<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Financial Statements
For the six months ended June 30, 2000
(Unaudited)
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Table of Contents
For the six months ended June 30, 2000
<TABLE>
<CAPTION>
Page
----
<S> <C>
Financial Statements (Unaudited):
Statements of Assets and Liabilities..................................... F-1
Statements of Operations................................................. F-8
Statements of Changes in Net Assets...................................... F-14
Notes to Financial Statements (Unaudited).................................. F-26
</TABLE>
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
----------------------------------------------------------
S&P 500 Total Real Estate
Index Money Return International Securities
Fund Market Fund Fund Equity Fund Fund
---------- ----------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Investment in GE
Investments Funds,
Inc.,
at fair value (note 2):
S&P 500 Index Fund
(284,329 shares;
cost -- $7,007,861).. $7,941,321 -- -- -- --
Money Market Fund
(13,679,548 shares;
cost --
$13,679,548)........ -- 13,679,548 -- -- --
Total Return Fund
(106,574 shares;
cost -- $1,528,974).. -- -- 1,743,555 -- --
International Equity
Fund (29,799 shares;
cost -- $422,979).... -- -- -- 441,028 --
Real Estate Securities
Fund (48,018 shares;
cost -- $690,829).... -- -- -- -- 606,941
Receivable from
affiliate.............. -- -- 258 -- --
Receivable for units
sold................... -- 2,215,612 250 -- --
---------- ---------- --------- ------- -------
Total assets........... 7,941,321 15,895,160 1,744,063 441,028 606,941
---------- ---------- --------- ------- -------
Liabilities
Accrued expenses payable
to affiliate (note 3).. 6,046 631,749 500 24,956 5,325
Payable for units
withdrawn.............. 181 -- -- -- --
---------- ---------- --------- ------- -------
Total liabilities...... 6,227 631,749 500 24,956 5,325
---------- ---------- --------- ------- -------
Net assets attributable
to variable life
policyholders.......... $7,935,094 15,263,411 1,743,563 416,072 601,616
========== ========== ========= ======= =======
Outstanding units....... 155,896 920,037 50,774 21,991 35,389
========== ========== ========= ======= =======
Net asset value per
unit................... $ 50.90 16.59 34.34 18.92 17.00
========== ========== ========= ======= =======
</TABLE>
F-1
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc. (continued)
----------------------------------------------------
Global Mid-Cap U.S. Premier
Income Value Equity Income Equity Growth Equity
Fund Fund Fund Fund Fund
------- ------------ --------- ------- -------------
<S> <C> <C> <C> <C> <C>
Assets
Investment in GE
Investments Funds, Inc.,
at fair value (note 2):
Global Income Fund
(2,681 shares; cost --
$25,075)............. $25,420 -- -- -- --
Mid-Cap Value Equity
Fund (47,588 shares;
cost -- $721,627)..... -- 719,060 -- -- --
Income Fund (103,512
shares; cost of
$1,248,714)........... -- -- 1,231,791 -- --
U.S. Equity Fund (3,332
shares; cost
$123,109)............. -- -- -- 126,574 --
Premier Growth Equity
Fund (5,995 shares;
cost $477,113)........ -- -- -- -- 528,610
Receivable from
affiliate............... 1,048 -- -- -- 57
------- ------- --------- ------- -------
Total assets............ 26,468 719,060 1,231,791 126,574 528,667
------- ------- --------- ------- -------
Liabilities
Accrued expenses payable
to affiliate (note 3)... 8 1,148 975 1,306 151
Payable for units
withdrawn............... -- -- -- 670 --
------- ------- --------- ------- -------
Total liabilities....... 8 1,148 975 1,976 151
------- ------- --------- ------- -------
Net assets attributable
to variable life
policyholders........... $26,460 717,912 1,230,816 124,598 528,516
======= ======= ========= ======= =======
Outstanding units........ 2,574 47,138 115,461 9,936 45,483
======= ======= ========= ======= =======
Net asset value per
unit.................... $ 10.28 15.23 10.66 12.54 11.62
======= ======= ========= ======= =======
</TABLE>
F-2
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
-------------------------------------------------------
Aggressive Capital High Multiple
Bond Growth Appreciation Income Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
---------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Investment in
Oppenheimer Variable
Account Funds, at fair
value (note 2):
Bond Fund/VA (123,699
shares; cost --
$1,432,216)......... $1,337,181 -- -- -- --
Aggressive Growth
Fund/VA (116,544
shares; cost --
$6,532,736)......... -- 11,262,767 -- -- --
Capital Appreciation
Fund/VA (103,963
shares; cost --
$4,885,814)......... -- -- 5,316,654 -- --
High Income Fund/VA
(413,314 shares;
cost -- $4,406,121).. -- -- -- 3,955,415 --
Multiple Strategies
Fund/VA (194,922
shares; cost --
$3,187,130)......... -- -- -- -- 3,233,757
Receivable from
affiliate.............. 369 973 -- 1,033 --
Receivable for units
sold................... 376 -- 106 221 471
---------- ---------- --------- --------- ---------
Total assets........... 1,337,926 11,263,740 5,316,760 3,956,669 3,234,228
---------- ---------- --------- --------- ---------
Liabilities
Accrued expenses payable
to affiliate (note 3).. 384 3,224 12,303 1,134 1,070
Payable for units
withdrawn.............. -- 925 -- -- --
---------- ---------- --------- --------- ---------
Total liabilities...... 384 4,149 12,303 1,134 1,070
---------- ---------- --------- --------- ---------
Net assets attributable
to variable life
policyholders.......... $1,337,542 11,259,591 5,304,457 3,955,535 3,233,158
========== ========== ========= ========= =========
Outstanding units....... 58,690 139,940 93,570 121,934 100,659
========== ========== ========= ========= =========
Net asset value per
unit................... $ 22.79 80.46 56.69 32.44 32.12
========== ========== ========= ========= =========
</TABLE>
F-3
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance Variable Insurance
Products Fund Products Fund II Products Fund III
-------------------------------- -------------------- -----------------------
Growth
Equity- Asset & Growth
Income Growth Overseas Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ---------- --------- --------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Variable
Insurance Products
Fund, at fair value
(note 2):
Equity-Income
Portfolio (562,340
shares; cost --
$12,640,853)........ $12,883,204 -- -- -- -- -- --
Growth Portfolio
(310,111 shares;
cost --
$13,927,742)........ -- 15,983,101 -- -- -- -- --
Overseas Portfolio
(186,561 shares;
cost -- $4,375,887).. -- -- 4,376,723 -- -- -- --
Investment in Variable
Insurance Products Fund
II, at fair value
(note 2):
Asset Manager
Portfolio (479,209
shares; cost --
$7,461,238)......... -- -- -- 7,926,121 -- -- --
Contrafund Portfolio
(415,626 shares;
cost -- $9,518,116).. -- -- -- -- 10,428,062 -- --
Investment in Variable
Insurance Products Fund
III, at fair value
(note 2):
Growth & Income
Portfolio (71,507
shares; cost --
$1,170,974).......... -- -- -- -- -- 1,106,925 --
Growth Opportunities
Portfolio (31,782
shares; cost --
$657,442)........... -- -- -- -- -- -- 655,017
Receivable from
affiliate.............. 2,193 -- -- -- -- -- --
Receivable for units
sold................... 55 -- -- 471 490 -- --
----------- ---------- --------- --------- ---------- --------- -------
Total assets........... 12,885,452 15,983,101 4,376,723 7,926,592 10,428,552 1,106,925 655,017
----------- ---------- --------- --------- ---------- --------- -------
Liabilities
Accrued expenses payable
to affiliate (note 3).. 3,700 11,129 39,513 23,727 7,378 1,129 1,081
Payable for units
withdrawn.............. -- 78,271 178 -- -- -- --
----------- ---------- --------- --------- ---------- --------- -------
Total liabilities...... 3,700 89,400 39,691 23,727 7,378 1,129 1,081
----------- ---------- --------- --------- ---------- --------- -------
Net assets attributable
to variable life
policyholders.......... $12,881,752 15,893,701 4,337,032 7,902,865 10,421,174 1,105,796 653,936
=========== ========== ========= ========= ========== ========= =======
Outstanding units....... 351,672 243,060 156,628 265,464 331,357 66,775 43,918
=========== ========== ========= ========= ========== ========= =======
Net asset value per
unit................... $ 36.63 65.39 27.69 29.77 31.45 16.56 14.89
=========== ========== ========= ========= ========== ========= =======
</TABLE>
F-4
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
PBHG Insurance
Federated Insurance Series Alger American Fund Series Fund, Inc.
