GE LIFE & ANNUITY Separate Account III
Financial Statements
For the six months ended June 30, 1999
(Unaudited)
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Table of Contents
For the six months ended June 30, 1999
- ------------------------------------------------------------------------------
Page
Financial Statements:
(Unaudited)
Statements of Assets and Liabilities..................................1
Statements of Operations..............................................9
Statements of Changes in Net Assets..................................14
Notes to Financial Statements............................................24
(Unaudited)
- ------------------------------------------------------------------------------
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities
As of June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
------------------------------------------------------------------------
S&P 500 Money Total International Real Estate Global
Index Market Return Equity Securities Income
Assets Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments Funds,
Inc., at fair value (note 2):
S&P 500 Index Fund (297,546
shares; cost - $7,059,809) $ 7,905,807 - - - - -
Money Market Fund (13,416,180
shares; cost - $13,416,180) - 13,416,180 - - - -
Total Return Portolio (123,671
shares; cost - $1,758,839) - - 1,935,456 - - -
International Equity Fund
(28,433 shares; cost - $364,898) - - - 358,262 - -
Real Estate Securities Fund
(58,116 shares; cost - $864,040) - - - - 732,838 -
Global Income Fund (203,683
shares; cost - $2,049,084) - - - - - 1,989,981
Value Equity Fund (51,972
shares; cost - $789,606) - - - - - -
Income Fund (116,357 shares;
cost $1,421,696) - - - - - -
U.S. Equity Fund (1,297 shares;
cost $44,894) - - - - - -
Premier Growth Equity Fund
(219 shares; cost - $16,955) - - - - -
Receivable from affiliate (note 3) - - 78 - - 524
Receivable for units sold 11 - - - - -
- ----------------------------------------------------------------------------------------------------------------------
Total assets $ 7,905,818 13,416,180 1,935,534 358,262 732,838 1,990,505
======================================================================================================================
Liabilities
- ----------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to
affiliate (note 3) 10,005 612,649 1,396 20,068 5,428 1,423
Payable for units withdrawn - 32,037 - - - -
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 10,005 644,686 1,396 20,068 5,428 1,423
- ----------------------------------------------------------------------------------------------------------------------
Net assets $ 7,895,813 12,771,494 1,934,138 338,194 727,410 1,989,082
======================================================================================================================
Outstanding units 163,814 802,734 60,841 22,191 45,041 188,182
======================================================================================================================
Net asset value per unit 48.20 15.91 31.79 15.24 16.15 10.57
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
-------------------------------------------------
Value U.S. Premier
Equity Income Equity Growth Equity
Assets Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments Funds,
Inc., at fair value (note 2):
S&P 500 Index Fund (297,546
shares; cost - $7,059,809) $ - - - -
Money Market Fund (13,416,180
shares; cost - $13,416,180) - - - -
Total Return Portolio (123,671
shares; cost - $1,758,839) - - - -
International Equity Fund
(28,433 shares; cost - $364,898) - - - -
Real Estate Securities Fund
(58,116 shares; cost - $864,040) - - - -
Global Income Fund (203,683 shares
cost - $2,049,084) - - - -
Value Equity Fund (51,972 shares;
cost - $789,606) 867,406 - - -
Income Fund (116,357 shares;
cost $1,421,696) - 1,409,085 - -
U.S. Equity Fund (1,297 shares;
cost $44,894) - - 49,573 -
Premier Growth Equity Fund
(219 shares; cost - $16,955) - - - 17,648
Receivable from affiliate (note 3) - - - -
Receivable for units sold - - - 39,292
- ------------------------------------------------------------------------------------
Total assets $ 867,406 1,409,085 49,573 56,940
====================================================================================
Liabilities
- ------------------------------------------------------------------------------------
Accrued expenses payable to affiliate 1,681 1,725 1,259 13
Payable for units withdrawn - - - -
- ------------------------------------------------------------------------------------
Total liabilities 1,681 1,725 1,259 13
- ------------------------------------------------------------------------------------
Net assets $ 865,725 1,407,360 48,314 56,927
====================================================================================
Outstanding units 51,196 135,323 3,996 5,458
====================================================================================
Net asset value per unit 16.91 10.40 12.09 10.43
====================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
1
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
-------------------------------------------------------------
Aggresive Capital High Multiple
Bond Growth Appreciation Income Strategies
Assets Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
- ---------------------------------------------------------------------------------------------------------
Investment in Oppenheimer Variable
Account Funds, at fair value
(note 2): Bond Fund/VA (176,950
shares; cost - $2,160,891) $ 2,034,920 - - - -
Aggressive Growth Fund/VA
(118,550 shares; cost -
$5,567,784) - 6,431,356 - - -
Capital Appreciation Fund/VA
(151,941 shares; cost - $5,757,094) - - 6,191,606 - -
High Income Fund/VA (459,040
shares; cost - $5,034,224) - - - 4,897,957 -
Multiple Strategies Fund/VA
(199,824 shares; cost -
$3,264,318) - - - - 3,385,020
Investment in Goldman Sachs Variable
Insurance Trust, at fair value
(note 2):
Growth and Income Fund (6,256
shares; cost - $70,458) - - - - -
Mid Cap Equity Fund (29,148
shares; cost - $269,098) - - - - -
Investment in Salomon Brothers
Variable Series Funds, at fair value
(note 2):
Strategic Bond Fund (104,944
shares; cost - $1,067,690) - - - - -
Receivable from affiliate (note 3) - - - 371 -
Receivable for units sold - - - - -
- ----------------------------------------------------------------------------------------------------------
Total assets $ 2,034,920 6,431,356 6,191,606 4,898,328 3,385,020
==========================================================================================================
Liabilities
- ----------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 1,652 4,868 1,359,295 3,536 2,723
Payable for units withdrawn - - 1,346,789 - -
- ----------------------------------------------------------------------------------------------------------
Total liabilities 1,652 4,868 2,706,084 3,536 2,723
- ----------------------------------------------------------------------------------------------------------
Net assets $ 2,033,268 6,426,488 3,485,522 4,894,792 3,382,297
==========================================================================================================
Outstanding units 89,928 144,969 81,210 148,687 114,305
==========================================================================================================
Net asset value per unit 22.61 44.33 42.92 32.92 29.59
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Goldman Sachs Variable Salomon
Insurance Trust Brothers Variable
Series Funds,
Inc.
