FIDELITY INVESTMENTS
VARIABLE ANNUITY ACCOUNT I
ANNUAL REPORT
DECEMBER 31, 1998
(2_FIDELITY_LOGOS)(REGISTERED TRADEMARK)
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF FIDELITY INVESTMENTS LIFE
INSURANCE COMPANY VARIABLE ANNUITY OWNERS. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED
OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER FIDELITY
INVESTMENTS LIFE INSURANCE COMPANY NOR FIDELITY BROKERAGE SERVICES,
INC. IS A BANK, AND NEITHER THE ANNUITIES NOR MUTUAL FUND SHARES ARE
BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC.
STATEMENT OF ASSETS AND LIABILITIES
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
ASSETS DECEMBER 31, 1998
Investments at current market
value:
Variable Insurance Products
Fund (VIP)
Money Market Portfolio - $ 729,673,657
729,673,657 shares (cost $
729,673,657)
High Income Portfolio - 276,299,106
23,963,496 shares (cost
$299,432,576)
Equity-Income Portfolio - 1,586,781,220
62,422,550 shares (cost
$1,123,439,969)
Growth Portfolio - 1,383,742,602
30,838,925 shares (cost
$893,138,771)
Overseas Portfolio - 255,668,374
12,751,540 shares (cost
$232,499,901)
Variable Insurance Products
Fund II (VIP II)
Investment Grade Bond 251,081,967
Portfolio - 19,373,609
shares (cost $242,709,050)
Asset Manager Portfolio - 812,865,053
44,761,291 shares (cost
$680,721,317)
Index 500 Portfolio - 1,066,865,828
7,553,032 shares (cost
$755,511,787)
Asset Manager: Growth 328,633,446
Portfolio - 19,297,325
shares (cost $264,843,950)
Contrafund Portfolio - 1,518,200,305
62,119,489 shares (cost
$953,095,125)
Variable Insurance Products
Fund III (VIP III)
Balanced Portfolio - 111,115,343
6,897,290 shares (cost
$100,607,941)
Growth & Income Portfolio - 587,747,247
36,393,018 shares (cost
$460,560,686)
Growth Opportunities 415,927,875
Portfolio - 18,178,666
shares (cost $322,295,381)
Morgan Stanley Universal
Funds (MSUF)
Emerging Markets Equity 4,454,538
Portfolio - 626,517 shares
(cost $5,780,763)
Emerging Markets Debt 2,153,635
Portfolio - 353,055 shares
(cost $3,326,221)
Global Equity Portfolio - 18,306,967
1,393,224 shares (cost
$18,326,499)
International Magnum 11,725,836
Portfolio - 1,044,153 shares
(cost $12,885,641)
PBHG Insurance Series Funds
(PBHG)
Growth II Portfolio - 5,011,598
430,920 shares (cost
$4,873,803)
Small Cap Value Portfolio - 41,078,481
3,538,198 shares (cost
$39,712,801)
Large Cap Value Portfolio - 19,897,931
1,394,389 shares (cost
$17,532,842)
Technology & Communications 25,809,987
Portfolio - 1,875,726 shares
(cost $21,742,573)
Select 20 Portfolio - 288,587,415
17,704,749 shares (cost
$233,594,225)
Strong Variable Insurance
Funds (SVIF)
Discovery Fund II Portfolio 2,503,055
- - 196,781 shares (cost
$2,473,591)
Growth Fund II Portfolio - 11,650,461
727,245 shares (cost
$10,275,292)
Opportunity Fund II 26,959,500
Portfolio - 1,241,229 shares
(cost $27,388,610)
Warburg Pincus Trust (WPT)
Small Company Growth 18,871,505
Portfolio - 1,178,732 shares
(cost $19,408,249)
International Equity 4,007,860
Portfolio - 364,682 shares
(cost $4,506,929)
Post-Venture Capital 6,739,331
Portfolio - 572,099 shares
(cost $7,042,701)
Total Assets $ 9,812,360,123
NET ASSETS COMPRISED OF:
Variable Annuity Contracts $ 9,364,193,435
Annuity Reserves 447,572,174
Retained in Variable Account 594,514
by Fidelity Investments Life
Insurance Company
NET ASSETS $ 9,812,360,123
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP - HIGH INCOME
VIP - MONEY MARKET
12/31/98 12/31/97 12/31/97
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 32,096,882 $ 26,699,688 $ 23,805,612 $ 18,527,541
EXPENSES:
Mortality risk, expense 4,861,321 4,865,592 2,607,824 2,709,414
risk and adminis- trative
charges
Net investment income (loss) 27,235,561 21,834,096 21,197,788 15,818,127
Realized gain (loss) on sale 0 0 4,318,426 6,949,695
of fund shares
Realized gain distributions 0 0 15,126,483 2,289,920
Unrealized appreciation 0 0 (57,719,667) 16,989,756
(depreciation)
Net increase (decrease) in 27,235,561 21,834,096 (17,076,970) 42,047,498
net assets from operations
Payments received from 832,133,915 629,101,224 17,985,450 15,807,824
contract owners
Transfers between sub- (509,285,719) (638,722,858) (33,267,856) 19,435,560
accounts and the fixed
account, net
Transfers for contract (81,249,209) (67,465,064) (11,355,372) (11,995,400)
benefits and terminations
Other transfers (to) from (99,738) (215,320) (9,675) (71,599)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 241,499,249 (77,302,018) (26,647,453) 23,176,385
net assets from contract
transactions
Retained in (returned from) (43,725) 29,046 41,287 (35,935)
Variable Annuity
Account I, net
Total increase (decrease) in 268,691,085 (55,438,876) (43,683,136) 65,187,948
net assets
Net assets at beginning of 460,982,572 516,421,448 319,982,242 254,794,294
year
Net assets at end of year $ 729,673,657 $ 460,982,572 $ 276,299,106 $ 319,982,242
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP - EQUITY-INCOME VIP - GROWTH
12/31/98 12/31/97 12/31/98 12/31/97
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 23,290,879 $ 23,220,927 $ 5,047,927 $ 6,191,892
EXPENSES:
Mortality risk, expense 13,461,086 14,608,539 8,974,434 9,346,562
risk and adminis- trative
charges
Net investment income (loss) 9,829,793 8,612,388 (3,926,507) (3,154,670)
Realized gain (loss) on sale 104,830,108 48,965,707 40,388,245 67,921,108
of fund shares
Realized gain distributions 82,888,133 116,749,676 132,043,151 27,716,088
Unrealized appreciation (36,054,859) 179,763,260 204,627,266 99,256,428
(depreciation)
Net increase (decrease) in 161,493,175 354,091,031 373,132,155 191,738,954
net assets from operations
Payments received from 23,651,693 37,916,433 21,087,538 27,687,604
