<PAGE>
CG VARIABLE ANNUITY ACCOUNTS I & II
Dear Investor:
We're pleased to provide you with this semiannual report for Connecticut General
Variable Annuity Accounts I and II for the six months ended June 30, 1995.
Following is a summary of key performance results:
For Qualified Contractholders
. Accumulation Unit Values for the Flexible Annuity increased 19.25% from the
December 31, 1994 level, from $74.835 to $89.239.
. For all other qualified contracts, Accumulation Unit Values increased 19.46%,
from $78.306 to $93.541.
. Accumulation Unit Values for Group Qualified Contracts with 50 participants or
more increased 19.75% from $89.219 to $106.842 during the period from January
1, 1995 to June 30, 1995.
. Over the last five years (June 30, 1991 to June 30, 1995), the Unit Values for
Group Qualified Contracts with 50 participants or more increased 51.9%.
For Non-Qualified Contractholders
. Accumulation Unit Values for the Flexible Annuity increased 19.25% from the
December 31, 1994 level, from $65.997 to $78.700.
. For all other non-qualified contracts, Accumulation Unit Values increased
19.46%, from $69.507 to $83.030.
. Accumulation Unit Values for Group Non-Qualified Contracts increased 19.75%
from $79.187 to $94.829 during the period from January 1, 1995 to June 30,
1995.
. Over the last five years (June 30, 1991 to June 30, 1995), the Unit Values for
Group Non-Qualified Contracts increased 51.9%.
In addition to the financial statements for your annuity contracts, this report
includes the financial statements and a list of holdings for the Companion Fund,
the mutual fund supporting Variable Annuity Accounts I & II.
Thank you for letting us serve your investment needs. We look forward to our
continuing relationship in the coming years.
/s/ Thomas C. Jones
Thomas C. Jones
President,
CIGNA Individual Insurance
/s/ Byron Oliver
Byron D. Oliver
President,
CIGNA Retirement & Investment Services
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of
Assets and Liabilities
Unaudited
June 30, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in Companion Fund at net asset value, 5,507,504 shares at
$9.82 per share (cost $55,395,404; unrealized depreciation
$1,311,774) $54,083,630
-----------
Total assets 54,083,630
-----------
LIABILITIES:
Payable to Connecticut General Life Insurance Company 6,001
-----------
Total liabilities 6,001
-----------
NET ASSETS $54,077,629
===========
NET ASSETS REPRESENTED BY:
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit
Units Value
------------ ------
<S> <C> <C> <C>
Group contracts:
50 participants or more 281,512 $106.842 $30,077,342
Less than 50 participants 48,571 99.960 4,855,130
Tax deferred annuity contracts issued
after May 1, 1976 119,633 88.194 10,550,903
Individual contracts:
Variable annuity contracts 22,206 93.541 2,077,132
Flexible annuity contracts 18,242 89.239 1,627,904
Reserve for variable annuity contracts
in distribution period 4,889,218
-----------
$54,077,629
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
2
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of
Changes in Net Assets
Unaudited
Six months ended June 30, 1995
<TABLE>
<S> <C>
FROM OPERATIONS:
Investment loss -- net $ (105,383)
Realized gain on investments -- net 290,994
Change in unrealized depreciation on investments -- net 9,030,863
-----------
Increase in net assets resulting from operations 9,216,474
-----------
FROM UNIT TRANSACTIONS:
Net participant contributions 438,571
Net amount transferred out of Account (647,877)
Withdrawal of funds on terminated contracts (2,913,119)
Annuity benefit distributions (362,736)
Mortality guarantee adjustment (18,720)
Equalization adjustment 2,772
-----------
Decrease in net assets derived from unit transactions (3,501,109)
-----------
INCREASE IN NET ASSETS 5,715,365
NET ASSETS:
Beginning of period 48,362,264
-----------
End of period $54,077,629
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
3
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of
Operations
Unaudited
Six months ended June 30, 1995
<TABLE>
<S> <C>
INVESTMENT LOSS:
Dividends $ --
Expenses:
Mortality and expense risk 105,383
-----------
Investment Loss -- Net (105,383)
-----------
REALIZED GAIN ON INVESTMENTS:
Proceeds from sale of shares 3,854,719
Cost of shares sold 3,563,725
-----------
Realized gain from security
transactions -- net 290,994
Capital gains distribution --
-----------
Realized Gain on Investments -- Net 290,994
-----------
UNREALIZED DEPRECIATION ON INVESTMENTS:
Beginning of period (10,342,637)
End of period (1,311,774)
-----------
Change in Unrealized Depreciation
on Investments -- Net 9,030,863
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS -- NET $ 9,216,474
===========
RATIO OF EXPENSES TO AVERAGE NET ASSETS .206%
RATIO OF NET INVESTMENT LOSS TO AVERAGE
NET ASSETS (.206%)
NUMBER OF ACCUMULATION UNITS OUTSTANDING
AT END OF PERIOD 490,164
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
4
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Notes to
Financial Statements
(Unaudited)
The Account is registered as a Unit Investment Trust under the Investment
Company Act of 1940, as amended. The operations of the Account are part of the
operations of Connecticut General Life Insurance Company (CG Life).
1. The following is a summary of significant accounting policies consistently
followed in the preparation of the Account's financial statements:
A. The investment in Companion Fund (Fund) shares is valued at the closing
net asset value per share as determined by the Fund on June 30, 1995. The
Fund was organized by Connecticut General Life Insurance Company in 1968.
B. The amount of the reserve for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements. Gains
or losses resulting from actual mortality experience, the full responsibility
for which is assumed by CG Life, are offset by transfers to or from CG Life.
C. Investment transactions are accounted for on the trade date (date the
order to buy or sell is executed), and income is recorded on the ex-dividend
date. Cost of investments sold is determined on the basis of the last-in,
first-out method.
D. The operations of the Account are included in, and taxed as part of, CG
Life's tax return, which is taxed as a life insurance company. Under
Internal Revenue Code Section 817 there is no taxable income attributable to
the Account.
2. Under the terms of the annuity contracts, the Individual participant can
elect either a fixed or variable annuity benefit at retirement. The Group
participant can elect either a fixed or variable annuity benefit during the
accumulation phase and at retirement. The assets providing for the variable
annuity benefit will be invested in the Fund, and the fixed annuity contract
will be purchased from the Account's sponsor, CG Life.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1995
----------------
<S> <C>
Transfers to CG Life for
purchase of fixed annuity
contracts during
accumulation phase
(included in net amount
transferred out of Account) $678,288
Transfers from CG Life
for purchase of variable
annuity contracts during
accumulation phase
(included in net amount
transferred out of Account) $ 30,411
Transfers from
accumulation period
to distribution period $108,502
</TABLE>
3. The cost of investments represents the accumulated cost of the Fund shares
purchased by the Account at net asset value with net participant contributions
received and from reinvestment of all distributions made by the Fund.
4. Mortality and expense risk charges, which generally range from 0.25%-0.50%
depending on contract size, and premium taxes (if any), are deducted from
participants' contributions and/or their accumulation accounts in accordance
with the terms of their contracts and are paid to CG Life. In addition,
participant contributions are net of sales load and administrative charges which
are also paid to CG Life in accordance with the contracts.
5. Contracts are sold primarily by persons who are insurance agents of or
brokers for CG Life authorized by applicable law to sell life and other forms of
personal insurance and who are similarly authorized to sell variable annuities.
These persons are for the most part registered representatives of CIGNA
Financial Advisors, Inc.
