<PAGE> 1
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO
FRED ALGER MANAGEMENT, INC.
NEW YORK, NEW YORK
Investment Management
Fred Alger Management, Inc., which has approximately $17 billion in assets
under management, became the manager of the Portfolio on July 15, 1999, the
Portfolio's inception date. Alger's normal investment minimum is $5 million.
Investment Objective
Long-term capital appreciation.
Investment Strategies
The Multi-Cap Growth Portfolio invests primarily in growth stocks. The
Portfolio Manager believes that these companies tend to fall into one of two
categories: High Unit Volume Growth and Positive Life Cycle Change. High Unit
Volume Growth companies are those vital, creative companies that offer goods or
services to a rapidly expanding marketplace. They include both established and
emerging firms, offering new or improved products, or firms simply fulfilling an
increased demand for an existing line. Positive Life Cycle Change companies are
those companies experiencing a major change that is expected to produce
advantageous results. These changes may be as varied as new management; new
products or technologies; restructuring or reorganization; or merger and
acquisition. The Portfolio can leverage, that is, borrow money, to buy
additional securities for its portfolio. By borrowing money, the Portfolio has
the potential to increase its returns if the increase in the value of the
securities purchased, exceeds the cost of borrowing, including the interest paid
on the money borrowed. The Enterprise Multi-Cap Growth Portfolio seeks long term
capital appreciation by investing in companies across all market capitalization
ranges.
1999 Performance Review
The birth of the Portfolio took place at the start of the third quarter, a
period during which the market experienced widespread weakness. After peaking in
mid-July, the S&P 500 began a downward trend that resulted in a -6.25 percent
return for the quarter. Only gains posted in the technology sector helped to
buoy the double-digit losses suffered by consumer staples, financials and
transportation stocks and prevented the S&P 500 from slipping even further.
Heavy losses were evident in other indices in the third quarter, including the
S&P MidCap 400 Index, -8.40 percent, and the Russell 2000 Index, -6.64 percent.
A variety of bearish indicators also appeared. On August 24, the Federal
Reserve raised both the Fed Funds rate and the discount rate by 0.25 percent.
During September, the Dow broke below the key 10,400 support level, the S&P 500
broke below its 200-day moving average line and the advance-decline line
continued to be very weak. Technology stocks also finally broke down during the
last month of the third quarter, leading the market downward.
After an anemic third quarter, however, domestic equity markets bounced
back in vigorous fashion. Growth stocks continued to significantly outperform
value stocks, and technology companies persisted as the clear market leaders.
And while large cap stocks continued to perform well, their smaller counterparts
were the obvious market standouts. Most major equity indices across all market
capitalizations generated strong double-digit returns during the final three
months of the year, ensuring that 1999 was yet another successful year for stock
investors.
1999 was a particularly good year for investors in the Enterprise Multi-Cap
Growth Portfolio. Fortunately, the Portfolio was well positioned to benefit from
the strong performance of certain segments of the market. Management's growth
stock philosophy was of great benefit during a year in which value severely
underperformed growth.
In addition, the Portfolio was heavily weighted in technology companies
throughout the year. Stocks such as Yahoo!, Microsoft and America Online fueled
much of the Portfolio's gains. Technology stocks were the clear market leaders
in 1999, thus making the Portfolio extremely well positioned for the strong bull
market. Specifically, the boom in Internet stocks was of great benefit to the
Portfolio. Exceptional stock picking and a number of superb July IPO allocations
also account for the excellent performance.
1
<PAGE> 2
The total return generated by the Portfolio was heavily impacted by the
inclusion of numerous IPOs during the month of July. Without exception, all of
the IPO allocations during July produced positive returns for the Portfolio. In
many cases these returns were exceptionally high, and in many cases large
percentages of the IPO allocations were eliminated from the Portfolio within a
day or two of their purchase. Examples of IPO allocations that more than doubled
in price and were completely or partially liquidated within two days of purchase
include: MP3.com Inc., Gadzoox Networks Inc., and Hoovers Inc.
In total, the IPOs accounted for virtually all of the Portfolio's gains of
93.6 percent during the month of July in what was otherwise an anemic month for
technology stocks. Better than normal IPO allocations for Fred Alger Management
and unusually strong IPO performance help to account for the tremendous returns.
Also, the relatively small asset size of the Portfolio during its first month of
existence greatly exaggerated the impact of IPOs on performance. The exceptional
returns produced by the Portfolio during the month of July were a one-time
anomaly and will be virtually impossible to reproduce.
IPOs did not impact the returns generated by the Portfolio after July 31,
1999. No new IPOs were added to the Portfolio after the end of July. Therefore,
August, September and fourth quarter return figures are IPO-free.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LIPPER MULTI-CAP CORE
MULTI-CAP GROWTH PORTFOLIO S&P 500 INDEX* INDEX*
-------------------------- -------------- ---------------------
<S> <C> <C> <C>
7/31/99 10000.00 10000.00 10000.00
1999 15113.60 11117.20 11163.70
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* Return calculated as of July 31, 1999 to correspond with the
indices indicated. Actual return since inception of July 15, 1999
was 192.60%.
** The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lipper Multi-Cap Core Index is an unmanaged index of
the 30 largest funds, based on total year-end net asset value, in
the Lipper Multi-Cap Core Fund category. It assumes the
reinvestment of dividends and capital gains and does not include
any management fees or expenses. One cannot invest in an index.
Future Investment Strategy
The economy of 2000 is likely to resemble the economy of 1999, but it will
probably not grow as rapidly. This is an inevitable by-product of higher
interest rates. Despite this, there are factors that may keep the economy moving
along at a decent rate: low unemployment, good wage gains, and positive
psychology. Inflation may remain subdued as a result of continually increasing
productivity and the slowing of economic growth. The flattening of oil prices
and the impact of the Internet on pricing may also help subdue inflation.
Interest rates may eventually fall, at some point responding to the slowing
economy and the dropping inflation. Presently, interest rates are being held up
artificially by concerns about the actions of the Fed. If the Fed lays off,
interest rates may drop.
Corporate earnings may not be as strong in 2000 as in 1999. The top-down
forecast for S&P earnings is an increase of 10 percent, which is lower than the
14 percent estimated for this year. It would be logical to assume that the
market will rise less vigorously as well.
2
<PAGE> 3
Should market conditions become neutral or favorable, Alger expects that
the Multi-Cap Growth Portfolio may continue to outperform broad market averages.
