<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-
EQUITY/INCOME SERIES
STATEMENT OF NET ASSETS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCK--97.38% OF SHARES VALUE
AEROSPACE & DEFENSE--1.37% ------------------------------
<S> <C> <C>
General Dynamics 48,500 $ 3,637,500
-----------
3,637,500
-----------
AUTOMOBILES & AUTOMOTIVE PARTS--4.27%
Ford Motor 142,000 5,360,500
General Motors 47,400 2,639,588
ITT 82,800 2,132,100
LucasVarity ADR 33,800 1,170,325
-----------
11,302,513
-----------
BANKING, FINANCE & INSURANCE--20.89%
American General 98,200 4,689,050
Aon 105,325 5,450,569
Banc One 84,600 4,097,813
Bank of Boston 51,700 3,725,631
CIGNA 23,300 4,135,750
Chase Manhattan 49,600 4,814,300
Crestar Financial 105,700 4,109,088
Fleet Financial Group 56,000 3,542,000
Hartford Financial Services 45,000 3,723,750
Mellon Bank 81,600 3,682,200
Mercantile Bancorporation 52,400 3,183,300
Signet Banking 48,500 1,746,000
Summit Bancorp 91,650 4,593,956
U.S. Bancorp 60,000 3,849,375
-----------
55,342,782
-----------
CABLE, MEDIA & PUBLISHING--2.79%
Dow Jones & Company 700 28,350
McGraw-Hill 125,400 7,375,088
-----------
7,403,438
-----------
CHEMICALS--5.91%
duPont(E.I.)deNemours 102,000 6,413,250
Eastman Chemical 8,900 565,150
Hercules 14,500 694,188
Imperial Chemical ADR 77,300 4,396,438
Rhone-Poulenc ADR 86,300 3,592,238
-----------
15,661,264
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT--3.81%
Eaton 58,500 5,107,781
Thomas & Betts 94,900 4,988,181
-----------
10,095,962
-----------
ENERGY--10.49%
Atlantic Richfield 53,000 3,736,500
British Petroleum ADR 63,443 4,750,325
Consolidated Natural Gas 38,900 2,093,306
Mobil 65,200 4,555,850
Texaco 48,800 5,307,000
USX-Marathon Group 102,700 2,965,463
Williams 100,350 4,390,313
-----------
27,798,757
-----------
</TABLE>
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-
EQUITY/INCOME SERIES
STATEMENT OF NET ASSETS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
--------------------------------
ENVIRONMENTAL SERVICES--3.09%
<S> <C> <C>
Browning Ferris 153,100 $ 5,090,575
Waste Management 96,600 3,103,275
------------
8,193,850
------------
FOOD, BEVERAGE & TOBACCO--9.43%
Anheuser-Busch 107,500 4,508,281
Fortune Brands 123,900 4,623,019
*Gallagher Group 47,500 875,781
General Mills 1,700 110,713
Heinz (H.J.) 93,800 4,326,525
Philip Morris 99,600 4,419,750
Quaker Oats 57,000 2,557,875
RJR Nabisco Holdings 108,040 3,565,320
------------
24,987,264
------------
HEALTHCARE & PHARMACEUTICALS--13.58%
American Home Products 84,800 6,487,200
Bausch & Lomb 82,300 3,878,388
Baxter International 128,100 6,693,225
Bristol-Myers Squibb 88,500 7,168,500
Glaxo Wellcome ADR 105,900 4,427,944
Pharmacia & Upjohn 210,700 7,321,825
------------
35,977,082
------------
METALS & MINING--1.10%
Freeport-McMoRan Copper & Gold Class B 93,600 2,913,300
------------
2,913,300
------------
PAPER & FOREST PRODUCTS--2.09%
Georgia-Pacific 39,500 3,372,313
Temple-Inland 40,040 2,162,160
------------
5,534,473
------------
RETAIL--2.43%
Eastman Kodak 47,800 3,668,650
May Department Stores 58,300 2,754,675
------------
6,423,325
------------
TELECOMMUNICATIONS--7.00%
Alltel 75,700 2,531,219
BCE 127,800 3,578,400
BellSouth 81,300 3,770,288
Frontier 239,100 4,767,056
SBC Communications 62,900 3,891,938
------------
18,538,901
------------
TRANSPORTATION & SHIPPING--3.95%
Norfolk Southern 38,200 3,848,650
Union Pacific 93,900 6,619,950
------------
10,468,600
------------
MISCELLANEOUS--5.18%
BOC Group 56,000 1,988,000
Block (H&R) 5,900 190,275
Minnesota Mining & Manufacturing 40,600 4,141,200
Pitney Bowes 103,900 7,402,875
------------
13,722,350
------------
TOTAL COMMON STOCK
(cost $212,048,114) $258,001,361
------------
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
REPURCHASE AGREEMENTS--3.53% AMOUNT VALUE
--------------------------------------
<S> <C> <C>
With Chase Manhattan 5.80% 7/1/97
(dated 6/30/97, collateralized by $3,286,000
U.S. Treasury Notes 5.375% due 11/30/97,
market value $3,297,182) $ 3,230,000 $ 3,230,000
With J.P. Morgan Securities 5.80% 7/1/97
(dated 6/30/97, collateralized by $3,112,000
U.S. Treasury Notes 5.125% due 4/30/98,
market value $3,123,486) 3,055,000 3,055,000
With PaineWebber 5.80% 7/1/97
(dated 6/30/97, collateralized by $1,934,000
U.S. Treasury Notes 7.25% due 2/15/98,
market value $2,033,071 and $1,047,000
U.S. Treasury Notes 9.125% due 5/15/99,
market value $1,114,310) 3,055,000 3,055,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $9,340,000) 9,340,000
-------------
TOTAL MARKET VALUE OF SECURITIES--100.91%
(cost $221,388,114) 267,341,361
Other assets under liabilities--(0.91%) (2,413,438)
-------------
Net assets applicable to 15,441,237 shares
($.01 par value outstanding); equivalent to
$17.16 per share--100.00% $ 264,927,923
=============
*Non-income producing security for the period ended June 30, 1997.