5
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Notes to
Financial Statements (Unaudited)
(Continued)
6. ACCUMULATION UNITS INFORMATION
<TABLE>
<CAPTION>
SCHEDULE OF SELECTED PER-UNIT DATA
----------------------------------
June 30, December 31,
-------- -------------------------------------
Group Contracts: 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
50 participants or more:
Net asset value:
----------------------------------
Beginning of period $ 89.219 $ 88.848 $ 86.503 $ 83.718 $ 61.058
End of period 106.842 89.219 88.848 86.503 83.718
-------- -------- -------- -------- --------
Net increase in net asset
value resulting from operations $ 17.623 $ 0.371 $ 2.345 $ 2.785 $ 22.660
======== ======== ======== ======== ========
Accumulation units outstanding:
----------------------------------
End of period 281,512 308,233 353,129 403,359 459,344
======== ======== ======== ======== ========
Less than 50 participants:
Net asset value:
----------------------------------
Beginning of period $ 83.580 $ 83.449 $ 81.459 $ 79.044 $ 57.799
End of period 99.960 83.580 83.449 81.459 79.044
-------- -------- -------- -------- --------
Net increase in net asset
value resulting from operations $ 16.380 $ 0.131 $ 1.990 $ 2.415 $ 21.245
======== ======== ======== ======== ========
Accumulation units outstanding:
----------------------------------
End of period 48,571 50,443 52,486 63,109 66,565
======== ======== ======== ======== ========
Tax-deferred annuity contracts
issued after May 1, 1976:
Net asset value:
----------------------------------
Beginning of period $ 73.775 $ 73.725 $ 72.031 $ 69.957 $ 51.201
End of period 88.194 73.775 73.725 72.031 69.957
-------- -------- -------- -------- --------
Net increase in net asset
value resulting from operations $ 14.419 $ 0.050 $ 1.694 $ 2.074 $ 18.756
======== ======== ======== ======== ========
Accumulation units outstanding:
----------------------------------
End of period 119,633 121,840 124,827 128,504 136,843
======== ======== ======== ======== ========
</TABLE>
6
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Notes to
Financial Statements (Unaudited)
(Continued)
6. ACCUMULATION UNITS INFORMATION (continued)
<TABLE>
<CAPTION>
SCHEDULE OF SELECTED PER-UNIT DATA (continued)
----------------------------------------------
June 30, December 31,
-------- ----------------------------------------
Individual Contracts: 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Variable annuity contracts:
Net asset value:
---------------------------------------
Beginning of period $78.306 $78.370 $76.684 $74.589 $54.672
End of period 93.541 78.306 78.370 76.684 74.589
-------- -------- -------- ------- -------
Net increase (decrease) in net asset
value resulting from operations $15.235 $(0.064) $ 1.686 $ 2.095 $19.917
======== ======== ======== ======= =======
Accumulation units outstanding:
---------------------------------------
End of period 22,206 23,011 30,646 44,003 47,745
======== ======== ======== ======= =======
Flexible annuity contracts:
Net asset value:
---------------------------------------
Beginning of period $74.835 $75.158 $73.800 $72.035 $52.985
End of period 89.239 74.835 75.158 73.800 72.035
-------- -------- -------- ------- -------
Net increase (decrease) in net asset
value resulting from operations $14.404 $(0.323) $ 1.358 $ 1.765 $19.050
======== ======== ======== ======= =======
Accumulation units outstanding:
---------------------------------------
End of period 18,242 19,687 22,970 25,148 29,545
======== ======== ======== ======= =======
</TABLE>
7. DIVERSIFICATION REQUIREMENTS
Under the provisions of Section 817(h) of the Internal Revenue Code (Code), a
variable annuity contract, other than a contract issued in connection with
certain types of employee benefit plans, will not be treated as an annuity
contract for federal tax purposes for any period for which the investments of
the segregated asset account on which the contract is based are not adequately
diversified. The Code provides that the "adequately diversified" requirement may
be met if the underlying investments satisfy either a statutory safe harbor test
or diversification requirements as set forth in regulations issued by the
Secretary of the Treasury.
The Secretary of the Treasury has issued regulations under Section 817(h) of the
Code. CG Life believes that the Account satisfies the current requirements of
the regulations, and it intends that the Account will continue to meet such
requirements.
7
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Statement of
Assets and Liabilities
Unaudited
June 30, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in Companion Fund at net asset value, 630,061 shares at
$9.82 per share (cost $7,481,022; unrealized depreciation
$1,293,839) $6,187,183
Receivable from Connecticut General Life Insurance Company 23,835
----------
Total assets 6,211,018
----------
LIABILITIES:
Total liabilities --
----------
NET ASSETS $6,211,018
==========
NET ASSETS REPRESENTED BY:
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit
Units Value
------------ -------
<S> <C> <C> <C>
Group contracts 6,851 $94.829 $ 649,698
Individual contracts:
Variable annuity contracts 8,560 83.030 710,760
Flexible annuity contracts 27,533 78.700 2,166,857
Reserve for variable annuity contracts
in distribution period 2,683,703
----------
$6,211,018
==========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
8
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Statement of
Changes in Net Assets
Unaudited
Six months ended June 30, 1995
<TABLE>
<S> <C>
FROM OPERATIONS:
Investment loss -- net $ (24,118)
Realized gain on investments -- net 13,380
Change in unrealized depreciation on investments -- net 1,027,047
----------
Increase in net assets resulting from operations 1,016,309
----------
FROM UNIT TRANSACTIONS:
Net participant contributions 3,741)
Withdrawal of funds on terminated contracts (37,673)
Annuity benefit distributions (194,858)
Mortality guarantee adjustment 55,527)
Equalization adjustment (17)
----------
Decrease in net assets derived from unit transactions (173,280)
----------
INCREASE IN NET ASSETS 843,029
NET ASSETS:
Beginning of period 5,367,989
----------
End of period $6,211,018
==========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
9
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Statement of
Operations
Unaudited
Six months ended June 30, 1995
<TABLE>
<S> <C>
INVESTMENT LOSS:
Dividends $ --
Expenses:
Mortality and expense risk 24,118
---------
Investment Loss -- Net (24,118)
---------
REALIZED GAIN ON INVESTMENTS:
Proceeds from sale of shares 287,067
Cost of shares sold 273,687
---------
Realized gain from security
transactions -- net 13,380
Capital gains distribution --
---------
Realized Gain on Investments -- Net 13,380
---------
UNREALIZED DEPRECIATION ON INVESTMENTS:
Beginning of period (2,320,886)
End of period (1,293,839)
----------
Change in Unrealized Depreciation
on Investments -- Net 1,027,047
----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS -- NET $1,016,309
==========
RATIO OF EXPENSES TO AVERAGE NET ASSETS .417%
RATIO OF NET INVESTMENT LOSS TO AVERAGE
NET ASSETS (.417%)
NUMBER OF ACCUMULATION UNITS OUTSTANDING
AT END OF PERIOD 42,944
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
10
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Notes to
Financial Statements
(Unaudited)
The Account is registered as a Unit Investment Trust under the Investment
Company Act of 1940, as amended. The operations of the Account are part of the
operations of Connecticut General Life Insurance Company (CG Life).
1. The following is a summary of significant accounting policies consistently
followed in the preparation of the Account's financial statements:
A. The investment in Companion Fund (Fund) shares is valued at the closing
net asset value per share as determined by the Fund on June 30, 1995. The
Fund was organized by Connecticut General Life Insurance Company in 1968.
B. The amount of the reserve for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements. Gains
or losses resulting from actual mortality experience, the full responsibility
for which is assumed by CG Life, are offset by transfers to or from CG Life.