Technology stocks may continue to do well next year, as this is one of the few
areas of the economy which is truly booming. Consequently, despite high
valuation, rapidly growing companies may remain the best place to invest, with
IT companies in the vanguard. Alger's reliance on comprehensive, in-house
fundamental research may ensure the Portfolio remains stocked with the most
appealing growth investments.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
3
<PAGE> 4
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 86.76% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 0.40%
Omnicom Group Inc. 1,900 $ 190,000
BROADCASTING -- 4.74%
AT&T Corporation -- Liberty
Media Group (a) 8,800 499,400
Clear Channel Communications
Inc. (a) 11,600 1,035,300
Echostar Communications
Corporation (Class A) (a) 7,600 741,000
-----------
2,275,700
CABLE -- 1.74%
Cablevision Systems Corporation
(Class A) (a) 1,900 143,450
Comcast Corporation (a) 8,850 447,478
Cox Communications Inc. (Class
A) (a) 4,700 242,050
-----------
832,978
COMMUNICATIONS -- 2.07%
Brocade Communications Systems
Inc. (a) 5,600 991,200
COMPUTER HARDWARE -- 3.56%
Cisco Systems Inc. (a) 7,400 792,725
Dell Computer Corporation (a) 8,900 453,900
Intel Corporation 5,600 460,950
-----------
1,707,575
COMPUTER SERVICES -- 19.41%
America Online Inc. (a) 29,300 2,210,319
Ariba Inc. (a) 9,200 1,631,850
ASM Lithography Holding (a) 900 102,375
At Home Corporation (a) 12,950 555,231
CNET Inc. (a) 8,200 465,350
Digital Islands (a) 5,000 475,625
Sun Microsystems Inc. (a) 9,600 743,400
VeriSign Inc. (a) 6,000 1,145,625
Yahoo! Inc. (a) 4,577 1,980,411
-----------
9,310,186
COMPUTER SOFTWARE -- 10.42%
Exodus Communications Inc. (a) 17,000 1,509,812
Legato Systems Inc. (a) 6,600 454,163
Microsoft Corporation (a) 12,000 1,401,000
RealNetworks Inc. (a) 1,500 180,469
Vignette Corporation (a) 8,900 1,450,700
-----------
4,996,144
ELECTRICAL EQUIPMENT -- 0.58%
Teradyne Inc. (a) 4,200 277,200
ELECTRONICS -- 9.83%
Altera Corporation (a) 11,200 555,100
Applied Micro Circuits
Corporation (a) 7,000 890,750
Broadcom Corporation (Class A)
(a) 3,400 926,075
Conexant Systems Inc. (a) 12,600 836,325
PMC-Sierra Inc. (a) 5,600 897,750
SDL Inc. (a) 2,800 610,400
-----------
4,716,400
ENERGY -- 0.77%
Calpine Corporation (a) 5,800 371,200
FINANCE -- 0.39%
Morgan Stanley Dean Witter &
Company 1,300 185,575
MACHINERY -- 0.24%
Applied Materials Inc. (a) 900 114,019
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
MANUFACTURING -- 0.83%
Corning Inc. 3,100 $ 399,706
MEDICAL INSTRUMENTS -- 1.27%
Affymetrix Inc. (a) 3,600 610,875
MEDICAL SERVICES -- 0.88%
Biogen Inc. (a) 5,000 422,500
MISC. FINANCIAL SERVICES -- 1.97%
American Express Company 2,900 482,125
Citigroup Inc. 8,300 461,169
-----------
943,294
MULTI-LINE INSURANCE -- 0.16%
American International Group
Inc. 700 75,687
OIL SERVICES -- 2.10%
BJ Services Company (a) 5,600 234,150
Halliburton Company 13,350 537,337
Nabors Industries Inc. (a) 7,700 238,219
-----------
1,009,706
PHARMACEUTICALS -- 5.42%
Abgenix Inc. (a) 3,400 450,500
Amgen Inc. (a) 15,700 942,981
MedImmune Inc. (a) 1,300 215,638
Protein Design Labs Inc. (a) 7,800 546,000
Warner-Lambert Company 5,400 442,462
-----------
2,597,581
RETAIL -- 5.44%
Amazon.com Inc. (a) 5,200 395,850
Costco Wholesale Corporation (a) 800 73,000
eBay Inc. (a) 9,200 1,151,725
Home Depot Inc. 10,800 740,475
Wal-Mart Stores Inc. 3,600 248,850
-----------
2,609,900
TECHNOLOGY -- 2.64%
Linear Technology Corporation 6,600 472,312
Texas Instruments Inc. 1,700 164,688
Xilinx Inc. (a) 13,800 627,469
-----------
1,264,469
TELECOMMUNICATIONS -- 6.47%
Efficient Networks Inc. (a) 7,100 482,800
Global TeleSystems Group Inc.
(a) 13,600 470,900
Lucent Technologies Inc. 6,600 493,762
MCI WorldCom Inc. (a) 6,150 326,334
McLeodUSA Inc. (a) 3,400 200,175
QUALCOMM Inc. (a) 2,800 493,150
Sprint Corporation 2,600 175,013
Sycamore Networks Inc. (a) 1,500 462,000
-----------
3,104,134
WIRELESS COMMUNICATIONS -- 5.43%
Digital Microwave Corporation
(a) 12,000 281,250
Motorola Inc. 4,600 677,350
Nextel Communications Inc.
(Class A) (a) 8,600 886,875
Nokia Corporation (ADR) 1,950 370,500
Sprint PCS (a) 3,800 389,500
-----------
2,605,475
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $31,555,938) 41,611,504
- ---------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
COMMERCIAL PAPER -- 14.65%
- ---------------------------------------------------------------------
AES Hawaii Inc. 6.60% due
01/12/00 $ 940,000 $ 938,104
Austra Corporation Asset
Collateral, 7.07% due
01/10/00 1,900,000 1,896,642
Countrywide Home Loans Inc.
5.35% due 01/07/00 1,800,000 1,798,395
Merrill Lynch & Company Inc.
5.55% due 01/27/00 1,400,000 1,394,389
Textron Inc. 6.90% due
01/14/00 1,000,000 997,508
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $7,025,038) 7,025,038
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.16%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $570,000, 6.25%, due
06/30/02
Value $570,098 554,000 554,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $554,000) 554,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $39,134,976) $49,190,542
OTHER ASSETS LESS LIABILITIES -- (2.57)% (1,230,598)
-----------
NET ASSETS -- 100% $47,959,944
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
5
<PAGE> 6
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
WILLIAM D. WITTER, INC.
NEW YORK, NEW YORK
Investment Management
William D. Witter, Inc., which has approximately $1.4 billion in assets
under management, became manager of the Portfolio on December 1, 1998. Witter's
normal investment minimum for a separate account is $1 million.