contract owners
Transfers between sub- (197,773,458) (42,350,907) 23,157,770 (133,879,505)
accounts and the fixed
account, net
Transfers for contract (72,201,646) (56,020,921) (39,644,250) (32,443,849)
benefits and terminations
Other transfers (to) from (257,492) (43,377) (152,014) (59,301)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in (246,580,903) (60,498,772) 4,449,044 (138,695,051)
net assets from contract
transactions
Retained in (returned from) 88,226 (375,922) 11,999 (258,418)
Variable Annuity
Account I, net
Total increase (decrease) in (84,999,502) 293,216,337 377,593,198 52,785,485
net assets
Net assets at beginning of 1,671,780,722 1,378,564,385 1,006,149,404 953,363,919
year
Net assets at end of year $ 1,586,781,220 $ 1,671,780,722 $ 1,383,742,602 $ 1,006,149,404
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
VIP - OVERSEAS
12/31/98 12/31/97
INCOME:
Dividends $ 4,778,919 $ 4,241,849
EXPENSES:
Mortality risk, expense 2,143,575 2,648,546
risk and adminis- trative
charges
Net investment income (loss) 2,635,344 1,593,303
Realized gain (loss) on sale 9,228,055 13,687,852
of fund shares
Realized gain distributions 14,085,236 16,838,855
Unrealized appreciation (1,421,498) (6,167,246)
(depreciation)
Net increase (decrease) in 24,527,137 25,952,764
net assets from operations
Payments received from 5,643,658 10,161,356
contract owners
Transfers between sub- (16,458,574) (23,441,635)
accounts and the fixed
account, net
Transfers for contract (8,696,657) (7,577,179)
benefits and terminations
Other transfers (to) from (59,360) (36,899)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in (19,570,933) (20,894,357)
net assets from contract
transactions
Retained in (returned from) 2,875 (60,265)
Variable Annuity
Account I, net
Total increase (decrease) in 4,959,079 4,998,142
net assets
Net assets at beginning of 250,709,295 245,711,153
year
Net assets at end of year $ 255,668,374 $ 250,709,295
</TABLE>
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
12/31/98 12/31/97 12/31/98 12/31/97
INCOME: 12/31/98 12/31/97 12/31/98 12/31/97
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
VIP II - INVESTMENT VIP II - ASSET MANAGER VIP II - INDEX 500
GRADE BOND
12/31/98 12/31/97 12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 5,744,010 $ 4,769,202 $ 24,381,840 $ 24,113,827 $ 9,035,234 $ 4,774,795
EXPENSES:
Mortality risk, expense 1,328,654 836,719 6,333,958 7,130,105 7,250,032 5,648,542
risk and administrative
charges
Net investment income (loss) 4,415,356 3,932,483 18,047,882 16,983,722 1,785,202 (873,747)
Realized gain (loss) on sale 2,547,932 858,556 16,078,991 13,884,351 42,436,975 24,508,427
of fund shares
Realized gain distributions 681,493 0 73,145,521 60,488,921 20,927,197 9,688,661
Unrealized appreciation 4,439,938 1,995,042 (3,584,516) 38,783,110 146,192,653 114,558,991
(depreciation)
Net increase (decrease) in 12,084,719 6,786,081 103,687,878 130,140,104 211,342,027 147,882,332
net assets from operations
Payments received from 11,030,713 4,109,827 10,822,258 12,080,157 40,862,335 46,826,607
contract owners
Transfers between sub- 127,766,369 22,693,615 (26,439,385) (32,631,061) 109,091,456 204,978,269
accounts and the fixed
account, net
Transfers for contract (8,719,110) (7,797,627) (50,593,986) (35,791,511) (35,534,283) (15,577,435)
benefits and terminations
Other transfers (to) from (85,669) (72,701) (177,374) (155,845) (36,685) (150,934)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 129,992,303 18,933,114 (66,388,487) (56,498,260) 114,382,823 236,076,507
net assets from contract
transactions
Retained in (returned from) 606 46,432 15,446 (92,781) 65,307 (107,699)
Variable Annuity
Account I, net
Total increase (decrease) in 142,077,628 25,765,627 37,314,837 73,549,063 325,790,157 383,851,140
net assets
Net assets at beginning of 109,004,339 83,238,712 775,550,216 702,001,153 741,075,671 357,224,531
year
Net assets at end of year $ 251,081,967 $ 109,004,339 $ 812,865,053 $ 775,550,216 $ 1,066,865,828 $ 741,075,671
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP II - ASSET MANAGER: VIP II - CONTRAFUND
GROWTH
12/31/98 12/31/97 12/31/98 12/31/97
INCOME:
Dividends $ 6,481,674 $ 0 $ 8,346,877 $ 8,157,175
EXPENSES:
Mortality risk, expense 2,558,057 2,618,594 10,481,022 10,453,261
risk and adminis- trative
charges
Net investment income (loss) 3,923,617 (2,618,594) (2,134,145) (2,296,086)
Realized gain (loss) on sale 15,999,371 5,935,984 53,814,041 35,690,439
of fund shares
Realized gain distributions 30,311,357 327,986 61,409,174 21,558,250
Unrealized appreciation (1,663,981) 52,266,796 223,438,815 161,313,279
(depreciation)
Net increase (decrease) in 48,570,364 55,912,172 336,527,885 216,265,882
net assets from operations
Payments received from 10,963,017 19,500,391 36,703,411 54,807,976
contract owners
Transfers between sub- (44,535,298) 70,469,134 (35,339,016) 66,369,243
accounts and the fixed
account, net
Transfers for contract (10,573,682) (6,744,007) (37,401,390) (25,715,125)
benefits and terminations
Other transfers (to) from (33,757) (80,124) (217,630) (281,176)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in (44,179,720) 83,145,394 (36,254,625) 95,180,918
net assets from contract
transactions
Retained in (returned from) (4,565) (31,806) 35,076 (190,999)
Variable Annuity
Account I, net
Total increase (decrease) in 4,386,079 139,025,760 300,308,336 311,255,801
net assets
Net assets at beginning of 324,247,367 185,221,607 1,217,891,969 906,636,168
year
Net assets at end of year $ 328,633,446 $ 324,247,367 $ 1,518,200,305 $ 1,217,891,969
</TABLE>
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP III - GROWTH &