C. Investment transactions are accounted for on the trade date (date the
order to buy or sell is executed), and income is recorded on the ex-dividend
date. Cost of investments sold is determined on the basis of the last-in,
first-out method.
D. The operations of the Account are included in, and taxed as part of, CG
Life's tax return, which is taxed as a life insurance company. Under Internal
Revenue Code Section 817 there is no taxable income attributable to the
Account.
2. Under the terms of the annuity contracts, the Individual participant can
elect either a fixed or variable annuity benefit at retirement. The Group
participant can elect either a fixed or variable annuity benefit during the
accumulation phase and at retirement. The assets providing for the variable
annuity benefit will be invested in the Fund, and the fixed annuity contract
will be purchased from the Account's sponsor, CG Life.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1995
----------------
<S> <C>
Transfers from
accumulation period
to distribution period $0
</TABLE>
3. The cost of investments represents the accumulated cost of the Fund shares
purchased by the Account at net asset value with net participant contributions
received and from reinvestment of all distributions made by the Fund.
4. Mortality and expense risk charges, which generally range from 0.25%-0.50%
depending on contract size, and premium taxes (if any), are deducted from
participants' contributions and/or their accumulation accounts in accordance
with the terms of their contracts and are paid to CG Life. In addition,
participant contributions are net of sales load and administrative charges which
are also paid to CG Life in accordance with the contracts.
5. Contracts are sold primarily by persons who are insurance agents of or
brokers for CG Life authorized by applicable law to sell life and other forms of
personal insurance and who are similarly authorized to sell variable annuities.
These persons are for the most part registered representatives of CIGNA
Financial Advisors, Inc.
11
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Notes to
Financial Statements (Unaudited)
(Continued)
6. ACCUMULATION UNITS INFORMATION
<TABLE>
<CAPTION>
SCHEDULE OF SELECTED PER-UNIT DATA
----------------------------------
June 30, December 31,
-------- -------------------------------------------
Group Contracts: 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value:
---------------------------------------
Beginning of period $79.187 $78.857 $76.776 $74.305 $54.193
End of period 94.829 79.187 78.857 76.776 74.305
------- ------- ------- ------- -------
Net increase in net asset
value resulting from operations $15.642 $ 0.330 $ 2.081 $ 2.471 $20.112
======= ======= ======= ======= =======
Accumulation units outstanding:
---------------------------------------
End of period 6,851 6,819 6,987 8,563 8,692
======= ======= ======= ======= =======
Individual Contracts:
Variable annuity contracts:
Net asset value:
---------------------------------------
Beginning of period $69.507 $69.564 $68.068 $66.208 $48.529
End of period 83.030 69.507 69.564 68.068 66.208
------- ------- -------- ------- -------
Net increase (decrease) in net asset
value resulting from operations $13.523 $(0.057) $ 1.496 $ 1.860 $17.679
======= ======= ======= ======= =======
Accumulation units outstanding:
---------------------------------------
End of period 8,560 8,823 11,050 11,433 12,288
======= ======= ======= ======= =======
Flexible annuity contracts:
Net asset value:
---------------------------------------
Beginning of period $65.997 $66.282 $65.084 $63.528 $46.728
End of period 78.700 65.997 66.282 65.084 63.528
------- ------- -------- ------- -------
Net increase (decrease) in net asset
value resulting from operations $12.703 $(0.285) $ 1.198 $ 1.556 $16.800
======= ======= ======= ======= =======
Accumulation units outstanding:
---------------------------------------
End of period 27,533 27,762 30,391 33,228 35,732
======= ======= ======= ======= =======
</TABLE>
12
<PAGE>
CG VARIABLE ANNUITY ACCOUNT II
Notes to
Financial Statements (Unaudited)
(Continued)
7. DIVERSIFICATION REQUIREMENTS
Under the provisions of Section 817(h) of the Internal Revenue Code (Code), a
variable annuity contract, other than a contract issued in connection with
certain types of employee benefit plans, will not be treated as an annuity
contract for federal tax purposes for any period for which the investments of
the segregated asset account on which the contract is based are not adequately
diversified. The Code provides that the "adequately diversified" requirement may
be met if the underlying investments satisfy either a statutory safe harbor test
or diversification requirements as set forth in regulations issued by the
Secretary of the Treasury.
The Secretary of the Treasury has issued regulations under Section 817(h) of the
Code. CG Life believes that the Account satisfies the current requirements of
the regulations, and it intends that the Account will continue to meet such
requirements.
13
<PAGE>
COMPANION FUND
Investments in Securities
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
COMMON STOCKS -- 91.6%
General Electric Co. 24,100 $ 1,358,637
Exxon Corp. 17,500 1,235,937
American Telephone & Telegraph Co. 22,100 1,174,062
Coca-Cola Co. 18,100 1,153,875
Royal Dutch Petroleum Co. 7,600 926,250
Philip Morris Companies, Inc. 12,000 892,500
Merck & Co., Inc. 17,700 867,300
Wal-Mart Stores, Inc. 32,400 866,700
International Business Machines Corp. 8,300 796,800
Microsoft Corp.* 8,200 741,075
Intel Corp. 11,600 734,425
Proctor & Gamble Co. 9,700 697,188
Johnson & Johnson 9,100 615,387
Motorola, Inc. 8,300 557,137
Mobil Corp. 5,600 537,600
Hewlett-Packard Co. 7,200 536,400
Du Pont (E.I.) De Nemours & Co. 7,800 536,250
PepsiCo, Inc. 11,200 511,000
General Motors Corp. 10,600 496,875
Bristol-Myers Squibb Co. 7,200 490,500
American International Group, Inc. 4,300 490,200
Amoco Corp. 7,000 466,375
GTE Corp. 13,500 460,688
Abbott Laboratories 11,300 457,650
BellSouth Corp. 7,000 444,500
Chevron Corp. 9,200 428,950
Ford Motor Co. 14,400 428,400
Pfizer, Inc. 4,400 406,450
Disney (Walt) Co. 7,300 406,063
SBC Communications, Inc. 8,400 400,050
McDonald's Corp. 9,800 383,425