ADR--American Depository Receipt
See accompanying notes
DELAWARE GROUP PREMIUM FUND, INC.- EMERGING GROWTH SERIES
STATEMENT OF NET ASSETS
June 30, 1997
(Unaudited)
NUMBER MARKET
COMMON STOCK--88.74% OF SHARES VALUE
-----------------------------
AEROSPACE & DEFENSE--1.41%
AAR 25,700 $ 830,431
*Kellstrom Industries 16,400 258,300
-------------
1,088,731
-------------
BANKING, FINANCE & INSURANCE--2.26%
*Long Beach Financial 8,900 77,875
Medallion Financial 28,900 547,294
Ocwen Asset Investment 36,100 728,769
Security Capital Pacific Trust 16,900 386,588
-------------
1,740,526
-------------
BUILDINGS & MATERIALS--0.47%
*Comfort Systems USA 23,100 360,938
-------------
360,938
-------------
CABLE, MEDIA, & PUBLISHING--6.07%
*Evergreen Media Class A 29,600 1,319,050
*Gemstar International Group Limited 19,200 356,400
*HSN 33,852 1,059,991
*Hollywood Entertainment 29,100 669,300
*Journal Register 22,900 455,138
*Metro Networks 12,200 297,375
*Norwood Promotional Products 35,900 520,550
-------------
4,677,804
-------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-------------------------------
<S> <C> <C>
COMPUTERS & TECHNOLOGY--14.13%
*Activision 1,000 $ 14,375
*Aspect Development 25,000 650,781
*Black Box 16,200 651,544
*Checkfree 41,800 735,419
*Credit Management Solutions 32,400 417,150
*Cypress Semiconductor 79,300 1,149,850
*EMC 32,500 1,267,500
*GTECH Holdings 25,400 819,150
*INSO 20,600 428,094
*Komag 40,300 661,172
*NOVA 28,800 747,000
*PSW Technologies 17,400 207,713
*Peerless Systems 55,000 770,000
*Platinum Technology 73,495 982,996
*Puma Technology 22,800 192,375
*Veritas Software 23,700 1,187,963
----------
10,883,082
----------
CONSUMER PRODUCTS--0.78%
*Home Products International 12,700 126,206
*Racing Champions 27,100 418,356
*Zag Industries Limited 5,300 53,828
----------
598,390
----------
ELECTRONICS & ELECTRICAL EQUIPMENT--6.35%
*Aavid Thermal Technologies 17,200 351,525
*ITI Technologies 23,800 545,913
*Micrel 6,400 324,800
*P-COM 34,600 1,137,475
Pittston Brink's Group 29,900 897,000
*Protection One 40,500 549,281
*Sipex 30,500 1,086,563
----------
4,892,557
----------
ENERGY--2.91%
*Patterson Energy 23,400 1,058,850
*Precision Drilling 24,400 1,180,350
----------
2,239,200
----------
ENVIRONMENTAL SERVICES--4.16%
*Republic Industries 71,240 1,727,570
*Superior Services 21,600 508,950
*TETRA Technologies 14,300 338,731
*Veritas DGC 26,000 591,500
*Waste Industries 2,300 40,681
----------
3,207,432
----------
FOOD, BEVERAGE & TOBACCO--0.61%
*Cheesecake Factory 800 16,800
*United Natural Foods 21,900 453,056
----------
469,856
----------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-----------------------------
HEALTHCARE & PHARMACEUTICALS--13.46%
<S> <C> <C>
ADAC Laboratories 21,500 $ 507,938
*Alternative Living Services 27,200 610,300
*American Oncology Resources 72,200 1,213,863
*ArQule 19,700 339,825
*Ariad Pharmaceuticals 46,200 294,525
*Capstone Pharmacy 67,800 735,206
*Cerus 29,300 267,363
*DepoTech 29,200 396,025
*DUSA Pharmaceuticals 37,200 230,175
*FPA Medical Management 28,300 670,356
*Guilford Pharmaceuticals 44,600 1,092,700
*Medical Resources 5,900 98,088
*Physician Sales & Service 30,600 582,356
*PMR 21,500 507,938
*Renal Care Group 17,500 730,625
*Res-Care 10,500 198,844
*Sunrise Assisted Living 36,400 1,278,550
*Vertex Pharmaceuticals 16,100 613,813
----------
10,368,490
----------
INDUSTRIAL MACHINERY--2.18%
*Central Sprinkler 11,900 316,838
*PRI Automation 24,300 921,881
Spinnaker Industries 14,000 441,000
----------
1,679,719
----------
LEISURE, LODGING, & ENTERTAINMENT--8.88%
*Ascent Entertainment Group 49,300 457,566
*CapStar Hotel 57,200 1,830,400
*Dave & Buster's 7,400 198,875
*Equity Marketing 35,100 842,400
*Extended Stay America 95,560 1,505,064
*Florida Panthers 36,000 868,500
*Mirage Resorts 23,200 585,800
*Morton's Restaurant Group 27,200 540,600
*Teardrop Golf 2,100 7,744
----------
6,836,949
----------
METALS & MINING--0.38%
*Kaynar Technologies 15,800 290,325
----------
290,325
----------
PACKAGING & CONTAINERS--1.28%
*Silgan Holdings 25,400 982,663
----------
982,663
----------
REAL ESTATE--0.24%
CWM Mortgage Holdings 7,800 186,713
----------
186,713
----------
RETAIL--9.29%
*Amazon.com 18,000 335,812
*Cost Plus 39,700 1,027,238
*Duty Free International 56,300 1,055,625
Eagle Hardware & Garden 39,600 904,612
*General Nutrition 56,800 1,586,850
*Linens N Things 13,600 402,900
*Piercing Pagoda 23,200 580,000
Schultz Sav-O Stores 14,400 260,100
*Staples 25,650 594,759
*Wilmar Industries 16,300 402,406
----------
7,150,302