------------------------------ --------------------
Growth and Mid Cap Strategic
Income Value Bond
Assets Fund Fund Fund
- --------------------------------------------------------------------------------------------------
<S> <C>
Investment in Oppenheimer Variable
Account Funds, at fair value
(note 2):
Bond Fund/VA (176,950 shares;
cost - $2,160,891) $ - - -
Aggressive Growth Fund/VA
(118,550 shares; cost - $5,567,784) - - -
Capital Appreciation Fund/VA (151,941
shares; cost - $5,757,094) - - -
High Income Fund/VA (459,040 shares;
cost - $5,034,224) - - -
Multiple Strategies Fund/VA
(199,824 shares; cost - $3,264,318) - - -
Investment in Goldman Sachs Variable
Insurance Trust, at fair value
(note 2):
Growth and Income Fund (6,256
shares; cost - $70,458) 72,196 - -
Mid Cap Equity Fund (29,148
shares; cost - $269,098) - 291,481 -
Investment in Salomon Brothers
Variable Series Funds, at fair
value (note 2):
Strategic Bond Fund (104,944
shares; cost - $1,067,690) - - 1,054,688
Receivable from affiliate (note 3) 2 - -
Receivable for units sold - - -
- --------------------------------------------------------------------------------------------------
Total assets $ 72,198 291,481 1,054,688
- --------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 52 291 785
Payable for units withdrawn - - -
- --------------------------------------------------------------------------------------------------
Total liabilities 52 291 785
- --------------------------------------------------------------------------------------------------
Net assets $ 72,146 291,190 1,053,903
- --------------------------------------------------------------------------------------------------
Outstanding units 7,430 29,354 104,450
- --------------------------------------------------------------------------------------------------
Net asset value per unit 9.71 9.92 10.09
- --------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
2
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Variable Insurance Products Funds II
----------------------------------------- --------------------------------------
Equity Asset
Income Growth Overseas Manager Contrafund
Assets Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance
Products Fund, at fair value (note 2):
Equity-Income Portfolio (642,522
shares; cost - $14,034,212) $ 17,508,720 - - - -
Growth Portfolio (316,020 shares;
cost - $13,508,940) - 14,451,613 - - -
Overseas Portfolio (195,833
shares; cost - $3,817,834) - - 4,073,321 - -
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (582,673
shares; cost - $8,967,856) - - - 10,307,490 -
Contrafund Portfolio (413,484 shares;
cost - $8,813,999) - - - - 10,791,923
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (100,214
shares; cost - $1,634,904) - - - - -
Growth Opportunities Portfolio
(31,940 shares; cost - $626,176) - - - - -
Receivable from affiliate (note 3) 1,018 - - - -
Receivable for units sold - - - - -
- ------------------------------------------------------------------------------------------------------------------------
Total assets $ 17,509,738 14,451,613 4,073,321 10,307,490 10,791,923
- ------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 12,536 16,884 33,877 28,654 12,638
Payable for units withdrawn 23,032 25,547 - - -
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities 35,568 42,431 33,877 28,654 12,638
- ------------------------------------------------------------------------------------------------------------------------
Net assets $ 17,474,170 14,409,182 4,039,444 10,278,836 10,779,285
- ------------------------------------------------------------------------------------------------------------------------
Outstanding units 432,422 274,618 180,332 357,152 372,857
- ------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 40.41 52.47 22.40 28.78 28.91
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Variable Insurance Product Fund III
------------------------------------------------
Growth & Growth
Income Opportunities
Assets Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance
Products Fund, at fair value (note 2):
Equity-Income Portfolio (642,522
shares; cost - $14,034,212) $ - -
Growth Portfolio (316,020 shares;
cost - $13,508,940) - -
Overseas Portfolio (195,833
shares; cost - $3,817,834) - -
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (582,673
shares; cost - $8,967,856) - -
Contrafund Portfolio (413,484 shares;
cost - $8,813,999) - -
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (100,214
shares; cost - $1,634,904) 1,713,652 -
Growth Opportunities Portfolio
(31,940 shares; cost - $626,176) - 755,066
Receivable from affiliate (note 3) - -
Receivable for units sold - -
- --------------------------------------------------------------------------------------------------
Total assets $ 1,713,652 755,066
- --------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 2,190 1,568
Payable for units withdrawn - -
- --------------------------------------------------------------------------------------------------
Total liabilities 2,190 1,568
- --------------------------------------------------------------------------------------------------
Net assets $ 1,711,462 753,498
- --------------------------------------------------------------------------------------------------
Outstanding units 100,852 47,123
- --------------------------------------------------------------------------------------------------
Net asset value per unit 16.97 15.99
- --------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
3
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Federated Insurance Series
-----------------------------------------------
American High
Leaders Income Bond Utility
Assets Fund II Fund II Fund II
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series,
at fair value (note 2):
American Leaders Fund II (51,263 shares;
cost - $1,005,067) $ 1,124,711 - -
High Income Bond Fund II (98,657 shares;
cost - $1,060,032) - 1,013,205 -
Utility Fund II (33,486 shares;
cost - $440,609) - - 486,553
Investment in Alger American,
at fair value (note 2):
Small Capitalization Portfolio (51,181 shares;
cost - $2,148,994) - - -
Growth Portfolio (79,152 shares;
cost - $4,014,797) - - -
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio (10,022 shares;
cost - $147,528) - - -
PBHG Growth II Portfolio (105,415 shares;
cost - $2,062,450) - - -
Receivable from affiliate (note 3) - - -
Receivable for units sold - 5 -
- --------------------------------------------------------------------------------------------------------------
Total assets $ 1,124,711 1,013,210 486,553
- --------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 1,683 1,264 1,289
- --------------------------------------------------------------------------------------------------------------
Total liabilities 1,683 1,264 1,289
- --------------------------------------------------------------------------------------------------------------
Net assets $ 1,123,028 1,011,946 485,264
- --------------------------------------------------------------------------------------------------------------
Outstanding units 59,991 65,077 25,104
- --------------------------------------------------------------------------------------------------------------
Net asset value per unit 18.72 15.55 19.33
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Alger American Fund PBHG Insurance Series Fund, Inc.
