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CONSECO VARIABLE INSURANCE COMPANY
ANNUAL REPORT
TO CONTRACT OWNERS
December 31, 1999
Conseco Variable Annuity Account C
<PAGE>
ANNUAL REPORT TO CONTRACT OWNERS
TABLE OF CONTENTS
DECEMBER 31, 1999
================================================================================
CONSECO VARIABLE ANNUITY ACCOUNT C PAGE
Statement of Assets and Liabilities as of December 31, 1999............. 2
Statements of Operations and Statements of Changes in Net Assets
for the Year Ended December 31, 1999 ................................. 6
Statements of Operations and Statements of Changes in Net Assets
for the Year Ended December 31, 1998.................................. 12
Notes to Financial Statements........................................... 18
Report of Independent Accountants....................................... 20
1
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
==============================================================================================================
NET ASSET
SHARES COST VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
The Alger American Fund:
Growth Portfolio ........................................... 43,028.2 $ 2,389,606 $ 2,770,153
Leveraged AllCap Portfolio ................................. 97,531.3 3,916,067 5,653,887
MidCap Growth Portfolio .................................... 6,756.2 183,851 217,752
Small Capitalization Portfolio ............................. 60,530.3 2,553,816 3,338,248
American Century Variable Portfolios, Inc:
Income and Growth Fund ..................................... 28,556.7 205,620 228,454
International Fund ......................................... 24,844.9 205,256 310,561
Value Fund ................................................. 63,197.1 414,438 376,022
Berger Institutional Products Trust:
100 Fund ................................................... 22,673.8 281,260 435,790
Growth and Income Fund ..................................... 21,378.5 373,775 565,461
Small Company Growth Fund .................................. 17,680.6 251,273 415,670
BIAM International Fund .................................... 189.6 2,401 2,774
Conseco Series Trust:
Balanced Portfolio ......................................... 1,243,454.6 17,185,347 18,217,616
Equity Portfolio ........................................... 9,951,546.8 213,879,824 230,683,998
Fixed Income Portfolio ..................................... 1,345,328.2 13,322,804 12,626,577
Government Securities Portfolio ............................ 116,636.0 1,389,935 1,278,451
Money Market Portfolio ..................................... 9,963,869.7 9,963,870 9,963,870
The Dreyfus Socially Responsible Growth Fund, Inc ........... 124,252.7 3,988,409 4,854,553
Dreyfus Stock Index Fund .................................... 641,747.1 20,046,678 24,675,176
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio ................................ 2,689.5 65,147 72,403
International Value Portfolio .............................. 449.7 7,051 7,047
Federated Insurance Series:
High Income Bond Fund II ................................... 73,383.1 775,518 751,443
International Equity Fund II ............................... 15,649.5 296,590 432,552
Utility Fund II ............................................ 51,589.3 727,373 740,307
Invesco Variable Investment Funds, Inc:
Equity Income Fund ......................................... 680.8 13,729 14,303
High Yield Fund ............................................ 10,671.7 124,829 122,832
Janus Aspen Series:
Aggressive Growth Portfolio ................................ 177,897.4 6,077,262 10,618,695
Growth Portfolio ........................................... 344,062.6 8,743,478 11,577,707
Worldwide Growth Portfolio ................................. 674,395.7 18,220,755 32,202,396
Lazard Retirement Series, Inc:
Equity Portfolio ........................................... 100.5 1,179 1,159
Small Cap Portfolio ........................................ 4.0 37 40
Lord Abbett Series Fund, Inc:
Growth and Income Portfolio ................................ 689.8 15,224 15,285
Mitchell Hutchins Series Trust:
Growth and Income Portfolio ................................ 453.2 6,562 7,405
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio ............................. 6,491.8 85,354 85,951
Partners Portfolio ......................................... 29,353.0 548,008 576,493
Strong Variable Insurance Funds, Inc:
Mid Cap Growth Fund II ..................................... 11,099.6 227,828 337,094
Strong Opportunity Fund II, Inc ............................. 11,435.0 258,657 297,196
Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund ........................................ 3,775.0 42,757 40,355
Worldwide Emerging Markets Fund ............................ 18,605.0 161,836 265,307
Worldwide Hard Assets Fund ................................. 51,097.4 527,213 560,027
Worldwide Real Estate Fund ................................. 1,345.6 12,381 12,313
- --------------------------------------------------------------------------------------------------------------
Total assets ............................................ 375,353,323
Liabilities:
Net amount due to Conseco Variable Insurance Company ........ 557,329
- --------------------------------------------------------------------------------------------------------------
Net assets (Note 6) ..................................... $374,795,994
==============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
=============================================================================================================
NET ASSET
SHARES COST VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net assets attributable to:
Contract owners' deferred annuity reserves:
The Alger American Fund:
Growth Portfolio........................................ 1,184,056.2 $2.337604 $2,767,855
Leveraged AllCap Portfolio ............................. 1,092,625.9 5.109085 5,582,319