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-------------------------------
TELECOMMUNICATIONS--4.85%
<S> <C> <C>
*IntelCom Group 26,600 $ 510,388
*PageMart Wireless 58,100 497,481
*PairGain Technologies 12,000 186,375
*Powerwave Technologies 6,500 146,250
*Telco Systems 57,800 509,363
*Teleport Communications Group 40,200 1,369,313
*TeleSpectrum Worldwide 48,800 344,650
*Yurie Systems 9,900 168,609
----------
3,732,429
----------
TEXTILES, APPAREL, & FURNITURE--0.95%
*Cyrk 3,600 41,850
*Quiksilver 12,300 392,063
*Sport-Haley 17,500 295,313
----------
729,226
----------
TRANSPORTATION & SHIPPING--0.49%
*Midwest Express Holdings 13,650 373,669
----------
373,669
----------
UTILITIES--1.18%
*AES 10,596 749,667
*York Research 20,400 156,825
----------
906,492
----------
MISCELLANEOUS--6.41%
*AHL Services 18,500 283,281
*CUC International 67,860 1,751,636
*Catalina Marketing 10,900 524,563
*KLA Instruments 11,000 536,594
*NFO Research 24,400 622,200
*Norrell 28,900 953,700
*Pierce Leahy 8,200 147,600
RCM Technologies 10,800 115,425
----------
4,934,999
----------
TOTAL COMMON STOCK
(cost $60,465,170) 68,330,492
----------
REPURCHASE AGREEMENTS PRINCIPAL
- --10.82% AMOUNT
------------
With Chase Manhattan 5.80% 7/1/97
(dated 6/30/97, collateralized by $2,932,000
U.S. Treasury Notes 5.375% due 11/30/97,
market value $2,941,693) $ 2,882,000 2,882,000
With J.P. Morgan Securities 5.95% 7/1/97
(dated 6/30/97, collateralized by $2,777,000
U.S. Treasury Notes 5.125% due 4/30/98,
market value $2,786,724) 2,726,000 2,726,000
With PaineWebber 5.80% 7/1/97
(dated 6/30/97, collateralized by $934,000
U.S. Treasury Notes 9.125% due 5/15/99,
market value $994,170 and $1,725,000
U.S. Treasury Notes 7.25% due 2/15/98,
market value $1,787,108) 2,725,000 2,725,000
----------
TOTAL REPURCHASE AGREEMENTS
(cost $8,333,000) 8,333,000
----------
TOTAL MARKET VALUE OF SECURITIES--99.56%
(cost $68,798,170) 76,663,492
Other assets over liabilities--0.44% 340,416
----------
Net assets applicable to 5,107,059 shares
(.01 par value outstanding); equivalent to
$15.08 per share--100.00% $77,003,908
==========
</TABLE>
*Non-income producing security for the period ended June 30, 1997.
See accompanying notes
3
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-
GLOBAL BOND SERIES
STATEMENT OF NET ASSETS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
BONDS--91.59% AMOUNT* (U.S. $)
-------------------------------
<S> <C> <C> <C>
AUSTRALIA--3.86%
New South Wales International
7.00% 4/1/04 A$ 150,000 $ 111,121
Queensland Treasury-Global
8.00% 5/14/03 580,000 463,890
-------------
575,011
-------------
CANADA--6.21%
Autobahn Schnell 8.50% 3/3/03 C$ 60,000 48,540
Banque National De Paris 9.00% 8/13/02 250,000 204,754
Export-Inport Bank of Japan 7.75% 10/8/02 160,000 125,168
General Electric Capital of Canada
7.125% 2/12/04 100,000 76,192
Government of Canada 9.00% 12/1/04 100,000 84,796
Government of Canada 10.25% 3/15/14 100,000 97,721
KFW International Finance 6.50% 12/28/01 60,000 44,819
Kingdom of Norway 8.375% 1/27/03 200,000 160,805
Ontario Hydro 10.00% 3/19/01 100,000 83,345
-------------
926,140
-------------
FINLAND--1.44%
Republic of Finland Government
7.875% 7/28/04 Fim 200,000 214,125
-------------
214,125
-------------
GERMANY--7.56%
Baden Wurt L-Finance NV
6.625% 8/20/03 Dem 250,000 154,364
DSL Finance NV Amsterdam
6.00% 2/21/06 500,000 292,447
Deut Pfandbriefe Hypobk Bank
5.625% 2/7/03 500,000 296,058
Euro Bank Reconstruction & Development
4.875% 2/28/01 500,000 292,676
International Bank Reconstruction &
Development 6.125% 9/27/02 150,000 91,458
-------------
1,127,003
-------------
ITALY--10.51%
Buoni Poliennali Del Tes 9.50% 2/1/01 Itl 1,000,000,000 648,564
Italian Government 12.00% 1/1/03 1,000,000,000 732,517
Republic of Italy 3.50% 6/20/01 20,000,000 186,232
-------------
1,567,313
-------------
JAPAN--8.77%
International Bank Reconstruction &
Development 4.50% 6/20/00 Jpy 20,000,000 190,814
Japan Government-129 (10 Year Issue)
6.40% 3/20/00 60,000,000 596,727
Japan Highway 7.875% 9/27/02 400,000 314,186
Matsushita Electric Industries 7.25% 8/1/02 200,000 205,500
-------------
1,307,227
-------------
NEW ZEALAND--12.24%
Government of New Zealand 8.00% 2/15/01 Nz$ 250,000 176,848
Government of New Zealand 8.00% 4/15/04 2,300,000 1,647,967
-------------
1,824,815
-------------
SWEDEN--10.48%
Swedish Government 8.00% 8/15/07 Sk 4,000,000 569,829
Swedish Government 9.00% 4/20/09 300,000 45,894
Swedish Government 10.25% 5/5/03 2,300,000 359,666
Swedish Government 13.00% 6/15/01 500,000 81,713
Sweden (Kingdom of) 5.50% 4/12/02 4,000,000 504,728
-------------
1,561,830