---------------------------------- ------------------------------------
Small PBHG Large PBHG
Capitalization Growth Cap Growth Growth II
Assets Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series,
at fair value (note 2):
American Leaders Fund II (51,263 shares;
cost - $1,005,067) $ - - - -
High Income Bond Fund II (98,657 shares;
cost - $1,060,032) - - - -
Utility Fund II (33,486 shares;
cost - $440,609) - - - -
Investment in Alger American,
at fair value (note 2):
Small Capitalization Portfolio (51,181 shares;
cost - $2,148,994) 2,230,448 - - -
Growth Portfolio (79,152 shares;
cost - $4,014,797) - 4,419,861 - -
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio (10,022 shares;
cost - $147,528) - - 165,761 -
PBHG Growth II Portfolio (105,415 shares;
cost - $2,062,450) - - - 1,533,782
Receivable from affiliate (note 3) - - - -
Receivable for units sold 6 10 - 6
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,230,454 4,419,871 165,761 1,533,788
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 2,395 3,175 17,944 1,565
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,395 3,175 17,944 1,565
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 2,228,059 4,416,696 147,817 1,532,223
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 163,707 196,036 9,193 108,284
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 13.61 22.53 16.08 14.15
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
4
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-------------------------------------------------------------------
Aggressive Worldwide
Growth Growth Growth Balanced
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (82,336 shares;
cost - $2,752,344) $ 2,850,481 - - -
Growth Portfolio (276,686 shares;
cost - $5,784,192) - 7,550,748 - -
Worldwide Growth Portfolio (382,870 shares;
cost - $9,934,143) - - 12,535,163 -
Balanced Portfolio (238,922 shares;
cost - $4,370,119) - - - 5,961,097
Flexible Income Portfolio (31,382 shares;
cost - $373,239) - - - -
International Growth Portfolio (100,402 shares;
cost - $2,166,240) - - - -
Capital Appreciation Portfolio (101,880 shares;
cost - $2,496,442) - - - -
Receivable from affiliate (note 3) 1,365,728 540 2,012 189
Receivable for units sold 1,372,850 5,382 - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 5,589,059 7,556,670 12,537,175 5,961,286
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 2,882 5,382 8,964 4,229
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,882 5,382 8,964 4,229
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $ 5,586,177 7,551,288 12,528,211 5,957,057
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding units 191,504 274,592 470,632 274,899
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 29.17 27.50 26.62 21.67
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
----------------------------------------------------------
Flexible International Capital
Income Growth Appreciation
Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (82,336 shares;
cost - $2,752,344) - - -
Growth Portfolio (276,686 shares;
cost - $5,784,192) - - -
Worldwide Growth Portfolio (382,870 shares;
cost - $9,934,143) - - -
Balanced Portfolio (238,922 shares;
cost - $4,370,119) - - -
Flexible Income Portfolio (31,382 shares;
cost - $373,239) 362,778 - -
International Growth Portfolio (100,402 shares;
cost - $2,166,240) - 2,344,381 -
Capital Appreciation Portfolio (101,880 shares;
cost - $2,496,442) - - 2,548,019
Receivable from affiliate (note 3) - - -
Receivable for units sold - - -
- --------------------------------------------------------------------------------------------------------------------------
Total assets 362,778 2,344,381 2,548,019
- --------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 807 2,268 4,489
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities 807 2,268 4,489
- --------------------------------------------------------------------------------------------------------------------------
Net assets 361,971 2,342,113 2,543,530
- --------------------------------------------------------------------------------------------------------------------------
Outstanding units 27,298 135,539 104,200
- --------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 13.26 17.28 24.41
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
5
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
-------------------------------------------------------------------------
S&P 500 Money Total International
Index Market Return Equity
Fund Fund Fund Fund
-------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ - 285,682 - -
Expenses - Mortality and expense
risk charges (note 3) 47,299 80,384 12,735 2,236
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (47,299) 205,298 (12,735) (2,236)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 443,174 - 9,133 (194)
Unrealized appreciation (depreciation)
on investments 383,647 - 113,319 19,100
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 826,821 - 122,452 18,906
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 779,522 205,298 109,717 16,670
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
----------------------------------------------------------------------------
Real Estate Global Value
Securities Income Equity Income
Fund Fund Fund Fund
----------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ - - - -
Expenses - Mortality and expense
risk charges (note 3) 4,783 9,491 4,498 9,766
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (4,783) (9,491) (4,498) (9,766)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) (30,998) (121,156) 69,217 83
Unrealized appreciation (depreciation)
on investments 92,002 (59,724) 73,250 (27,311)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 61,004 (180,880) 142,467 (27,228)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 56,221 (190,371) 137,969 (36,994)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
-----------------------------------
U.S. Premier
Equity Growth Equity
Fund Fund
-----------------------------------
Six Months Period from
Ended 6/30/99 6/11-6/30/99
- -------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ - -
Expenses - Mortality and expense
risk charges (note 3) 238 12
- -------------------------------------------------------------------------------------------
Net investment income (expense) (238) (12)
- -------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 172 -
Unrealized appreciation (depreciation)
on investments 4,435 693
- -------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 4,607 693
- -------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 4,369 681
- -------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
6
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
--------------------------------------------------------
Aggressive Capital
Bond Growth Appreciation
Fund/VA Fund/VA Fund/VA
--------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 106,098 - 188,558
Expenses - Mortality and expense
risk charges (note 3) 16,729 43,620 33,249
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 89,369 (43,620) 155,309
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) (1,721) 995,688 607,508
Unrealized appreciation (depreciation)
on investments (147,232) 252,124 (24,098)
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (148,953) 1,247,812 583,410
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ (59,584) 1,204,192 738,719
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Oppenheimer Variable Account Funds Variable Insurance Trust
------------------------------------ ------------------------------------
High Multiple Growth and Mid Cap
Income Strategies Income Value
Fund/VA Fund/VA Fund Fund
--------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 348,986 267,777 - -
Expenses - Mortality and expense
risk charges (note 3) 37,969 22,068 183 2,174
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 311,017 245,709 (183) (2,174)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 27,814 9,796 501 139,056
Unrealized appreciation (depreciation)
on investments (161,492) (10,989) 1,689 22,187
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (133,678) (1,193) 2,190 161,243
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 177,339 244,516 2,007 159,069
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Salomon Brothers
Variable
Series
Funds, Inc.
----------------
Strategic
Bond
Fund
-----------------
Period from
3/19-6/30/99
- -----------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ -
Expenses - Mortality and expense
risk charges (note 3) 3,852
- -----------------------------------------------------------------------
Net investment income (expense) (3,852)
- -----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
Net realized gain (loss) 8,165
Unrealized appreciation (depreciation)
on investments (13,002)
- -----------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (4,837)
- -----------------------------------------------------------------------
Increase (decrease) in net assets from operations $ (8,689)
- -----------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
7
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
====================================================================================================================
Variable Insurance Products Fund
---------------------------------------------------------
Equity
Income Growth Overseas
Portfolio Portfolio Portfolio
---------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 777,968 1,536,820 157,482
Expenses - Mortality and expense
risk charges (note 3) 112,785 95,252 28,617
- --------------------------------------------------------------------------------------------------------------------
Net investment income 665,183 1,441,568 128,865
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 400,524 1,079,668 255,957
Unrealized appreciation (depreciation)
on investments 816,175 (721,440) (3,470)
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 1,216,699 358,228 252,487
- --------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 1,881,882 1,799,796 381,352
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================================================================
Variable Insurance Products Fund II Variable Insurance Product Fund III
------------------------------------ -----------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 770,034 411,197 19,845 18,845
Expenses - Mortality and expense
risk charges (note 3) 69,375 69,393 11,455 4,829
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income 700,659 341,804 8,390 14,016
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 113,127 692,451 141,586 13,883
Unrealized appreciation (depreciation)
on investments (356,927) (34,230) (24,345) 14,533
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (243,800) 658,221 117,241 28,416
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 456,859 1,000,025 125,631 42,432
================================================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
8
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
====================================================================================================================
Federated Insurance Series
---------------------------------------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
---------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 108,731 91,518 38,888
Expenses - Mortality and expense
risk charges (note 3) 7,234 9,551 3,400
- --------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 101,497 81,967 35,488
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 11,623 (18,093) 4,483
Unrealized appreciation (depreciation)
on investments 4,757 (41,365) (30,373)
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 16,380 (59,458) (25,890)
- --------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 117,877 22,509 9,598
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=================================================================================================================================
Alger American PBHG Insurance Series Fund, Inc.