Federal National Mortgage Assn. 3,800 358,625
Ameritech Corp. 7,800 343,200
Bell Atlantic Corp. 6,100 341,600
Minnesota Mining & Mfg. Co. 5,900 337,775
American Home Products Corp. 4,300 332,712
Sears, Roebuck & Company 5,500 329,312
Lilly (Eli) & Co. 4,100 321,850
Citicorp 5,500 318,312
Boeing Company 4,800 300,600
Unilever NV 2,300 299,287
Eastman Kodak Co. 4,800 291,000
Dow Chemical Co. 3,900 $ 280,313
BankAmerica Corp. 5,300 278,912
Gillette Co. 6,200 276,675
Columbia/HCA Healthcare Corp. 6,200 268,150
US West, Inc. 6,400 266,400
Home Depot, Inc. 6,400 260,000
Atlantic Richfield Co. 2,300 252,425
American Express Company 7,000 245,875
Texaco, Inc. 3,700 242,813
Chrysler Corp. 5,000 239,375
NYNEX Corp. 5,900 237,475
Oracle Systems Corp.* 6,050 233,681
Viacom, Inc., Class B* 5,000 231,875
Schering-Plough Corp. 5,200 229,450
Emerson Electric Co. 3,100 221,650
Kellogg Co. 3,100 221,263
Time Warner, Inc. 5,300 217,963
Schlumberger, Ltd. 3,400 211,225
MCI Communications Corp. 9,533 209,726
NationsBank Corp. 3,900 209,137
Tele-Communications, Inc., Class A* 8,900 208,594
Southern Company 9,200 205,850
Anheuser-Busch Companies, Inc. 3,600 204,750
Lockheed Martin Corp. 3,230 203,894
Airtouch Communications, Inc.* 7,000 199,500
Travelers Corporation 4,547 198,931
Capital Cities/ABC, Inc. 1,800 194,400
WMX Technologies, Inc. 6,800 192,950
Cisco Systems, Inc. 3,800 192,137
Sara Lee Corp. 6,700 190,950
Morgan (J.P.) & Co. 2,700 189,337
Banc One Corp. 5,740 185,115
Seagram Company, Ltd. 5,200 180,050
Caterpillar, Inc. 2,800 179,900
Allied-Signal, Inc. 4,000 178,000
Pacific Gas & Electric Co. 6,100 176,900
ITT Corp. 1,500 176,250
Xerox Corp. 1,500 175,875
Texas Instruments, Inc. 1,300 174,037
Federal Home Loan Mortgage 2,500 171,875
Campbell Soup Company 3,500 171,500
Compaq Computer Corp.* 3,700 167,887
Sprint Corp. 4,900 164,763
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
14
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
Warner-Lambert Co. 1,900 $ 164,113
General Re Corp. 1,200 160,650
Chemical Banking Corp. 3,400 160,650
Union Pacific Corp. 2,900 160,587
Pacific Telesis Group 6,000 160,500
Penney (J.C.) Co., Inc. 3,300 158,400
Computer Assoc. International, Inc. 2,300 155,825
International Paper Co. 1,800 154,350
Micron Technology, Inc. 2,800 153,650
Amgen, Inc.* 1,900 152,831
Heinz (H.J.) Co. 3,400 150,875
Colgate-Palmolive Co. 2,000 146,250
May Department Stores Co. 3,500 145,688
Baxter International, Inc. 4,000 145,500
Monsanto Company 1,600 144,200
- ----------------------------------------------------------------------
Total 100-Largest Stocks 35,504,819
- ----------------------------------------------------------------------
Rockwell International Corp. 3,100 141,825
Kimberly-Clark Corp. 2,300 137,712
Weyerhaeuser Co. 2,900 136,663
Merrill Lynch & Co., Inc. 2,600 136,500
Archer-Daniels-Midland Co. 7,245 134,938
United Technologies Corp. 1,700 132,812
Raytheon Co. 1,700 131,962
Northern Telecom, Ltd. 3,600 131,400
McDonnell Douglas Corp. 1,700 130,475
CPC International, Inc. 2,100 129,675
Norfolk Southern Corp. 1,900 128,013
AMP, Inc. 3,000 126,750
Enron Corp. 3,600 126,450
Wells Fargo & Co. 700 126,175
Dun & Bradstreet Corp. 2,400 126,000
Automatic Data Processing, Inc. 2,000 125,750
Aluminum Co. of America 2,500 125,312
PPG Industries, Inc. 2,900 124,700
Tenneco, Inc. 2,700 124,200
Barrick Gold Corp. 4,900 123,725
Norwest Corp. 4,300 123,625
Phillips Petroleum Co. 3,700 123,488
Medtronic, Inc. 1,600 123,400
Conagra, Inc. 3,500 122,062
Duke Power Co. 2,900 120,350
Chase Manhattan Corp. 2,500 117,500
Toys `R' Us, Inc.* 3,900 $ 114,075
First Union Corp. 2,500 113,125
General Mills, Inc. 2,200 113,025
Dean Witter, Discover & Co. 2,400 112,800
Georgia-Pacific Corp. 1,300 112,775
CSX Corp. 1,500 112,687
Limited, Inc. 5,000 110,000
Texas Utilities Co. 3,200 110,000
Scott Paper Company 2,200 108,900
Gannett Co., Inc. 2,000 108,500
SCE Corp. 6,300 107,887
American Brands, Inc. 2,700 107,325
Albertson's, Inc. 3,600 107,100
Bank New York, Inc. 2,600 104,975
Corning, Inc. 3,200 104,800
Applied Materials, Inc.* 1,200 103,950
Novell, Inc.* 5,200 103,675
Deere & Co. 1,200 102,750
KeyCorp 3,258 102,220
Browning-Ferris Inds., Inc. 2,800 101,150
Occidental Petroleum Corp. 4,400 100,650
Aetna Life & Casualty Co. 1,600 100,600
FPL Group, Inc. 2,600 100,425
United Healthcare Corp. 2,400 99,300
SunTrust Banks, Inc. 1,700 99,025
American General Corp. 2,900 97,875
Consolidated Edison Co. of N.Y., Inc. 3,300 97,350
Loews Corp. 800 96,800
Alcan Aluminum, Ltd. 3,200 96,800
First Data Corp. 1,700 96,688
Chubb Corp. 1,200 96,150
Public Service Enterprises Group, Inc. 3,400 94,350
Unocal Corp. 3,400 93,925
Kmart Corp. 6,400 93,600
American Electric Power Co., Inc. 2,600 91,325
Upjohn Co. 2,400 90,900
Air Products & Chemicals, Inc. 1,600 89,200
Placer Dome, Inc. 3,400 88,825
First Interstate Bancorp 1,100 88,275
Illinois Tool Works, Inc. 1,600 88,000
Dominion Resources, Inc. 2,400 87,600
PNC Financial Corp. 3,300 87,037
Goodyear Tire & Rubber Co. 2,100 86,625
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
15
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
Wachovia Corp. 2,400 $85,800
PECO Energy Co. 3,100 85,638
Digital Equipment Corp. 2,100 85,575
Mellon Bank Corp. 2,050 85,331
Walgreen Co. 1,700 85,213
Pitney-Bowes, Inc. 2,200 84,425
NIKE, Inc., Class B 1,000 84,000
UST, Inc. 2,800 83,300
Hercules, Inc. 1,700 82,875
Burlington Northern, Inc. 1,300 82,387
AMR Corporation* 1,100 82,087
Mattell, Inc. 3,156 82,056
Marsh & McLennan Companies, Inc. 1,000 81,125
Unicom Corp. 3,000 79,875
Grace (W.R.) & Co. 1,300 79,788
Silcon Graphics, Inc.* 2,000 79,750
International Flavors & Fragrances, Inc. 1,600 79,600
USX Corporation-Marathon Group 4,000 79,000
Apple Computer, Inc. 1,700 78,944
First Chicago Corp. 1,300 77,838
Honeywell, Inc. 1,800 77,625
CIGNA Corp. 1,000 77,625
Entergy Corp. 3,200 77,200
Sysco Corp. 2,600 76,700
Houston Industries, Inc. 1,800 75,825
Donnelley (R.R.) & Sons Co. 2,100 75,600
PacifiCorp 4,000 75,000
DSC Communications Corp.* 1,600 74,400
Fleet Financial Group, Inc. 2,000 74,250
Wrigley (Wm.) Jr. Company 1,600 74,200
NBD Bancorp, Inc. 2,300 73,600
- ----------------------------------------------------------------------
Total 200-Largest Stocks 45,635,957