-------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT* (U.S. $)
----------------------------------
UNITED KINGDOM--7.22%
<S> <C> <C>
Abbey National Treasury 8.00% 4/2/03 Gbp 200,000 $ 340,878
Depfa Finance 7.125% 11/11/03 100,000 163,363
Glaxo Wellcome 8.75% 12/01/05 80,000 142,844
Powergen 8.50% 7/3/06 100,000 173,353
SmithKline Beecham 8.375% 12/29/00 150,000 256,127
-----------
1,076,565
-----------
UNITED STATES--23.30%
J. Sainsbury 6.25% 3/27/02 $ 100,000 98,000
Korea Electric Power 6.375% 12/1/03 100,000 96,125
Republic of Finland 5.50% 2/9/01 800,000 476,996
U.S. Treasury Bonds 13.375% 8/15/01 700,000 876,729
U.S.Treasury Inflation Index Notes
3.375% 1/15/07 404,306 394,704
U.S. Treasury Notes 5.625% 11/30/98 400,000 398,296
U.S. Treasury Notes 6.125% 7/31/00 300,000 298,944
U.S.Treasury Notes 7.50% 11/15/01 800,000 833,896
-----------
3,473,690
-----------
TOTAL BONDS
(cost $13,606,676) 13,653,719
-----------
REPURCHASE AGREEMENTS--12.20%
With Chase Manhattan 5.80% 7/01/97
(dated 6/30/97, collateralized by $635,000
U.S. Treasury Notes 5.375% due 11/30/97,
market value $642,139) 629,000 629,000
With J.P. Morgan Securities 5.80% 7/01/97
(dated 6/30/97, collateralized by $606,000
U.S. Treasury Notes 5.125% due 4/30/98,
market value $608,311) 595,000 595,000
With PaineWebber 5.80% 7/01/97
(dated 6/30/97, collateralized by $377,000
U.S. Treasury Notes 7.25% due 2/15/98,
market value $390,106, and $204,000)
U.S. Treasury Notes 9.125% due 5/15/99,
market value $217,016) 595,000 595,000
-----------
TOTAL REPURCHASE AGREEMENTS
(cost $1,819,000) 1,819,000
-----------
TOTAL MARKET VALUE OF SECURITIES--103.79%
(cost $15,425,676) 15,472,719
Other assets under liabilities(--3.79%) (565,124)
-----------
Net assets applicable to 1,411,747 shares
($.01 par value outstanding); equivalent
to $10.56 per share--100.00% $14,907,595
===========
</TABLE>
*Principal amount is stated in the currency in which each bond is
denominated.
A$- Australian Dollars Jpy- Japanese Yen
C$- Canadian Dollars NZ$- New Zealand Dollars
Fim- Finish Markka Sk- Swedish Kroner
Dem- German Deutsche Mark Gbp- British Pounds
Itl- Italian Lira $- U.S. Dollars
See accompanying notes
4
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
EQUITY/ EMERGING GLOBAL
INCOME GROWTH BOND
SERIES SERIES SERIES
--------------------------------------------------------
ASSETS:
<S> <C> <C> <C>
Investment at market $267,341,361 $76,663,492 $15,472,719
- -------------------------------------------------------------------------------------------------------------
Dividends and interest receivable 590,422 2,510 373,415
- -------------------------------------------------------------------------------------------------------------
Receivable for fund shares sold 143,356 152,552 58,736
- -------------------------------------------------------------------------------------------------------------
Receivable for investment securities sold 1,741,049 1,454,117 1,925,137
- -------------------------------------------------------------------------------------------------------------
Cash and foreign currencies 59,743 -- 925
- -------------------------------------------------------------------------------------------------------------
Other assets 1,950 156 --
- -------------------------------------------------------------------------------------------------------------
Total assets 269,877,881 78,272,827 17,830,932
- -------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for investment securities purchased 4,318,039 1,104,418 2,850,726
- -------------------------------------------------------------------------------------------------------------
Payable for fund shares repurchased 466,488 48,676 37
- -------------------------------------------------------------------------------------------------------------
Other accounts payable and accrued expenses 165,431 115,825 72,574
- -------------------------------------------------------------------------------------------------------------
Total liabilities 4,949,958 1,268,919 2,923,337
- -------------------------------------------------------------------------------------------------------------
NET ASSETS $264,927,923 $77,003,908 $14,907,595
========================================================
Shares outstanding 15,441,237 5,107,059 1,411,747
=============================================================================================================
Net asset value $ 17.16 $ 15.08 $ 10.56
=============================================================================================================
</TABLE>
See accompanying notes.