Midcap Growth Portfolio................................. 107,741.1 2.019311 217,563
Small Capitalization Portfolio ......................... 1,477,791.4 2.256980 3,335,346
American Century Variable Portfolios, Inc:
Income and Growth Fund.................................. 180,072.1 1.267565 228,253
International Fund...................................... 148,279.0 2.092737 310,309
Value Fund.............................................. 300,067.3 1.252172 375,736
Berger Institutional Products Trust:
100 Fund................................................ 225,561.6 1.930345 435,412
Growth and Income Fund.................................. 237,838.2 2.375451 564,973
Small Company Growth Fund .............................. 158,133.4 2.626310 415,307
BIAM International Fund................................. 1,907.4 1.454682 2,775
Conseco Series Trust:
Balanced Portfolio ..................................... 6,250,753.5 2.874258 17,966,277
Equity Portfolio
Qualified ............................................ 6,177,794.7 36.036177 222,624,107
Nonqualified ......................................... 154,728.4 28.525694 4,413,735
Fixed Income Portfolio
Qualified ............................................ 2,139,411.3 5.673933 12,138,877
Nonqualified ......................................... 69,191.3 5.451644 377,206
Government Securities Portfolio ........................ 989,802.9 1.290459 1,277,300
Money Market Portfolio
Qualified ............................................ 3,343,310.9 2.930114 9,796,281
Nonqualified ......................................... 18,871.5 2.930112 55,295
The Dreyfus Socially Responsible Growth Fund, Inc ....... 1,607,963.6 2.963507 4,765,212
Dreyfus Stock Index Fund ................................ 8,745,043.0 2.808320 24,558,883
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio ............................ 57,394.8 1.260430 72,342
International Value Portfolio .......................... 5,892.4 1.194910 7,041
Federated Insurance Series:
High Income Bond Fund II................................ 521,674.5 1.404876 732,888
International Equity Fund II ........................... 158,076.2 2.734170 432,207
Utility Fund II ........................................ 417,936.4 1.769836 739,679
Invesco Variable Investment Funds, Inc:
Equity Income Fund...................................... 12,179.6 1.173420 14,292
High Yield Fund......................................... 119,098.6 1.030465 122,727
Janus Aspen Series:
Aggressive Growth Portfolio ............................ 2,363,771.3 4.488515 10,609,823
Growth Portfolio ....................................... 3,595,530.3 3.192835 11,479,937
Worldwide Growth Portfolio ............................. 8,203,822.8 3.897775 31,976,652
Lazard Retirement Series, Inc:
Equity Portfolio........................................ 1,021.9 1.133077 1,158
Small Cap Portfolio..................................... 44.2 0.892662 39
Lord Abbett Series Fund, Inc:
Growth and Income Portfolio............................. 13,117.1 1.164236 15,271
Mitchell Hutchins Series Trust:
Growth and Income Portfolio ............................ 6,824.5 1.084118 7,399
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio ......................... 79,073.7 1.086053 85,878
Partners Portfolio...................................... 422,449.4 1.363460 575,993
Strong Variable Insurance Funds, Inc:
Mid Cap Growth Fund II.................................. 110,428.3 3.050073 336,814
Strong Opportunity Fund II, Inc ......................... 160,379.9 1.851524 296,947
Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund .................................... 37,695.5 1.069651 40,321
Worldwide Emerging Markets Fund ........................ 253,897.1 1.044064 265,085
Worldwide Hard Assets Fund.............................. 556,013.0 1.006344 559,540
Worldwide Real Estate Fund ............................. 14,854.6 0.828169 12,302
- -------------------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' deferred
annuity reserves...................................... $370,593,356
=============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
DECEMBER 31, 1999
================================================================================
REPORTED
VALUE
- --------------------------------------------------------------------------------
Net assets attributable to contract owners' deferred
annuity reserves (from page 3) $370,593,356
- --------------------------------------------------------------------------------
Contract owners' annuity payment reserves:
Alger American Leveraged AllCap Portfolio..................... 70,328
Conseco Series Trust:
Balanced Portfolio
Qualified................................................... 205,231
Equity Income Portfolio
Qualified .................................................. 3,281,836
Nonqualified ............................................... 30,106
Fixed Income Portfolio
Qualified .................................................. 106,231
Money Market Portfolio
Qualified .................................................. 24,951
The Dreyfus Socially Responsible Growth Fund, Inc ............. 90,149
Dreyfus Stock Index Fund ...................................... 89,012
Federated High Income Bond Fund II............................. 17,274
Janus Aspen Growth Portfolio .................................. 97,321
Janus Aspen Worldwide Growth Portfolio ........................ 190,199
- --------------------------------------------------------------------------------
Net assets attributable to contract owners' annuity
payment reserves... 4,202,638
- --------------------------------------------------------------------------------
Net assets .............................................. $374,795,994
================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
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THIS PAGE INTENTIONALLY LEFT BLANK.