Investment Objective
The objective of the Enterprise Small Company Growth Portfolio is to seek
capital appreciation.
Investment Strategies
The Small Company Growth Portfolio invests primarily in common stocks of
small capitalization companies with above-average growth characteristics that
are reasonably valued. The Portfolio Manager uses a disciplined approach in
evaluating growth companies. It relates the expected growth rate in earnings to
the price-earnings ratio of the stock. Generally, the Portfolio Manager will not
buy a stock if its price-earnings ratio exceeds its growth rate. By using this
valuation parameter, the Portfolio Manager believes it moderates some of the
inherent volatility in the small capitalization sector of the market. Securities
will be sold when the Portfolio Manager believes the stock price exceeds the
valuation criteria, or when the stock appreciates to a point where it is
substantially over-weighted in the Portfolio, or when the company no longer
meets expectations. The Portfolio Manager's goal is to hold a stock for a
minimum of one year but this may not always be feasible and there may be times
when short-term gains or losses will be realized.
1999 Performance Review
In 1999, concentrating on equities of growing companies was a successful
strategy. Regardless of capitalization sector, growth securities achieved better
results than those of the core or value classifications.
"At a reasonable price" is subject to a variety of interpretations. Witter
defines the phrase as meaning equities whose price/ earnings ratios, based on
forward earnings, are less than their projected growth rates. In 1999, this
interpretation restrained the results. Many of the best performing equities were
Internet-related and others that had limited revenues and no immediate prospects
for earnings. In fact, the highest achiever of the equities in the Portfolio was
Intranet Solutions, Inc., an exception to Witter's basic approach. The company
was founded in 1990 and was originally a systems integration and consulting firm
in Eden Prairie, MN. Recently it acquired software that allows information to
move directly from a PC to the Internet. This system avoids writing additional
code for entry into a server and saves both time and money. The company's
revenues are less than $20 million and it is projected to earn $0.12 per share
for the March 2000 fiscal year. The stock was purchased between $7.25 and $7.50
per share in August 1999 and ended the year at $37 per share.
The practice of concentrating on companies with strong financials was a
positive contributor. Portfolio turnover was 62 percent in 1999. In view of the
volatility that existed, greater transaction activity may have added to the
return. Such an approach, however, would have increased long-term capital gains.
With the exception of the second quarter in which GDP expanded at a 1.8
percent annualized rate, the economy grew at a 4 percent-plus pace. Except for
industrial capacity, most components of the economy were being utilized at
levels that were expected to increase inflation. In addition, concerns developed
that global demand would rise too rapidly. Consequently, interest rates moved
higher. For example, the yield on five-year maturity U.S. Treasuries, which
started the year at 4.55 percent, was at 6.49 percent on December 31. With the
exception of the transportation sector commitments such as Alaska Air, higher
borrowing costs had only minor effects on the underlying earnings of the
holdings.
Another significant macro-economic trend during the period was the rise in
capital spending with particular emphasis on equipment and software. Following a
15.8 percent increase in these components in 1998, in 1999 these expenditures
were estimated to have increased between 12 and 13 percent. Throughout the year,
technology (defined broadly) represented the largest single component of the
Portfolio. As of December 31, the combination of computer services and software,
electronics, and the
6
<PAGE> 7
technology sub-component accounted for 46.5 percent of the Portfolio. In
addition to the particularly positive performance of Intranet Solutions, Applied
Science & Technology, Cymer Inc., and Exchange Applications produced returns of
224 percent, 214 percent, and 108 percent, respectively.
Other key contributors to the results were medical device companies such as
Cytyc Corp., Candela Corp., and Aurora Biosciences. Less dramatic but meaningful
advances were achieved by companies in unrelated areas such as AstroPower, a
producer of solar energy products, Charles River Associates, an economic
consulting firm, and Ryanair Holdings, a Dublin based discount airline growing
at 20 to 25 percent per year.
Equities that negatively impacted the Portfolio's return included the
transportation sector positions, with the exception of Ryanair Holdings, and
companies that experienced what Witter believes and hope to be temporary
interruptions of their fundamental growth. This group includes Catalytica, Inc.,
whose North Carolina pharmaceutical production facilities were impacted by
Hurricane Floyd. Another example was Theragenics Corporation, whose revenue and
earnings momentum was affected by its outsourcing its marketing function to
Johnson & Johnson. Other issues whose performance was below average included
non-technology companies like On Assignment, Inc., a staffing specialist, whose
18X price/earnings ratio is less than its past and projected earnings growth
rate of 20 percent plus. Investors simply had limited interest in this type of
holding.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
SMALL COMAPNY GROWTH LIPPER SMALL CAP GROWTH
PORTFOLIO RUSSELL 2000 INDEX* INDEX**
-------------------- ------------------- -----------------------
<S> <C> <C> <C>
11/30/98 10000.00 10000.00 10000.00
1998 10920.00 10619.00 11003.00
1999 17000.00 12877.00 17732.00
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investors returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The Russell 2000 is an unmanaged index of the stocks of 2000 small
and mid-cap companies. It assumes the reinvestment of dividends and
capital gains and excludes management fees and expenses. The Lipper
Small-Cap Growth Index is an unmanaged index of the 30 largest
funds, based on total year-end net asset value, in the Lipper
Small-Cap Growth Fund category. It assumes the reinvestment of
dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
Future Investment Strategy
As the current economic expansion is about to become the longest advance in
U.S. history, there appears to be no significant imbalances that may cause a
recession. The focus of businesses on productivity improvement has been visible
and is projected to continue. Consequently, opportunities for new technology
products and services will be present over the near and intermediate terms. The
combination of Federal policy and the concerns about inflation by fixed-income
investors will regulate economic growth but not destroy it.
Valuation levels of common stocks have been uneven and are expected to
continue to be so. The prospects of rapid growth attract funds and moderate
growth attracts only moderate interest.
Witter shall continue to use 25 percent as a minimum return expectation for
all new purchases. While long-term capital appreciation is the Portfolio's goal,
in view of the volatility that persists, reductions of successful holdings
following sharp price increases may be made.
7
<PAGE> 8
Small companies as a class produced good relative performance in the last
nine months of the year. The Russell and S&P returns were 26.3 percent and 15.5
percent, respectively. Witter believes this trend may continue and that a larger
number of small capitalization issues will participate.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
8
<PAGE> 9
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 91.28% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 0.78%
AAR Corporation 10,150 $ 182,066
BUSINESS SERVICES -- 10.52%
Charles River Associates Inc.