5
<PAGE>
STATEMENTS OF OPERATIONS
Six months ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
EQUITY/ EMERGING GLOBAL
INCOME GROWTH BOND
SERIES SERIES SERIES
----------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 211,318 $ 235,961 $ 427,551
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends 2,905,712 54,914 --
- ---------------------------------------------------------------------------------------------------------------------------------
Foreign tax withheld -- -- (2,231)
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment income 3,117,030 290,875 425,320
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 633,817 243,484 46,622
- ---------------------------------------------------------------------------------------------------------------------------------
Dividend disbursing and transfer agent fees and expenses 10,614 3,351 1,262
- ---------------------------------------------------------------------------------------------------------------------------------
Custodial fees 4,221 10,339 1,603
- ---------------------------------------------------------------------------------------------------------------------------------
Professional fees 5,769 3,632 7,250
- ---------------------------------------------------------------------------------------------------------------------------------
Accounting fees and salaries 48,273 14,953 2,915
- ---------------------------------------------------------------------------------------------------------------------------------
Taxes other than income 7,966 2,065 2,200
- ---------------------------------------------------------------------------------------------------------------------------------
Registration fees 21,718 1,211 1,930
- ---------------------------------------------------------------------------------------------------------------------------------
Directors fees 1,851 766 319
- ---------------------------------------------------------------------------------------------------------------------------------
Printing and Postage 2,600 2,178 1,300
- ---------------------------------------------------------------------------------------------------------------------------------
Other 12,202 1,964 1,303
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 749,031 283,943 66,704
- ---------------------------------------------------------------------------------------------------------------------------------
Less expenses absorbed by Delaware Management Company, Inc. or
Delaware International Advisers Ltd. -- (26,767) (17,567)
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,367,999 33,699 376,183
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) on:
Investment transactions 9,630,955 17,687 (200,796)
- ---------------------------------------------------------------------------------------------------------------------------------
Foreign currency transactions -- -- 93,001
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 9,630,955 17,687 (107,795)
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 24,475,763 3,715,409 (206,453)
- ---------------------------------------------------------------------------------------------------------------------------------
Translation of assets and liabilities in foreign currencies -- -- 12,036
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments 24,475,763 3,715,409 (194,417)
- ---------------------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS 34,106,718 3,733,096 (302,212)
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $36,474,717 $ 3,766,795 $ 73,971
=================================================================================================================================
</TABLE>
See accompanying notes.
6
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year ended December 31, 1996 and six months ended June 30, 1997
<TABLE>
<CAPTION>
EQUITY/ EMERGING GLOBAL
INCOME GROWTH BOND
SERIES SERIES SERIES*
------------------------------------------------------
<S> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1996 $ 109,003,456 $ 20,509,664 $ --
- ----------------------------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 3,405,801 185,659 231,186
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 14,743,863 661,923 83,530
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments 6,445,954 1,635,650 264,767
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 24,595,618 2,483,232 579,483
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from:
Net investment income (3,496,319) (131,779) (119,481)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (8,895,014) (1,171,368) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends to shareholders (12,391,333) (1,303,147) (119,481)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 45,438,836 34,733,744 9,010,816
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 57,643,121 35,913,829 9,470,818
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1996 $ 166,646,577 $ 56,423,493 $ 9,470,818
- ----------------------------------------------------------------------------------------------------------------------------------
Changes from operations:
Net investment income 2,367,999 33,699 376,183
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 9,630,955 17,687 (107,795)
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments 24,475,763 3,715,409 (194,417)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 36,474,717 3,766,795 73,971
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from:
Net investment income (2,170,882) (204,613) (319,448)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (14,788,457) (736,608) (83,855)
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends to shareholders (16,959,339) (941,221) (403,303)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 78,765,968 17,754,841 5,766,109
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 98,281,346 20,580,415 5,436,777
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT JUNE 30, 1997 $ 264,927,923 $ 77,003,908 $ 14,907,595
==================================================================================================================================
</TABLE>
*May 2, 1996 was the date of initial public offering for the Global Bond Series.
See accompanying notes.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
Delaware Group Premium Fund, Inc. (the "Fund"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Fund is organized as a Maryland corporation and offers
fifteen series: the Equity/Income Series, the High Yield Series, the Capital
Reserves Series, the Money Market Series, the Growth Series, the Multiple
Strategy Series, the International Equity Series, the Value Series, the
Emerging Growth Series, the Global Bond Series, the Strategic Income Series,
the Devon Series, the Emerging Markets Series, the Convertible Securities
Series, and the Quantum Series (the "Series"). The shares of the Funds are
sold only to separate accounts of life insurance companies.
The Series' investment objectives are as follows:
<TABLE>
<CAPTION>
SERIES INVESTMENT OBJECTIVE
------ --------------------
<S> <C>
Equity/Income Series The investment objective is to seek the highest possible total rate of
return by selecting issues that exhibit the potential for capital
appreciation while providing higher than average dividend income.
Emerging Growth Series The investment objective is to seek long-term capital appreciation by
investing primarily in small-capital common stocks and convertible
securities of emerging and other growth-oriented companies. These
securities will have been judged to be responsive to changes in the
market place and to have fundamental characteristics to support
growth. Income is not an objective.
Global Bond Series The investment objective is to seek current income consistent with
preservation of principal by investing primarily in fixed income
securities that may also provide the potential for capital appreciation.
The Series is a global fund, as such, at least 65% of the Series' assets
will be invested in fixed income securities of issuers organized or
having a majority of their assets in or deriving a majority of their
operating income in at least three different countries, one of which may
be the United States.
</TABLE>
1. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION: Investments are stated at value. Portfolio securities
which are traded on stock exchanges are valued at the last reported sale
price on the exchange or market where primarily traded or listed. Securities
not traded or securities not listed are valued at the mean between the last
quoted bid and asked prices. Long-term debt securities are valued at their
bid quotations. Forward foreign currency contracts are valued at the forward
exchange rates prevailing on the day of valuation. Interpolated values are der
ived when the settlement date of the contract is on an interim date for which
quotations are not available. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined
in good faith by or under the direction of the Fund's Board of Directors.