5
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
----------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ..................... $128,480 $ 173,044 $15,904 $313,672 $ 27
Expenses:
Mortality and expense risk fees .................................... 17,060 31,692 1,384 25,908 1,856
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ................................... 111,420 141,352 14,520 287,764 (1,829)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ............................................. 111,748 558,078 10,857 50,558 2,160
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .............................. 295,980 1,309,281 19,785 638,612 8,273
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ............. 407,728 1,867,359 30,642 689,170 10,433
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ........ $519,148 $2,008,711 $45,162 $976,934 $ 8,604
====================================================================================================================================
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
----------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................... $ 111,420 $ 141,352 $ 14,520 $ 287,764 $ (1,829)
Net realized gains (losses) on sales of investments
in portfolio shares ........................................... 111,748 558,078 10,857 50,558 2,160
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ............................ 295,980 1,309,281 19,785 638,612 8,273
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ....... 519,148 2,008,711 45,162 976,934 8,604
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................. 536,875 709,993 59,860 411,916 54,378
Contract redemptions ........................................... (245,853) (236,059) (2,797) (216,597) (5,265)
Net transfers .................................................. 1,364,778 1,780,573 (17,279) (236,971) 71,174
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ......................... 1,655,800 2,254,507 39,784 (41,652) 120,287
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets .................... 2,174,948 4,263,218 84,946 935,282 128,891
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................... 592,907 1,389,429 132,617 2,400,064 99,362
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ......................... $ 2,767,855 $ 5,652,647 $ 217,563 $ 3,335,346 $ 228,253
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
===========================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- -------------------------- ----------------------------------------------------- -----------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 16,781 $ 67 $ -- $ -- $ 15 $3,303,327 $64,761,215 $ 890,651
1,617 2,993 3,068 3,685 2,143 15 160,412 1,193,037 103,858
- ---------------------------------------------------------------------------------------------------------------------------
(1,617) 13,788 (3,001) (3,685) (2,143) -- 3,142,915 63,568,178 786,793
- ---------------------------------------------------------------------------------------------------------------------------
3,093 (24,861) 7,460 23,544 11,746 (1,677) 419,126 10,008,486 (184,733)
104,334 (35,009) 132,558 168,678 164,105 373 729,573 3,199,282 (792,858)
- ---------------------------------------------------------------------------------------------------------------------------
107,427 (59,870) 140,018 192,222 175,851 (1,304) 1,148,699 13,207,768 (977,591)
- ---------------------------------------------------------------------------------------------------------------------------
$ 105,810 $(46,082) $ 137,017 $ 188,537 $ 173,708 $(1,304) $4,291,614 $76,775,946 $(190,798)
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
==============================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- --------------------------- ---------------------------------------------------- --------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (1,617) $ 13,788 $ (3,001) $ (3,685) $ (2,143) $ 00 $ 3,142,915 $ 63,568,178 $ 786,793
3,093 (24,861) 7,460 23,544 11,746 (1,677) 419,126 10,008,486 (184,733)
104,334 (35,009) 132,558 168,678 164,105 373 729,573 3,199,282 (792,858)
- ------------------------------------------------------------------------------------------------------------------------------
105,810 (46,082) 137,017 188,537 173,708 (1,304) 4,291,614 76,775,946 (190,798)
- ------------------------------------------------------------------------------------------------------------------------------
34,926 66,180 46,621 103,748 42,921 4,918 1,850,837 9,915,752 948,729
(34,093) (797) (13,320) (77,541) (13,080) 00 (1,231,243) (19,376,258) (1,468,531)
68,072 214,621 8,401 176,231 96,668 (839) (20,639,749) (1,366,270)
68,905 280,004 41,702 202,438 126,509 4,079 (2,411,288) (30,100,255) (1,886,072)
- ------------------------------------------------------------------------------------------------------------------------------
174,715 233,922 178,719 390,975 300,217 2,775 1,880,326 46,675,691 (2,076,870)
- ------------------------------------------------------------------------------------------------------------------------------
135,594 141,814 256,693 173,998 115,090 00 16,291,182 183,674,093 14,699,184
- ------------------------------------------------------------------------------------------------------------------------------
$ 310,309 $ 375,736 $ 435,412 $ 564,973 $ 415,307 $ 2,775 $ 18,171,508 $ 230,349,784 $ 12,622,314
==============================================================================================================================
</TABLE>
7
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
------------------------ ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ................ $ 107,961 $ 361,663 $ 161,066 $ 411,370 $ 699
Expenses:
Mortality and expense risk fees ............................... 13,829 74,500 31,289 198,788 420
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .............................. 94,132 287,163 129,777 212,582 279
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares .......................................... (39,974) -- 121,526 1,264,839 3,050
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ........................... (103,269) -- 661,999 2,084,671 4,512
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........... (143,243) -- 783,525 3,349,510 7,562
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ...... $ (49,111) $ 287,163 $ 913,302 $3,562,092 $ 7,841
===================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
------------------------ ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................... $ 94,132 $ 287,163 $ 129,777 $ 212,582 $ 279
Net realized gains (losses) on sales of investments
in portfolio shares ........................................... (39,974) -- 121,526 1,264,839 3,050
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ............................ (103,269) -- 661,999 2,084,671 4,512
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ....... (49,111) 287,163 913,302 3,562,092 7,841
- -----------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................. 68,158 1,321,953 980,324 4,113,547 26,306
Contract redemptions ........................................... (205,996) (2,655,856) (140,733) (1,780,271) --
Net transfers .................................................. 525,195 5,473,590 1,256,049 4,598,908 18,846
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ......................... 387,357 4,139,687 2,095,640 6,932,184 45,152
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ............................... 338,246 4,426,850 3,008,942 10,494,276 52,993
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................... 939,054 5,449,677 1,846,419 14,153,619 19,349
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ......................... $1,277,300 $9,876,527 $4,855,361 $24,647,895 $ 72,342
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT INVESCO VARIABLE
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- -------------- ---------------------------------------- ---------------------- ---------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 497 $ 53,015 $ 6,865 $ 52,867 $ 185 $ 7,078 $ 170,221 $ 53,182 $ 37,051
18 7,373 2,752 7,442 237 652 49,307 69,843 211,547
- ------------------------------------------------------------------------------------------------------------------------------------