VIP III - BALANCED INCOME
12/31/98 12/31/97* 12/31/98 12/31/97*
INCOME:
Dividends $ 1,599,419 $ 24,769 $ 0 $ 1,535,282
EXPENSES:
Mortality risk, expense 649,414 307,802 3,268,604 1,300,226
risk and adminis- trative
charges
Net investment income (loss) 950,005 (283,033) (3,268,604) 235,056
Realized gain (loss) on 3,178,661 1,117,028 5,527,477 255,257
sale of fund shares
Realized gain distributions 2,443,558 0 1,561,847 4,989,668
Unrealized appreciation 6,090,310 4,417,092 99,729,988 27,456,573
(depreciation)
Net increase (decrease) in 12,662,534 5,251,087 103,550,708 32,936,554
net assets from operations
Payments received from 6,696,440 6,706,277 33,928,974 29,329,428
contract owners
Transfers between sub- 33,335,133 50,665,808 206,598,227 193,894,819
accounts and the fixed
account, net
Transfers for contract (3,139,722) (1,021,595) (10,371,919) (2,031,557)
benefits and terminations
Other transfers (to) from (28,013) (11,728) (75,465) (80,558)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 36,863,838 56,338,762 230,079,817 221,112,132
net assets from contract
transactions
Retained in (returned from) (1,989) 1,111 55,231 12,805
Variable Annuity
Account I, net
Total increase (decrease) in 49,524,383 61,590,960 333,685,756 254,061,491
net assets
Net assets at beginning of 61,590,960 0 254,061,491 0
year
Net assets at end of year $ 111,115,343 $ 61,590,960 $ 587,747,247 $ 254,061,491
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP III - GROWTH MSUF - EMERGING MARKETS
OPPORTUNITIES EQUITY
12/31/98 12/31/97* 12/31/98 12/31/97**
12/31/98 12/31/97* 12/31/98 12/31/97**
INCOME:
Dividends $ 3,366,752 $ 204,581 $ 24,349 $ 9,254
EXPENSES:
Mortality risk, expense 2,844,670 1,508,291 30,867 777
risk and adminis- trative
charges
Net investment income (loss) 522,082 (1,303,710) (6,518) 8,477
Realized gain (loss) on 7,155,764 671,295 198,635 1,555
sale of fund shares
Realized gain distributions 11,703,472 286,414 0 40,944
Unrealized appreciation 56,119,613 37,512,881 (1,271,839) (54,386)
(depreciation)
Net increase (decrease) in 75,500,931 37,166,880 (1,079,722) (3,410)
net assets from operations
Payments received from 21,503,396 42,870,806 655,182 56,721
contract owners
Transfers between sub- 47,566,760 202,642,472 3,139,054 1,725,664
accounts and the fixed
account, net
Transfers for contract (7,734,200) (3,368,361) (41,665) (91)
benefits and terminations
Other transfers (to) from (25,262) (262,599) 2,855 (62)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 61,310,694 241,882,318 3,755,426 1,782,232
net assets from contract
transactions
Retained in (returned from) 54,411 12,641 12 0
Variable Annuity
Account I, net
Total increase (decrease) in 136,866,036 279,061,839 2,675,716 1,778,822
net assets
Net assets at beginning of 279,061,839 0 1,778,822 0
year
Net assets at end of year $ 415,927,875 $ 279,061,839 $ 4,454,538 $ 1,778,822
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MSUF - EMERGING MARKETS
DEBT
12/31/98 12/31/97**
INCOME:
Dividends $ 245,208 $ 57,525
EXPENSES:
Mortality risk, expense 20,272 1,196
risk and adminis- trative
charges
Net investment income (loss) 224,936 56,329
Realized gain (loss) on 31,585 1,555
sale of fund shares
Realized gain distributions 0 24,962
Unrealized appreciation (1,105,348) (67,238)
(depreciation)
Net increase (decrease) in (848,827) 15,608
net assets from operations
Payments received from 384,094 28,145
contract owners
Transfers between sub- (233,992) 2,812,620
accounts and the fixed
account, net
Transfers for contract (2,839) 0
benefits and terminations
Other transfers (to) from (226) (946)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 147,037 2,839,819
net assets from contract
transactions
Retained in (returned from) (11) 9
Variable Annuity
Account I, net
Total increase (decrease) in (701,801) 2,855,436
net assets
Net assets at beginning of 2,855,436 0
year
Net assets at end of year $ 2,153,635 $ 2,855,436
</TABLE>
* FOR THE PERIOD JANUARY 27, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MSUF - GLOBAL EQUITY MSUF - INTERNATIONAL PBHG - GROWTH II
MAGNUM
12/31/98 12/31/97** 12/31/98 12/31/97** 12/31/98 12/31/97**
$ 119,133 $ 12,390 $ 38,795 $ 36,464 $ 0 $ 0
94,880 1,073 68,976 737 32,254 847
24,253 11,317 (30,181) 35,727 (32,254) (847)
275,615 0 445,069 1,566 225,669 726
107,863 26,464 43,290 2,429 0 0
(13,408) (6,124) (1,107,058) (52,747) 68,354 69,441
394,323 31,657 (648,880) (13,025) 261,769 69,320
2,529,920 347,239 1,887,488 130,652 848,495 110,103
13,311,023 1,832,160 9,278,436 1,267,297 1,774,406 2,022,554
(145,036) 0 (174,277) 0 (74,612) (117)
6,125 (576) (2,117) 268 (335) 21
15,702,032 2,178,823 10,989,530 1,398,217 2,547,954 2,132,561
121 11 (20) 14 (2) (4)
16,096,476 2,210,491 10,340,630 1,385,206 2,809,721 2,201,877
2,210,491 0 1,385,206 0 2,201,877 0
$ 18,306,967 $ 2,210,491 $ 11,725,836 $ 1,385,206 $ 5,011,598 $ 2,201,877
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MSUF - GLOBAL EQUITY PBHG - SMALL CAP VALUE PBHG - LARGE CAP VALUE
12/31/98 12/31/98 12/31/97** 12/31/98 12/31/97**
$ 119,133 $ 6,754 $ 0 $ 49,627 $ 0
94,880 223,929 3,809 53,767 427
24,253 (217,175) (3,809) (4,140) (427)
275,615 1,376,831 1,588 495,109 1,407
107,863 40,814 0 104,635 0
(13,408) 1,169,066 196,614 2,352,195 12,894
394,323 2,369,536 194,393 2,947,799 13,874
2,529,920 5,952,540 604,447 1,555,866 56,451
13,311,023 25,299,733 7,434,078 14,748,371 689,520
(145,036) (771,427) (924) (75,122) (102)
6,125 (2,376) (1,552) (38,706) (1)
15,702,032 30,478,470 8,036,049 16,190,409 745,868
121 55 (22) (20) 1
16,096,476 32,848,061 8,230,420 19,138,188 759,743
2,210,491 8,230,420 0 759,743 0
$ 18,306,967 41,078,481 $ 8,230,420 $ 19,897,931 $ 759,743