- ----------------------------------------------------------------------
Westinghouse Electric Corp. 5,000 73,125
TRW, Inc. 900 71,888
Dayton Hudson Corp. 1,000 71,750
Barnett Banks, Inc. 1,400 71,750
Eastman Chemcial Co. 1,200 71,400
Ralston Purina Co. 1,400 71,400
MBNA Corp. 2,100 70,875
Central & Southwest Corp. 2,700 70,875
First Fidelity Bancorporation 1,200 70,800
United States HealthCare, Inc. 2,300 70,438
Union Carbide Corp. 2,100 70,087
Textron, Inc. 1,200 69,750
CoreStates Financial Corp. 2,000 69,750
GAP (The), Inc. 2,000 69,750
Household International, Inc. 1,400 69,300
ALLTEL Corp. 2,700 68,512
Bankers Trust New York Corp. 1,100 68,200
Champion International Corp. 1,300 67,762
CUC International, Inc.* 1,600 67,200
Avon Products, Inc. 1,000 67,000
Boston Scientific Corp.* 2,100 66,937
Carolina Power & Light Co. 2,200 66,550
Burlington Resources, Inc. 1,800 66,375
Hershey Foods Corp. 1,200 66,300
Lowe's Companies, Inc. 2,200 65,725
Crown Cork & Seal Co., Inc.* 1,300 65,163
Genuine Parts Co. 1,700 64,388
Nucor Corp. 1,200 64,200
Eaton Corp. 1,100 63,938
Rubbermaid, Inc. 2,300 63,825
Amerada Hess Corp. 1,300 63,537
Winn-Dixie Stores, Inc. 1,100 63,525
Boatmen's Bancshares, Inc. 1,800 63,450
Cooper Industries, Inc. 1,600 63,200
Sun Microsystems, Inc.* 1,300 63,050
Quaker Oats Co. 1,900 62,463
Fluor Corp. 1,200 62,400
Masco Corp. 2,300 62,100
Loral Corp. 1,200 62,100
National City Corp. 2,100 61,687
Block (H&R), Inc. 1,500 61,687
Morton International, Inc. 2,100 61,425
Consolidated Rail Corp. 1,100 61,187
Marriott International, Inc. 1,700 60,988
Whirlpool Corp. 1,100 60,500
CBS, Inc. 900 60,300
Great Lakes Chemical Corp. 1,000 60,250
Salomon, Inc. 1,500 60,188
St. Paul Companies, Inc. 1,200 59,100
American Stores Co. 2,100 59,063
Phelps Dodge Corp. 1,000 59,000
Detroit Edison Co. 2,000 59,000
Cinergy Corp. 2,220 58,275
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
16
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
Transamerica Corp. 1,000 $58,250
Dover Corp. 800 58,200
Union Camp Corp. 1,000 57,875
Dresser Industries, Inc. 2,600 57,850
Ingersol-Rand Co. 1,500 57,375
Halliburton Co. 1,600 57,200
Lincoln National Corp. 1,300 56,875
Promus Companies, Inc.* 1,450 56,550
Bank of Boston Corp. 1,500 56,250
Alco Standard Corporation 700 55,912
Engelhard Corp. 1,300 55,738
Tribune Co. 900 55,238
Santa Fe Pacific Corp. 2,162 55,131
Rohn & Haas Co. 1,000 54,875
Shawmut National Corp. 1,700 54,188
Shawmut National Corp. (Wrts)* 5 49
Tyco Laboratories, Inc. 1,000 54,000
Newell Company 2,200 53,900
McGraw-Hill, Inc. 700 53,112
Baltimore Gas & Electric Co. 2,100 52,500
Becton, Dickinson and Co. 900 52,425
Union Electric Co. 1,400 52,150
Tandy Corp. 1,000 51,875
SAFECO Corp. 900 51,694
Delta Air Lines, Inc. 700 51,625
Dow Jones & Co., Inc. 1,400 51,625
Melville Corp. 1,500 51,375
Panhandle Eastern Corp. 2,100 51,187
Advanced Micro Devices, Inc.* 1,400 50,925
Providian Corp. 1,400 50,750
Pioneer Hi-Bred International, Inc. 1,200 50,400
Nordstrom, Inc. 1,200 49,650
Hilton Hotels Corp. 700 49,175
Newmont Mining Corp. 1,172 49,078
Consolidated Natural Gas Co. 1,300 49,075
Federal Express Corp.* 800 48,600
VF Corp. 900 48,375
Inco, Ltd. 1,700 48,025
Cabletron Systems, Inc.* 900 47,925
Southwest Airlines Co. 2,000 47,750
General Public Utilities Corp. 1,600 47,600
Ohio Edison Co. 2,100 47,512
Mead Corp. 800 47,500
Praxair, Inc. 1,900 47,500
National Semiconductor Corp.* 1,700 47,175
Dillard Department Stores, Inc., Class A 1,600 47,000
UNUM Corp. 1,000 46,875
Premark International, Inc. 900 46,687
- ----------------------------------------------------------------------
Total 300-Largest Stocks 51,542,046
- ----------------------------------------------------------------------
Reynolds Metals Co. 900 46,575
Clorox Co. 700 45,675
Coastal Corp. 1,500 45,562
Knight-Ridder, Inc. 800 45,500
Computer Sciences Corp.* 800 45,500
Williams (The) Companies, Inc. 1,300 45,338
Lotus Development Corp.* 700 44,625
Circuit City Stores, Inc. 1,400 44,275
Price/Costco, Inc.* 2,700 43,875
Kroger Co.* 1,600 43,000
Sherwin-Williams Co. 1,200 42,750
Harcourt General, Inc. 1,000 42,500
Golden West Financial Corp. 900 42,413
Louisiana-Pacific Corp. 1,600 42,000
Northern States Power Co. 900 41,513
Interpublic Group 1,100 41,250
Grainger (W.W.), Inc. 700 41,125
Service Corp. International 1,300 41,112
Sun Company, Inc. 1,500 41,063
Baker Hughes, Inc. 2,000 41,000
Tenet Healthcare Corp. 2,800 40,250
Dana Corp. 1,400 40,075
General Dynamics Corp. 900 39,938
Westvaco Corp. 900 39,825
Deluxe Corp. 1,200 39,750
Great Western Financial Corp. 1,900 39,187
Mallinckrodt Group, Inc. 1,100 39,050
Jefferson-Pilot Corp. 700 38,325
Times Mirror Co., Class A 1,600 38,200
Hasbro, Inc. 1,200 38,100
Temple-Inland, Inc. 800 38,100
Parker-Hannifin Corp. 1,050 38,063
USX Corporation-U.S. Steel Group 1,100 37,813
Torchmark Corp. 1,000 37,750
Kerr-McGee Corp. 700 37,537
Laidlaw, Inc., Class B 3,900 37,537
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
17
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
Reebok International, Ltd. 1,100 $37,400
Cyprus Amax Minerals Co. 1,300 37,050
Black & Decker Corp. 1,200 37,050
Sonat, Inc. 1,200 36,600
Northrop Grumman Corp. 700 36,487
Nalco Chemical Co. 1,000 36,375
Pall Corp. 1,600 35,600
Ahmanson (H.F.) & Co. 1,600 35,200
St. Jude Medical, Inc. 700 35,088
Sigma-Aldrich Corp. 700 34,387
Johnson Controls, Inc. 600 33,900
U.S. Bancorp, Inc. 1,400 33,688
FMC Corp.* 500 33,625
Brown-Forman Corp., Class B 1,000 33,375
Andrew Corp.* 575 33,278
Bausch & Lomb, Inc. 800 33,200
James River Corp. 1,200 33,150
New York Times Co., Class A 1,400 32,900
Dial Corp. 1,300 32,175
Avery Dennison Corp. 800 32,000
Ashland, Inc. 900 31,612
Homestake Mining Co. 1,900 31,350
Western Atlas, Inc.* 700 31,063
Harris Corp. 600 30,975
Moore Corporation, Ltd. 1,400 30,975
Beneficial Corp. 700 30,800
Rite Aid Corp. 1,200 30,750
Autodesk, Inc. 700 30,100
Niagara Mohawk Power Co. 2,000 29,500
Pacific Enterprises 1,200 29,400
American Greetings Corp., Class A 1,000 29,375
Cooper Tire & Rubber Co. 1,200 29,250
SuperValu, Inc. 1,000 29,125
Whitman Corp. 1,500 29,063
Woolworth Corp. 1,900 28,738
Polaroid Corp. 700 28,525
Roadway Services, Inc. 600 28,350
Pennzoil Co. 600 28,275
ALZA Corp., Class A* 1,200 28,050
General Signal Corp. 700 27,825