----------------------------------- -----------------------------------
Small PBHG Large PBHG
Capitalization Growth Cap Growth Growth II
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 250,852 419,655 - -
Expenses - Mortality and expense
risk charges (note 3) 13,613 27,995 688 1,324
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 237,239 391,660 (688) (1,324)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 255,292 299,446 644 614,765
Unrealized appreciation (depreciation)
on investments (293,934) (152,444) 6,212 (543,801)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (38,642) 147,002 6,856 70,964
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 198,597 538,662 6,168 69,640
=================================================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
9
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
====================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------------
Aggressive Worldwide
Growth Growth Growth Balanced
Portfolio Portfolio Portfolio Portfolio
-------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 112,673 46,883 22,883 61,468
Expenses - Mortality and expense
risk charges (note 3) 25,314 46,164 80,536 38,432
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 87,359 719 (57,653) 23,036
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 1,167,998 406,970 605,165 219,975
Unrealized appreciation (depreciation)
on investments (319,284) 629,475 817,450 356,260
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 848,714 1,036,445 1,422,615 576,235
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 936,073 1,037,164 1,364,962 599,271
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================================================
Janus Aspen Series
-------------------------------------------------------
Flexible International Capital
Income Growth Appreciation
Portfolio Portfolio Portfolio
-------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 12,793 5,822 5,094
Expenses - Mortality and expense
risk charges (note 3) 2,768 15,752 15,009
- ----------------------------------------------------------------------------------------------------------------
Net investment income (expense) 10,025 (9,930) (9,915)
- ----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 4,865 268,211 451,604
Unrealized appreciation (depreciation)
on investments (18,960) (43,325) (4,594)
- ----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (14,095) 224,886 447,010
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ (4,070) 214,956 437,095
================================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
10
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
====================================================================================================================================
GE Investments Funds, Inc.
------------------------------------------------------------------
S&P 500 Money Total International
Index Market Return Equity
Fund Fund Fund Fund
------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (47,299) 205,298 (12,735) (2,236)
Net realized gain (loss) 443,174 - 9,133 (194)
Unrealized appreciation (depreciation)
on investments 383,647 - 113,319 19,100
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 779,522 205,298 109,717 16,670
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 193,605 3,215,344 9,104 -
Loan interest (1,313) 31,166 (543) (6)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - - -
Surrenders (60,995) (2,596,496) (33,962) -
Loans 460 52,918 (3,166) -
Cost of insurance and administrative expense (note 3) (36,775) (70,884) (9,846) (1,777)
Transfer gain (loss) and transfer fees (17,716) (17,781) 1,613 (1,035)
Transfers (to) from the Guarantee Account (note 1) 10,200 - 250 -
Interfund transfers 949,302 1,113,105 73,419 24,103
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 1,036,768 1,727,372 36,869 21,285
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 1,816,290 1,932,670 146,586 37,955
Net assets at beginning of year 6,079,523 10,838,824 1,787,552 300,239
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 7,895,813 12,771,494 1,934,138 338,194
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===========================================================================================================================
GE Investments Funds, Inc.
---------------------------------------------------------
Real Estate Global Value
Securities Income Equity
Fund Fund Fund
---------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (4,783) (9,491) (4,498)
Net realized gain (loss) (30,998) (121,156) 69,217
Unrealized appreciation (depreciation)
on investments 92,002 (59,724) 73,250
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 56,221 (190,371) 137,969
- ---------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 9,200 3,403 3,802
Loan interest 10 - (1,027)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - -
Surrenders (29,203) - -
Loans (4,130) 8,000 (6,006)
Cost of insurance and administrative expense (note 3) (4,548) (3,855) (3,611)
Transfer gain (loss) and transfer fees 2,354 (2,006) (2,656)
Transfers (to) from the Guarantee Account (note 1) 7 - 29,405
Interfund transfers (9,342) 2,145,426 175,141
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (35,652) 2,150,968 195,048
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 20,569 1,960,597 333,017
Net assets at beginning of year 706,841 28,485 532,708
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 727,410 1,989,082 865,725
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
==================================================================================================================
GE Investments Funds, Inc.