479 45,642 4,113 45,425 (52) 6,426 120,914 (16,661) (174,496)
- ------------------------------------------------------------------------------------------------------------------------------------
-- (19,531) 57,813 8,985 4,665 41 862,750 671,059 803,052
(4) (23,518) 133,905 (48,438) (739) (816) 3,700,827 2,118,576 11,240,473
- ------------------------------------------------------------------------------------------------------------------------------------
(4) (43,049) 191,718 (39,453) 3,926 (775) 4,563,577 2,789,635 12,043,525
- ------------------------------------------------------------------------------------------------------------------------------------
$ 475 $ 2,593 $195,831 $ 5,972 $ 3,874 $ 5,651 $ 4,684,491 $ 2,772,974 $ 11,869,029
====================================================================================================================================
<CAPTION>
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT INVESCO VARIABLE
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- -------------- ---------------------------------------- ---------------------- ---------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 479 $ 45,642 $ 4,113 $ 45,425 $ (52) $ 6,426 $ 120,914 $ (16,661) $ (174,496)
-- (19,531) 57,813 8,985 4,665 41 862,750 671,059 803,052
(4) (23,518) 133,905 (48,438) (739) (816) 3,700,827 2,118,576 11,240,473
- ------------------------------------------------------------------------------------------------------------------------------------
475 2,593 195,831 5,972 3,874 5,651 4,684,491 2,772,974 11,869,029
- ------------------------------------------------------------------------------------------------------------------------------------
1,121 248,365 46,235 160,218 6,527 17,301 867,225 1,432,168 3,759,132
-- (131,357) (40,030) (130,590) (39,449) (169) (850,365) (605,936) (1,445,920)
5,445 72,129 433 (48,512) 7,531 78,290 2,922,201 4,119,809 2,721,386
- ------------------------------------------------------------------------------------------------------------------------------------
6,566 189,137 6,638 (18,884) (25,391) 95,422 2,939,061 4,946,041 5,034,598
- ------------------------------------------------------------------------------------------------------------------------------------
7,041 191,730 202,469 (12,912) (21,517) 101,073 7,623,552 7,719,015 16,903,627
- ------------------------------------------------------------------------------------------------------------------------------------
-- 558,432 229,738 752,591 35,809 21,654 2,986,271 3,858,243 15,263,224
- ------------------------------------------------------------------------------------------------------------------------------------
$ 7,041 $750,162 $432,207 $739,679 $ 14,292 $122,727 $ 10,609,823 $ 11,577,258 $ 32,166,851
====================================================================================================================================
</TABLE>
9
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
---------- ---------- ---------- ---------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
---------- ---------- ---------- ---------- ----------
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ................ $ 38 $ -- $ 1,204 $ -- $ 13,707
Expenses:
Mortality and expense risk fees ............................... 5 35 234 60 2,419
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .............................. 33 (35) 970 (60) 11,288
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ........................................ -- 403 2,442 5 (9,505)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ......................... (20) (359) (434) 687 (453)
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........ (20) 44 2,008 692 (9,958)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 13 $ 9 $ 2,978 $ 632 $ 1,330
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
---------- ---------- ---------- ---------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
---------- ---------- ---------- ---------- ----------
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) .................................. $ 33 $ (35) $ 970 $ (60) $ 11,288
Net realized gains (losses) on sales of investments
in portfolio shares .......................................... -- 403 2,442 5 (9,505)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ........................... (20) (359) (434) 687 (453)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ...... 13 9 2,978 632 1,330
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................ 470 23 2,114 1,597 18,533
Contract redemptions .......................................... -- -- (2,618) -- (1,945)
Net transfers ................................................. 675 (3,687) (1,174) (77) (176,039)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ........................ 1,145 (3,664) (1,678) 1,520 (159,451)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets ................... 1,158 (3,655) 1,300 2,152 (158,121)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ................................... -- 3,694 13,971 5,247 243,999
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ........................ $ 1,158 $ 39 $ 15,271 $ 7,399 $ 85,878
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ---------- -------- -----------------------------------------------------------
STRONG
MID CAP OPPORTUNITY EMERGING HARD REAL COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE TOTAL
- ------------------------------------------------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 14,677 $ 99 $ 15,306 $ 2,318 $ -- $ 2,415 $ 58 $ 71,076,725
5,325 1,397 2,006 403 1,425 2,876 114 2,233,024
- ------------------------------------------------------------------------------------------------------------------- ---------------
9,352 (1,298) 13,300 1,915 (1,425) (461) (56) 68,843,701
- ------------------------------------------------------------------------------------------------------------------- ---------------
(6,481) 3,848 15,250 285 (3,381) (42,065) 17 14,694,678
26,253 104,993 29,993 (5,860) 121,754 100,379 (232) 26,087,847
- ------------------------------------------------------------------------------------------------------------------- ---------------
19,772 108,841 45,243 (5,575) 118,373 58,314 (215) 40,782,525
- ------------------------------------------------------------------------------------------------------------------- ---------------
$ 29,124 $107,543 $ 58,543 $ (3,660) $116,948 $ 57,853 $ (271) $109,626,226
=================================================================================================================== ===============
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ---------- -------- -----------------------------------------------------------
STRONG
MID CAP OPPORTUNITY EMERGING HARD REAL COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE TOTAL
- ------------------------------------------------------------------------------------------------------------------- ---------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 9,352 $ (1,298) $ 13,300 $ 1,915 $ (1,425) $ (461) $ (56) $ 68,843,701
(6,481) 3,848 15,250 285 (3,381) (42,065) 17 14,694,678
26,253 104,993 29,993 (5,860) 121,754 100,379 (232) 26,087,847
- ------------------------------------------------------------------------------------------------------------------- ---------------
29,124 107,543 58,543 (3,660) 116,948 57,853 (271) 109,626,226
- ------------------------------------------------------------------------------------------------------------------- ---------------
166,393 30,192 70,611 13,252 18,011 24,652 382 28,182,464
(29,377) (3,003) (54,554) (5,053) (2,937) (1,281) -- (31,048,874)
(21,587) (33,708) 98,488 (354) 39,382 311,470 9,394 462,611
- ------------------------------------------------------------------------------------------------------------------- ---------------
115,429 (6,519) 114,545 7,845 54,456 334,841 9,776 (2,403,799)
- ------------------------------------------------------------------------------------------------------------------- ---------------
144,553 101,024 173,088 4,185 171,404 392,694 9,505 107,222,427
- ------------------------------------------------------------------------------------------------------------------- ---------------
431,440 235,790 123,859 36,136 93,681 166,846 2,797 267,573,567