</TABLE>
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
PBHG - TECHNOLOGY & PBHG - SELECT 20
COMMUNICATIONS
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 2,529 $ 0 $ 2,946 $ 0
EXPENSES:
Mortality risk, expense 112,511 3,175 846,066 3,029
risk and adminis- trative
charges
Net investment income (loss) (109,982) (3,175) (843,120) (3,029)
Realized gain (loss) on sale 501,364 348 4,426,860 49
of fund shares
Realized gain distributions 0 0 0 0
Unrealized appreciation 4,097,815 (30,401) 54,862,065 131,125
(depreciation)
Net increase (decrease) in 4,489,197 (33,228) 58,445,805 128,145
net assets from operations
Payments received from 2,836,026 1,166,675 21,842,392 241,149
contract owners
Transfers between sub- 11,197,748 6,356,784 204,410,297 5,661,006
accounts and the fixed
account, net
Transfers for contract (214,261) (1,170) (1,977,564) (748)
benefits and terminations
Other transfers (to) from (3,097) 15,296 (160,112) (2,417)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 13,816,416 7,537,585 224,115,013 5,898,990
net assets from contract
transactions
Retained in (returned from) 23 (6) (1,003,458) 1,002,920
Variable Annuity
Account I, net
Total increase (decrease) in 18,305,636 7,504,351 281,557,360 7,030,055
net assets
Net assets at beginning of 7,504,351 0 7,030,055 0
year
Net assets at end of year $ 25,809,987 $ 7,504,351 $ 288,587,415 $ 7,030,055
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SVIF - DISCOVERY FUND SVIF - GROWTH FUND II
II
12/31/98 12/31/97** 12/31/98 12/31/97**
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 0 $ 0 $ 27 $ 16,323
EXPENSES:
Mortality risk, expense 14,947 433 51,551 686
risk and adminis- trative
charges
Net investment income (loss) (14,947) (433) (51,524) 15,637
Realized gain (loss) on sale 29,945 (2,563) 177,519 438
of fund shares
Realized gain distributions 23,062 0 0 35,082
Unrealized appreciation 47,865 (18,401) 1,398,499 (23,330)
(depreciation)
Net increase (decrease) in 85,925 (21,397) 1,524,494 27,827
net assets from operations
Payments received from 484,124 115,879 1,671,169 210,484
contract owners
Transfers between sub- 1,166,837 743,684 7,114,821 1,229,535
accounts and the fixed
account, net
Transfers for contract (73,254) (383) (127,725) 0
benefits and terminations
Other transfers (to) from 1,695 (55) (162) 20
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 1,579,402 859,125 8,658,103 1,440,039
net assets from contract
transactions
Retained in (returned from) (72) 72 314 (316)
Variable Annuity
Account I, net
Total increase (decrease) in 1,665,255 837,800 10,182,911 1,467,550
net assets
Net assets at beginning of 837,800 0 1,467,550 0
year
Net assets at end of year $ 2,503,055 $ 837,800 $ 11,650,461 $ 1,467,550
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SVIF - OPPORTUNITY FUND
II
12/31/98 12/31/97**
INCOME:
Dividends $ 57,387 $ 2,789
EXPENSES:
Mortality risk, expense 143,590 1,349
risk and adminis- trative
charges
Net investment income (loss) (86,203) 1,440
Realized gain (loss) on sale 178,312 3,293
of fund shares
Realized gain distributions 1,317,403 0
Unrealized appreciation (453,869) 24,759
(depreciation)
Net increase (decrease) in 955,643 29,492
net assets from operations
Payments received from 4,790,463 316,468
contract owners
Transfers between sub- 18,417,464 2,666,657
accounts and the fixed
account, net
Transfers for contract (215,435) (73)
benefits and terminations
Other transfers (to) from (691) (524)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 22,991,801 2,982,528
net assets from contract
transactions
Retained in (returned from) (331) 367
Variable Annuity
Account I, net
Total increase (decrease) in 23,947,113 3,012,387
net assets
Net assets at beginning of 3,012,387 0
year
Net assets at end of year $ 26,959,500 $ 3,012,387
</TABLE>
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUBACCOUNTS INVESTING IN:
VIP III - GROWTH &
VIP III - BALANCED INCOME
12/31/98 12/31/97* 12/31/98 12/31/97*
INCOME:
Dividends $ 1,599,419 $ 24,769 $ 0 $ 1,535,282
EXPENSES:
Mortality risk, expense 649,414 307,802 3,268,604 1,300,226
risk and adminis- trative
charges
Net investment income (loss) 950,005 (283,033) (3,268,604) 235,056
Realized gain (loss) on 3,178,661 1,117,028 5,527,477 255,257
sale of fund shares
Realized gain distributions 2,443,558 0 1,561,847 4,989,668
Unrealized appreciation 6,090,310 4,417,092 99,729,988 27,456,573
(depreciation)
Net increase (decrease) in 12,662,534 5,251,087 103,550,708 32,936,554
net assets from operations
Payments received from 6,696,440 6,706,277 33,928,974 29,329,428
contract owners
Transfers between sub- 33,335,133 50,665,808 206,598,227 193,894,819
accounts and the fixed
account, net
Transfers for contract (3,139,722) (1,021,595) (10,371,919) (2,031,557)
benefits and terminations
Other transfers (to) from (28,013) (11,728) (75,465) (80,558)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 36,863,838 56,338,762 230,079,817 221,112,132
net assets from contract
transactions
Retained in (returned from) (1,989) 1,111 55,231 12,805
Variable Annuity
Account I, net
Total increase (decrease) in 49,524,383 61,590,960 333,685,756 254,061,491
net assets
Net assets at beginning of 61,590,960 0 254,061,491 0
year
Net assets at end of year $ 111,115,343 $ 61,590,960 $ 587,747,247 $ 254,061,491
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VIP III - GROWTH MSUF - EMERGING MARKETS
OPPORTUNITIES EQUITY
12/31/98 12/31/97* 12/31/98 12/31/97**
INCOME:
Dividends $ 3,366,752 $ 204,581 $ 24,349 $ 9,254
EXPENSES:
Mortality risk, expense 2,844,670 1,508,291 30,867 777
risk and adminis- trative
charges
Net investment income (loss) 522,082 (1,303,710) (6,518) 8,477