-------------------------------------------------
U.S. Premier
Income Equity Growth Equity
Fund Fund Fund
-------------------------------------------------
Six Months Six Months Period from
nded 6/30/99 Ended 6/30/99 6/11-6/30/99
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (9,766) (238) (12)
Net realized gain (loss) 83 172 -
Unrealized appreciation (depreciation)
on investments (27,311) 4,435 693
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations (36,994) 4,369 681
- ------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 16,162 - -
Loan interest (1,756) - -
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - -
Surrenders (1,251) - -
Loans - - -
Cost of insurance and administrative expense (note 3) (7,795) (179) (5)
Transfer gain (loss) and transfer fees 466 (148) (1)
Transfers (to) from the Guarantee Account (note 1) 20,109 - -
Interfund transfers (48,630) 34,110 56,252
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (22,695) 33,783 56,246
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (59,689) 38,152 56,927
Net assets at beginning of year 1,467,049 10,162 -
- ------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 1,407,360 48,314 56,927
==================================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
11
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
====================================================================================================================================
Oppenheimer Variable Account Funds
-----------------------------------------------------------
Aggressive Capital
Bond Growth Appreciation
Fund/VA Fund/VA Fund/VA
-----------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 89,369 (43,620) 155,309
Net realized gain (loss) (1,721) 995,688 607,508
Unrealized appreciation (depreciation) on investments (147,232) 252,124 (24,098)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations (59,584) 1,204,192 738,719
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - 10,005 33,750
Loan interest 655 (2,206) (774)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - (22,618) -
Surrenders (33,327) (114,671) (29,526)
Loans (4,660) (78,902) (114,394)
Cost of insurance and administrative expense (note 3) (11,553) (34,203) (23,918)
Transfer gain (loss) and transfer fees 32,043 (43,500) (1,586,042)
Transfers (to) from the Guarantee Account (note 1) 6,430 6,740 7
Interfund transfers (370,341) (997,033) (2,521,117)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (380,753) (1,276,388) (4,242,014)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (440,337) (72,196) (3,503,295)
Net assets at beginning of period 2,473,605 6,498,684 6,988,817
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,033,268 6,426,488 3,485,522
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===========================================================================================================================
Oppenheimer Variable Account Funds
---------------------------------------------------
High Multiple
Income Strategies
Fund/VA Fund/VA
---------------------------------------------------
Six Months Six Months
Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 311,017 245,709
Net realized gain (loss) 27,814 9,796
Unrealized appreciation (depreciation) on investments (161,492) (10,989)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 177,339 244,516
- ---------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 5,354 36,781
Loan interest 136 761
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - -
Surrenders (28,872) (12,127)
Loans (41,540) (5,349)
Cost of insurance and administrative expense (note 3) (27,495) (16,336)
Transfer gain (loss) and transfer fees 17,937 3,159
Transfers (to) from the Guarantee Account (note 1) 221 471
Interfund transfers (1,369,543) (117,901)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (1,443,802) (110,541)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (1,266,463) 133,975
Net assets at beginning of period 6,161,255 3,248,322
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 4,894,792 3,382,297
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
Salomon
Goldman Sachs Variable Brothers Variable
Insurance Trust Series Funds, Inc.
------------------------------------------------------------------
Growth and Mid Cap Strategic
Income Value Bond
Fund Fund Fund
------------------------------------------------------------------
Six Months Six Months Period from
Ended 6/30/99 Ended 6/30/99 3/19-6/30/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ (183) (2,174) (3,852)
Net realized gain (loss) 501 139,056 8,165
Unrealized appreciation (depreciation) on investments 1,689 22,187 (13,002)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 2,007 159,069 (8,689)
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 1,250 7,450 -
Loan interest (86) (44) -
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - -
Surrenders - - -
Loans - - (41,036)
Cost of insurance and administrative expense (note 3) (156) (1,179) (1,650)
Transfer gain (loss) and transfer fees (18) 7,261 (668)
Transfers (to) from the Guarantee Account (note 1) - 23,524 -
Interfund transfers 63,860 14,840 1,105,946
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 64,850 51,852 1,062,592
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 66,857 210,921 1,053,903
Net assets at beginning of period 5,289 80,269 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 72,146 291,190 1,053,903
===================================================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
12
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
-----------------------------------------------------
Equity
Income Growth Overseas
Portfolio Portfolio Portfolio
-----------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income $ 665,183 1,441,568 128,865
Net realized gain 400,524 1,079,668 255,957
Unrealized appreciation (depreciation) on investments 816,175 (721,440) (3,470)
- ---------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 1,881,882 1,799,796 381,352
- ---------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 2,854 154,093 3,180
Loan interest (10,895) (13,304) (3,261)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - (21,324)
Surrenders (120,551) (505,987) (48,296)
Loans (131,517) (21,956) (22,094)
Cost of insurance and administrative expense (note 3) (79,272) (69,277) (19,705)
Transfer gain (loss) and transfer fees (3,296) (36,420) (33,837)
Transfers (to) from the Guarantee Account (note 1) 42,540 4,200 221
Interfund transfers (933,508) (359,478) (1,203,316)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (1,233,645) (848,129) (1,348,432)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 648,237 951,667 (967,080)
Net assets at beginning of year 16,825,933 13,457,515 5,006,524
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 17,474,170 14,409,182 4,039,444
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II
-----------------------------------------------
Asset
Manager Contrafund
Portfolio Portfolio
-----------------------------------------------
Six Months Six Months
Ended 6/30/99 Ended 6/30/99
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income $ 700,659 341,804
Net realized gain 113,127 692,451
Unrealized appreciation (depreciation) on investments (356,927) (34,230)
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 456,859 1,000,025
- -----------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - 62,872
Loan interest (6,271) (5,984)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits (36,815) (23,810)
Surrenders (353,490) (367,888)
Loans 1,343 (107,807)
Cost of insurance and administrative expense (note 3) (50,833) (52,121)
Transfer gain (loss) and transfer fees (813) (21,428)
Transfers (to) from the Guarantee Account (note 1) 23,978 6,437
Interfund transfers (103,052) (888,235)
- -----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (525,953) (1,397,964)
- -----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (69,094) (397,939)
Net assets at beginning of year 10,347,930 11,177,224
- -----------------------------------------------------------------------------------------------------------------
Net assets at end of year $10,278,836 10,779,285
=================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Variable Insurance Product Fund III
--------------------------------------------
Growth & Growth
Income Opportunities
Portfolio Portfolio
--------------------------------------------
Six Months Six Months
Ended 6/30/99 Ended 6/30/99
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income $ 8,390 14,016
Net realized gain 141,586 13,883
Unrealized appreciation (depreciation) on investments (24,345) 14,533
- --------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 125,631 42,432
- --------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 9,442 589
Loan interest (774) -
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - -
Surrenders (13,137) -
Loans (43,027) (229)
Cost of insurance and administrative expense (note 3) (7,802) (3,998)
Transfer gain (loss) and transfer fees 11,412 230
Transfers (to) from the Guarantee Account (note 1) - -
Interfund transfers 624,520 70,171
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 580,634 66,763
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 706,265 109,195
Net assets at beginning of year 1,005,197 644,303
- --------------------------------------------------------------------------------------------------------------
Net assets at end of year $1,711,462 753,498
==============================================================================================================
</TABLE>
See accompanying notes to unaudited financial statements.