- ------------------------------------------------------------------------------------------------------------------- ---------------
$ 575,993 $336,814 $296,947 $ 40,321 $265,085 $559,540 $ 12,302 $374,795,994
- ------------------------------------------------------------------------------------------------------------------- ---------------
</TABLE>
11
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
-------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ................. $ 26,144 $ 36,253 $ 6,544 $ 270,282 $ 485
Expenses:
Mortality and expense risk fees ................................ 2,618 9,102 798 20,373 205
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ............................... 23,526 27,151 5,746 249,909 280
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ......................................... 7,619 80,329 (2,335) 36,865 (245)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .......................... 86,212 334,099 15,345 30,953 14,561
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ......... 93,831 414,428 13,010 67,818 14,316
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations .... $ 117,357 $ 441,579 $ 18,756 $ 317,727 $ 14,596
====================================================================================================================================
<CAPTION>
====================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
-------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................... $ 23,526 $ 27,151 $ 5,746 $ 249,909 $ 280
Net realized gains (losses) on sales of investments
in portfolio shares .......................................... 7,619 80,329 (2,335) 36,865 (245)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ........................... 86,212 334,099 15,345 30,953 14,561
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ....... 117,357 441,579 18,756 317,727 14,596
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................. 83,527 169,533 22,749 450,527 34,949
Contract redemptions ........................................... (5,654) (126,978) (2,059) (716,237) --
Net transfers .................................................. 252,392 184,203 80,365 101,839 49,817
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ......................... 330,265 226,758 101,055 (163,871) 84,766
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets .................... 447,622 668,337 119,811 153,856 99,362
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................... 145,285 721,092 12,806 2,246,208 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year .................................. $ 592,907 $1,389,429 $ 132,617 $2,400,064 $ 99,362
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
----------------------- ------------------------------------------------- --------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,313 $ 5,413 $ 565 $ 1,005 $ 46 $ -- $ 1,153,158 $ 15,752,727 $ 1,035,769
937 1,231 1,184 956 517 31 154,368 1,178,671 111,522
- ------------------------------------------------------------------------------------------------------------------------------------
376 4,182 (619) 49 (471) (31) 998,790 14,574,056 924,247
- ------------------------------------------------------------------------------------------------------------------------------------
1,818 (3,973) 684 2,512 (318) 373 340,355 7,214,092 39,407
975 (3,479) 24,584 23,975 382 -- (29,185) 3,784,130 (170,505)
- ------------------------------------------------------------------------------------------------------------------------------------
2,793 (7,452) 25,268 26,487 64 373 311,170 10,998,222 (131,098)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,169 $ (3,270) $ 24,649 $ 26,536 $ (407) $ 342 $ 1,309,960 $ 25,572,278 $ 793,149
====================================================================================================================================
<CAPTION>
====================================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
----------------------- ------------------------------------------------- --------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 376 $ 4,182 $ (619) $ 49 $ (471) $ (31) $ 998,790 $ 14,574,056 $ 924,247
1,818 (3,973) 684 2,512 (318) 373 340,355 7,214,092 39,407
975 (3,479) 24,584 23,975 382 -- (29,185) 3,784,130 (170,505)
- ------------------------------------------------------------------------------------------------------------------------------------
3,169 (3,270) 24,649 26,536 (407) 342 1,309,960 25,572,278 793,149
- ------------------------------------------------------------------------------------------------------------------------------------
21,242 36,363 104,218 32,961 25,129 (33) 2,454,610 12,980,634 1,173,981
(45) (273) -- (3,854) (1,462) -- (1,184,970) (24,815,715) (3,238,373)
111,123 85,483 79,944 39,965 89,153 (3,309) (401,921) (20,876,437) 57,978
- ------------------------------------------------------------------------------------------------------------------------------------
132,320 121,573 184,162 69,072 112,820 (3,342) 867,719 (32,711,518) (2,006,414)
- ------------------------------------------------------------------------------------------------------------------------------------
135,489 118,303 208,811 95,608 112,413 (3,000) 2,177,679 (7,139,240) (1,213,265)
- ------------------------------------------------------------------------------------------------------------------------------------
105 23,511 47,882 78,390 2,677 3,000 14,113,503 190,813,333 15,912,449
- ------------------------------------------------------------------------------------------------------------------------------------
$135,594 $141,814 $256,693 $173,998 $115,090 $ -- $16,291,182 $183,674,093 $14,699,184
====================================================================================================================================
</TABLE>
13
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
------------------------ ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ................ $ 48,886 $ 255,531 $ 67,412 $ 152,478 $ 91
Expenses:
Mortality and expense risk fees ............................... 8,378 49,938 11,421 90,857 46
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .............................. 40,508 205,593 55,991 61,621 45
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ........................................ 17,349 -- 73,930 502,333 --
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ......................... (14,738) -- 160,015 1,688,088 2,744
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........ 2,611 -- 233,945 2,190,421 2,744
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ... $ 43,119 $ 205,593 $ 289,936 $2,252,042 $ 2,789
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
------------------------ ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................... $ 40,508 $ 205,593 $ 55,991 $ 61,621 $ 45
Net realized gains (losses) on sales of investments
in portfolio shares ........................................... 17,349 -- 73,930 502,333 --
Net change in unrealized appreciation
(depreciation) of investments in portfolio shares ............. (14,738) -- 160,015 1,688,088 2,744
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ....... 43,119 205,593 289,936 2,252,042 2,789
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................. 68,785 280,659 495,636 2,668,744 398
Contract redemptions ........................................... (111,079) (1,403,691) (98,716) (253,677) --
Net transfers .................................................. 326,004 1,940,167 513,868 3,880,194 16,162
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ......................... 283,710 817,135 910,788 6,295,261 16,560
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets .................... 326,829 1,022,728 1,200,724 8,547,303 19,349
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................. 612,225 4,426,949 645,695 5,606,316 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year .................................. $ 939,054 $5,449,677 $1,846,419 $14,153,619 $19,349
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT INVESCO
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
-------- ------------------------------------ ---------------------- ----------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 6,718 $ 198 $ 29,269 $ 1,814 $ 2,253 $ -- $ 157,855 $ 464,175