Money market instruments are stated at amortized cost, which approximates
market value.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
Foreign dividends are also recorded on the ex-dividend date or as soon after
the ex-dividend date that the Funds are aware of such dividends, net of all
non-rebatable tax withholdings. Interest income includes premium and discount
amortization on money market instruments; it also includes original issue and
market discount amortization on long-term debt investments. Realized gains or
losses from investment transactions are reported on an identified cost basis.
Withholding taxes on foreign dividends have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and
rates.
Certain fund expenses are paid through "soft dollar" arrangements with
brokers. The amount of these expenses was less than 0.01% of each Fund's
average daily net assets.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Expenses common to all funds within the Delaware Group are allocated amongst
the funds on the basis of average net assets.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Series are
maintained in US dollars. All assets and liabilities denominated in a foreign
currency are translated into US dollars based upon foreign exchange rates
prevailing at the end of the period. Income and expenses and purchases and
sales of investments are translated into US dollars at the rate of exchange
prevailing on the respective dates of such transactions.
The effects of changes in foreign currency exchange rates on investments in
securities are not segregated from the effects of changes in market prices of
those securities, but are included with the net realized and unrealized gain
or loss on investment in securities. Reported net realized gains and losses
on foreign currency transactions arise from sales and maturities of forward
foreign currency contracts, currency gains and losses between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Funds' books and the U.S. dollar equivalent of the amounts actually received
paid. Net change in unrealized appreciation or depreciation on translation of
assets and liabilities in foreign currencies arise from changes in the value
of other assets and liabilities at the end of the period resulting from
changes in the exchange rates.
TAXES: Each Series has complied with the special provisions of the Internal
Revenue Code for regulated investment companies. As such, each Series is not
subject to U.S. federal income taxes to the extent that it distributes all of
its taxable income for its fiscal year. Income and capital gain distributions
are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principals.
Withholding taxes on foreign interest have been provided for in accordance
with the applicable country's tax rates.
2. OTHER ASSETS OVER (UNDER) LIABILITIES
The statement of net assets accounts "Other assets over (under) liabilities"
at June 30, 1997, consisted of the following assets (liabilities)
<TABLE>
<CAPTION>
EQUITY/INCOME EMERGING GROWTH GLOBAL BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Cash $ 59,743 $ -- $ 925
- ------------------------------------------------------------------------------------------------------------------
Receivable for dividends earned 588,905 1,156 --
- ------------------------------------------------------------------------------------------------------------------
Receivable for interest earned 1,517 1,354 373,415
- ------------------------------------------------------------------------------------------------------------------
Receivable for securities sold 1,741,049 1,454,117 1,925,137
- ------------------------------------------------------------------------------------------------------------------
Receivable for capital shares sold 143,356 152,552 58,736
- ------------------------------------------------------------------------------------------------------------------
Payable for securities purchased (4,318,039) (1,104,418) (2,850,726)
- ------------------------------------------------------------------------------------------------------------------
Payable for capital shares repurchased (466,488) (48,676) (37)
- ------------------------------------------------------------------------------------------------------------------
Accrued expenses (165,431) (66,899) (72,574)
- ------------------------------------------------------------------------------------------------------------------
Other, net 1,950 (48,770) --
- ------------------------------------------------------------------------------------------------------------------
$(2,413,438) $ 340,416 $ (565,124)
=================================================================
</TABLE>
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
In accordance with the terms of the Investment Management Agreement, the
Equity/Income Series and the Emerging Growth Series pay Delaware Management
Company, Inc. ("DMC"), the investment manager of these Series, and the Global
Bond Series pays Delaware International Advisers Ltd. ("DIAL"), the
investment manager of this Series, a fee which is calculated on the average
daily net assets of each Series, at an annual rate less fees paid to the
unaffiliated directors for the Equity/Income Series. The management fees for
the Emerging Growth Series and Global Bond Series are calculated daily on the
net assets of each Series at an annual rate without consideration of amounts
paid to unaffiliated directors. The management fee rates are as follows:
<TABLE>
<CAPTION>
EQUITY/INCOME EMERGING GROWTH GLOBAL BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Management fees as a percentage of average
daily net assets (per annum) 0.60% 0.75% 0.75%
</TABLE>
DMC and DIAL have elected voluntarily to waive their fees and reimburse each
Series to the extent that annual operating expenses, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, exceed 0.80% of
average daily net assets for each Series through June 30, 1997. Total expenses
absorbed by DMC and DIAL for the six months ended June 30, 1997, are as follows:
<TABLE>
<CAPTION>
EQUITY/INCOME EMERGING GROWTH GLOBAL BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Total expenses absorbed by DMC or DIAL -- $26,767 $17,567
</TABLE>
The Equity/Income Series, the Emerging Growth Series and the Global Bond Series
have engaged Delaware Service Company, Inc. ("DSC"), an affiliate of DMC, to
serve as dividend disbursing and transfer agent for each Series. Effective
August 19, 1996, the Fund also engaged DSC to provide accounting services for
the Fund. Previously, fund personnel provided this service and the related costs
were recorded in salaries and other expense categories in the statement of
operations. For the six months ended June 30, 1997, the amounts expensed for
each Series are as follows:
<TABLE>
<CAPTION>
EQUITY/INCOME EMERGING GROWTH GLOBAL BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Dividend disbursing and transfer agent fees and
other expenses $ 10,614 $ 3,351 $ 1,262
Accounting fees 36,482 10,186 1,987
</TABLE>
On June 30, 1997, the Series had payables to affiliates as follows:
<TABLE>
<CAPTION>
EQUITY/INCOME EMERGING GROWTH GLOBAL BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Investment management fee payable to DMC or DIAL $103,925 $46,274 $60,548
Dividend disbursing, transfer agent fees, accounting
fees and other expenses payable to DSC 9,645 2,748 4,857
Other expenses payable to DMC and its affiliates 13,630 4,008 2,743
</TABLE>
Certain officers of DMC and DIAL are officers, directors, and/or employees of
the Fund. These officers, directors, and employees are paid no compensation
by the Fund.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. ANALYSIS OF NET ASSETS
The analysis of net assets at June 30, 1997 consisted of the following:
<TABLE>
<CAPTION>
EQUITY/ EMERGING GLOBAL
INCOME GROWTH BOND
SERIES SERIES SERIES
------ ------ ------
<S> <C> <C> <C>
Common stock par value $.01 per share* $ 154,412 $ 51,071 $ 14,117
- ----------------------------------------------------------------------------------------------------------------------------------
Paid-in-capital in excess of par value of shares issued 208,407,912 69,141,253 14,762,808
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income** 958,691 9,707 262,294
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments** 9,453,661 (63,445) (183,142)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation or depreciation on investments
and foreign currencies 45,953,247 7,865,322 51,518
- ----------------------------------------------------------------------------------------------------------------------------------
$264,927,923 $ 77,003,908 $ 14,907,595
=========================================================
</TABLE>
*Each Series has 50,000,000 authorized shares.