13
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Federated Insurance Series
-----------------------------------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 101,497 81,967 35,488
Net realized gain (loss) 11,623 (18,093) 4,483
Unrealized appreciation (depreciation) on investments 4,757 (41,365) (30,373)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 117,877 22,509 9,598
- --------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 57,574 3,000 -
Loan interest (11) (1,187) (313)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - - -
Surrenders - (28,048) -
Loans (1,566) (114,910) 9,095
Cost of insurance and administrative expense (note 3) (6,593) (6,927) (2,737)
Transfer gain (loss) and transfer fees (note 3) 1,925 1,560 169
Transfers (to) from the Guarantee Account (note 1) 6,150 - -
Interfund transfers (90,913) 6,426 (57,118)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (33,434) (140,086) (50,904)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 84,443 (117,577) (41,306)
Net assets at beginning of year 1,038,585 1,129,523 526,570
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 1,123,028 1,011,946 485,264
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Alger American
---------------------------------------
Small
Capitalization Growth
Portfolio Portfolio
----------------------------------------
Six Months Six Months
Ended 6/30/99 Ended 6/30/99
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 237,239 391,660
Net realized gain (loss) 255,292 299,446
Unrealized appreciation (depreciation) on investments (293,934) (152,444)
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 198,597 538,662
- -----------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 33,551 52,303
Loan interest (4,269) (2,925)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - (26,523)
Surrenders - (70,041)
Loans (292) (33,013)
Cost of insurance and administrative expense (note 3) (12,876) (22,731)
Transfer gain (loss) and transfer fees (note 3) 47,385 1,389
Transfers (to) from the Guarantee Account (note 1) 11,769 250
Interfund transfers (1,068,092) 633,773
- -----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (992,824) 532,482
- -----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (794,227) 1,071,144
Net assets at beginning of year 3,022,286 3,345,552
- -----------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 2,228,059 4,416,696
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PBHG Insurance Series Fund, Inc.
---------------------------------
PBHG Large PBHG
Cap Growth Growth II
Portfolio Portfolio
----------------------------------
Six Months Six Months
Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (688) (1,324)
Net realized gain (loss) 644 614,765
Unrealized appreciation (depreciation) on investments 6,212 (543,801)
- ------------------------------------------------------------------------------------------------------
Increase in net assets from operations 6,168 69,640
- ------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 6,138 2,000
Loan interest 26 -
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - -
Surrenders - -
Loans (563) -
Cost of insurance and administrative expense (note 3) (708) (2,263)
Transfer gain (loss) and transfer fees (note 3) (989) (18,607)
Transfers (to) from the Guarantee Account (note 1) - -
Interfund transfers 102,050 1,343,460
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 105,954 1,324,590
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 112,122 1,394,230
Net assets at beginning of year 35,695 137,993
- ------------------------------------------------------------------------------------------------------
Net assets at end of year $ 147,817 1,532,223
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
----------------------------------------------------
Aggressive Worldwide
Growth Growth Growth
Portfolio Portfolio Portfolio
----------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 87,359 719 (57,653)
Net realized gain (loss) 1,167,998 406,970 605,165
Unrealized appreciation (depreciation) on investments (319,284) 629,475 817,450
- -----------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 936,073 1,037,164 1,364,962
- -----------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 21,937 68,552 119,940
Loan interest (2,074) (4,462) (1,269)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits - (23,434) (23,423)
Surrenders (53,299) (123,902) (15,285)
Loans (14,718) (59,579) (58,918)
Cost of insurance and administrative expense (note 3) (19,973) (33,542) (60,272)
Transfer gain (loss) and transfer fees (note 3) 1,481,896 (4,103) 3,284
Transfers (to) from the Guarantee Account (note 1) - 3,347 33,109
Interfund transfers 462,046 431,199 (34,229)
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 1,875,815 254,076 (37,063)
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 2,811,888 1,291,240 1,327,899
Net assets at beginning of year 2,774,289 6,260,048 11,200,312
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 5,586,177 7,551,288 12,528,211
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
14
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series (continued)
----------------------------------------------------------------
Flexible International Capital
Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/99 Ended 6/30/99 Ended 6/30/99 Ended 6/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 23,036 10,025 (9,930) (9,915)
Net realized gain 219,975 4,865 268,211 451,604
Unrealized appreciation (depreciation) on investments 356,260 (18,960) (43,325) (4,594)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 599,271 (4,070) 214,956 437,095
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 36,428 9,934 16,030 64,272
Loan interest (6,350) 72 1,047 (1,068)
Transfers (to) from the general account of GE Life & Annuity:
Death benefits (24,021) - - -
Surrenders (123,633) - - (41,706)
Loans (226,396) 2,250 (4,839) (19,398)
Cost of insurance and administrative expense (note 3) (28,158) (2,075) (11,784) (14,687)
Transfer gain (loss) and transfer fees 1,505 42 (28,447) 112,178
Transfers (to) from the Guarantee Account (note 1) 11,227 - - -
Interfund transfers 632,238 (80,268) (888,256) 1,078,985
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 272,840 (70,045) (916,249) 1,178,576
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 872,111 (74,115) (701,293) 1,615,671
Net assets at beginning of period 5,084,946 436,086 3,043,406 927,859
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $5,957,057 361,971 2,342,113 2,543,530
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
15
<PAGE>
GE Life & Annuity Separate Account III
Notes to Financial Statements
June 30, 1999
(Unaudited)
- ------------------------------------------------------------------------------
(1) Description of Entity
GE Life & Annuity Separate Account III (the Account) is a separate
investment account established in 1986 by GE Life and Annuity Assurance
Company (GE Life & Annuity) under the laws of the Commonwealth of Virginia.
The Account operates as a unit investment trust under the Investment
Company Act of 1940. The Account is used to fund certain benefits for
variable life insurance policies issued by GE Life & Annuity. GE Life &
Annuity is a stock life insurance company operating under a charter granted
by the Commonwealth of Virginia on March 21, 1871. A majority of the
capital stock of GE Life & Annuity is owned by General Electric Capital
Assurance Company. The remaining portion is owned by GE Financial Assurance
Holdings, Inc. General Electric Capital Assurance Company and GE Financial
Assurance Holdings, Inc. are indirect, wholly-owned subsidiaries of General
Electric Capital Corporation ("GE Capital"). GE Capital, a diversified
financial services company, is a wholly-owned subsidiary of General
Electric Company (GE), a New York corporation. Prior to April 1, 1996, GE
Life & Annuity was an indirect wholly-owned subsidiary of Aon Corporation
(Aon).
During first quarter of 1999, a new subdivision was added to the Account
(see note 2). The Premier Growth Equity Fund invests solely in a designated
portfolio of the GE Investments Funds, Inc and is a series type mutual
fund.
For policies issued after May 1, 1995, some policyowners may transfer cash
values between the Account's portfolios and the Guarantee Account that is
part of the general account of GE Life & Annuity. Amounts transferred to
the Guarantee Account earn interest at the interest rate effective at the
time of such transfer and remain in effect for one year, after which a new
rate may be declared.
(2) Summary of Significant Accounting Policies
(a) Investments
Investments are stated at fair value which is based on the underlying
net asset value per share of the respective portfolios or funds.
Purchases and sales of investments are recorded on the trade date and
income distributions are recorded on the ex-dividend date. Realized
gains and losses on investments are determined on the average cost
basis. The units and unit values are disclosed as of the last business
day in the applicable year or period.