---------------------------- ------------------------ -------------------
PBHG
American High Income Small Large Cap PBHG
Leaders Bond Utility Capitalization Growth Growth Growth II
Fund II Fund II Fund II Portfolio Portfolio Portfolio Portfolio
-------- ----------- ------- -------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Federated
Insurance Series, at
fair value (note 2):
American Leaders Fund
II (39,097 shares;
cost -- $769,495)... $750,263 -- -- -- -- -- --
High Income Bond Fund
II (77,322 shares;
cost -- $739,329)... -- 705,178 -- -- -- -- --
Utility Fund II
(31,923 shares;
cost -- $429,322)... -- -- 430,647 -- -- -- --
Investment in Alger
American Fund, at fair
value (note 2):
Small Capitalization
Portfolio (89,739
shares; cost --
$3,668,522)........ -- -- -- 2,894,964 -- -- --
Growth Portfolio
(100,868 shares;
cost --
$5,411,364)........ -- -- -- -- 5,789,840 -- --
Investment in PBHG
Insurance Series Fund,
Inc., at fair value
(note 2):
PBHG Large Cap Growth
Portfolio (23,060
shares; cost --
$571,067).......... -- -- -- -- -- 693,635 --
PBHG Growth II
Portfolio
(99,015 shares;
cost --
$2,657,861)........ -- -- -- -- -- -- 2,740,743
Receivable from
affiliate............. -- 68 -- -- 467 -- --
Receivable for units
sold.................. 55 -- 808 -- -- -- --
-------- ------- ------- --------- --------- ------- ---------
Total assets.......... 750,318 705,246 431,455 2,894,964 5,790,307 693,635 2,740,743
-------- ------- ------- --------- --------- ------- ---------
Liabilities
Accrued expenses
payable to affiliate
(note 3).............. 934 234 1,000 1,687 1,659 32,586 3,289
Payable for units
withdrawn............. -- -- -- -- 76,797 -- 2,087,321
-------- ------- ------- --------- --------- ------- ---------
Total liabilities..... 934 234 1,000 1,687 78,456 32,586 2,090,610
-------- ------- ------- --------- --------- ------- ---------
Net assets attributable
to variable life
policyholders......... $749,384 705,012 430,455 2,893,277 5,711,851 661,049 650,133
======== ======= ======= ========= ========= ======= =========
Outstanding units...... 44,633 46,969 23,130 170,193 215,298 22,905 24,478
======== ======= ======= ========= ========= ======= =========
Net asset value per
unit.................. $ 16.79 15.01 18.61 17.00 26.53 28.86 26.56
======== ======= ======= ========= ========= ======= =========
</TABLE>
F-5
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
----------------------------------------------------------------------------------------------------
Global
Aggressive Worldwide Flexible International Capital Life Global
Growth Growth Growth Balanced Income Growth Appreciation Sciences Technology
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- --------- --------- ------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in
Janus Aspen
Series, at fair
value (note 2):
Aggressive
Growth
Portfolio
(151,162
shares; cost --
$8,426,739).... $8,434,848 -- -- -- -- -- -- -- --
Growth Portfolio
(327,542 shares;
cost --
$8,416,608).... -- 10,772,853 -- -- -- -- -- -- --
Worldwide Growth
Portfolio
(394,264
shares; cost --
$15,252,448)... -- -- 18,936,501 -- -- -- -- -- --
Balanced
Portfolio
(281,961 shares;
cost --
$5,883,947).... -- -- -- 7,421,222 -- -- -- -- --
Flexible Income
Portfolio
(21,164 shares;
cost --
$247,035)...... -- -- -- -- 238,091 -- -- -- --
International
Growth
Portfolio
(102,476 shares;
cost --
$4,027,303).... -- -- -- -- -- 4,067,260 -- -- --
Capital
Appreciation
Portfolio
(100,339 shares;
cost --
$2,822,714).... -- -- -- -- -- -- 3,183,743 -- --
Global Life
Sciences
Portfolio
(7,030 shares;
costs --
$56,970)....... -- -- -- -- -- -- -- 60,596 --
Global
Technology
Portfolio
(3,631 shares;
cost --
$35,495)....... -- -- -- -- -- -- -- -- 35,660
Receivable from
affiliate........ -- 1,760 5,501 929 -- -- -- -- --
Receivable for
units sold....... -- 806 3,170 -- -- -- -- -- --
---------- ---------- ---------- --------- ------- --------- --------- ------ ------
Total assets..... 8,434,848 10,775,419 18,945,172 7,422,151 238,091 4,067,260 3,183,743 60,596 35,660
---------- ---------- ---------- --------- ------- --------- --------- ------ ------
Liabilities
Accrued expenses
payable to
affiliate (note
3)............... 13,683 2,981 5,331 2,019 625 1,570 3,963 17 10
Payable for units
withdrawn........ 2,293 -- -- 651 -- -- 761 -- --
---------- ---------- ---------- --------- ------- --------- --------- ------ ------
Total
liabilities..... 15,976 2,981 5,331 2,670 625 1,570 4,724 17 10
---------- ---------- ---------- --------- ------- --------- --------- ------ ------
Net assets
attributable to
variable life
policyholders.... $8,418,872 10,772,438 18,939,841 7,419,481 237,466 4,065,690 3,179,019 60,579 35,650
========== ========== ========== ========= ======= ========= ========= ====== ======
Outstanding
units............ 166,942 316,093 484,147 304,576 17,525 139,907 103,450 5,683 3,488
========== ========== ========== ========= ======= ========= ========= ====== ======
Net asset value
per unit......... $ 50.43 34.08 39.12 24.36 13.55 29.06 30.73 10.66 10.22
========== ========== ========== ========= ======= ========= ========= ====== ======
</TABLE>
F-6
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Goldman Sachs Salomon Brothers
Variable Variable Series
Insurance Trust Funds Inc.
--------------- ----------------
Growth
and Mid Cap Total
Income Value Investors Return
Fund Fund Fund Fund
------- ------- --------- ------
<S> <C> <C> <C> <C>
Assets
Investment in Goldman Sachs Variable
Insurance Trust, at fair value (note 2):
Growth and Income Fund (3,963 shares;
cost -- $44,565).......................... $43,477 -- -- --
Mid Cap Value Fund (31,081 shares; cost --
$245,732)................................ -- 271,963 -- --
Investment in Salomon Brothers Variable
Series Funds Inc., at fair value (note 2):
Investors Fund (11,749 shares; cost --
$156,620)................................ -- -- 156,849 --
Total Return Fund (836 shares; cost --
$9,010).................................. -- -- -- 8,822
Receivable from affiliate.................... 7 -- -- 1
------- ------- ------- -----
Total assets................................ 43,484 271,963 156,849 8,823
------- ------- ------- -----
Liabilities
Accrued expenses payable to affiliate (note
3).......................................... 12 157 35 3
Payable for units withdrawn.................. -- 743 -- --
------- ------- ------- -----
Total liabilities........................... 12 900 35 3
------- ------- ------- -----
Net assets attributable to variable life
policyholders............................... $43,472 271,063 156,814 8,820
======= ======= ======= =====
Outstanding units............................ 4,715 31,373 10,807 811
======= ======= ======= =====
Net asset value per unit..................... $ 9.22 8.64 14.51 10.88
======= ======= ======= =====
</TABLE>
See accompanying notes to unaudited financial statements.