Realized gain (loss) on 7,155,764 671,295 198,635 1,555
sale of fund shares
Realized gain distributions 11,703,472 286,414 0 40,944
Unrealized appreciation 56,119,613 37,512,881 (1,271,839) (54,386)
(depreciation)
Net increase (decrease) in 75,500,931 37,166,880 (1,079,722) (3,410)
net assets from operations
Payments received from 21,503,396 42,870,806 655,182 56,721
contract owners
Transfers between sub- 47,566,760 202,642,472 3,139,054 1,725,664
accounts and the fixed
account, net
Transfers for contract (7,734,200) (3,368,361) (41,665) (91)
benefits and terminations
Other transfers (to) from (25,262) (262,599) 2,855 (62)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 61,310,694 241,882,318 3,755,426 1,782,232
net assets from contract
transactions
Retained in (returned from) 54,411 12,641 12 0
Variable Annuity
Account I, net
Total increase (decrease) in 136,866,036 279,061,839 2,675,716 1,778,822
net assets
Net assets at beginning of 279,061,839 0 1,778,822 0
year
Net assets at end of year $ 415,927,875 $ 279,061,839 $ 4,454,538 $ 1,778,822
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MSUF - EMERGING MARKETS
DEBT
12/31/98 12/31/97**
INCOME:
Dividends $ 245,208 $ 57,525
EXPENSES:
Mortality risk, expense 20,272 1,196
risk and adminis- trative
charges
Net investment income (loss) 224,936 56,329
Realized gain (loss) on 31,585 1,555
sale of fund shares
Realized gain distributions 0 24,962
Unrealized appreciation (1,105,348) (67,238)
(depreciation)
Net increase (decrease) in (848,827) 15,608
net assets from operations
Payments received from 384,094 28,145
contract owners
Transfers between sub- (233,992) 2,812,620
accounts and the fixed
account, net
Transfers for contract (2,839) 0
benefits and terminations
Other transfers (to) from (226) (946)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 147,037 2,839,819
net assets from contract
transactions
Retained in (returned from) (11) 9
Variable Annuity
Account I, net
Total increase (decrease) in (701,801) 2,855,436
net assets
Net assets at beginning of 2,855,436 0
year
Net assets at end of year $ 2,153,635 $ 2,855,436
</TABLE>
* FOR THE PERIOD JANUARY 27, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MSUF - GLOBAL EQUITY MSUF - INTERNATIONAL PBHG - GROWTH II
MAGNUM
12/31/98 12/31/97** 12/31/98 12/31/97** 12/31/98 12/31/97**
$ 119,133 $ 12,390 $ 38,795 $ 36,464 $ 0 $ 0
94,880 1,073 68,976 737 32,254 847
24,253 11,317 (30,181) 35,727 (32,254) (847)
275,615 0 445,069 1,566 225,669 726
107,863 26,464 43,290 2,429 0 0
(13,408) (6,124) (1,107,058) (52,747) 68,354 69,441
394,323 31,657 (648,880) (13,025) 261,769 69,320
2,529,920 347,239 1,887,488 130,652 848,495 110,103
13,311,023 1,832,160 9,278,436 1,267,297 1,774,406 2,022,554
(145,036) 0 (174,277) 0 (74,612) (117)
6,125 (576) (2,117) 268 (335) 21
15,702,032 2,178,823 10,989,530 1,398,217 2,547,954 2,132,561
121 11 (20) 14 (2) (4)
16,096,476 2,210,491 10,340,630 1,385,206 2,809,721 2,201,877
2,210,491 0 1,385,206 0 2,201,877 0
$ 18,306,967 $ 2,210,491 $ 11,725,836 $ 1,385,206 $ 5,011,598 $ 2,201,877
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MSUF - GLOBAL EQUITY PBHG - SMALL CAP VALUE PBHG - LARGE CAP VALUE
12/31/98 12/31/98 12/31/97** 12/31/98 12/31/97**
$ 119,133 $ 6,754 $ 0 $ 49,627 $ 0
94,880 223,929 3,809 53,767 427
24,253 (217,175) (3,809) (4,140) (427)
275,615 1,376,831 1,588 495,109 1,407
107,863 40,814 0 104,635 0
(13,408) 1,169,066 196,614 2,352,195 12,894
394,323 2,369,536 194,393 2,947,799 13,874
2,529,920 5,952,540 604,447 1,555,866 56,451
13,311,023 25,299,733 7,434,078 14,748,371 689,520
(145,036) (771,427) (924) (75,122) (102)
6,125 (2,376) (1,552) (38,706) (1)
15,702,032 30,478,470 8,036,049 16,190,409 745,868
121 55 (22) (20) 1
16,096,476 32,848,061 8,230,420 19,138,188 759,743
2,210,491 8,230,420 0 759,743 0
$ 18,306,967 41,078,481 $ 8,230,420 $ 19,897,931 $ 759,743
</TABLE>
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
** FOR THE PERIOD NOVEMBER 24, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - SMALL COMPANY WPT - INTERNATIONAL
GROWTH EQUITY
12/31/98 12/31/97** 12/31/98 12/31/97**
INCOME:
Dividends $ 0 $ 0 $ 23,172 $ 3,122
EXPENSES:
Mortality risk, expense 109,179 2,764 33,177 273
risk and adminis- trative
charges
Net investment income (loss) (109,179) (2,764) (10,005) 2,849
Realized gain (loss) on sale 365,092 (1) 131,244 (984)
of fund shares
Realized gain distributions 0 0 0 21,605
Unrealized appreciation (688,006) 151,262 (470,679) (28,390)
(depreciation)
Net increase (decrease) in (432,093) 148,497 (349,440) (4,920)
net assets from operations
Payments received from 3,184,739 547,503 691,255 37,724
contract owners
Transfers between sub- 9,937,370 5,700,629 3,128,429 522,333
accounts and the fixed
account, net
Transfers for contract (217,900) 0 (35,648) (93)
benefits and terminations
Other transfers (to) from 1,392 1,366 40,912 (23,099)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 12,905,601 6,249,498 3,824,948 536,865
net assets from contract
transactions
Retained in (returned from) 832 (830) (25,097) 25,504
Variable Annuity
Account I, net
Total increase (decrease) in 12,474,340 6,397,165 3,450,411 557,449
net assets
Net assets at beginning of 6,397,165 0 557,449 0
year
Net assets at end of year $ 18,871,505 $ 6,397,165 $ 4,007,860 $ 557,449
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WPT - POST-VENTURE TOTAL
CAPITAL
12/31/98 12/31/97** 12/31/98 12/31/97
12/31/98 12/31/97** 12/31/98 12/31/97
INCOME:
Dividends $ 0 $ 150 $ 148,545,952 $ 122,599,545
EXPENSES:
Mortality risk, expense 38,870 679 68,637,487 64,003,447
risk and adminis- trative
charges
Net investment income (loss) (38,870) (529) 79,908,465 58,596,098