(a) 20,200 676,700
Labor Ready Inc. (a) 30,750 372,844
Maximus Inc. (a) 23,800 807,712
Object Design Inc. (a) 12,000 174,000
On Assignment Inc. (a) 14,500 433,188
-----------
2,464,444
COMPUTER SERVICES -- 11.50%
Integral Systems Inc. Maryland
(a) 15,300 675,112
Kronos Inc. (a) 11,625 697,500
Mapinfo Corporation (a) 24,000 882,000
National Computer Systems Inc. 11,700 440,213
-----------
2,694,825
COMPUTER SOFTWARE -- 14.39%
Exchange Applications Software
(a) 8,200 458,175
Intranet Solutions Inc. (a) 11,000 407,000
Legato Systems Inc. (a) 13,760 946,860
Pervasive Software Inc. (a) 33,000 558,937
Sterling Software Inc. (a) 15,400 485,100
Timberline Software Corporation 14,600 196,188
Wind River Systems Inc. (a) 8,700 318,637
-----------
3,370,897
ELECTRONICS -- 13.85%
Applied Science & Technology
Inc. (a) 33,100 1,100,058
Cymer Inc. (a) 17,900 823,400
Nanometrics Inc. (a) 25,700 517,212
Veeco Instruments Inc. (a) 17,200 805,175
-----------
3,245,845
MANUFACTURING -- 7.31%
Astropower Inc. (a) 44,140 617,960
Mueller Industries Inc. (a) 5,940 215,325
PRI Automation Inc. (a) 13,100 879,337
-----------
1,712,622
MEDICAL INSTRUMENTS -- 11.37%
Candela Corporation (a) 44,000 819,500
Cytyc Corporation (a) 13,600 830,450
Staar Surgical Company (a) 22,000 214,500
Theragenics Corporation (a) 36,080 326,975
Varian Medical Systems Inc. (a) 15,900 474,019
-----------
2,665,444
MEDICAL SERVICES -- 1.86%
Impath Inc. (a) 17,100 434,981
SECURITY & INVESTIGATION SERVICES -- 1.24%
Barringer Technologies Inc. (a) 47,500 290,938
TECHNOLOGY -- 5.84%
Aurora Bioscience Corporation
(a) 30,200 800,300
Catalytica Inc. (a) 41,830 567,319
-----------
1,367,619
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
TRANSPORTATION -- 11.01%
Alaska Air Group Inc. (a) 11,200 $ 393,400
Amtran Inc. (a) 18,500 358,438
Atlas Air Inc. (a) 22,240 610,210
Ryanair Holdings (ADR) (a) 13,335 735,092
Sea Containers Ltd. (Class A) 18,100 481,912
-----------
2,579,052
TRAVEL/ENTERTAINMENT/LEISURE -- 1.61%
Polaris Industries Inc. 10,400 377,000
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $16,312,568) 21,385,733
- ---------------------------------------------------------------------
U.S. TREASURY BILLS -- 0.85%
- ---------------------------------------------------------------------
U.S. Treasury Bill
4.925% due 01/20/00 $ 200,000 199,480
-----------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $199,480) 199,480
- ---------------------------------------------------------------------
COMMERCIAL PAPER -- 6.98%
- ---------------------------------------------------------------------
Laclede Gas Company
4.45% due 01/05/00 339,000 338,832
Peoples Energy Corporation
5.10% due 01/04/00 1,000,000 999,575
Stellar Funding Group
6.90% due 01/06/00 298,000 297,715
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $1,636,122) 1,636,122
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.44%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury Note
$340,000, 6.625% due 04/30/02,
Value $350,212 337,000 337,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $337,000) 337,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $18,485,170) $23,558,335
OTHER ASSETS LESS LIABILITIES -- (0.55)% (129,065)
-----------
NET ASSETS -- 100% $23,429,270
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
9
<PAGE> 10
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
GABELLI ASSET MANAGEMENT COMPANY
RYE, NEW YORK
Investment Management
Gabelli Asset Management Company, which manages approximately $9 billion
for institutional clients and whose normal investment minimum is $1 million,
became manager of the Portfolio on June 1, 1996.
Investment Objective
The objective of the Enterprise Small Company Value Portfolio is to seek
maximum capital appreciation.
Investment Strategies
The Small Company Value Portfolio invests primarily in common stocks of
small capitalization companies that the Portfolio Manager believes are
undervalued -- that is, the stock's market price does not fully reflect the
company's value. The Portfolio Manager uses a proprietary research technique to
determine which stocks have a market price that is less than the "private market
value" or what an investor would pay for the company. The Portfolio Manager then
determines whether there is an emerging valuation catalyst that will focus
investor attention on the underlying assets of the company and increase the
market price. Smaller companies may be subject to a valuation catalyst such as
increased investor attention, takeover efforts or a change in management.
1999 Performance Review
It was a narrow market, as the NASDAQ zipped up over 80 percent, yet there
were near equal returns for the top companies in the S&P 500 and Wilshire 5000.
However, investors still had distinct biases. Large-cap stocks represented by
the S&P 500 and Dow Jones Industrial Average continued to outperform the
small-cap stocks in the Russell 2000, albeit by a smaller margin than in recent
years. Growth stocks continued to outpace value stocks. Once again, the majority
of stocks appeared to walk through knee high mud, as is reflected in the broad
based, non-cap weighted Value Line Composite's -3.7 percent decline. Technology
stocks continued to lead the market.
The Russell 2000 exploded at year-end. Small-cap stocks had substantially
underperformed large-caps. This trend is beginning to reverse, partly driven by
low valuations.
The Portfolio's 1999 return includes the excellent performance of
telecommunications, cable television and entertainment stocks. It also benefited
from a strong rally by small group broadcasters following further deregulation
in the broadcast industry. Finally, takeovers continued to add positively to
performance.
For the year, the top Portfolio performers included Omnipoint Corporation,
TCI Satellite Entertainment, Inc., Leap Wireless International, Inc., Aerial
Communications, Inc., and ValueVision International, Inc. TCI Satellite
Entertainment benefited from the Satellite Television Home Viewers Act signed on
November 29. The new law allows satellite television companies to include local
broadcasters in their services. Aerial Communications and Omnipoint are being
bought by Voice Stream Wireless.