F-7
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
--------------------------------
Money Total
S&P 500 Index Market Return
Fund Fund Fund
------------- ---------- -------
Six months ended June 30, 2000
--------------------------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends............... $ -- 412,925 --
Expenses -- Mortality and expense risk
charges and administrative expenses (note
3)........................................ 52,889 88,280 11,488
--------- ------- -------
Net investment income (expense).............. (52,889) 324,645 (11,488)
--------- ------- -------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss)................... 181,722 -- 12,484
Unrealized appreciation (depreciation)..... (242,929) -- 40,688
Capital gain distributions................. -- -- --
--------- ------- -------
Net realized and unrealized gain (loss) on
investments................................. (61,207) -- 53,172
--------- ------- -------
Increase (decrease) in net assets from
operations.................................. $(114,096) 324,645 41,684
========= ======= =======
<CAPTION>
GE Investments Funds, Inc.
(continued)
--------------------------------
Real
Estate Global
International Securities Income
Equity Fund Fund Fund
------------- ---------- -------
Six months ended June 30, 2000
--------------------------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends............... $ -- -- --
Expenses -- Mortality and expense risk
charges and administrative expenses (note
3)........................................ 3,107 3,977 506
--------- ------- -------
Net investment income (expense).............. (3,107) (3,977) (506)
--------- ------- -------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss)................... 36,422 (36,933) (12,622)
Unrealized appreciation (depreciation)..... (28,996) 123,444 930
Capital gain distributions................. -- -- --
--------- ------- -------
Net realized and unrealized gain (loss) on
investments................................. 7,426 86,511 (11,692)
--------- ------- -------
Increase (decrease) in net assets from
operations.................................. $ 4,319 82,534 (12,198)
========= ======= =======
</TABLE>
F-8
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
(continued)
---------------------------------
Mid-Cap Premier
Value U.S. Growth
Equity Income Equity Equity
Fund Fund Fund Fund
-------- ------- ------ -------
Six months ended June 30, 2000
---------------------------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends............... $ -- -- -- --
Expenses -- Mortality and expense risk
charges and administrative expenses (note
3)........................................ 4,869 8,414 872 3,399
-------- ------- ---- ------
Net investment income (expense).............. (4,869) (8,414) (872) (3,399)
-------- ------- ---- ------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss)................... 4,871 (18,122) 988 4,948
Unrealized appreciation (depreciation)..... (31,344) 59,328 (55) (3,249)
Capital gain distributions................. -- -- -- --
-------- ------- ---- ------
Net realized and unrealized gain (loss) on
investments................................. (26,473) 41,206 933 1,699
-------- ------- ---- ------
Increase (decrease) in net assets from
operations.................................. $(31,342) 32,792 61 (1,700)
======== ======= ==== ======
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
-------------------------------------------------------
Aggressive Capital High Multiple
Bond Growth Appreciation Income Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
-------- ---------- ------------ -------- ----------
Six months ended June 30, 2000
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............ $108,521 -- 6,341 414,296 145,756
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3).... 9,591 70,333 35,041 27,491 21,296
-------- --------- -------- -------- --------
Net investment income
(expense).............. 98,930 (70,333) (28,700) 386,805 124,460
-------- --------- -------- -------- --------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)............... (53,962) 648,214 804,899 (42,282) 4,777
Unrealized
appreciation
(depreciation)....... (31,732) 902,131 (673,984) (398,786) (153,516)
Capital gain
distributions........ -- 389,633 338,409 -- 211,696
-------- --------- -------- -------- --------
Net realized and
unrealized gain (loss)
on investments......... (85,694) 1,939,978 469,324 (441,068) 62,957
-------- --------- -------- -------- --------
Increase (decrease) in
net assets from
operations............. $ 13,236 1,869,645 440,625 (54,263) 187,417
======== ========= ======== ======== ========
</TABLE>
F-9
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products Fund
------------------------------------
Equity-Income Growth Overseas
Portfolio Portfolio Portfolio
------------- ---------- ----------
Six months ended June 30, 2000
------------------------------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends........... $ 248,784 16,715 65,884
Expenses -- Mortality and expense risk
charges and administrative expenses
(note 3).............................. 89,136 103,893 31,837
----------- ---------- ----------
Net investment income (expense).......... 159,648 (87,178) 34,047
----------- ---------- ----------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss)............... (48,152) 401,629 385,641
Unrealized appreciation
(depreciation)........................ (1,653,726) (1,321,104) (1,117,777)
Capital gain distributions............. 937,281 1,663,182 414,893
----------- ---------- ----------
Net realized and unrealized gain (loss)
on investments.......................... (764,597) 743,707 (317,243)
----------- ---------- ----------
Increase (decrease) in net assets from
operations.............................. $ (604,949) 656,529 (283,195)
=========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Products Fund II Products Fund III
----------------------- ------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
----------- ---------- --------- -------------
Six months ended Six months ended
June 30, 2000 June 30, 2000
----------------------- ------------------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends.................. $ 274,793 39,966 15,017 10,736
Expenses -- Mortality and
expense risk charges and
administrative expenses
(note 3)................... 55,487 73,295 7,884 4,807
----------- ---------- -------- -------
Net investment income
(expense).................... 219,306 (33,329) 7,133 5,929
----------- ---------- -------- -------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss).... 223,226 295,657 (39,106) (3,503)
Unrealized appreciation
(depreciation)............. (1,221,801) (1,987,830) (118,781) (98,718)
Capital gain distributions.. 647,393 1,450,776 98,008 54,448
----------- ---------- -------- -------
Net realized and unrealized
gain (loss) on investments... (351,182) (241,397) (59,879) (47,773)
----------- ---------- -------- -------
Increase (decrease) in net
assets from operations....... $ (131,876) (274,725) (52,746) (41,844)
=========== ========== ======== =======
</TABLE>
F-10
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Federated Insurance Series
-----------------------------
American High Income
Leaders Bond Utility
Fund II Fund II Fund II
-------- ----------- -------
Six months ended
June 30, 2000
-----------------------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends.................. $ 7,773 83,925 12,337
Expenses -- Mortality and expense risk charges
and administrative expenses (note 3)......... 5,230 6,701 2,787
-------- -------- -------
Net investment income (expense)................. 2,543 77,224 9,550
-------- -------- -------
Net realized and unrealized gain on investments:
Net realized gain (loss)...................... 2,260 (77,307) 4,693
Unrealized appreciation (depreciation)........ (68,814) (29,235) (32,723)
Capital gain distributions.................... 23,521 -- 8,200
-------- -------- -------
Net realized and unrealized gain (loss) on
investments.................................... (43,033) (106,542) (19,830)
-------- -------- -------
Increase (decrease) in net assets from
operations..................................... $(40,489) (29,318) (10,280)
======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
PBHG Insurance
Alger American Fund Series Fund, Inc.
