance
Products Fund High Income Portfolio, Fidelity Investments Variable Insurance
Products Fund Overseas Portfolio, Fidelity Investments Variable Insurance
Products Fund II Asset Manager Portfolio, Fidelity Investments Variable
Insurance Products Fund II Contrafund Portfolio, Janus Aspen Series Aggressive
Growth Portfolio, Janus Aspen Series Balanced Portfolio, Janus Aspen Series
Flexible Income Portfolio, Janus Aspen Series Growth Portfolio, Janus Aspen
Series Worldwide Growth Portfolio, MFS Variable Insurance Trust Total Return
Series, MFS Variable Insurance Trust World Government Series, Oppenheimer Funds
Aggressive Growth Fund, Oppenheimer Funds Global Securities Fund, Oppenheimer
Funds Growth & Income Fund, Oppenheimer Funds Strategic Bond Fund, Portfolio
Partners Inc. (PPI) MFS Emerging Equities Portfolio, Portfolio Partners Inc.
(PPI) MFS Research Growth Portfolio, Portfolio Partners Inc. (PPI) MFS Value
Equity Portfolio, Portfolio Partners Inc. (PPI) Scudder International Growth
Portfolio, and Portfolio Partners Inc. (PPI) T. Rowe Price Growth Equity
Portfolio subaccounts), as of December 31, 1999, and the related statement of
operations and changes in net assets for the year then ended. These financial
statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The accompanying financial statements of the Account for the years
ended December 31, 1998 and 1997, were audited by other auditors whose report
dated February 26, 1999, expressed an unqualified opinion on those financial
statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards 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.
Our procedures included confirmation of investments owned as of December 31,
1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting the Aetna Life Insurance and Annuity Company Variable
Life Account B at December 31, 1999, and the results of their operations and
changes in their net assets for the year then ended, in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Fort Wayne, Indiana
February 28, 2000