10
<PAGE> 11
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
SMALL COMPANY VALUE LIPPER SMALL CAP VALUE
PORTFOLIO RUSSELL 2000* INDEX*
------------------- ------------- ----------------------
<S> <C> <C> <C>
1989 10000.00 10000.00 10000.00
1990 9023.80 8049.00 8560.20
1991 13366.30 11755.60 11888.80
1992 16239.10 13919.80 13992.80
1993 19407.40 16550.60 16241.80
1994 19410.70 16249.40 16127.10
1995 21794.10 20870.70 19579.20
1996 24237.60 24312.30 23537.90
1997 34980.40 29750.90 30318.90
1998 38342.80 28989.30 28284.20
1999 47553.90 35152.40 28656.90
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The Russell 2000 is an unmanaged index of the stocks of 2000 small
and mid-cap companies. It assumes the reinvestment of dividends and
capital gains and excludes management fees and expenses. The Lipper
Small Cap Value Index is an unmanaged index of the 30 largest
funds, based on total year-end net asset value, in the Lipper Small
Cap Value Fund category. It assumes the reinvestment of dividends
and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
Future Investment Strategy
America is the world's undisputed economic heavyweight champion. World
class industrial companies have revitalized the manufacturing sector of the
economy and American semiconductor, computer and software firms are global
leaders in the information age. American ingenuity is creating jobs. Job
creation is not without some pain and uncertainty. Inflation is running at
around 3 percent and long interest rates are around 6.5 percent.
Today, this market mechanism allocates capital from "bricks and mortars" to
"clicks and mortars." However, as in other periods of time, speculative excesses
can end in bubbles that burst. While this time it is different, it is still the
same. The U.S. economy and our lives will be forever changed by the Internet.
There is no looking back. However, valuations in many companies have overshot
their mark. In others, they have been woefully ignored.
While the overall market has no margin of safety, there are still lots of
bargains in the small cap arena. As value managers, Gabelli's application of
analytical principles results in a focus on economic and stock market sectors
that are ignored. Gabelli will continue to use its research to ferret out
undervalued stocks. Gabelli expects to be in front of companies that either are
the subject of takeovers or are likely to go through a form of financial
engineering.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
11
<PAGE> 12
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 97.68% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 1.39%
Ackerley Group Inc. 330,000 $ 5,981,250
BOWLIN Outdoor Advertising &
Travel Centers Inc. (a) 66,000 346,500
------------
6,327,750
AEROSPACE -- 4.69%
AAR Corporation 30,000 538,125
Ametek Inc. 100,000 1,906,250
Curtiss-Wright Corporation 90,000 3,318,750
GenCorp Inc. 210,000 2,073,750
Kaman Corporation (Class A) 112,000 1,442,000
Moog Inc. (Class A) (a) 40,000 1,080,000
Sequa Corporation (Class A) (a) 70,000 3,775,625
Sequa Corporation (Class B) (a) 40,500 2,430,000
SPS Technologies Inc. (a) 150,000 4,790,625
------------
21,355,125
APPAREL & TEXTILES -- 0.22%
Carlyle Industries Inc. (a) 200,259 125,162
Hartmarx Corporation (a) 220,000 893,750
------------
1,018,912
AUTOMOTIVE -- 7.16%
A. O. Smith Corporation 12,000 262,500
A. O. Smith Corporation (Class
A) 4,000 83,000
Arvin Industries Inc. 48,000 1,362,000
Borg-Warner Automotive Inc. 35,000 1,417,500
Clarcor Inc. 230,000 4,140,000
Earl Scheib Inc. (a) 225,000 660,937
Federal-Mogul Corporation 60,000 1,207,500
Lund International Holdings
Inc. (a) 25,000 146,875
Midas Inc. 44,000 962,500
Modine Manufacturing Company 265,000 6,625,000
Navistar International
Corporation (a) 70,000 3,316,250
Standard Motor Products Inc. 260,000 4,192,500
Superior Industries
International Inc. 108,000 2,895,750
Tenneco Automotive Inc. 150,000 1,396,875
Wynns International Inc. 280,000 3,955,000
------------
32,624,187
BROADCASTING -- 10.13%
Chris-Craft Industries Inc. (a) 161,000 11,612,125
Echostar Communications
Corporation (Class A) (a) 38,000 3,705,000
Fisher Companies Inc. 28,000 1,729,000
Granite Broadcasting
Corporation (a) 150,000 1,518,750
Gray Communications Systems
Inc. 86,000 1,521,125
Gray Communications Systems
Inc. (Class B) 165,000 2,227,500
Paxson Communications
Corporation (a) 215,000 2,566,562
United Television Inc. 69,500 9,417,250
UnitedGlobalCom Inc. (a) 105,000 7,415,625
USA Networks Inc. (a) 80,000 4,420,000
------------
46,132,937
BUILDING & CONSTRUCTION -- 0.21%
Core Materials Corporation (a) 50,000 115,625
Huttig Building Products Inc.
(a) 14,444 71,319
Salem Communications
Corporation (a) 35,000 791,875
------------
978,819
BUSINESS SERVICES -- 0.16%
MDC Corporation (Class A) (a) 30,000 251,250
Nashua Corporation (a) 25,000 187,500
National Processing Inc. (a) 32,000 284,000
------------
722,750
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
CABLE -- 6.21%
Cablevision Systems Corporation
(Class A) (a) 218,000 $ 16,459,000
Rogers Communications Inc.
(Class B) (a) 390,000 9,652,500
TCI Satellite Entertainment
Inc. (Class A) (a) 135,000 2,160,000
------------
28,271,500
CHEMICALS -- 1.85%
Bush Boake Allen Inc. 23,000 564,937
Church & Dwight Company Inc. 82,000 2,188,375
Ferro Corporation 82,000 1,804,000
OMNOVA Solutions Inc. 210,000 1,627,500
Sybron Chemicals Inc. (a) 190,000 2,232,500
------------
8,417,312
COMPUTER HARDWARE -- 0.00%
Cerion Technologies Inc. (a)
(d) 90,000 0
COMPUTER SERVICES -- 0.20%
Tyler Technologies Inc. (a) 170,000 935,000
COMPUTER SOFTWARE -- 0.13%
Xionics Document Technologies
Inc. (a) 55,000 574,063
CONSUMER DURABLES -- 0.64%
Hussmann International Inc. 120,000 1,807,500
Noel Group Units (a)(f) 135,000 54,000
Noel Liquidating Trust Units
(a)(f) 135,000 94,500
Oneida Ltd. 44,000 957,000
------------
2,913,000
CONSUMER PRODUCTS -- 0.14%
ARC International Corporation
(a) 30,000 22,500
Mikasa Inc. 62,000 623,875
------------
646,375
CONSUMER SERVICES -- 0.51%
Berlitz International Inc. (a) 69,000 1,185,937
ITT Educational Services Inc.