------------------------ -------------------
PBHG
Small Large Cap PBHG
Capitalization Growth Growth Growth II
Portfolio Portfolio Portfolio Portfolio
-------------- --------- --------- ---------
Six months ended Six months ended
June 30, 2000 June 30, 2000
------------------------ -------------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends.... $ -- -- -- --
Expenses -- Mortality and
expense risk charges and
administrative expenses (note
3)............................. 19,589 37,453 2,888 5,397
----------- -------- ------ -------
Net investment income (expense)... (19,589) (37,453) (2,888) (5,397)
----------- -------- ------ -------
Net realized and unrealized gain
(loss) on investments:
Net realized gain (loss)........ 400,885 108,693 34,052 192,166
Unrealized appreciation
(depreciation)................. (1,435,058) (656,576) 11,383 1,153
Capital gain distributions...... 1,020,453 732,190 -- --
----------- -------- ------ -------
Net realized and unrealized gain
(loss) on investments............ (13,720) 184,307 45,435 193,319
----------- -------- ------ -------
Increase (decrease) in net assets
from operations.................. $ (33,309) 146,854 42,547 187,922
=========== ======== ====== =======
</TABLE>
F-11
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
---------------------------------------------
Aggressive Worldwide
Growth Growth Growth Balanced
Portfolio Portfolio Portfolio Portfolio
----------- --------- ---------- ---------
Six months ended June 30, 2000
---------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary Dividends.... $ -- -- -- --
Expenses -- Mortality and
expense risk charges and
administrative expenses (note
3)............................. 72,178 68,774 130,260 48,868
----------- -------- ---------- --------
Net investment income (expense)... (72,178) (68,774) (130,260) (48,868)
----------- -------- ---------- --------
Net realized and unrealized gain
(loss) on investments:
Net realized gain (loss)........ 2,726,250 636,607 3,969,731 143,574
Unrealized appreciation
(depreciation)................. (3,466,076) (906,904) (3,809,510) (557,003)
Capital gain distributions...... 809,741 415,299 271,412 470,225
----------- -------- ---------- --------
Net realized and unrealized gain
(loss) on investments............ 69,915 145,002 431,633 56,796
----------- -------- ---------- --------
Increase (decrease) in net assets
from operations.................. $ (2,263) 76,228 301,373 7,928
=========== ======== ========== ========
</TABLE>
<TABLE>
<CAPTION>
Janus Aspen Series (continued)
--------------------------------------------------------------------
Flexible International Capital Global Life Global
Income Growth Appreciation Sciences Technology
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- ------------- ------------ --------------- ---------------
Period from Period from
June 1, 2000 to June 6, 2000 to
Six months ended June 30, 2000 June 30, 2000 June 30, 2000
------------------------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............ $ -- -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3).... 1,788 29,884 23,740 58 24
------- ---------- -------- ----- ---
Net investment income
(expense).............. (1,788) (29,884) (23,740) (58) (24)
------- ---------- -------- ----- ---
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)............... (5,949) 1,588,305 379,076 1 --
Unrealized
appreciation
(depreciation)....... 2,569 (1,469,842) (532,711) 3,626 166
Capital gain
distributions........ 6,385 10,273 11,285 -- --
------- ---------- -------- ----- ---
Net realized and
unrealized gain (loss)
on investments......... 3,005 128,736 (142,350) 3,627 166
------- ---------- -------- ----- ---
Increase (decrease) in
net assets from
operations............. $ 1,217 98,852 (166,090) 3,569 142
======= ========== ======== ===== ===
</TABLE>
F-12
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Operations, Continued
(Unaudited)
<TABLE>
<CAPTION>
Goldman Sachs
Variable Insurance
Trust Fund Salomon Brothers Variable Series Funds Inc.
------------------ ---------------------------------------------
Growth and Mid Cap
Income Value Strategic Total Return
Fund Fund Bond Fund Investors Fund Fund
---------- ------- ------------- ----------------- -------------
Six months Period from Six months
Six months ended ended March 31, 2000 to ended
June 30, 2000 June 30, 2000 June 30, 2000 June 30, 2000
------------------ ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............ $ -- -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3).... 424 1,720 485 55 50
------- ------- ------- --- ---
Net investment income
(expense).............. (424) (1,720) (485) (55) (50)
------- ------- ------- --- ---
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)............... (1,555) (47,679) 5,604 1 (6)
Unrealized
appreciation
(depreciation)....... 1,704 53,143 (10,939) 229 236
Capital gain
distributions........ -- -- -- -- --
------- ------- ------- --- ---
Net realized and
unrealized gain (loss)
on investments......... 149 5,464 (5,335) 230 230
------- ------- ------- --- ---
Increase (decrease) in
net assets from
operations............. $ (275) 3,744 (5,820) 175 180
======= ======= ======= === ===
</TABLE>
See accompanying notes to unaudited financial statements.
F-13
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
---------------------------------
Money Total
S&P 500 Market Return
Index Fund Fund Fund
---------- ---------- ---------
Six months ended June 30, 2000
---------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)........... $ (52,889) 324,645 (11,488)
Net realized gain (loss).................. 181,722 -- 12,484
Unrealized appreciation (depreciation) on
investments.............................. (242,929) -- 40,688
Capital gain distributions................ -- -- --
---------- ---------- ---------
Increase (decrease) in net assets from
operations................................. (114,096) 324,645 41,684
---------- ---------- ---------
From capital transactions:
Net premiums.............................. 10,143 2,203,887 1,250
Loan interest............................. (934) 32,589 (240)
Transfers (to) from the general account of
GE Life & Annuity:
Death benefits.......................... (95,421) -- --
Surrenders.............................. (132,996) (2,470,638) (87,095)
Loans................................... (4,052) (774,164) (3,031)
Cost of insurance and administrative
expense (note 3)....................... (39,556) (81,383) (8,152)
Transfer gain (loss) and transfer fees.. (1,852) (1,820,915) 336
Transfers (to) from the Guarantee Account
(note 1)................................. (14,838) (131,309) 500
Interfund transfers....................... (45,351) 2,549,977 35,592
---------- ---------- ---------
Increase (decrease) in net assets from
capital transactions....................... (324,857) (491,956) (60,840)
---------- ---------- ---------
Increase (decrease) in net assets......... (438,953) (167,311) (19,156)
Net assets at beginning of year............. 8,374,047 15,430,722 1,762,719
---------- ---------- ---------
Net assets at end of period................. $7,935,094 15,263,411 1,743,563
========== ========== =========
</TABLE>
F-14
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc. (continued)
------------------------------------------
Real Mid-Cap
Estate Global Value
International Securities Income Equity
Equity Fund Fund Fund Fund
------------- ---------- -------- -------
Six months ended June 30, 2000
------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense).. $ (3,107) (3,977) (506) (4,869)
Net realized gain (loss)......... 36,422 (36,933) (12,622) 4,871
Unrealized appreciation
(depreciation) on investments... (28,996) 123,444 930 (31,344)
Capital gain distributions....... -- -- -- --
-------- ------- -------- -------
Increase (decrease) in net assets
from operations................... 4,319 82,534 (12,198) (31,342)
-------- ------- -------- -------
From capital transactions:
Net premiums..................... -- 5,000 -- 4,254
Loan interest.................... -- (439) 892 (900)
Transfers (to) from the general
account of GE Life & Annuity:
Death benefits................. -- -- -- --
Surrenders..................... -- -- -- --
Loans.......................... (100) (2,894) -- --
Cost of insurance and
administrative expense (note
3)............................ (1,986) (3,054) (152) (3,678)
Transfer gain (loss) and transfer
fees............................ (10,247) (474) 464,789 (7,335)
Transfers (to) from the Guarantee
Account (note 1)................ -- -- -- --
Interfund transfers.............. 14,260 (93,544) (454,714) 1,567
-------- ------- -------- -------
Increase (decrease) in net assets
from capital transactions......... 1,927 (95,405) 10,815 (6,092)
-------- ------- -------- -------
Increase (decrease) in net
assets.......................... 6,246 (12,871) (1,383) (37,434)
Net assets at beginning of year.... 409,826 614,487 27,843 755,346
-------- ------- -------- -------
Net assets at end of period........ $416,072 601,616 26,460 717,912
======== ======= ======== =======
</TABLE>
F-15
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
(continued)
----------------------------------
U.S. Premier
Income Equity Growth Equity
Fund Fund Fund
---------- ------- -------------
Six months ended June 30, 2000
----------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)........... $ (8,414) (872) (3,399)
Net realized gain (loss).................. (18,122) 988 4,948
Unrealized appreciation (depreciation) on
investments.............................. 59,328 (55) (3,249)
Capital gain distributions................ -- -- --
---------- ------- -------
Increase (decrease) in net assets from
operations................................. 32,792 61 (1,700)
---------- ------- -------
From capital transactions:
Net premiums.............................. -- 1,273 --
Loan interest............................. (668) -- --
Transfers (to) from the general account of
GE Life & Annuity:
Death benefits.......................... -- -- --
Surrenders.............................. (51,628) -- --
Loans................................... (10,684) -- --
Cost of insurance and administrative
expense (note 3)....................... (6,434) (640) (2,724)
Transfer gain (loss) and transfer fees.. (25) 241 89
Transfers (to) from the Guarantee Account
(note 1)................................. -- 3,580 3,961