Realized gain (loss) on sale 267,294 (323) 314,630,189 220,454,353
of fund shares
Realized gain distributions 0 0 447,963,689 261,085,925
Unrealized appreciation (324,010) 20,640 698,755,704 728,471,680
(depreciation)
Net increase (decrease) in (95,586) 19,788 1,541,258,047 1,268,608,056
net assets from operations
Payments received from 1,689,005 322,881 1,124,015,556 941,198,431
contract owners
Transfers between sub- 3,948,700 898,095 11,055,106 1,685,570
accounts and the fixed
account, net
Transfers for contract (40,972) (0) (381,403,163) (273,553,332)
benefits and terminations
Other transfers (to) from (2,575) (2) (1,415,552) (1,534,424)
Fidelity Invest- ments Life
Insurance Co., net
Net increase (decrease) in 5,594,158 1,220,974 752,251,947 667,796,245
net assets from contract
transactions
Retained in (returned from) (128) 125 (707,597) (23,945)
Variable Annuity
Account I, net
Total increase (decrease) in 5,498,444 1,240,887 2,292,802,397 1,936,380,356
net assets
Net assets at beginning of 1,240,887 0 7,519,557,726 5,583,177,370
year
Net assets at end of year $ 6,739,331 $ 1,240,887 $ 9,812,360,123 $ 7,519,557,726
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I
OF
FIDELITY INVESTMENTS LIFE INSURANCE COMPANY
1. ORGANIZATION
Fidelity Investments Variable Annuity Account I (the "Account"), a
unit investment trust registered under the Investment Company Act of
1940 as amended, was established by Fidelity Investments Life
Insurance Company (FILI) on July 22, 1987 and exists in accordance
with the regulations of the State of Utah Insurance Department. The
Account is a funding vehicle for individual Fidelity Retirement
Reserves and Fidelity Income Advantage variable annuity contracts.
FILI is a wholly-owned subsidiary of FMR Corp. Under applicable
insurance law, the assets and liabilities of the Account are clearly
identified and distinguished from the other assets and liabilities of
FILI. The Account cannot be charged with liabilities arising out of
any other business of FILI.
In 1997, FILI added eighteen new subaccounts to the Account: VIP III -
Balanced, VIP III - Growth & Income, VIP III - Growth Opportunities,
MSUF - Emerging Markets Equity, MSUF - Emerging Markets Debt, MSUF -
Global Equity, MSUF - International Magnum, PBHG - Growth II, PBHG -
Small Cap Value, PBHG - Large Cap Value, PBHG - Technology &
Communications, PBHG - Select 20, SVIF - Discovery Fund II, SVIF -
Growth Fund II, SVIF - Opportunity Fund II, WPT - Small Company
Growth, WPT - International Equity, WPT - Post-Venture Capital.
In addition to the Account, a contractholder may also allocate funds
to the Fixed Account, which is part of FILI's general account. Because
of exemptive and exclusionary provisions, interests in the Fixed
Account have not been registered under the Securities Act of 1933 and
FILI's general account has not been registered as an investment
company under the Investment Company Act of 1940.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Account in preparation of the financial statements
in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
Investments are made in the subaccounts and are valued at the reported
net asset values of such subaccounts.
ACCOUNTING FOR INVESTMENTS
Investment transactions are recorded on the trade date. Income from
dividends is recorded on the ex-dividend date. Realized gains and
losses on the sales of investments are computed on the basis of the
identified cost of the investment sold.
ANNUITY RESERVES
Annuity reserves are computed for contracts in the income stage
according to the 1983 Individual Annuitant Mortality Table. The
assumed investment return is 3.5% unless the annuitant elects
otherwise, in which case the rate may vary from 3.5% to 7%, as
regulated by the laws of the respective states. The mortality risk is
fully borne by FILI and may result in additional amounts being
transferred into the Account by FILI.
FEDERAL INCOME TAXES
The operations of the Account are included in the federal income tax
return of FILI, which is taxed as a life insurance company under the
provisions of the Internal Revenue Code ("the Code").
Under the current provisions of the Code, FILI does not expect to
incur federal income taxes on the earnings of the Account to the
extent the earnings are credited under the contracts. FILI incurs
federal income taxes on the difference between the financial statement
carrying value of reserves for contracts in the income stage and those
reserves held for federal income tax purposes. The tax effect of this
temporary difference is expected to be recovered by FILI. As such, no
charge is being made currently to the Account for federal income
taxes. FILI will review periodically the status of such decision based
on changes in the tax law. Such a charge may be made in future years
for any federal income taxes that would be attributable to the
contracts.
ESTIMATES
The preparation of the statement of assets and liabilities and the
statements of operations and changes in net assets in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the related amounts and
disclosures in the financial statements. Actual results could differ
from those estimates.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with the
current year presentation.
3. EXPENSES
FILI deducts a daily charge from the net assets of the Account for
administrative expenses and for the assumption of mortality risk and
expense risk. Prior to November 1, 1997, the daily charge was
equivalent to an annual effective rate of 1% of net assets. On
November 1, 1997, FILI reduced the daily charge on the Retirement
Reserves contracts to an annual effective rate of 0.8% of net assets.