(a) 75,000 1,157,813
------------
2,343,750
ELECTRICAL EQUIPMENT -- 2.49%
Ampco-Pittsburgh Corporation 130,000 1,316,250
Oak Technology Inc. (a) 400,000 3,775,000
SL Industries Inc. 58,000 674,250
Thomas Industries Inc. 220,000 4,496,250
UCAR International Inc. (a) 60,000 1,068,750
------------
11,330,500
ELECTRONICS -- 1.52%
CTS Corporation 45,000 3,391,875
Power-One Inc. (a) 7,000 320,687
Watkins-Johnson Company 80,000 3,200,000
------------
6,912,562
ENERGY -- 0.36%
Kaneb Services Inc. (a) 180,000 787,500
Yankee Energy Systems Inc. 20,000 878,750
------------
1,666,250
</TABLE>
12
<PAGE> 13
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
ENTERTAINMENT & LEISURE -- 5.87%
Ascent Entertainment Group Inc.
(a) 170,000 $ 2,156,875
Bull Run Corporation (a) 150,000 881,250
Churchill Downs Inc. 35,000 789,688
Gaylord Entertainment Company 269,701 8,074,174
GC Companies Inc. (a) 195,000 5,045,625
Hearst-Argyle Television Inc.
(a) 35,000 931,875
Jackpot Enterprises Inc. (a) 205,000 1,704,062
Sinclair Broadcast Group Inc.
(a) 50,000 610,156
TV Guide Inc. (Class A) (a) 152,000 6,536,000
------------
26,729,705
FINANCE -- 0.76%
Advest Group Inc. 20,000 367,500
Century Business Services Inc.
(a) 15,000 126,563
Pioneer Group Inc. (a) 190,000 2,992,500
------------
3,486,563
FOOD & BEVERAGES & TOBACCO -- 4.13%
Ben & Jerry's Homemade Inc. (a) 12,000 298,500
Buenos Aires Embotelladora
(ADR) (a) (d) 40,227 0
Celestial Seasonings Inc. (a) 250,000 4,652,344
Eskimo Pie Corporation 20,000 147,500
General Cigar Holdings Inc.
(Class A) (a) 300,000 2,493,750
General Cigar Holdings Inc.
(Class B) (a) 190,000 1,520,000
Ingles Markets Inc. (Class A) 90,000 1,001,250
PepsiAmericas Inc. (a) 160,000 600,000
Ralcorp Holdings Inc. (a) 75,000 1,495,313
Robert Mondavi Corporation
(Class A) (a) 20,000 695,000
Tootsie Roll Industries Inc. 97,850 3,222,934
Whitman Corporation 200,000 2,687,500
------------
18,814,091
HOTELS & RESTAURANTS -- 1.97%
Advantica Restaurant Group Inc.
(a) 60,000 105,000
Aztar Corporation (a) 530,000 5,763,750
Boca Resorts Inc. (a) 120,000 1,170,000
Extended Stay America Inc. (a) 40,000 305,000
Lakes Gaming Inc. (a) 35,000 277,812
Park Place Entertainment
Corporation (a) 30,000 375,000
Trump Hotels & Casino Resorts
Inc. (a) 285,000 961,875
------------
8,958,437
INSURANCE -- 2.53%
Argonaut Group Inc. 110,000 2,186,250
Danielson Holding Corporation
(a) 60,000 345,000
Liberty Corporation 140,000 5,906,250
Midland Company 148,000 3,071,000
------------
11,508,500
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
MACHINERY -- 4.43%
Baldwin Technology Company Inc.
(Class A) (a) 165,000 $ 350,625
Commercial Intertech
Corporation 60,000 765,000
Fairchild Corporation (Class A)
(a) 170,000 1,540,625
Flowserve Corporation 155,000 2,635,000
Franklin Electric Company Inc. 16,500 1,158,094
Idex Corporation 110,000 3,341,250
Katy Industries Inc. 160,000 1,390,000
Kollmorgen Corporation 140,000 1,723,750
Nortek Inc. (a) 120,000 3,360,000
Paxar Corporation (a) 180,000 1,518,750
Standex International
Corporation 20,000 418,750
Tennant Company 10,000 327,500
Watts Industries Inc. (Class A) 112,000 1,652,000
------------
20,181,344
MANUFACTURING -- 4.66%
Aviall Inc. (a) 90,000 736,875
Barnes Group Inc. 55,000 897,188
Belden Inc. 55,000 1,155,000
Bway Corporation (a) 8,000 49,000
Crane Company 65,000 1,291,875
Cuno Inc. (a) 100,000 2,070,312
Dexter Corporation 25,000 993,750
Fedders Corporation (Class A) 380,000 1,947,500
Fedders USA Inc. 100,000 550,000
Graco Inc. 40,000 1,435,000
Industrial Distribution Group
Inc. (a) 35,000 113,750
Mark IV Industries Inc. 160,000 2,830,000
Material Sciences Corporation
(a) 138,000 1,405,875
Myers Industries Inc. 60,000 945,000
Oil Dri Corporation of America 123,000 1,768,125
Park Ohio Holdings Corporation
(a) 155,000 1,530,625
Rawlings Sporting Goods Company
Inc. (a) 70,500 423,000
Strattec Security Corporation
(a) 33,000 1,068,375
------------
21,211,250
MEDICAL SERVICES -- 0.13%
CIRCOR International Inc. (a) 60,000 618,750
METALS & MINING -- 0.61%
Homestake Mining Company 35,000 273,438
TVX Gold Inc. (a) 970,000 788,125
WHX Corporation (a) 190,000 1,710,000
------------
2,771,563
MISC. FINANCIAL SERVICES -- 0.15%
Data Broadcasting Corporation
(a) 85,000 701,250
NEUTRACEUTICALS -- 0.19%
Omni Nutraceuticals Inc. 15,000 16,875
Weider Nutrition International
Inc. 225,000 829,688
------------
846,563
PAPER PRODUCTS -- 0.59%
Greif Brothers Corporation
(Class A) 90,000 2,677,500
PHARMACEUTICALS -- 3.71%
Agribrands International Inc.
(a) 15,000 690,000
Carter-Wallace Inc. 285,000 5,112,187
Ivax Corporation (a) 380,000 9,785,000
Twinlab Corporation (a) 165,000 1,309,688
------------
16,896,875
</TABLE>
13
<PAGE> 14
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
A.H. Belo Corporation (Class A) 40,000 $ 762,500
Lee Enterprises Inc. 66,000 2,107,875
McClatchy Company (Class A) 90,000 3,892,500
Media General Inc. (Class A) 170,000 8,840,000
Meredith Corporation 40,000 1,667,500
Penton Media Inc. 105,000 2,520,000
Pulitzer Inc. 58,000 2,338,125
Thomas Nelson Inc. 40,000 370,000
Topps Company Inc. (a) 200,000 2,075,000
------------
24,573,500
REAL ESTATE -- 0.97%
Catellus Development
Corporation (a) 245,000 3,139,062
Griffin Land & Nurseries Inc.