Interfund transfers....................... (56,887) (8,772) 67,090
---------- ------- -------
Increase (decrease) in net assets from
capital transactions....................... (126,326) (4,318) 68,416
---------- ------- -------
Increase (decrease) in net assets......... (93,534) (4,257) 66,716
Net assets at beginning of year............. 1,324,350 128,855 461,800
---------- ------- -------
Net assets at end of period................. $1,230,816 124,598 528,516
========== ======= =======
</TABLE>
F-16
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
------------------------------------
Aggressive Capital
Bond Growth Appreciation
Fund/VA Fund/VA Fund/VA
---------- ---------- ------------
Six months ended June 30, 2000
------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)......... $ 98,930 (70,333) (28,700)
Net realized gain....................... (53,962) 648,214 804,899
Unrealized appreciation (depreciation)
on investments......................... (31,732) 902,131 (673,984)
Capital gain distributions.............. -- 389,633 338,409
---------- ---------- ---------
Increase (decrease) in net assets from
operations............................... 13,236 1,869,645 440,625
---------- ---------- ---------
From capital transactions:
Net premiums............................ -- 25,098 20,472
Loan interest........................... 1,324 (2,788) (1,155)
Transfers (to) from the general account
of GE Life & Annuity:
Death benefits........................ -- -- --
Surrenders............................ (13,237) (250,252) (66,466)
Loans................................. (14,340) (48,820) (571,432)
Cost of insurance and administrative
expense (note 3)..................... (7,116) (48,494) (23,232)
Transfer gain (loss) and transfer
fees................................. 446,347 6,198 24,116
Transfers from the Guarantee Account
(note 1)............................... 1,405 6,212 46,140
Interfund transfers..................... (698,505) 564,191 517,174
---------- ---------- ---------
Increase (decrease) in net assets from
capital transactions..................... (284,122) 251,345 (54,384)
---------- ---------- ---------
Increase (decrease) in net assets....... (270,886) 2,120,990 386,241
Net assets at beginning of year........... 1,608,428 9,138,601 4,918,216
---------- ---------- ---------
Net assets at end of period............... $1,337,542 11,259,591 5,304,457
========== ========== =========
</TABLE>
F-17
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable
Accounts Fund
(continued)
----------------------
High Multiple
Income Strategies
Fund/VA Fund/VA
---------- ----------
Six months ended
June 30, 2000
----------------------
<S> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)....................... $ 386,805 124,460
Net realized gain (loss).............................. (42,282) 4,777
Unrealized appreciation (depreciation) on
investments.......................................... (398,786) (153,516)
Capital gain distributions............................ -- 211,696
---------- ---------
Increase (decrease) in net assets from operations....... (54,263) 187,417
---------- ---------
From capital transactions:
Net premiums.......................................... -- --
Loan interest......................................... 1,818 9,156
Transfers (to) from the general account of GE Life &
Annuity:
Death benefits...................................... -- --
Surrenders.......................................... (105,238) (52,029)
Loans............................................... (21,941) (7,277)
Cost of insurance and administrative expense (note
3)................................................. (19,986) (15,131)
Transfer gain (loss) and transfer fees.............. 432,765 361
Transfers (to) from the Guarantee Account (note 1).... 4,023 943
Interfund transfers................................... (800,830) (7,737)
---------- ---------
Increase (decrease) in net assets from capital
transactions........................................... (509,389) (71,714)
---------- ---------
Increase (decrease) in net assets..................... (563,652) 115,703
Net assets at beginning of year......................... 4,519,187 3,117,455
---------- ---------
Net assets at end of period............................. $3,955,535 3,233,158
========== =========
</TABLE>
F-18
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products Fund
------------------------------------
Equity-Income Growth Overseas
Portfolio Portfolio Portfolio
------------- ---------- ----------
Six months ended June 30, 2000
------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense)........ $ 159,648 (87,178) 34,047
Net realized gain (loss)............... (48,152) 401,629 385,641
Unrealized appreciation (depreciation)
on investments........................ (1,653,726) (1,321,104) (1,117,777)
Capital gain distributions............. 937,281 1,663,182 414,893
----------- ---------- ----------
Increase (decrease) in net assets from
operations.............................. (604,949) 656,529 (283,195)
----------- ---------- ----------
From capital transactions:
Net premiums........................... 1,230 9,495 2,530
Loan interest.......................... (7,786) (18,435) (2,838)
Transfers (to) from the general account
of GE Life & Annuity:
Death benefits....................... (139,146) (135,401) --
Surrenders........................... (365,593) (539,015) (73,493)
Loans................................ (14,620) (83,320) (611,272)
Cost of insurance and administrative
expense............................. (58,950) (70,080) (21,850)
Transfer gain (loss) and transfer
fees................................ 29,338 (408) 51,884
Transfers from the Guarantee Account
(note 1).............................. 6,715 53,849 443
Interfund transfers.................... (1,133,707) 246,303 547,850
----------- ---------- ----------
Increase (decrease) in net assets from
capital transactions.................... (1,682,519) (537,012) (106,746)
----------- ---------- ----------
Increase (decrease) in net assets...... (2,287,468) 119,517 (389,941)
Net assets at beginning of year.......... 15,169,220 15,774,184 4,726,973
----------- ---------- ----------
Net assets at end of period.............. $12,881,752 15,893,701 4,337,032
=========== ========== ==========
</TABLE>
F-19
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Products Fund II Products Fund III
----------------------- ------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
----------- ---------- --------- -------------
Six months ended Six months ended
June 30, 2000 June 30, 2000
----------------------- ------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income
(expense)................. $ 219,306 (33,329) 7,133 5,929
Net realized gain (loss)... 223,226 295,657 (39,106) (3,503)
Unrealized appreciation
(depreciation) on
investments............... (1,221,801) (1,987,830) (118,781) (98,718)
Capital gain
distributions............. 647,393 1,450,776 98,008 54,448
----------- ---------- --------- --------
Increase (decrease) in net
assets from operations...... (131,876) (274,725) (52,746) (41,844)
----------- ---------- --------- --------
From capital transactions:
Net premiums............... -- 25,797 -- --
Loan interest.............. (6,194) (4,747) 782 (41)
Transfers (to) from the
general account of GE Life
& Annuity:
Death benefits........... -- (123,201) -- --
Surrenders............... (349,608) (128,306) (14,475) (39,679)
Loans.................... (8,961) (124,208) (28,635) (38,083)
Cost of insurance and
administrative expense
(note 3)................ (39,956) (49,711) (5,426) (3,232)
Transfer gain (loss) and
transfer fees........... 2,733 (8,151) 1,884 (4,114)
Transfers (to) from
Guarantee Account (note
1)........................ 1,808 2,315 (10,233) --
Interfund transfers........ (1,092,403) (661,170) (299,971) (126,157)
----------- ---------- --------- --------
Increase (decrease) in net
assets from capital
transactions................ (1,492,581) (1,071,382) (356,074) (211,306)
----------- ---------- --------- --------
Increase (decrease) in net
assets.................... (1,624,457) (1,346,107) (408,820) (253,150)
Net assets at beginning of
year........................ 9,527,322 11,767,281 1,514,616 907,086
----------- ---------- --------- --------
Net assets at end of period.. $ 7,902,865 10,421,174 1,105,796 653,936
=========== ========== ========= ========
</TABLE>
F-20
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Federated Insurance Series
------------------------------
American High Income
Leaders Bond Utility
Fund II Fund II Fund II
--------- ----------- -------
Six months ended
June 30, 2000
------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense).............. $ 2,543 77,224 9,550
Net realized gain (loss)..................... 2,260 (77,307) 4,693
Unrealized appreciation (depreciation) on
investments................................. (68,814) (29,235) (32,723)
Capital gain distributions................... 23,521 -- 8,200
--------- --------- -------
Increase (decrease) in net assets from
operations.................................... (40,489) (29,318) (10,280)
--------- --------- -------
From capital transactions:
Net premiums................................. 4,082 3,600 --
Loan interest................................ (4) (973) (209)
Transfers (to) from the general account of GE
Life & Annuity:
Death benefits............................. -- -- --
Surrenders................................. (6,843) (3,957) (9,261)
Loans...................................... (1,277) (12,274) (1,826)
Cost of insurance and administrative
expense (note 3).......................... (3,885) (5,217) (1,965)
Transfer gain (loss) and transfer fees..... (803) 435,646 37,448
Transfers (to) from the Guarantee Account
(note 1).................................... (14,910) -- 2,400
Interfund transfers.......................... (111,971) (698,651) 760
--------- --------- -------
Increase (decrease) in net assets from capital
transactions.................................. (135,611) (281,826) 27,347
--------- --------- -------
Increase (decrease) in net assets............ (176,100) (311,144) 17,067
Net assets at beginning of year................ 925,484 1,016,156 413,388
--------- --------- -------
Net assets at end of period.................... $ 749,384 705,012 430,455
========= ========= =======
</TABLE>
F-21
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
PBHG Insurance
Alger American Fund Series Fund, Inc.