**Accumulated undistributed net investment income includes net realized gains
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
5. INVESTMENTS
The aggregate cost of investments purchased, the aggregate proceeds from
investments sold, the cost of investment securities, the aggregate gross
unrealized appreciation, the aggregate gross unrealized depreciation, and the
net unrealized appreciation of investments and other financial instruments
for federal income tax purposes at June 30, 1997 are as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE GROSS GROSS NET
COST OF PROCEEDS COST OF UNREALIZED UNREALIZED UNREALIZED
PURCHASES* FROM SALES* INVESTMENTS APPRECIATION DEPRECIATION APPRECIATION
---------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Equity/Income Series $116,455,082 $ 55,142,175 $221,515,882 $ 47,086,708 $ 1,261,229 $ 45,825,479
Emerging Growth Series 62,455,924 38,967,059 69,030,158 10,681,832 3,048,498 7,633,334
Global Bond Series 11,704,989 6,106,708 15,425,676 243,377 196,334 47,043
</TABLE>
*Does not include U.S. government securities and temporary cash investments.
6. SUPPLEMENTAL FINANCIAL INSTRUMENT INFORMATION:
FORWARD FOREIGN CURRENCY CONTRACTS: The Global Bond Series may purchase or
sell forward foreign currency contracts to hedge risks of fluctuations in
specific transactions or portfolio positions. Forward foreign currency
contracts obligate the Funds to take or deliver a financial instrument of
foreign currency at a future date at a specified price. The unrealized gain
or loss on the contracts are reflected in the accompanying financial
statements. The Series is subject to the credit risks that the counterparties
to these contracts will fail to perform; although this risk is minimized by
purchasing such agreements from financial institutions with long standing,
superior performance records. In addition, the Series is subject to the
market risks associated with unanticipated movements in the value of a
foreign currency relative to the U.S. dollar; however, such changes in the
value generally are offset by changes in the value of the items being hedged
by such contracts.
REPURCHASE AGREEMENTS: Each Series may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements
secured by obligations of the U.S. government. The respective collateral is
held by each Series' custodian bank until the maturity of the respective
repurchase agreements. Each repurchase agreement is at least 100%
collateralized. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization of the collateral may be subject
to legal proceedings.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
7. CONCENTRATION OF CREDIT RISK
Each Series may invest up to 10% of its total assets in illiquid securities
which include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The
relative illiquidity of some of these securities may adversely affect the
Series' ability to dispose of such securities in a timely manner and at a
fair price when it is necessary to liquidate such securities. These
securities, if any, have been denoted in each Series' Statement of Net
Assets.
The Global Bond Series invests in foreign securities. Some countries in which
the Series may invest require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially
smaller, less liquid and more volatile than the major securities markets in
the United States. Consequently, acquisition and disposition of securities by
the Series may be inhibited. In addition, a significant proportion of the
aggregate market value of equity securities listed on the major securities
exchanges in emerging markets are held by a smaller number of investors. This
may limit the number of shares available for acquisition or disposition of
the Series.
Distribution of investments for the Global Bond Series by industry, as a
percentage of net assets, consisted of the following at June 30, 1997:
Foreign Government............................. 35%
U.S. Government................................ 19
Banking........................................ 12
Utilities...................................... 9
Financial Services............................. 8
Pharmaceuticals................................ 4
Cash and other................................. 13
---
100%
===
8. SUMMARY OF CHANGES FROM CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SHARES ISSUED
UPON CAPITAL NET INCREASE/(DECREASE)
CAPITAL REINVESTMENT OF SHARES RESULTING FROM CAPITAL
SHARES SOLD DIVIDENDS REDEEMED SHARE TRANSACTIONS
-----------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------ ------ ------
Year ended December 31, 1996*:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity/Income Series 3,486,920 $52,083,570 899,233 $12,391,333 (1,307,916) $(19,036,067) 3,078,237 $45,438,836
Emerging Growth Series 3,395,485 49,046,522 101,808 1,303,147 (1,086,091) (15,615,925) 2,411,202 34,733,744
Global Bond Series 876,461 9,137,415 11,182 119,481 (23,197) (246,080) 864,446 9,010,816
Six months ended June 30, 1997:
Equity/Income Series 4,592,028 $73,014,134 1,125,687 $16,959,338 (703,278) $(11,207,504) 5,014,437 $78,765,968
Emerging Growth Series 1,540,433 22,147,514 63,254 941,222 (370,808) (5,333,895) 1,232,879 17,754,841
Global Bond Series 636,287 6,694,632 38,585 403,303 (127,571) (1,331,826) 547,301 5,766,109
</TABLE>
*May 2, 1996 was the date of initial public offering for the Global Bond
Series.