-- 3,099 2,125 5,388 120 54 21,327 25,410 120,229
- ------------------------------------------------------------------------------------------------------------------------------------
-- 3,619 (1,927) 23,881 1,694 2,199 (21,327) 132,445 343,946
- ------------------------------------------------------------------------------------------------------------------------------------
-- 5,201 46,233 44,535 1 (4) 53,509 187,231 728,557
-- (7,710) (8,218) 8,673 1,313 (1,181) 657,242 507,794 1,763,273
- ------------------------------------------------------------------------------------------------------------------------------------
-- (2,509) 38,015 53,208 1,314 (1,185) 710,751 695,025 2,491,830
- ------------------------------------------------------------------------------------------------------------------------------------
$ -- $ 1,110 $ 36,088 $ 77,089 $ 3,008 $ 1,014 $ 689,424 $ 827,470 $ 2,835,776
====================================================================================================================================
<CAPTION>
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT INVESCO
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
-------- ------------------------------------ ---------------------- ----------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 3,619 $ (1,927) $ 23,881 $ 1,694 $ 2,199 $ (21,327) $ 132,445 $ 343,946
-- 5,201 46,233 44,535 1 (4) 53,509 187,231 728,557
-- (7,710) (8,218) 8,673 1,313 (1,181) 657,242 507,794 1,763,273
- ------------------------------------------------------------------------------------------------------------------------------------
-- 1,110 36,088 77,089 3,008 1,014 689,424 827,470 2,835,776
- ------------------------------------------------------------------------------------------------------------------------------------
-- 130,446 36,964 101,816 -- 8,399 314,457 575,858 3,035,033
-- (31,009) (2,387) (16,382) -- -- (81,251) (119,797) (2,091,287)
-- 316,153 17,561 283,497 32,801 12,241 330,898 862,739 2,193,731
- ------------------------------------------------------------------------------------------------------------------------------------
-- 415,590 52,138 368,931 32,801 20,640 564,104 1,318,800 3,137,477
- ------------------------------------------------------------------------------------------------------------------------------------
-- 416,700 88,226 446,020 35,809 21,654 1,253,528 2,146,270 5,973,253
- ------------------------------------------------------------------------------------------------------------------------------------
-- 141,732 141,512 306,571 -- -- 1,732,743 1,711,973 9,289,971
- ------------------------------------------------------------------------------------------------------------------------------------
$ -- $558,432 $229,738 $752,591 $ 35,809 $ 21,654 $ 2,986,271 $ 3,858,243 $15,263,224
====================================================================================================================================
</TABLE>
15
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
---------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares ................. $ -- $ 1 $ 868 $ 365 $ 156
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees ................................ -- 7 26 17 286
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ............................... -- (6) 842 348 (130)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ......................................... -- -- -- -- (72)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .......................... -- 361 495 156 1,051
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares .......... -- 361 495 156 979
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ...... $ -- $ 355 $ 1,337 $ 504 $ 849
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
---------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) ................................... $ -- $ (6) $ 842 $ 348 $ (130)
Net realized gains (losses) on sales of investments
in portfolio shares ........................................... -- -- -- -- (72)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ............................ -- 361 495 156 1,051
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations ....... -- 355 1,337
504 849
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ................................. -- 3,339 11,680 719 12,525
Contract redemptions ........................................... -- -- -- -- --
Net transfers .................................................. -- -- 954 4,024 230,625
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions .......................... -- 3,339 12,634 4,743 243,150
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets ...................... -- 3,694 13,971 5,247 243,999
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................. -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year .................................... $ -- $ 3,694 $ 13,971 $ 5,247 $ 243,999
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ---------- -------- -----------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 8,709 $ -- $ 1,483 $ 169 $ 1,250 $ 50,996 $ -- $ -- $19,540,381
2,368 154 447 279 745 2,656 5 2 1,827,897
- ------------------------------------------------------------------------------------------------------------------------------------
6,341 (154) 1,036 (110) 505 48,340 (5) (2) 17,712,484
- ------------------------------------------------------------------------------------------------------------------------------------
(10,055) 480 (2,663) 199 (21,681) (69,021) -- -- 9,273,246
556 4,306 8,517 3,119 (6,249) (75,494) 164 -- 8,806,323
- ------------------------------------------------------------------------------------------------------------------------------------
(9,499) 4,786 5,854 3,318 (27,930) (144,515) 164 -- 18,079,569
- ------------------------------------------------------------------------------------------------------------------------------------
$ (3,158) $ 4,632 $ 6,890 $ 3,208 $(27,425) $(96,175) $ 159 $ (2) $35,792,053
====================================================================================================================================
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ---------- -------- -----------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 6,341 $ (154) $ 1,036 $ (110) $ 505 $ 48,340 $ (5) $ (2) $17,712,484
(10,055) 480 (2,663) 199 (21,681) (69,021) -- -- 9,273,246
556 4,306 8,517 3,119 (6,249) (75,494) 164 -- 8,806,323
- ------------------------------------------------------------------------------------------------------------------------------------
(3,158) 4,632 6,890 3,208 (27,425) (96,175) 159 (2) 35,792,053
- ------------------------------------------------------------------------------------------------------------------------------------
157,481 11,715 45,152 9,453 22,033 34,250 2,638 9,511 25,628,081
(2,370) (190) (980) (436) (1,843) (3,409) -- -- (34,314,124)
204,724 214,553 67,755 6,504 20,696 (112,948) -- (9,824) (8,796,326)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
359,835 226,078 111,927 15,521 40,886 (82,107) 2,638 (313) (17,482,369)
- ------------------------------------------------------------------------------------------------------------------------------------
356,677 230,710 118,817 18,729 13,461 (178,282) 2,797 (315) 18,309,684
- ------------------------------------------------------------------------------------------------------------------------------------
74,763 5,080 5,042 17,407 80,220 345,128 -- 315 249,263,883
- ------------------------------------------------------------------------------------------------------------------------------------
$431,440 $235,790 $123,859 $ 36,136 $ 93,681 $166,846 $ 2,797 $ -- $267,573,567
====================================================================================================================================
</TABLE>
17
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
================================================================================
(1) GENERAL
Conseco Variable Annuity Account C ("Account C") was established in 1980 as
a segregated investment account for individual and group variable annuity
contracts which are registered under the Securities Act of 1933. Account C is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a unit investment trust. Account C was originally registered with the U.S.