------------------------ -------------------
PBHG
Small Large Cap PBHG
Capitalization Growth Growth Growth II
Portfolio Portfolio Portfolio Portfolio
-------------- --------- --------- ---------
Six months ended Six months ended
June 30, 2000 June 30, 2000
------------------------ -------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income
(expense).................... $ (19,589) (37,453) (2,888) (5,397)
Net realized gain (loss)...... 400,885 108,693 34,052 192,166
Unrealized appreciation
(depreciation) on
investments.................. (1,435,058) (656,576) 11,383 1,153
Capital gain distributions.... 1,020,453 732,190 -- --
----------- --------- ------- --------
Increase (decrease) in net
assets from operations......... (33,309) 146,854 42,547 187,922
----------- --------- ------- --------
From capital transactions:
Net premiums.................. 26,092 10,678 250 4,082
Loan interest................. (432) (2,154) (104) (86)
Transfers (to) from the
general account of
GE Life & Annuity:
Death benefits.............. -- -- -- --
Surrenders.................. (46,275) (62,092) (17,527) --
Loans....................... (489) (5,123) (464) (15,906)
Cost of insurance and
administrative expense
(note 3)................... (13,891) (26,299) (2,128) (2,238)
Transfer gain (loss) and
transfer fees.............. 37,626 30,315 (971) (552,401)
Transfers (to) from the
Guarantee Account (note 1)... 44,693 747 -- 41,500
Interfund transfers........... 60,136 95,013 351,484 658,177
----------- --------- ------- --------
Increase (decrease) in net
assets from capital
transactions................... 107,460 41,085 330,540 133,128
----------- --------- ------- --------
Increase (decrease) in net
assets....................... 74,151 187,939 373,087 321,050
Net assets at beginning of
year........................... 2,819,126 5,523,912 287,962 329,083
----------- --------- ------- --------
Net assets at end of period..... $ 2,893,277 5,711,851 661,049 650,133
=========== ========= ======= ========
</TABLE>
F-22
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
----------------------------------------------
Aggressive Worldwide
Growth Growth Growth Balanced
Portfolio Portfolio Portfolio Portfolio
----------- ---------- ---------- ---------
Six months ended June 30, 2000
----------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income
(expense)................... $ (72,178) (68,774) (130,260) (48,868)
Net realized gain (loss)..... 2,726,250 636,607 3,969,731 143,574
Unrealized appreciation
(depreciation) on
investments................. (3,466,076) (906,904) (3,809,510) (557,003)
Capital gain distributions... 809,741 415,299 271,412 470,225
----------- ---------- ---------- ---------
Increase (decrease) in net
assets from operations........ (2,263) 76,228 301,373 7,928
----------- ---------- ---------- ---------
From capital transactions:
Net premiums................. 20,040 36,989 50,800 25,452
Loan interest................ 13,094 (4,592) (254) (12,843)
Transfers (to) from the
general account of GE Life &
Annuity:
Death benefits............. -- -- -- --
Surrenders................. (161,852) (120,530) (190,237) --
Loans...................... (164,529) (77,969) (592,187) (36,470)
Cost of insurance and
administrative expense
(note 3).................. (46,568) (47,713) (85,913) (31,309)
Transfer gain (loss) and
transfer fees............. 238,892 26,813 87,975 48,025
Transfers (to) from the
Guarantee Account (note 1).. 74,738 51,050 35,692 (6,095)
Interfund transfers.......... (2,102,805) 936,245 948,244 487,222
----------- ---------- ---------- ---------
Increase (decrease) in net
assets from capital
transactions.................. (2,128,990) 800,293 254,120 473,982
----------- ---------- ---------- ---------
Increase (decrease) in net
assets...................... (2,131,253) 876,521 555,493 481,910
Net assets at beginning of
year.......................... 10,550,125 9,895,917 18,384,348 6,937,571
----------- ---------- ---------- ---------
Net assets at end of period.... $ 8,418,872 10,772,438 18,939,841 7,419,481
=========== ========== ========== =========
</TABLE>
F-23
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series (continued)
---------------------------------------------------------------------
Flexible International Capital Global Life Global
Income Growth Appreciation Sciences Technology
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- ------------- ------------ --------------- ---------------
Period from Period from
June 1, 2000 to June 6, 2000 to
Six months ended June 30, 2000 June 30, 2000 June 30, 2000
------------------------------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ (1,788) (29,884) (23,740) (58) (24)
Net realized gain
(loss)............... (5,949) 1,588,305 379,076 1 --
Unrealized
appreciation
(depreciation) on
investments.......... 2,569 (1,469,842) (532,711) 3,626 166
Capital gain
distributions........ 6,385 10,273 11,285 -- --
--------- ---------- --------- ------ ------
Increase (decrease) in
net assets from
operations............. 1,217 98,852 (166,090) 3,569 142
--------- ---------- --------- ------ ------
From capital
transactions:
Net premiums.......... -- 7,965 39,137 -- --
Loan interest......... 469 (1,891) (1,680) -- --
Transfers (to) from
the general account
of GE Life & Annuity:
Death benefits...... -- -- -- -- --
Surrenders.......... (41,001) (349,380) (53,039) -- --
Loans............... 9,718 (570,600) (28,091) -- --
Cost of insurance
and administrative
expense (note 3)... (1,285) (20,635) (16,549) (6) (26)
Transfer gain (loss)
and transfer fees.. (9) 116,665 417 -- --
Transfers (to) from
the Guarantee Account
(note 1)............. 1 -- 24,901 -- --
Interfund transfers... (93,062) 967,584 (267,511) 57,016 35,534
--------- ---------- --------- ------ ------
Increase (decrease) in
net assets from capital
transactions........... (125,169) 149,708 (302,415) 57,010 35,508
--------- ---------- --------- ------ ------
Increase (decrease) in
net assets........... (123,952) 248,560 (468,505) 60,579 35,650
Net assets at beginning
of year................ 361,418 3,817,130 3,647,524 -- --
--------- ---------- --------- ------ ------
Net assets at end of
period................. $ 237,466 4,065,690 3,179,019 60,579 35,650
========= ========== ========= ====== ======
</TABLE>
F-24
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Statements of Changes in Net Assets, Continued
(Unaudited)
<TABLE>
<CAPTION>
Goldman Sachs
Variable Insurance
Trust Salomon Brothers Variable Series Funds Inc.