(a) 110,000 1,265,000
------------
4,404,062
RETAIL -- 2.69%
Burlington Coat Factory
Warehouse Corporation 125,000 1,734,375
Coldwater Creek Inc. (a) 40,000 820,000
Lillian Vernon Corporation 330,000 3,671,250
Neiman-Marcus Group Inc. (Class
A) 200,000 5,587,500
Phar Mor Inc. (a) 75,000 206,250
Sports Authority Inc. (a) 115,000 230,000
------------
12,249,375
SECURITY & INVESTIGATION SERVICES -- 2.39%
Burns International Services
Corporation (a) 135,000 1,459,688
Pittway Corporation (Class A) 75,000 3,360,937
Rollins Inc. 364,000 5,460,000
Wackenhut Corporation (Class A)
(a) 40,000 597,500
------------
10,878,125
TELECOMMUNICATIONS -- 10.75%
Aerial Communications Inc. (a) 73,000 4,443,875
Associated Group Inc. (Class A)
(a) 76,000 6,935,000
Atlantic Tele-Network Inc. 15,000 137,813
Commonwealth Telephone
Enterprises Inc. (a) 26,077 1,378,821
Commonwealth Telephone
Enterprises Inc. (Class B)
(a) 59,633 3,413,989
Communications Systems Inc. 62,000 806,000
COMSAT Corporation 60,000 1,192,500
CoreComm Ltd. (a) 150,000 8,906,250
GST Telecommunications Inc. (a) 165,000 1,495,313
Hector Communications
Corporation (a) 8,000 112,000
Omnipoint Corporation (a) 32,000 3,860,000
RCN Corporation (a) 75,000 3,637,500
Rogers Cantel Mobile
Communications Inc. (Class B)
(a) 47,000 1,709,625
Telephone and Data Systems Inc. 81,000 10,206,000
Teligent Inc. (Class A) (a) 12,000 741,000
------------
48,975,686
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
TRANSPORTATION -- 1.65%
GATX Corporation 209,000 $ 7,053,750
TransPro Inc. 70,000 450,625
------------
7,504,375
UTILITIES -- 3.45%
AGL Resources Inc. 15,000 255,000
Aquarion Company 100,000 3,700,000
Citizens Utilities Company
(Class B) (a) 400,000 5,675,000
Eastern Enterprises 60,000 3,446,250
WICOR, Inc. 90,000 2,626,875
------------
15,703,125
WASTE MANAGEMENT -- 0.02%
EnviroSource Inc. (a) 150,000 115,500
WIRELESS COMMUNICATIONS -- 2.63%
Allen Telecom Inc. (a) 75,500 872,969
Price Communications
Corporation (a) 400,000 11,125,000
------------
11,997,969
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $352,894,016) 444,974,900
- ---------------------------------------------------------------------
U.S. TREASURY BILL -- 0.41%
- ---------------------------------------------------------------------
U.S. Treasury Bill 5.16%
due 01/20/00 $1,870,000 1,864,907
------------
TOTAL U.S. TREASURY BILL
(IDENTIFIED COST $1,864,907) 1,864,907
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.88%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury Note
$4,070,000 6.25%, due 02/15/07
Value $4,196,607 4,018,000 4,018,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $4,018,000) 4,018,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $358,776,923) $450,857,807
OTHER ASSETS LESS LIABILITIES -- 1.03% 4,704,892
------------
NET ASSETS -- 100% $455,562,699
=====================================================================
</TABLE>
(a) Non-income producing security.
(d) Security is fair valued at December 31, 1999.
(f) Restricted securities as to resale. The value of the Portfolio's investments
in restricted securities was $148,500, representing 0.03% of net assets at
December 31, 1999.
(ADR) American Depository Receipt.
See notes to financial statements.
14
<PAGE> 15
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
MONTAG & CALDWELL, INC.
ATLANTA, GEORGIA
Investment Management
Montag & Caldwell has served as Portfolio Manager to the Enterprise Growth
Portfolio since the Portfolio was organized on December 1, 1998. Montag &
Caldwell manages approximately $35 billion for institutional clients, and its
normal investment minimum is $40 million.
Investment Objective
The objective of the Enterprise Growth Portfolio is to seek capital
appreciation.
Investment Strategies
The Growth Portfolio invests primarily in U.S. common stocks. The "Growth
at a Reasonable Price" strategy employed by the Portfolio combines growth and
value style investing. This means that the Portfolio invests in the stocks of
companies with long-term earnings potential but which are currently selling at a
discount to their estimated long-term value. The Portfolio's equity selection
process is generally lower risk than a typical growth stock approach. Valuation
is the key selection criterion that makes the investment style risk averse. Also
emphasized are growth characteristics to identify companies whose shares are
attractively priced and may experience strong earnings growth relative to other
companies.
1999 Performance Review
Due to strength in the Portfolio's technology holdings and certain consumer
and financial issues, 1999 was another good year for the Enterprise Growth
Portfolio. Montag attributes the Portfolio's performance to the strength in the
Portfolio's technology holdings offsetting weakness in certain consumer and
health care issues.
While the S&P 500 and other market-weighted indices made considerable
progress in 1999, many stocks showed little change or actually declined in
price. The year's stock market advance was extremely narrow, dominated almost
exclusively by the technology sector. Montag thinks the weakness in the broader
market is related to the increase in both short and long-term interest rates.
Higher interest rates increase the costs of borrowing for consumers and
businesses and reduce the attractiveness of stocks versus higher yielding bonds.
15
<PAGE> 16
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LEHMAN HIGH-YIELD BB LIPPER HIGH-YIELD BOND
HIGH-YIELD BOND PORTFOLIO BOND INDEX* FUND INDEX*
------------------------- -------------------- ----------------------
<S> <C> <C> <C>
11/30/94 10000 10000 10000
1994 10111 10079 10025
1995 11788 12280 11767
1996 13314 13376 13296
1997 15096 15066 15047
1998 15639 15955 15035
1999 16243 16254 15753
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lipper Large Cap Growth Index is an unmanaged index
of the 30 largest funds, based on total year-end net asset value,
in the Lipper Large Cap Growth Fund category. It assumes the
reinvestment of dividends and capital gains and does not include
any management fees or expenses. One cannot invest in an index.
Future Investment Strategy
While many technology stocks are now richly valued, Montag believes there
are still selective opportunities in technology. Global industry conditions
remain robust, and the build-out of the Internet is increasing the demand for
technology goods and services.