Echlin, Inc. 800 27,800
Comcast Corp., Class A 1,500 27,281
PACCAR, Inc. 575 26,881
Worthington Industries, Inc. 1,300 26,569
Varity Corp.* 600 26,400
Ryder System, Inc. 1,100 26,263
Manor Care, Inc. 900 26,213
Cummins Engine Co., Inc. 600 26,175
Unisys Corp. 2,400 26,100
Tandem Computers, Inc.* 1,600 25,800
Armstrong World Ind., Inc. 500 25,062
Wendy's International, Inc. 1,400 25,025
Biomet, Inc.* 1,600 24,800
Ecolab, Inc. 1,000 24,500
Allergan, Inc. 900 24,412
Bethlehem Steel Corp. 1,500 24,375
Boise Cascade Corp. 600 24,300
Scientific-Atlanta, Inc. 1,100 24,200
Pep Boys-Manny, Moe & Jack 900 24,075
Maytag Corp. 1,500 24,000
Darden Restaurants, Inc.* 2,200 23,925
Cox Communications, Inc., Class A* 1,229 23,812
Stone Container Corp.* 1,100 23,375
Liz Claiborne, Inc. 1,100 23,375
- ----------------------------------------------------------------------
Total 400-Largest Stocks 54,918,544
- ----------------------------------------------------------------------
Mercantile Stores Co., Inc. 500 23,250
Snap-On Tools Corp. 600 23,250
Fruit of the Loom, Inc., Class A* 1,100 23,238
Raychem Corp. 600 23,025
Stanley Works 600 22,725
Giant Foods, Inc., Class A 800 22,700
Santa Fe Pacific Gold Corp. 1,840 22,310
Columbia Gas Systems, Inc. 700 22,225
Owens-Corning Fiberglas Corp.* 600 22,125
Ceridian Corp. 600 22,125
Brunswick Corp. 1,300 22,100
Goodrich (B.F.) Co. 400 21,450
Perkin-Elmer Corp. 600 21,300
Federal Paper Board Co., Inc. 600 21,225
USF&G Corp. 1,300 21,125
Bard (C. R.), Inc. 700 21,000
Harnischfeger Industries, Inc. 600 20,775
Lehman Brothers Holdings, Inc. 940 20,562
Thomas & Betts Corp. 300 20,513
Millipore Corp. 300 20,250
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
18
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
King World Productions, Inc.* 500 $20,250
National Service Industries, Inc. 700 20,212
Louisiana Land & Exploration Co. 500 19,938
Tektronix, Inc. 400 19,700
Teledyne, Inc. 800 19,600
McDermott International, Inc. 800 19,300
Oryx Energy Co. 1,400 19,250
NICOR, Inc. 700 18,813
Timken Co. 400 18,450
Asarco, Inc. 600 18,300
Inland Steel Industries, Inc. 600 18,300
Bemis Company, Inc. 700 18,200
Amdahl Corp. 1,600 17,800
Foster Wheeler Corp. 500 17,625
Russell Corp. 600 17,250
Clark Equipment Co.* 200 17,175
Potlatch Corp. 400 16,700
United States Surgical Corp. 800 16,700
Navistar International Corp.* 1,100 16,637
ENSERCH Corp. 900 15,413
Ogden Corp. 700 15,312
Beverly Enterprises, Inc.* 1,200 14,850
Crane Co. 400 14,500
Echo Bay Mines, Ltd. 1,600 14,400
Pittston Services Group 600 14,400
Alexander & Alexander Services, Inc. 600 14,325
TRINOVA Corp. 400 14,000
Ball Corp. 400 13,950
Briggs & Stratton Corp. 400 13,800
Cincinnati Milacron, Inc. 500 13,500
EG & G, Inc. 800 13,400
Consolidated Freightways, Inc. 600 13,275
Fleming Companies, Inc. 500 13,250
TJX Companies, Inc. 1,000 13,250
Great Atlantic & Pacific Tea Co., Inc. 500 13,187
Peoples Energy Corp. 500 12,938
Safety-Kleen Corp. 800 12,900
Brunos, Inc. 1,100 12,787
Jostens, Inc. 600 12,750
Santa Fe Energy Resources, Inc. 1,300 12,350
Alberto-Culver Co., Class B 400 12,100
USLIFE Corp. 300 12,075
Shared Med Systems Corp. 300 12,038
Fleetwood Enterprises, Inc. 600 11,850
Centex Corp. 400 11,300
Longs Drug Stores Corp. 300 11,250
Pulte Corp. 400 11,200
NorAm Energy Corp. 1,700 11,050
USAir Group, Inc. 900 10,463
First Mississippi Corp. 300 10,237
Meredith Corp. 400 10,150
Armco, Inc. 1,500 10,125
Rowan Companies, Inc.* 1,200 9,750
Cray Research, Inc.* 400 9,750
Harland (J.H.) Co. 400 9,150
Eastern Enterprises 300 8,962
Giddings & Lewis, Inc. 500 8,938
Helmerich & Payne, Inc. 300 8,850
Bally Entertainment Corp. 700 8,575
ONEOK, Inc. 400 8,550
Coors (Adolph) Co., Class B 500 8,188
Springs Industries, Inc., Class A 200 7,450
Charming Shoppes, Inc. 1,400 7,350
Stride Rite Corp. 700 7,263
Yellow Corp. 400 7,250
Kaufman & Broad Home Corp. 500 7,250
Shoney's, Inc.* 600 7,050
Brown Group, Inc. 300 6,825
Community Psychiatric Centers 600 6,750
Intergraph Corp.* 600 6,675
Ryans Family Steak Houses, Inc.* 800 6,300
Luby's Cafeterias, Inc. 300 6,038
NACCO Industries, Inc., Class A 100 5,987
Outboard Marine Corp. 300 5,887
Bassett Furniture Industries, Inc. 200 5,600
Handleman Co. 500 4,813
Data General Corp.* 500 4,813
M/A-Com, Inc.* 400 4,700
Zurn Industries, Inc. 200 4,000
GC Companies, Inc.* 120 3,930
Zenith Electronics Corp.* 500 3,688
Skyline Corp. 200 3,625
Morrison Knudsen Corp. 500 3,375
Aviall, Inc. 300 2,512
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
19
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number of Market
Shares Value
<S> <C> <C>
SPX Corp. 200 $2,275
Strattec Security Corp.* 180 2,205
Gardner Denver Machinery, Inc.* 72 1,260
Harris Computer Systems, Inc. 30 413
TOTAL COMMON STOCKS -- 91.6%
----------
(Cost $47,797,677) 56,344,389
----------
PREFERRED STOCK -- .1%
(Cost $128)
Teledyne, Inc., Class E* 18 263
----------
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
20
<PAGE>
COMPANION FUND
Investments in Securities (Continued)
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Par Market
(000) Value
<S> <C> <C>
SHORT-TERM OBLIGATIONS -- 8.2%
Commercial Paper -- 2.4%
U.S. Treasury Bills,
5.55%, 8/3/95** $ 135 $ 134,313
5.62%, 8/10/95** $ 150 149,063
5.37%, 9/21/95** $ 65 64,205
Xerox Corp., 6.10%, 7/5/95 $1,174 1,174,204
-----------
1,521,785
-----------
Repurchase Agreements -- 5.8%
Repurchase Agreement with Goldman Sachs, Inc.,
entered into 6/28/95 at 6.00%, maturing 7/3/95 at
$1,595,328 (collateralized by U.S. Treasury Bonds,
13.875% due 5/15/11 with a face value of $1,594,000
and a value of $2,505,927) $1,594 1,594,000
Repurchase Agreement with Goldman Sachs, Inc.,
entered into 6/29/95 at 6.00%, maturing 7/5/95 at
$1,994,993 (collateralized by U.S. Treasury Notes,
7.50% due 12/31/96 with a face value of $1,993,000
and a value of $2,035,252) $1,993 1,993,000
-----------
3,587,000
-----------
TOTAL SHORT-TERM OBLIGATIONS 5,108,785
(Cost -- $5,108,785) -----------
TOTAL INVESTMENT IN SECURITIES -- 99.9%
(Total Cost -- $52,906,590) 61,453,437
Cash and Other Assets, Less Liabilities -- .1% 44,574
-----------
NET ASSETS -- 100.0% $61,498,011
(equivalent to $9.82 per share based on 6,264,528 ===========
shares outstanding)
</TABLE>
* Non-income producing securities.