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for each capital share outstanding throughout the year)
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DIVIDENDS FROM:
--------------------------------- --------------------
Net Net Net
asset realized and Total asset
Year value Net unrealized from Net Net realized value
ended beginning investment gain (loss) on investment investment gain on Total end
12/31 of period income investments operations income investments dividends of period
- -----------------------------------------------------------------------------------------------------------------------
EQUITY/INCOME SERIES
<S> <C> <C> <C> <C> <C> <C> <C>
1992 $10.750 $0.416 $0.504 $0.920 $(0.450) $ -- $(0.450) $11.220
1993 11.220 0.434 1.266 1.700 (0.410) -- (0.410) 12.510
1994 12.510 0.412 (0.422) (0.010) (0.420) (0.600) (1.020) 11.480
1995 11.480 0.416 3.574 3.990 (0.430) (0.210) (0.640) 14.830
1996 14.830 0.377 2.398 2.775 (0.420) (1.205) (1.625) 15.980
EMERGING GROWTH SERIES
1993* $10.000 $ -- $0.200 $0.200 $ -- $ -- $ -- $10.200
1994 10.200 0.079 (0.119) (0.040) -- -- -- 10.160
1995 10.160 0.098 3.852 3.950 (0.090) -- (0.090) 14.020
1996 14.020 0.050 1.380 1.430 (0.090) (0.800) (0.890) 14.560
GLOBAL BOND SERIES
1996* $10.000 $0.339 $0.831 $1.170 $(0.210) -- $(0.210) $10.960
</TABLE>
RESTUBBED TABLE
FINANCIAL HIGHLIGHTS
(Selected data for each capital share outstanding throughout the year)
<TABLE>
<CAPTION>
Ratio of Ratio of
expenses to Ratio of net net investment
Ratio of average net investment income to average Net assets
Year expenses assets prior income net assets prior Portfolio at end Average
ended Total to average to expense to average to expense turnover of period commission
12/31 return*** net assets limitation net assets limitation rate (000's omitted) rate paid+
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 8.82% 0.79% 0.81% 3.86% 3.84% 72% $ 38,278 N/A
1993 15.45% 0.75% 0.76% 3.95% 3.94% 67% 65,519 N/A
1994 (0.20%) 0.71% 0.71% 3.63% 3.63% 91% 72,725 N/A
1995 36.12% 0.69% 0.69% 3.24% 3.24% 85% 109,003 N/A
1996 20.72% 0.67% 0.67% 2.66% 2.66% 81% 166,647 $0.0600
1993* 2.00% **** **** **** **** **** $ 204 N/A
1994 (0.39%) 0.80% 1.47% 1.63% 0.96% 59% 7,087 N/A
1995 39.21% 0.80% 0.96% 11.03% 0.87% 76% 20,510 N/A
1996 11.00% 0.80% 0.92% 0.56% 0.44% 112% 56,423 $0.0600
1996* 11.79% 0.80% 1.19% 6.51% 6.12% 56% $ 9,471 N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DIVIDENDS FROM:
--------------------------------- --------------------
Net Net Net
asset realized and Total asset
Year value Net unrealized from Net Net realized value
ended beginning investment gain (loss) on investment investment gain on Total end
12/31 of period income investments operations income investments dividends of period
- -----------------------------------------------------------------------------------------------------------------------
EQUITY/INCOME SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $15.980 $ 0.159 $ 2.541 $ 2.700 $(0.170) $(1.350) $(1.520) $17.160
EMERGING GROWTH SERIES
1997 $14.560 $ 0.005 $ 0.745 $ 0.750 $(0.050) $(0.180) $(0.230) $15.080
GLOBAL BOND SERIES
1997 $10.960 $ 0.335 $(0.370) $(0.035) $(0.280) $(0.085) $(0.365) $10.560
</TABLE>
RESTUBBED TABLE
<TABLE>
<CAPTION>
Ratio of Ratio of
expenses to Ratio of net net investment
Ratio of average net investment income to average Net assets
Year expenses assets prior income net assets prior Portfolio at end Average
ended Total to average to expense to average to expense turnover of period commission
12/31 return*** net assets limitation net assets limitation rate (000's omitted) rate paid
- ---------------------------------------------------------------------------------------------------------------------------------
EQUITY/INCOME SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 18.27% 0.71% 0.71% 2.25% 2.25% 54% $264,928 $0.0600
EMERGING GROWTH SERIES
1997 5.25% 0.80% 0.88% 0.10% 0.02% 142% $ 77,004 $0.0597
GLOBAL BOND SERIES
1997 (0.25%) 0.80% 1.08% 7.61% 7.32% 107% $ 14,908 N/A
</TABLE>
*The date of initial public offering was December 27, 1993 for the Emerging
Growth Series and May 2, 1996 for the Global Bond Series. Total return has
not been annualized for the Emerging Growth Series; ratios and portfolio
turnover have been annualized and total return has not been annualized for
the Global Bond Series.
**Ratios have been annualized and total return has not been annualized.
***Total return percentages in this table are calculated on the basis
prescribed by the Securities and Exchange Commission. These percentages are
based on the underlying mutual fund shares in which Separate Account C, D,
G, and K may invest. The total return percentages in the table are NOT
calculated on the same basis as the performance percentages notes in the
letter at the front of this booklet (those percentages are based upon the
change in unit values).
****The ratios of expenses and net investment income to average net assets and
portfolio turnover have been omitted as management believes that such ratios
are not meaningful due to the limited assets of the Series.
+Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.
13