Securities and Exchange Commission as a diversified open-end management
investment company under the Act. Effective May 1, 1993, Account C was
restructured into a single unit investment trust which invested solely in shares
of the portfolios of the Conseco Series Trust, a diversified open-end management
investment company. Thereafter, additional investment options were offered.
The operations of Account C are included in the operations of Conseco
Variable Insurance Company (the "Company") pursuant to the provisions of the
Texas Insurance Code. The Company is an indirect wholly owned subsidiary of
Conseco, Inc., a publicly-held specialized financial services holding company
listed on the New York Stock Exchange.
Currently, the following investment options are available (effective date in
parenthesis):
THE ALGER AMERICAN FUND
Growth Portfolio (May 1, 1997)
Leveraged AllCap Portfolio (June 1, 1995)
MidCap Growth Portfolio (May 1, 1997)
Small Capitalization Portfolio (June 1, 1995)
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Income and Growth Fund (May 1, 1998)
International Fund (May 1, 1997)
Value Fund (May 1, 1997)
BERGER INSTITUTIONAL PRODUCTS TRUST (MAY 1, 1997)
100 Fund
Growth and Income Fund
Small Company Growth Fund
BIAM International Fund
CONSECO SERIES TRUST
Balanced Portfolio
Equity Portfolio
Fixed Income Portfolio
Government Securities Portfolio
Money Market Portfolio
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
(JUNE 1, 1995)
DREYFUS STOCK INDEX FUND (JUNE 1, 1995)
DREYFUS VARIABLE INVESTMENT FUND (MAY 1, 1998)
International Value Portfolio
Disciplined Stock Portfolio
FEDERATED INSURANCE SERIES (JUNE 1, 1995)
High Income Bond Fund II
International Equity Fund II
Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC. (MAY 1, 1998)
Equity Income Fund
High Yield Fund
JANUS ASPEN SERIES (JUNE 1, 1995)
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC. (MAY 1, 1998)
Equity Portfolio
Small Cap Portfolio
LORD ABBETT SERIES FUND, INC. (MAY 1, 1998)
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST (MAY 1, 1998)
Growth and Income Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (MAY 1, 1997)
Limited Maturity Bond Portfolio
Partners Portfolio
STRONG VARIABLE INSURANCE FUNDS, INC. (MAY 1, 1997)
Mid Cap Growth Fund II
STRONG OPPORTUNITY FUND II (MAY 1, 1997)
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund (June 1, 1995)
Worldwide Emerging Markets Fund (June 1, 1996)
Worldwide Hard Assets Fund (June 1,1995)
Worldwide Real Estate Fund (May 1, 1998)
VanEck Worldwide Insurance Trust terminated the Worldwide Hard Assets Fund
on May 1, 1997, and the Gold and Natural Resources Fund was renamed the
Worldwide Hard Assets Fund. The 1998 activity was due to final transfers being
processed.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported increases and decreases in net assets from
operations during the reporting period. Actual results could differ from those
estimates.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION, TRANSACTIONS AND INCOME
Investments in portfolio shares are valued using the net asset value of the
respective portfolios at the end of each New York Stock Exchange business day.
Investment share transactions are accounted for on a trade date basis (the date
the order to purchase or redeem shares is executed) and dividend income is
recorded on the ex-dividend date. The cost of investments in portfolio shares
sold is determined on a first-in first-out basis. Account C does not hold any
investments which are restricted as to resale.
Net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of
Account C as of the beginning of the valuation date.
FEDERAL INCOME TAXES
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of Account C are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in Account C and are not taxable
until received by the contract owner or beneficiary in the form of annuity
payments or other distributions.
18
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
DECEMBER 31, 1999 AND 1998
ANNUITY RESERVES
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments.