** Pledged as initial margin for Stock Index Futures Contracts. At June 30,
1995, the Fund was long 19 S&P 500 Futures Contracts expiring in Sept. 1995.
Unrealized gain amounted to $176,700.
The Notes to Financial Statements are an integral part of these Statements.
21
<PAGE>
COMPANION FUND
Statement of
Assets and Liabilities
June 30, 1995 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at market value
(Cost -- $52,906,590) $61,453,437
Receivable for investments sold 280
Dividends and interest receivable 129,083
Investment for deferred compensation plan
(Cost -- $42,241) 48,459
Other 3,517
-----------
Total assets 61,634,776
-----------
LIABILITIES:
Accrued advisory fees payable 18,356
Payable for deferred compensation plan 48,459
Variation margin payable 11,590
Other accrued expenses
(including $18,579 due to affiliate) 58,360
-----------
Total liabilities 136,765
-----------
NET ASSETS:
(Equivalent to $9.82 per share based on -----------
6,264,528 shares outstanding) $61,498,011
===========
COMPONENTS OF NET ASSETS:
Capital paid in $51,398,999
Undistributed net investment income 975,801
Unrealized appreciation of investments 8,729,765
Accumulated net realized gains 393,446
-----------
NET ASSETS $61,498,011
===========
</TABLE>
Statement of
Operations
Six months ended June 30, 1995 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 740,305
Interest 104,744 $ 845,049
----------
Expenses:
Investment advisory fees 101,252
Custodian fees and expenses 52,324
Administrative services 25,758
Auditing and legal fees 15,785
Trustees' fees 8,342
Shareholder report 4,373
Other 1,920 209,754
---------- -----------
NET INVESTMENT INCOME: 635,295
-----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from securities
transactions 718,329
Net realized gain from futures
transactions 226,039
Unrealized appreciation of
investments 8,830,702
Unrealized appreciation of futures
contracts 159,650
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS: 9,934,720
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $10,570,015
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
22
<PAGE>
COMPANION FUND
Statement of
Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
1995 1994
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 635,295 $ 1,281,213
Net realized gain from securities transactions 718,329 110,651
Net realized gain (loss) from futures transactions 226,039 (155,097)
Unrealized appreciation (depreciation)
of investments 8,813,652 (955,176)
Unrealized appreciation on futures contracts 176,700 17,050
----------- -----------
Net increase in net assets from operations 10,570,015 298,641
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
($.14255 per share) -- (938,698)
From net realized gain
($.85531 per share) -- (5,214,268)
Required for tax purposes in excess of realized gains
($.07554 per share) -- (460,493)
----------- -----------
Total distributions to shareholders -- (6,613,459)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net decrease from capital share transactions (3,800,414) (434,866)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS: 6,769,601 (6,749,684)
NET ASSETS:
Beginning of period 54,728,410 61,478,094
----------- -----------
End of period (including undistributed net investment
income of $975,801 and $340,506 respectively) $61,498,011 $54,728,410
=========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
23
<PAGE>
COMPANION FUND
Notes to Financial Statements (Unaudited)
1. Adoption of Indexation Approach. On November 9, 1993, the Trustees of
Companion Fund (the "Fund") authorized CIGNA Investments, Inc. ("CII"), the
Fund's investment adviser, to change the investment approach of the Fund from
one emphasizing active management of equity securities to an indexation
approach. Under this new approach, the Fund will attempt to replicate the total
return performance, reduced by Fund expenses, of the Standard & Poor's 500
Composite Stock Price Index.
2. Significant Accounting Policies. The Fund is a separate series of CIGNA
Variable Products Group, a Massachusetts business trust (the "Trust"). The
Trust, which consists only of the Fund, is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements.
A. Security Valuation -- Equity securities, including warrants, that are listed
on a national securities exchange or part of the NASDAQ National Market System
are valued at the last sale price or, if there has been no sale that day, at the
last bid price. Debt and other equity securities traded in the over-the-counter
market, including listed securities whose primary markets are believed to be
over-the-counter, are valued at the most recent bid price. Short-term
investments with remaining maturities of up to and including 60 days are valued
at amortized cost, which approximates market. Short-term investments that
mature in more than 60 days are valued at current market quotations. Other
securities and assets of the Fund are appraised at fair value as determined in
good faith by, or under the authority of, the Trust's Board of Trustees.
Futures Contracts -- Upon entering into a futures contract, the Fund is required
to pledge to the broker an amount of cash and/or securities equal to the initial
margin requirements. During the period a futures contract is open, changes in
the value of a contract are recognized as unrealized gains or losses by "marking
to market" on a daily basis to reflect the market value of the contract at the
end of each day's trading. Daily variation margin payments are received or
made, depending on whether there were unrealized gains or losses. When a
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Futures contracts include the risk that a
change in the value of the contract may not correlate with the value of the
underlying securities.
B. Security Transactions and Related Investment Income -- Security transactions
are accounted for on the trade date (date the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date, and interest income is
recorded on the accrual basis. Securities gains and losses are determined on the
basis of identified cost. The cost for Federal income tax purposes is
substantially the same.
C. Federal Taxes -- It is the Fund's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and capital gains, if any,
to its shareholders. Therefore, no Federal income or excise taxes on realized
income have been accrued.
24
<PAGE>
COMPANION FUND
Notes to Financial Statements (Unaudited)
(Continued)
D. Dividends and Distributions to Shareholders -- Dividends and distributions
are recorded by the Fund on the ex-dividend date. Payments in excess of
financial accounting income due to differences between financial and tax
accounting, to meet the minimum distribution requirements for tax basis income,
are deducted from paid in capital when such differences are determined to be
permanent.
E. Repurchase Agreements -- Securities pledged as collateral for repurchase
agreements are held by the Portfolio's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements ensure that the market value
of the collateral is sufficient in the event of default; however, in the event
of default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
3. Investment Advisory Fees and Other Transactions with Affiliates. Investment
advisory fees were paid or accrued to CIGNA Investments, Inc. ("CII"), certain
officers and directors of which are affiliated with the Fund. Such advisory
fees are based on an annual rate of 0.35% applied to the average daily net
assets of the Fund.