------------------ ---------------------------------------------
Growth and Mid Cap
Income Value Strategic Total Return
Fund Fund Bond Fund Investors Fund Fund
---------- ------- ------------- ----------------- -------------
Six months Period from Six months
Six months ended ended March 31, 2000 to ended
June 30, 2000 June 30, 2000 June 30, 2000 June 30, 2000
------------------ ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ (424) (1,720) (485) (55) (50)
Net realized gain
(loss)............... (1,555) (47,679) 5,604 1 (6)
Unrealized
appreciation
(depreciation) on
investments.......... 1,704 53,143 (10,939) 229 236
Capital gain
distributions........ -- -- -- -- --
-------- ------- -------- ------- -----
Increase (decrease) in
net assets from
operations............. (275) 3,744 (5,820) 175 180
-------- ------- -------- ------- -----
From capital
transactions:
Net premiums.......... -- 2,000 -- -- --
Loan interest......... -- -- 892 -- --
Transfers (to) from
the general account
of GE Life & Annuity:
Death benefits...... -- -- -- -- --
Surrenders.......... -- -- -- -- --
Loans............... -- -- -- -- --
Cost of insurance
and administrative
expense (note 3)... (281) (1,338) (135) (18) (68)
Transfer gain (loss)
and transfer fees.. 416 (2,405) 449,397 (1) 33
Transfers from the
Guarantee Account
(note 1)............. -- -- -- -- --
Interfund transfers... (24,957) 25,160 (546,782) 156,658 2,250
-------- ------- -------- ------- -----
Increase (decrease) in
net assets from capital
transactions........... (24,822) 23,417 (96,628) 156,639 2,215
-------- ------- -------- ------- -----
Increase (decrease) in
net assets........... (25,097) 27,161 (102,448) 156,814 2,395
Net assets at beginning
of year................ 68,569 243,902 102,448 -- 6,425
-------- ------- -------- ------- -----
Net assets at end of
period................. $ 43,472 271,063 -- 156,814 8,820
======== ======= ======== ======= =====
</TABLE>
See accompanying notes to financial statements.
F-25
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 2000
(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. General
Electric Capital Assurance Company and its parent, 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.
During the second quarter of 2000, two new investment subdivisions were
added to the Account. The Global Life Sciences Portfolio and the Global
Technology Portfolio each invests solely in a designated portfolio of the
Janus Aspen Series. All designated portfolios described above are series type
mutual funds.
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) Unit Classes
There is one unit class included in the Account. Units are sold under policy
form P1097. Effective on or after September 15, 2000, Type II units will be
sold under policy forms P1254 and P1255.
(b) 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 period.
The aggregate cost of the investments acquired and the aggregate proceeds of
investments sold, for the six months or lesser period ended June 30, 2000
were:
<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
-------------- ----------- -----------
<S> <C> <C>
GE Investment Funds, Inc.:
S&P 500 Index Fund.................................... $ 1,418,842 1,771,025
Money Market Fund..................................... 86,220,993 88,520,604
Total Return Fund..................................... 53,124 126,339
International Equity Fund............................. 2,989,641 2,990,464
Real Estate Securities Fund........................... 31,988 130,870
Global Income Fund.................................... 1,542,190 1,532,064
Mid-Cap Value Equity Fund............................. 575,933 587,226
Income Fund........................................... 248,476 383,678
U.S. Equity Fund...................................... 32,772 37,338
Premier Growth Equity Fund............................ 109,004 44,135
</TABLE>
F-26
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2)Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
-------------- ----------- -----------
<S> <C> <C>
Oppenheimer Variable Account Funds:
Bond Fund/VA.......................................... $ 1,622,844 1,809,473
Aggressive Growth Fund/VA............................. 2,066,576 1,497,779
Capital Appreciation Fund/VA.......................... 6,137,140 5,882,523
High Income Fund/VA................................... 3,353,965 3,525,675
Multiple Strategies Fund/VA........................... 446,610 183,567
Variable Insurance Products Fund:
Equity-Income Portfolio............................... 4,575,675 5,167,202
Growth Portfolio...................................... 3,863,856 2,751,794
Overseas Portfolio.................................... 11,727,388 11,388,912
Variable Insurance Products Fund II:
Asset Manager Portfolio............................... 1,291,736 2,027,115
Contrafund Portfolio.................................. 3,276,615 2,911,971
Variable Insurance Products Fund III:
Growth & Income Portfolio............................. 408,076 659,631
Growth Opportunties Portfolio......................... 97,063 248,399
Federated Insurance Series:
American Leaders Fund II.............................. 88,661 198,671
High Income Bond Fund II.............................. 3,888,816 4,094,305
Utility Fund II....................................... 189,339 145,205
Alger American Fund:
Small Capitalization Portfolio........................ 4,929,425 3,821,921
Growth Portfolio...................................... 1,502,576 691,731
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth Portfolio....................... 566,751 234,174
PBHG Growth II Portfolio.............................. 13,225,055 11,009,053
Janus Aspen Series:
Aggressive Growth Portfolio........................... 21,834,306 23,227,401
Growth Portfolio...................................... 3,277,562 2,134,879
Worldwide Growth Portfolio............................ 13,080,652 12,695,367
Balanced Portfolio.................................... 1,503,600 503,189
Flexible Income Portfolio............................. 117,281 238,001
International Growth Portfolio........................ 11,146,350 11,017,687
Capital Appreciation Portfolio........................ 1,714,867 2,030,472
Global Life Sciences Portfolio........................ 57,016 47
Global Technology Portfolio........................... 35,534 39
Goldman Sachs Variable Insurance Trust:
Growth and Income Fund................................ 31,673 56,950
Mid Cap Value Fund.................................... 1,532,402 1,510,015
Salomon Brothers Variable Series Funds Inc.:
Strategic Bond Fund................................... 1,425,836 1,523,006
Investors Fund........................................ 156,658 39
Total Return Fund..................................... 2,283 119
</TABLE>
F-27
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2)Summary of Significant Accounting Policies -- Continued
(c) Capital Transactions
The increase (decrease) in outstanding units from capital transactions for
six months or lesser period ended June 30, 2000 is as follows:
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
---------------------------------------------------
S&P 500 Money Total Real Estate
Index Market Return International Securities
Fund Fund Fund Equity Fund Fund
------- ------- ------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999......... 162,477 951,339 52,618 22,022 41,745
------- ------- ------ ------ ------
From capital transactions:
Net premiums............. 207 (51,910) 37 -- 334
Loan Interest............ (19) (768) (7) -- (29)
Transfers (to) from the
general account of GE
Life & Annuity:
Death benefits......... (1,944) -- -- -- --
Surrenders............. (2,710) 58,193 (2,625) -- --
Loans.................. (83) 18,235 (91) -- (194)
Cost of insurance and
administrative
expenses.............. (806) 1,917 (246) 5 (204)
Transfers (to) from the
Guarantee Account....... (302) 3,093 15 -- --
Interfund transfers...... (924) (60,062) 1,073 (36) (6,263)
------- ------- ------ ------ ------
Net increase (decrease) in
units from capital
transactions.............. (6,581) (31,302) (1,844) (31) (6,356)
------- ------- ------ ------ ------
Units outstanding at June
30, 2000.................. 155,896 920,037 50,774 21,991 35,389
======= ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
GE Investments Funds, Inc. (continued)
---------------------------------------------------
Global Mid-Cap U.S. Premier
Income Value Equity Income Equity Growth Equity
Fund Fund Fund Fund Fund
------ ------------ ------- ------ -------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999.......... 2,659 47,150 127,587 10,235 39,302
----- ------ ------- ------ ------
From capital transactions:
Net premiums.............. -- (42) 1 83 --
Loan Interest............. -- 9 (64) -- --
Transfers (to) from the
general account of GE
Life & Annuity:
Death benefits.......... -- -- -- -- --
Surrenders.............. -- -- (4,957) -- --
Loans................... -- -- (1,026) -- --
Cost of insurance and
administrative
expenses............... -- 36 (618) (42) (246)
Transfers (to) from the