The aggregate cost of the investments acquired and the aggregate
proceeds of investments sold, for the six months or period ended June
30, 1999 were:
16 (Continued)
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
(Unaudited)
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -----------------------------------------------------------------------------
GE Investment Funds, Inc.:
S&P 500 Index $ 6,866,563 $ 6,021,084
Money Market 97,349,355 95,175,303
Total Return 150,724 127,583
International Equity 24,186 4,233
Real Estate Securities 75,715 116,239
Global Income 6,989,121 4,846,781
Value Equity 1,566,900 1,374,685
Income 41,731 75,590
U.S. Equity 38,791 5,081
Premier Growth Equity 16,960 5
Oppenheimer Variable Account Funds:
Bond 3,574,746 3,870,388
Aggressive Growth 9,648,747 10,974,629
Capital Appreciation 12,003,828 11,187,997
High Income 3,524,858 6,737,857
Multiple Strategies 384,132 250,843
Variable Insurance Products Fund:
Equity-Income 2,141,284 2,744,883
Growth 21,247,187 20,633,928
Overseas 3,297,735 4,519,684
Variable Insurance Products Fund II:
Asset Manager 1,177,242 1,007,111
Contrafund 3,101,429 4,136,137
Variable Insurance Products Fund III:
Growth & Income 3,823,434 3,234,421
Growth Opportunties 180,911 100,431
Goldman Sachs Variable Insurance Trust
Growth and Income 77,552 12,841
Mid Cap Value 1,366,620 1,316,839
17 (Continued)
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
(Unaudited)
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth 22,834,201 23,612,177
Growth 2,789,511 2,544,011
Worldwide Growth 3,291,062 3,413,843
Balanced 1,153,241 866,534
Flexible Income 165,470 225,882
International Growth 2,820,212 3,750,034
Capital Appreciation 34,987,228 33,809,209
Federated Insurance Series:
Utility Fund II 59,711 75,537
High Income Bond Fund II 1,984,085 2,043,406
American Leaders Fund II 218,669 151,071
The Alger American Fund
Small Capitalization 6,151,671 6,904,867
Growth 3,100,131 2,172,406
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth 117,365 10,861
PBHG Growth II 6,679,691 5,356,228
Salomon Brothers Variable Series Funds, Inc.
Strategic Bond 3,530,808 2,471,283
(b) Capital Transactions
The increase (decrease) of outstanding units from capital transactions
for the six months or lesser period ended June 30, 1999 is as follows:
18 (Continued)
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
GE Investments Funds, Inc.
--------------------------------------------------------
S&P 500 Money Total International
Index Market Return Equity
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 140,437 692,577 59,645 20,749
From capital transactions:
Net premiums 4,292 202,958 308 --
Loan Interest (29) 1,967 (18) --
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- -- -- --
Surrenders (1,352) (163,895) (1,152) --
Loans 10 3,340 (107) --
Cost of insurance (815) (4,474) (334) (115)
Fixed Transfers 226 -- 8 --
Interfund transfers 21,045 70,261 2,491 1,557
-------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions 23,377 110,157 1,196 1,442
-------- -------- -------- --------
Units outstanding at June 30, 1999 163,814 802,734 60,841 22,191
- --------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (continued)
--------------------------------------------------------------------------------
Real Estate Global Value U.S. Premier
Securities Income Equity Income Equity Growth Equity
Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 47,312 2,483 38,490 137,493 952 --
From capital transactions:
Net premiums 550 294 244 1,514 -- --
Loan Interest 1 -- (66) (165) -- --
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- -- -- -- -- --
Surrenders (1,745) -- -- (117) -- --
Loans (247) 690 (386) -- -- --
Cost of insurance (272) (333) (232) (730) (16) --
Fixed Transfers -- -- 1,890 1,884 -- --
Interfund transfers (558) 185,048 11,256 (4,556) 3,060 5,458
-------- -------- -------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions (2,271) 185,699 12,706 (2,170) 3,044 5,458
-------- -------- -------- -------- -------- --------
Units outstanding at June 30, 1999 45,041 188,182 51,196 135,323 3,996 5,458
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Oppenheimer Variable Account Funds
--------------------------------------------------------------------------------------
Aggressive Capital High Multiple
Bond Growth Appreciation Income Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
- ---------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 106,851 176,259 187,368 193,022 118,293
From capital transactions:
Net premiums -- 253 1,349 163 1,289
Loan Interest 27 (56) (31) 4 27
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- (574) -- -- --
Surrenders (1,366) (2,910) (1,180) (876) (425)
Loans (191) (2,002) (4,572) (1,260) (188)
Cost of insurance (474) (868) (956) (834) (573)
Fixed Transfers 264 171 -- 7 17
Interfund transfers (15,183) (25,304) (100,768) (41,539) (4,135)
-------- -------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions (16,923) (31,290) (106,158) (44,335) (3,988)
-------- -------- -------- -------- --------
Units outstanding at June 30, 1999 89,928 144,969 81,210 148,687 114,305
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon
Brothers
Goldman Sachs Variable Variable Series
Insurance Trust Fund, Inc.
--------------------------------------- ----------------------
Growth and Mid Cap Strategic
Income Value Bond
Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 598 9,377 --
From capital transactions:
Net premiums 131 3,338 --
Loan Interest (9) (20) --
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- -- --
Surrenders -- -- --
Loans -- -- (4,031)
Cost of insurance (16) (528) (162)
Fixed Transfers -- 10,539 --
Interfund transfers 6,726 6,648 108,643
-------- -------- --------
Net increase (decrease) in units resulting
from capital transactions 6,832 19,977 104,450
-------- -------- --------
Units outstanding at June 30, 1999 7,430 29,354 104,450
- ------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Variable Insurance Products Fund
------------------------------------------------------
Equity
Income Growth Overseas
Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 466,221 291,541 240,006
From capital transactions:
Net premiums 78 3,212 144
Loan Interest (299) (277) (148)
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits - - (968)
Surrenders (3,312) (10,549) (2,192)
Loans (3,613) (458) (1,003)
Cost of insurance (2,178) (1,444) (894)
Fixed Transfers 1,169 88 10
Interfund transfers (25,644) (7,495) (54,623)
-------- ------- --------
Net increase (decrease) in units resulting
from capital transactions (33,799) (16,923) (59,674)
-------- -------- --------
Units outstanding at June 30, 1999 432,422 274,618 180,332
- --------------------------------------------------------------------------------------------------------
Variable Insurance Variable Insurance Products
Products Fund II Fund III
----------------------------------- --------------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 376,015 427,427 63,540 42,641
From capital transactions:
Net premiums -- 2,492 618 39
Loan Interest (225) (237) (51) --
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits (1,322) (944) -- --
Surrenders (12,697) (14,584) (861) --
Loans 48 (4,274) (2,820) (15)
Cost of insurance (1,826) (2,066) (511) (269)
Fixed Transfers 861 255 -- --
Interfund transfers (3,702) (35,212) 40,937 4,727
-------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions (18,863) (54,570) 37,312 4,482
-------- -------- -------- --------
Units outstanding at June 30, 1999 357,152 372,857 100,852 47,123
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Federated Insurance Series
--------------------------------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
- -------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 61,968 74,067 27,861
From capital transactions:
Net premiums 3,220 190 --
Loan Interest (1) (75) (17)
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- -- --
Surrenders -- (1,780) --
Loans (88) (7,293) 491
Cost of insurance (369) (440) (148)
Fixed Transfers 344 -- --
Interfund transfers (5,083) 408 (3,083)
------- ------- -------
Net increase (decrease) in units resulting
from capital transactions (1,977) (8,990) (2,757)
------- ------- -------
Units outstanding at June 30, 1999 59,991 65,077 25,104
- -------------------------------------------------------------------------------------------------
Alger American Fund PBHG Insurance Series Fund, Inc.