FILI also deducts an annual maintenance charge of $30 from the
Retirement Reserves contract value. The maintenance charge is waived
on certain contracts.
4. AFFILIATED COMPANY TRANSACTIONS
The contracts are distributed through Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Insurance Agency, Inc. (FIA), both of which
are affiliated with FMR Corp. FBSI and FIA are the distributors and
FBSI is the principal underwriter of the contracts. Fidelity
Management & Research Company, an affiliate of FMR Corp., acts as
investment advisor to the VIP, VIP II and VIP III portfolios. Fidelity
Investments Institutional Operations Company, Inc., an affiliate of
FMR Corp., is the transfer and shareholder servicing agent for the
VIP, VIP II and VIP III portfolios.
5. PURCHASES AND SALES OF INVESTMENTS
The following table shows aggregate cost of shares purchased and
proceeds from sales of each subaccount for the year ended December 31,
1998:
PURCHASES SALES
VIP - Money Market $ 657,253,698 $ 388,562,613
VIP - High Income 134,998,726 125,280,621
VIP - Equity-Income 120,554,037 274,328,788
VIP - Growth 229,070,123 96,492,436
VIP - Overseas 59,851,488 62,698,966
VIP II - Investment Grade Bond 180,694,171 45,604,413
VIP II - Asset Manager 114,939,939 90,119,577
VIP II - Index 500 245,811,554 108,651,025
VIP II - Asset Manager: Growth 51,345,748 61,295,059
VIP II - Contrafund 140,576,537 117,521,057
VIP III - Balanced 62,067,031 21,811,619
VIP III - Growth & Income 251,267,657 22,839,366
VIP III - Growth Opportunities 106,888,738 33,298,079
MSUF - Emerging Markets Equity 10,337,623 6,588,703
MSUF - Emerging Markets Debt 6,399,608 6,027,646
MSUF - Global Equity 20,819,189 4,984,920
MSUF - International Magnum 21,402,427 10,399,808
PBHG - Growth II 7,753,465 5,237,767
PBHG - Small Cap Value 44,260,707 13,958,543
PBHG - Large Cap Value 20,243,585 3,952,701
PBHG - Technology & 26,048,029 12,341,572
Communications
PBHG - Select 20 260,393,831 38,125,396
SVIF - Discovery Fund II 2,242,581 655,136
SVIF - Growth Fund II 11,944,270 3,337,377
SVIF - Opportunity Fund II 27,937,894 3,715,224
WPT - Small Company Growth 18,345,097 5,547,843
WPT - International Equity 11,333,444 7,543,598
WPT - Post-Venture Capital 8,740,244 3,185,084
6. UNIT VALUES
A summary of changes in accumulation units and ending unit and
contract values for variable annuity contracts at December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT UNITS ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE
UNITS FROM SUBACCOUNTS, UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1998 TO DECEMBER
31, 1998
VIP - Money Market 28,256,730 53,473,071 (31,221,377) (8,172,462) 42,335,962 $ 16.72 $ 707,791,321
VIP - High Income 10,481,116 651,046 (1,222,100) (635,465) 9,274,597 $ 27.53 255,292,340
VIP - Equity-Income 40,838,032 680,307 (4,883,340) (2,007,973) 34,627,026 $ 43.62 1,510,417,235
VIP - Growth 23,048,124 503,652 247,746 (1,015,638) 22,783,884 $ 59.17 1,348,176,594
VIP - Overseas 10,512,524 249,861 (808,508) (415,974) 9,537,903 $ 26.31 250,931,855
VIP II-Investment Grade Bond 5,524,907 601,825 6,493,163 (977,320) 11,642,575 $ 20.24 235,678,611
VIP II - Asset Manager 30,320,855 477,314 (1,046,747) (2,336,087) 27,415,335 $ 28.30 775,932,084
VIP II - Index 500 28,695,264 1,600,404 3,712,872 (1,925,404) 32,083,136 $ 31.60 1,013,959,556
VIP II-Asset Manager: Growth 17,201,030 608,493 (2,402,390) (731,978) 14,675,155 $ 20.93 307,208,746
VIP II - Contrafund 57,789,065 1,791,259 (1,947,601) (2,205,978) 55,426,745 $ 26.40 1,463,251,419
VIP III - Balanced 4,649,810 524,844 2,527,177 (768,426) 6,933,405 $ 13.98 96,949,417
VIP III - Growth & Income 18,798,233 2,515,821 14,337,709 (2,665,442) 32,986,321 $ 16.29 537,510,714
VIP III-Growth Opportunities 21,154,834 1,669,675 3,510,201 (1,087,554) 25,247,156 $ 15.62 394,273,082
MSUF-Emerging Markets Equity 176,936 69,786 348,445 (9,039) 586,128 $ 7.56 4,432,182
MSUF - Emerging Markets Debt 270,613 37,746 (18,180) (9,275) 280,904 $ 7.44 2,090,788
MSUF - Global Equity 214,479 228,308 1,160,084 (98,472) 1,504,399 $ 11.54 17,359,758
MSUF - International Magnum 126,071 175,181 806,757 (109,594) 998,415 $ 10.65 10,636,111
PBHG - Growth II 198,868 83,110 167,957 (10,072) 439,863 $ 10.90 4,792,592
PBHG - Small Cap Value 760,923 539,438 2,325,754 (197,450) 3,428,665 $ 11.48 39,353,426
PBHG - Large Cap Value 71,061 134,930 1,218,750 (93,574) 1,331,167 $ 14.05 18,705,104
PBHG - Technology & 746,784 277,870 978,928 (74,549) 1,929,033 $ 12.94 24,965,791
Communications
PBHG - Select 20 551,473 1,714,311 15,088,136 (824,463) 16,529,457 $ 16.80 277,617,062
SVIF - Discovery Fund II 69,087 49,186 115,355 (18,508) 215,120 $ 10.31 2,218,812
SVIF - Growth Fund II 139,945 154,865 608,714 (70,633) 832,891 $ 13.08 10,898,297
SVIF - Opportunity Fund II 277,353 444,329 1,651,011 (153,655) 2,219,038 $ 11.43 25,359,470
WPT - Small Company Growth 596,845 317,788 1,001,041 (66,887) 1,848,787 $ 9.82 18,154,923