The Fund reimburses CII for a portion of the compensation and related expenses
of the Fund's Treasurer and Secretary and certain persons who assist in carrying
out the responsibilities of those offices. For the six months ended June 30,
1995, the Fund paid or accrued $25,758.
CII is an indirect, wholly-owned subsidiary of CIGNA Corporation.
4. Trustees' Fees. Trustees' fees represent remuneration paid or accrued to
trustees who are not employees of CIGNA Corporation or any of its affiliates.
Trustees may elect to defer receipt of all or a portion of their fees which are
invested in mutual fund shares in accordance with a deferred compensation plan.
5. Purchases and Sales of Securities. Purchases and sales of securities,
excluding short-term obligations, aggregated $1,033,426 and $6,707,646,
respectively, for the six months ended June 30, 1995. At June 30, 1995
unrealized depreciation for Federal income tax purposes aggregated $8,546,848,
of which $9,945,403 related to appreciated securities and $1,398,555 related to
depreciated securities.
6. Capital Stock. The Fund offers an unlimited number of shares of beneficial
interest without par value. Of the 6,264,528 shares outstanding at June 30,
1995, 6,140,035 shares were held by State Street Bank and Trust Company as
custodian under agreement with CG Life relating to variable annuity contracts
issued by that company. The remainder, representing 2.0% of the shares
outstanding, was held by an employee benefit plan established by CG Life for
certain of its employees.
25
<PAGE>
COMPANION FUND
Notes to Financial Statements (Unaudited)
(Continued)
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1995 December 31, 1994
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 95,741 $ 893,126 140,151 $ 1,241,778
Shares issued to shareholders
in reinvestment of dividends
and distributions -- -- 794,689 6,613,459
---------------------------------------------------------------
95,741 893,126 934,840 7,855,237
Shares redeemed (516,545) (4,693,540) (929,467) (8,290,103)
---------------------------------------------------------------
Net increase (decrease) (420,804) $(3,800,414) 5,373 $ (434,866)
===============================================================
</TABLE>
26
<PAGE>
COMPANION FUND
Notes to Financial Statements (Unaudited)
(Continued)
7. Financial Highlights. The following selected per share data, ratios and
supplemental data is computed on the basis of a share outstanding throughout the
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Six Months
Ended
June 30,
1995 1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 8.19 $ 9.20 $11.94 $12.83 $10.75 $11.94
------ ------ ------ ------ ------ ------
Income from investment operations
Net investment income ** 0.10 0.19 0.16 0.12 0.19 0.26
Net realized and unrealized gains (losses) 1.53 (0.13) 0.22 0.34 3.79 (0.74)
------ ------ ------ ------ ------ ------
Total from investment operations 1.63 0.06 0.38 0.46 3.98 (0.48)
------ ------ ------ ------ ------ ------
Less: Distributions
Dividends from net investment income -- (0.14) (0.17) (0.12) (0.20) (0.25)
Distributions from capital gains -- (0.85) (2.95) (1.23) (1.70) (0.46)
Required for tax purposes in excess
of realized gains -- (0.08) -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions -- (1.07) (3.12) (1.35) (1.90) (0.71)
------ ------ ------ ------ ------ ------
Net asset value, end of year $ 9.82 $ 8.19 $ 9.20 $11.94 $12.83 $10.75
====== ====== ====== ====== ====== ======
Total return 19.90% 0.67% 2.97% 3.59% 37.46% (3.99)%
Ratios and Supplemental Data:
Net assets, end of period (000) $61,498 $54,728 $61,478 $68,287 $73,446 $60,658
Ratio of expenses to
average net assets 0.36% 0.78% 0.66% 0.59% 0.56% 0.59%
Ratio of net investment income
to average net assets 1.10% 2.23% 1.30% 0.94% 1.38% 2.08%
Portfolio Turnover 2% 4% 185%* 82% 77% 63%
</TABLE>
* During November 1993, the portfolio was indexed to the S&P 500, resulting in
a complete turnover of the portfolio at that time.
** Net investment income per share has been calculated in accordance with SEC
requirements, with the exception that end of year accumulated
undistributed/(overdistributed) net investment income has not been adjusted to
reflect current year permanent differences between financial and tax accounting.
27
<PAGE>
COMPANION FUND
Matters Submitted to a Vote of Shareholders
A Special Meeting of the Shareholder of the series of shares of CIGNA Variable
Products Group (the "Trust") known as Companion Fund was held on Tuesday,
April 25, 1995 at 11:15 a.m., Eastern Time.
Two Trustees were elected by a vote of the Shareholder to serve as members of
the Board of the Trust until the election and qualification of their successors.
The Shareholder of the Trust voted to elect the following Trustees:
<TABLE>
<CAPTION>
FOR VOTE WITHHELD
<S> <C> <C>
Russell H. Jones 6,099,774.104 451,592.718
------------- -----------
Paul J. McDonald 6,112,863.748 438,503.074
------------- -----------
</TABLE>
The terms of Messrs. R. Bruce Albro, Hugh R. Beath and Arthur C. Reeds, III as
Trustees of the Trust continued after the meeting.
The appointment of Price Waterhouse LLP to serve as independent accountants for
the fiscal year ending December 31, 1995 was ratified by a vote of the
Shareholder of the Trust as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
6,413,925.56 85,082.686 58,903.398
------------ ---------- ----------
</TABLE>
No other business was transacted at the meeting.
28
<PAGE>
Trustees and Officers
Companion Fund
Trustees:
R. Bruce Albro, Chairman;
Senior Managing Director
CIGNA Investments, Inc.
Hugh R. Beath
Managing Director,
AdMedia Corporate Advisors, Inc.
Russell H. Jones
Vice President,
Kaman Corporation
Paul J. McDonald
Executive Vice President
Finance and Chief Financial
Officer, Friendly Ice Cream Corporation
Arthur C. Reeds III
President, CIGNA Investment
Management and CIGNA
Investments, Inc.
Officers:
R. Bruce Albro
Chairman of the Board and President
Alfred A. Bingham III
Vice President and Treasurer
Jeffrey S. Winer
Vice President and Secretary
CUSTODIAN AND TRANSFER AGENT:
State Street Bank and Trust Company
P.O. Box 2351
Boston, Massachusetts 02107
INVESTMENT ADVISER:
CIGNA Investments, Inc.
Hartford, Connecticut 06152
ADDRESS OF THE FUND:
Companion Fund
1380 Main Street
Springfield, Massachusetts 01103
- --------------------------------------------------------------------------------
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500,"
and "500" are trademarks of the Standard & Poor's Corporation (S&P) and have
been licensed for use by CG Life. Companion Fund is not sponsored, endorsed,
sold or promoted by S&P, and S&P makes no representation regarding the
advisability of investing in the Fund.
29
<PAGE>
CG Variable
Annuity
Accounts I & II
Companion
Fund
- -----------------
Semiannual
Report
- -----------------
June 30, 1995
CG Flexible Annuity
CG Group Variable Annuity
This report has been prepared for the information of participants of CG Variable
Annuity Accounts I & II pursuant to variable annuity contracts issued by
Connecticut General Life Insurance Company and is not authorized for
distribution to prospective investors unless preceded or accompanied by current
prospectuses of both the annuity account under discussion and the Companion
Fund.
- --------------------------------------------------------------------------------
The Companion Fund was organized by Connecticut General Life Insurance Company
in 1968. Both CIGNA Investments, Inc. and CIGNA Financial Advisors, Inc. are
affiliates of Connecticut General Life Insurance Company.
[LOGO OF CIGNA APPEARS HERE]