---------------------------------------- -----------------------------------------
Small PBHG Large PBHG
Capitalization Growth Cap Growth Growth II
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 249,982 171,128 2,362 12,126
From capital transactions:
Net premiums 2,783 2,452 392 143
Loan Interest (354) (137) 2 --
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- (1,244) -- --
Surrenders -- (3,285) -- --
Loans (24) (1,548) (36) --
Cost of insurance (1,068) (1,066) (45) (162)
Fixed Transfers 976 12 -- --
Interfund transfers (88,588) 29,724 6,518 96,177
-------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions (86,275) 24,908 6,831 96,158
-------- -------- -------- --------
Units outstanding at June 30, 1999 163,707 196,036 9,193 108,284
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Janus Aspen Series
--------------------------------------------------------------------------------------
Aggressive Worldwide Flexible
Growth Growth Growth Balanced Income
Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 123,521 263,803 471,394 261,302 32,471
From capital transactions:
Net premiums 3,786 2,865 2,265 1,825 734
Loan Interest (358) (186) (24) (318) 5
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- (979) (442) (1,204) --
Surrenders (9,198) (5,178) (289) (6,195) --
Loans (2,540) (2,490) (1,113) (11,345) 166
Cost of insurance (3,447) (1,402) (1,138) (1,411) (153)
Fixed Transfers -- 140 625 563 --
Interfund transfers 79,740 18,019 (646) 31,682 (5,925)
-------- -------- -------- -------- --------
Net increase (decrease) in units resulting
from capital transactions 67,983 10,789 (762) 13,597 (5,173)
-------- -------- -------- -------- --------
Units outstanding at June 30, 1999 191,504 274,592 470,632 274,899 27,298
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
----------------------------------------
International Capital
Growth Appreciation
Portfolio Portfolio
- -------------------------------------------------------------------------------------
Units outstanding at December 31, 1998 192,621 47,461
From capital transactions:
Net premiums 1,031 3,419
Loan Interest 67 (57)
Tranfers (to) from the
general acct. of GE Life & Annuity:
Death benefits -- --
Surrenders -- (2,219)
Loans (311) (1,032)
Cost of insurance (758) (781)
Fixed Transfers -- --
Interfund transfers (57,111) 57,409
-------- --------
Net increase (decrease) in units resulting
from capital transactions (57,082) 56,739
-------- --------
Units outstanding at June 30, 1999 135,539 104,200
- -------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
(c) Federal Income Taxes
The Account is not taxed separately because the operations of the
Account are part of the total operations of GE Life & Annuity. GE Life
& Annuity is taxed as a life insurance company under the Internal
Revenue Code (the Code). GE Life & Annuity is included in the General
Electric Capital Assurance Company consolidated federal income tax
return. Under existing federal income tax law, no taxes are payable on
the investment income or on the capital gains of the Account.
(d) Use of Estimates
Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and
assumptions that affect amounts and disclosures reported therein.
Actual results could differ from those estimates.
(3) Related Party Transactions
The premiums transferred from GE Life & Annuity to the Account represent
gross premiums recorded by GE Life & Annuity on its variable life insurance
policies. During the first ten years following a premium payment, a charge
is deducted monthly at an effective annual rate of .50% of the premium
payment from the policy cash value to cover distribution expenses and
premiums taxes. If a policy is surrendered or lapses during the first nine
years, a charge is made by GE Life & Annuity to cover the expenses of
issuing the policy. Subject to certain limitations, the charge generally
equals 6% of the premium withdrawn in the first four years, and this charge
decreases 1% per year for every year thereafter. A charge equal to the
lesser of $25 or 2% of the amount paid on a partial surrender will be made
to compensate GE Life & Annuity for the costs incurred in connection with
the partial surrender.
A charge based on the policy specified amount of insurance, death benefit
option, cash values, duration, the insured's sex, issue age and risk class
is deducted from the policy cash values each month to compensate GE Life &
Annuity for the cost of insurance. In addition, GE Life & Annuity charges
the Account for the mortality and expense (M&E) risk that GE Life & Annuity
assumes. This M&E charge is deducted daily and equals the effective annual
rate of .90% of the net assets of the Account. GE Life & Annuity also
charges the Account for certain administrative charges which are deducted
daily and equal the effective annual rate of .40% of the net assets of the
Account.
24
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
GE Investments Funds, Inc. (the Fund) is an open-end diversified
management investment company.
Capital Brokerage Corporation, an affiliate of GE Life & Annuity, is a
Washington Corporation registered with the Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Capital Brokerage Corporation
serves as principal underwriter for variable life insurance policies and
variable annuities issued by GE Life & Annuity.
GE Investment Management Incorporated (Investment Advisor), a wholly-owned
subsidiary of GE, currently serves as investment advisor to GE Investments
Funds, Inc. As compensation for its services, the Investment Advisor is
paid an investment advisory fee by the Fund based on the average daily net
assets at an effective annual rate of .35% for the S&P 500 Index Fund, .50%
for the Money Market, Income, and Total Return Funds, 1.00% for the
International Equity Fund, .85% for the Real Estate Securities Fund, .60%
for the Global Income Fund, .55 for the U.S. Equity Fund, and .65% for the
Value Equity and Premier Growth Equity Funds. Prior to May 1, 1997, Aon
Advisors, Inc. served as investment advisor to the Fund and was subject to
the same compensation arrangement as GE Investment Management Incorporated.
Certain officers and directors of GE Life & Annuity are also officers and
directors of Capital Brokerage Corporation.
25