WPT - International Equity 54,981 62,350 268,596 (11,853) 374,074 $ 10.33 3,864,918
WPT - Post-Venture Capital 120,198 154,767 349,002 (35,839) 588,128 $ 10.83 6,371,227
$ 9,364,193,435
</TABLE>
6. UNIT VALUES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING PAYMENTS TRANSFERS CONTRACT UNITS ENDING DOLLARS
BALANCE RECEIVED BETWEEN TERMINATIONS BALANCE
UNITS FROM SUBACCOUNTS, UNIT
CONTRACT NET VALUE
OWNERS
JANUARY 1, 1997 TO DECEMBER
31, 1997
VIP - Money Market 33,393,564 35,765,040 (40,993,364) 91,490 28,256,730 $ 15.98 $ 451,543,983
VIP - High Income 9,856,952 586,582 661,363 (623,781) 10,481,116 $ 29.00 303,988,166
VIP - Equity-Income 43,073,117 1,075,044 (1,451,095) (1,859,034) 40,838,032 $ 39.39 1,608,658,423
VIP - Growth 26,772,269 709,036 (3,594,444) (838,737) 23,048,124 $ 42.76 985,593,562
VIP - Overseas 11,419,855 436,554 (983,144) (360,741) 10,512,524 $ 23.52 247,274,432
VIP II-Investment Grade Bond 4,615,384 228,138 1,229,196 (547,811) 5,524,907 $ 18.75 103,579,135
VIP II - Asset Manager 33,062,627 530,613 (1,505,174) (1,767,211) 30,320,855 $ 24.80 751,916,385
VIP II - Index 500 18,160,844 2,122,452 9,533,877 (1,121,909) 28,695,264 $ 24.83 712,404,342
VIP II-Asset Manager: Growth 12,261,937 1,205,712 4,500,037 (766,656) 17,201,030 $ 17.95 308,741,994
VIP II - Contrafund 53,010,249 2,983,188 3,494,055 (1,698,427) 57,789,065 $ 20.47 1,183,200,370
VIP III - Balanced * 606,056 4,630,639 (586,885) 4,649,810 $ 11.98 55,714,035
VIP III - Growth & Income * 2,622,603 17,602,327 (1,426,697) 18,798,233 $ 12.68 238,278,772
VIP III - Growth 3,852,029 18,523,967 (1,221,162) 21,154,834 $ 12.63 267,246,966
Opportunities *
MSUF - Emerging Markets 5,745 171,206 (15) 176,936 $ 10.05 1,778,822
Equity **
MSUF - Emerging Markets Debt 2,756 269,897 (2,040) 270,613 $ 10.48 2,834,996
**
MSUF - Global Equity ** 34,595 181,040 (1,156) 214,479 $ 10.25 2,198,667
MSUF - International Magnum ** 13,105 127,421 (14,455) 126,071 $ 9.86 1,242,464
PBHG - Growth II ** 11,237 205,656 (18,025) 198,868 $ 10.15 2,018,998
PBHG - Small Cap Value ** 59,114 730,068 (28,259) 760,923 $ 10.43 7,936,253
PBHG - Large Cap Value ** 5,653 68,352 (2,944) 71,061 $ 10.27 729,623
PBHG - Technology & 120,942 639,601 (13,759) 746,784 $ 9.87 7,369,743
Communications **
PBHG - Select 20 ** 23,751 554,810 (27,088) 551,473 $ 10.42 5,745,102
SVIF - Discovery Fund II ** 11,942 74,522 (17,377) 69,087 $ 9.69 669,714
SVIF - Growth Fund II ** 21,083 122,113 (3,251) 139,945 $ 10.25 1,434,554
SVIF - Opportunity Fund II ** 31,632 265,241 (19,520) 277,353 $ 10.15 2,814,079
WPT - Small Company Growth ** 55,431 572,410 (30,996) 596,845 $ 10.19 6,081,692
WPT - International Equity ** 3,884 53,678 (2,581) 54,981 $ 9.24 508,179
WPT - Post-Venture Capital ** 32,317 88,717 (836) 120,198 $ 10.25 1,232,198
$ 7,262,735,649
* FOR THE PERIOD JANUARY 27,
1997 (COMMENCEMENT OF
OPERATIONS) THROUGH DECEMBER
31, 1997.
** FOR THE PERIOD NOVEMBER
24, 1997 (COMMENCEMENT OF
OPERATIONS) THROUGH DECEMBER
31, 1997.
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of Fidelity Investments Variable Annuity
Account I:
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and changes in net assets
present fairly, in all material respects, the financial position of
Fidelity Investments Variable Annuity Account I (comprised of VIP -
Money Market, VIP - High Income, VIP - Equity-Income, VIP - Growth,
VIP - Overseas, VIP II - Investment Grade Bond, VIP II - Asset
Manager, VIP II - Index 500, VIP II - Asset Manager: Growth, VIP II -
Contrafund, VIP III - Balanced, VIP III - Growth & Income, VIP III -
Growth Opportunities, MSUF - Emerging Markets Equity, MSUF - Emerging
Markets Debt, MSUF - Global Equity, MSUF - International Magnum, PBHG
- - Growth II, PBHG - Small Cap Value, PBHG - Large Cap Value, PBHG -
Technology & Communications, PBHG - Select 20, SVIF - Discovery Fund
II, SVIF - Growth Fund II, SVIF - Opportunity Fund II, WPT - Small
Company Growth, WPT - International Equity and WPT - Post-Venture
Capital) of Fidelity Investments Life Insurance Company at December
31, 1998, and the results of its operations and the changes in its net
assets for each of the periods indicated therein, in conformity with
generally accepted accounting principles. These financial statements
are the responsibility of Fidelity Investments Life Insurance
Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of investments at December 31, 1998 by
correspondence with the funds, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 25, 1999
(2_FIDELITY_LOGOS)(REGISTERED TRADEMARK)
America's largest privately-held investment management organization.
Fidelity Retirement Reserves (policy form NRR-96100), Fidelity
Variable Annuity and Fidelity Income Advantage (policy form
FVIA-92100) are issued by Fidelity Investments Life Insurance Company.
Fidelity Brokerage Services, Inc., member NYSE, SIPC, Fidelity
Insurance Agency, Inc. and Fidelity Investments Insurance
Agency of Texas, Inc. are the distributors.
82 Devonshire Street, Boston, MA 02109