Annuity payment reserves for contracts under which contract owners are
receiving periodic retirement payments are computed according to the Progressive
Annuity Mortality Table and the 1983 Group Annuity Mortality Table. The assumed
net investment rate is equal to the assumed rate of accumulation. The annuity
unit values for periodic retirement payments are as follows:
DECEMBER 31,
1999 1998
================================================================================
The Alger American Fund:
Leveraged AllCap ..................................... $ 1.264 N/A
Conseco Series Trust:
Balanced ............................................. 1.305 $ 1.043
Equity
Qualified ........................................... 10.473 7.308
Nonqualified ........................................ 9.697 6.766
Fixed Income
Qualified ........................................... 4.789 5.012
Nonqualified ........................................ 4.792 5.016
Money Market
Qualified ........................................... 1.022 1.019
The Dreyfus Socially Responsible Growth Fund ........... 1.049 N/A
Dreyfus Stock Index Fund ............................... 1.255 1.097
Federated Insurance Series:
High Income Bond Fund II ............................. 0.975 N/A
Janus Aspen Series:
Growth ............................................... 1.132 N/A
Worldwide Growth ..................................... 2.611 1.660
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(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate cost of purchases of investments in portfolio shares was
$134,689,005 and $63,530,550 for the years ended December 31, 1999 and 1998,
respectively. The aggregate proceeds from sales of investments in portfolio
shares were $67,907,279 and $63,152,626 for the years ended December 31, 1999
and 1998, respectively.
(4) DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
mortality or expense experience because the Company assumes the mortality and
expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the actual
sales and administrative expenses.
The Company deducts daily from Account C a fee, which is equal on an annual
basis to 1.00 percent of the daily value of the total investments of Account C,
for assuming the mortality and expense risks except for the Equity, Fixed
Income, and Money Market portfolios of the Conseco Series Trust which are 0.64
percent, 0.74 percent and 0.99 percent, respectively. These fees were $2,233,024
and $1,827,897 for the years ended December 31, 1999 and 1998, respectively.
Pursuant to an agreement between Account C and the Company (which may be
terminated by the Company at any time), the Company provides sales and
administrative services to Account C, as well as a minimum death benefit prior
to retirement for certain contracts. Under individual contracts and group
deferred compensation contracts, the Company may deduct a percentage of amounts
surrendered to cover sales expenses. The percentage varies up to 8.00 percent
based on the type of contract and the number of years the contract has been
held. In addition, the Company deducts units from certain contracts annually and
upon full surrender to cover an administrative fee of $15, $20, or $25. This fee
is recorded as a redemption in the accompanying Statements of Changes in Net
Assets. Under group contracts no longer being sold, the Company deducts a
percentage of the renewal contract purchase payments to cover sales and
administrative expenses and the minimum death benefit prior to retirement of the
contract owners. Sales and administrative charges were $465,909 and $597,806 for
the years ended December 31, 1999 and 1998, respectively.
(5) OTHER TRANSACTIONS WITH AFFILIATES
Conseco Equity Sales, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of the
Company through various retail broker/dealers including Conseco Securities, Inc.
(formerly Conseco Financial Services, Inc. prior to its name change in August
1999), an affiliate of the Company.
(6) NET ASSETS
Net assets consisted of the following at December 31, 1999:
================================================================================
Proceeds from the sales of units since organization,
less cost of units redeemed ................................. $ 59,967,901
Undistributed net investment income ........................... 206,883,885
Undistributed net realized gains on sales of investments ...... 60,083,883
Net unrealized appreciation of investments .................... 47,860,325
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Net assets ................................................ $374,795,994
================================================================================
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
TO THE BOARD OF DIRECTORS OF CONSECO VARIABLE
INSURANCE COMPANY AND CONTRACT OWNERS OF
CONSECO VARIABLE ANNUITY ACCOUNT C
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Conseco Variable Annuity
Account C (the "Account") at December 31, 1999, and the results of its
operations and the changes in its net assets for each of the two years in the
period then ended, in conformity with accounting principles generally accepted
in the United States. 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 audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of portfolio shares owned at December 31,
1999 by correspondence with the funds, provide a reasonable basis for the
opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Indianapolis, Indiana
February 10, 2000
<PAGE>
================================================================================
CONSECO VARIABLE ANNUITY ACCOUNT C
SPONSOR
Conseco Variable Insurance Company - Carmel, Indiana.
DISTRIBUTOR
Conseco Equity Sales, Inc.
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP - Indianapolis, Indiana.
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C IS ISSUED BY CONSECO VARIABLE INSURANCE
COMPANY THE PRODUCT IS UNDERWRITTEN, AND THE SECURITIES WITHIN ARE OFFERED, BY
CONSECO EQUITY SALES, INC., A BROKER-DEALER FOR CONSECO VARIABLE INSURANCE
COMPANY. BOTH COMPANIES ARE SUBSIDIARIES OF CONSECO, INC., A FINANCIAL SERVICES
ORGANIZATION HEADQUARTERED IN CARMEL, INDIANA. CONSECO, THROUGH ITS SUBSIDIARY
COMPANIES, IS ONE OF MIDDLE AMERICA'S LEADING SOURCES FOR INSURANCE, INVESTMENT
AND LENDING PRODUCTS, HELPING 12 MILLION CUSTOMER STEP UP TO A BETTER, MORE
SECURE FUTURE. CONSECO EQUITY SALES, INC., IS A MEMBER OF THE NASD.
CONSECO VARIABLE INSURANCE COMPANY
11815 North Pennsylvania Street
Carmel, Indiana 46032
CV-207 (2/00) 05964
(C) 1999 Conseco Variable Insurance Company
www.conseco.com
INSURANCE INVESTMENTS LENDING
- --------------------------------------------------------------[CONSECO LOGO(SM)]
CONSECO(R)
Step up.(SM)