Guarantee Account........ -- -- -- 235 358
Interfund transfers....... (85) (15) (5,462) (575) 6,069
----- ------ ------- ------ ------
Net increase (decrease) in
units from capital
transactions............... (85) (12) (12,126) (299) 6,181
----- ------ ------- ------ ------
Units outstanding at June
30, 2000................... 2,574 47,138 115,461 9,936 45,483
===== ====== ======= ====== ======
</TABLE>
F-28
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2)Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
----------------------------------------------------
Aggressive Capital High Multiple
Bond Growth Appreciation Income Strategies
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA
------- ---------- ------------ ------- ----------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999........ 71,486 136,764 94,309 137,529 102,886
------- ------- ------ ------- -------
From capital transactions:
Net premiums............ -- 325 194 -- 1
Loan Interest........... 23 (36) (11) 30 283
Transfers (to) from the
general account of GE
Life & Annuity:
Death benefits........ -- -- -- -- --
Surrenders............ (232) (3,242) (626) (1,742) (1,608)
Loans................. (251) (632) (5,380) (363) (225)
Cost of insurance and
administrative
expenses............. (125) (628) (219) (331) (468)
Transfers (to) from the
Guarantee Account...... 25 80 434 67 29
Interfund transfers..... (12,236) 7,309 4,869 (13,256) (239)
------- ------- ------ ------- -------
Net increase (decrease) in
units from capital
transactions............. (12,796) 3,176 (739) (15,595) (2,227)
------- ------- ------ ------- -------
Units outstanding at June
30, 2000................. 58,690 139,940 93,570 121,934 100,659
======= ======= ====== ======= =======
</TABLE>
<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Variable Insurance Products Fund Products Fund II Products Fund III
------------------------------------ -------------------- -----------------------
Equity- Asset Growth & Growth
Income Growth Overseas Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- --------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999...... 400,455 251,944 161,000 315,788 366,925 88,834 58,334
---------- ---------- ---------- ------- ------- ------- -------
From capital
transactions:
Net premiums.......... 35 156 70 -- 863 1 1
Loan Interest......... (222) (305) (78) (208) (159) 48 (3)
Transfers (to) from
the general account
of GE Life & Annuity:
Death benefits...... (3,965) (2,242) -- -- (4,121) -- --
Surrenders.......... (10,418) (8,924) (2,026) (11,766) (4,292) (892) (2,761)
Loans............... (417) (1,379) (16,847) (302) (4,155) (1,765) (2,650)
Cost of insurance
and administrative
expenses........... (1,680) (1,160) (602) (1,345) (1,663) (334) (225)
Transfers (to) from
the Guarantee
Account.............. 191 892 12 61 77 (631) --
Interfund transfers... (32,307) 4,078 15,099 (36,764) (22,118) (18,486) (8,778)
---------- ---------- ---------- ------- ------- ------- -------
Net increase (decrease)
in units from capital
transactions........... (48,783) (8,884) (4,372) (50,324) (35,568) (22,059) (14,416)
---------- ---------- ---------- ------- ------- ------- -------
Units outstanding at
June 30, 2000.......... 351,672 243,060 156,628 265,464 331,357 66,775 43,918
========== ========== ========== ======= ======= ======= =======
</TABLE>
F-29
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2)Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
PBHG Insurance
Federated Insurance Series Alger American Fund Series Fund, Inc.
---------------------------- ------------------------ --------------------
American High Small PBHG Large PBHG
Leaders Income Bond Utility Capitalization Growth Cap Growth Growth II
Fund II Fund II Fund II Portfolio Portfolio Portfolio Portfolio
-------- ----------- ------- -------------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999...... 52,435 65,984 21,792 164,765 214,105 11,687 14,784
------ ------- ------ ------- ------- ------ ------
From capital
transactions:
Net premiums.......... 236 95 -- 2,029 1,183 9 58
Loan Interest......... -- (26) 28 (34) (239) (4) (1)
Transfers (to) from
the general account
of GE Life & Annuity:
Death benefits...... -- -- -- -- -- -- --
Surrenders.......... (396) (105) 1,227 (3,597) (6,878) (593) --
Loans............... (74) (325) 242 (38) (567) (16) (225)
Cost of insurance
and administrative
expenses........... (225) (138) 260 (1,080) (2,913) (72) (32)
Transfers (to) from
the Guarantee
Account.............. (863) -- (318) 3,474 83 -- 587
Interfund transfers... (6,480) (18,516) (101) 4,674 10,524 11,894 9,307
------ ------- ------ ------- ------- ------ ------
Net increase (decrease)
in units from capital
transactions........... (7,802) (19,015) 1,338 5,428 1,193 11,218 9,694
------ ------- ------ ------- ------- ------ ------
Units outstanding at
June 30, 2000.......... 44,633 46,969 23,130 170,193 215,298 22,905 24,478
====== ======= ====== ======= ======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
Janus Aspen Series
--------------------------------------------------
Aggressive Worldwide Flexible
Growth Growth Growth Balanced Income
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1999.......... 211,129 293,473 476,525 284,911 26,831
------- ------- ------- ------- ------
From capital transactions:
Net premiums.............. 373 1,081 2,331 1,175 --
Loan Interest............. 244 (134) (12) (593) 35
Transfers (to) from the
general account of GE
Life & Annuity:
Death benefits.......... -- -- -- -- --
Surrenders.............. (3,020) (3,525) (8,727) -- (3,049)
Loans................... (3,070) (2,280) (27,167) (1,684) 723
Cost of insurance and
administrative
expenses............... (869) (1,395) (3,941) (1,445) (96)
Transfers (to) from the
Guarantee Account........ 1,395 1,493 1,637 (281) --
Interfund transfers....... (39,240) 27,380 43,501 22,493 (6,919)
------- ------- ------- ------- ------
Net increase (decrease) in
units from capital
transactions............... (44,187) 22,620 7,622 19,665 (9,306)
------- ------- ------- ------- ------
Units outstanding at June
30, 2000................... 166,942 316,093 484,147 304,576 17,525
======= ======= ======= ======= ======
</TABLE>
F-30
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(2)Summary of Significant Accounting Policies -- Continued
<TABLE>
<CAPTION>
Janus Aspen Series (continued)
-----------------------------------------------
Global
International Capital Life Global
Growth Appreciation Sciences Technology
Portfolio Portfolio Portfolio Portfolio
------------- ------------ --------- ----------
<S> <C> <C> <C> <C>
Units outstanding at December
31, 1999...................... 134,264 113,207 -- --
------- ------- ----- -----
From capital transactions:
Net premiums................. 1,360 1,261 -- --
Loan Interest................ (323) (54) -- --
Transfers (to) from the
general account of GE Life &
Annuity:
Death benefits............. -- -- -- --
Surrenders................. (59,666) (1,709) -- --
Loans...................... (97,445) (905) -- --
Cost of insurance and
administrative expenses... (3,524) (533) (1) (3)
Transfers (to) from the
Guarantee Account........... -- 802 -- --
Interfund transfers.......... 165,241 (8,619) 5,684 3,491
------- ------- ----- -----
Net increase (decrease) in
units from capital
transactions.................. 5,643 (9,757) 5,683 3,488
------- ------- ----- -----
Units outstanding at June 30,
2000.......................... 139,907 103,450 5,683 3,488
======= ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
Goldman Sachs
Variable Insurance Salomon Brothers Variable
Trust Series Funds Inc.
------------------ --------------------------
Growth and Mid Cap Total
Income Value Strategic Investors Return
Fund Fund Bond Fund Fund Fund
---------- ------- --------- --------- ------
<S> <C> <C> <C> <C> <C>
Units outstanding at December 31,
1999............................ 7,445 29,140 10,103 -- 606
------ ------ ------- ------ ---
From capital transactions:
Net premiums................... -- 173 -- -- --
Loan Interest.................. -- -- 17 -- --
Transfers (to) from the general
account of GE Life & Annuity:
Death benefits............... -- -- -- -- --
Surrenders................... -- -- -- -- --
Loans........................ -- -- -- -- --
Cost of insurance and
administrative expenses..... (30) (116) (3) (1) (6)
Transfers (to) from the
Guarantee Account............. -- -- -- -- --
Interfund transfers............ (2,700) 2,176 (10,117) 10,808 211
------ ------ ------- ------ ---
Net increase (decrease) in units
from capital transactions....... (2,730) 2,233 (10,103) 10,807 205
------ ------ ------- ------ ---
Units outstanding at June 30,
2000............................ 4,715 31,373 -- 10,807 811
====== ====== ======= ====== ===
</TABLE>
F-31
<PAGE>
GE LIFE & ANNUITY SEPARATE ACCOUNT III
Notes to Financial Statements -- Continued
June 30, 2000
(Unaudited)
(d) 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.
(e) 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.
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.
F-32