As it becomes more evident to investors that the Federal Reserve will be
successful at engineering a soft landing for the U.S. economy, the broader
market may begin to improve. Bond yields may then stabilize and drift somewhat
lower as the economy slows; and investors may become increasingly confident that
corporate profits can keep growing since a recession-induced decline in profits
may not be needed to keep inflation in check. Because the Federal Reserve is
operating in a preemptive fashion, Montag believes the Fed will be successful in
achieving sustained economic growth with low inflation and, as a result, the
stock market may begin to broaden out while it continues toward higher levels.
In addition to selective technology issues, Montag continues to view the
shares of global, consumer growth companies as quite attractive. With the
triumph of capitalism, the longer-term opportunities for these high quality
companies may be enormous. Now that consumers overseas are benefiting from the
pickup in world trade, the intermediate-term outlook is also quite good. Montag
expects research-driven pharmaceutical and medical device companies to perform
better in 2000 because their shares may represent excellent value and offer
strong double-digit earnings growth prospects. Well-positioned consumer-oriented
companies with a global opportunity, but more dependent on the U.S. economy, may
also do well as it becomes more evident that a soft economic landing has been
achieved.
Although Montag's long-term outlook for bonds is positive, Montag
anticipates that short-term anxiety over further Federal Reserve action and
concern about the strength of holiday retail spending will cause interest rates
to increase temporarily. With real GDP continuing to increase at a strong rate,
many market participants expect the Fed to increase short-term interest rates at
their February meeting. Inflation continues to be contained despite tight labor
markets and strength in global economies. Montag expects that the combination of
preemptive actions by the Fed and continued tame inflation may lead to a soft
landing that will allow interest rates to drift lower over the long-term.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
16
<PAGE> 17
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 97.05% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
BANKING -- 1.75%
Wells Fargo & Company 100,000 $ 4,043,750
BUSINESS SERVICES -- 2.25%
Interpublic Group of Companies
Inc. 90,000 5,191,875
COMPUTER HARDWARE -- 10.20%
Dell Computer Corporation (a) 75,300 3,840,300
EMC Corporation (a) 46,400 5,069,200
Hewlett-Packard Company 80,000 9,115,000
Intel Corporation 67,000 5,514,938
------------
23,539,438
COMPUTER SERVICES -- 5.28%
Electronic Data Systems
Corporation 126,100 8,440,819
Solectron Corporation (a) 39,400 3,747,925
------------
12,188,744
COMPUTER SOFTWARE -- 11.01%
Electronic Arts Inc. (a) 70,000 5,880,000
Microsoft Corporation (a) 80,000 9,340,000
Oracle Corporation (a) 90,900 10,186,481
------------
25,406,481
CONSUMER PRODUCTS -- 9.46%
Gillette Company 240,000 9,885,000
Newell Rubbermaid Inc. 130,000 3,770,000
Procter & Gamble Company 74,500 8,162,406
------------
21,817,406
ELECTRICAL EQUIPMENT -- 2.40%
General Electric Company 35,800 5,540,050
ENTERTAINMENT & LEISURE -- 1.66%
Carnival Corporation 80,000 3,825,000
FOOD & BEVERAGES & TOBACCO -- 7.39%
Bestfoods 80,000 4,205,000
Coca-Cola Company 160,000 9,320,000
PepsiCo Inc. 100,000 3,525,000
------------
17,050,000
HEALTH CARE -- 2.32%
Medtronic Inc. 146,900 5,352,669
HOTELS & RESTAURANTS -- 6.31%
Marriott International Inc.
(Class A) 180,000 5,681,250
McDonald's Corporation 220,000 8,868,750
------------
14,550,000
MEDICAL INSTRUMENTS -- 2.18%
Boston Scientific Corporation
(a) 230,000 5,031,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
MISC. FINANCIAL SERVICES -- 2.38%
American Express Company 33,000 $ 5,486,250
MULTI-LINE INSURANCE -- 2.58%
American International Group
Inc. 55,000 5,946,875
PHARMACEUTICALS -- 11.93%
Bristol-Myers Squibb Company 93,400 5,995,112
Johnson & Johnson 75,800 7,058,875
Pfizer Inc. 290,000 9,406,875
Schering-Plough Corporation 120,000 5,062,500
------------
27,523,362
RETAIL -- 10.85%
Circuit City Stores Inc. 80,500 3,627,531
Costco Wholesale Corporation
(a) 47,700 4,352,625
Gap Inc. 129,200 5,943,200
Home Depot Inc. 162,000 11,107,125
------------
25,030,481
TELECOMMUNICATIONS -- 7.10%
MCI WorldCom Inc. (a) 180,000 9,551,250
Tellabs Inc. (a) 106,600 6,842,388
------------
16,393,638
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $200,038,488) 223,917,269
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.96%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $11,335,000, 7.50% due
11/15/01
Value $11,784,819 $11,444,000 11,444,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $11,444,000) 11,444,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $211,482,488) $235,361,269
OTHER ASSETS LESS LIABILITIES -- (2.01)% (4,641,740)
------------
NET ASSETS -- 100% $230,719,529
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
17
<PAGE> 18
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
MARSICO CAPITAL MANAGEMENT, LLC
DENVER, COLORADO
Investment Management
Marsico Capital Management, LLC became Portfolio Manager to the Enterprise
Capital Appreciation Portfolio on November 1, 1999. Marsico manages
approximately $14 billion for institutional clients and its usual investment
minimum is $100 million.
Investment Objective
The objective of the Enterprise Capital Appreciation Portfolio is to seek
maximum capital appreciation.
Investment Strategies
The Capital Appreciation Portfolio's investment strategy blends top-down
economic and industry analysis with bottom-up stock selection. The Portfolio
Manager's investment approach emphasizes large capitalization U.S. companies
that, in the Portfolio Manager's opinion, have the ability to produce
above-average earnings growth. The investment process begins by establishing an
overall macroeconomic outlook which in turn forms the strategic backdrop for
actual portfolio construction. Various economic, social, and political factors
are considered, including global trends (e.g., productivity enhancements),
interest rates, inflation, central bank policies, the regulatory environment,
and the overall competitive landscape. This analysis also seeks to uncover
specific industries and companies that are expected to benefit from the
macroeconomic environment. The potential for maximum capital appreciation is the
basis for investment decisions; any income is incidental.
Stock selection stresses rigorous hands-on fundamental internal research.
The primary focus is to identify companies with market expertise/dominance,
durable franchises, improving fundamentals (e.g., margins, Return on Equity,
Return on Assets), strong balance sheets, global distribution capabilities and
management teams. Valuation is also an important consideration in selecting
stocks. Stocks are sold for three primary reasons: overvaluation relative to
expected earnings growth potential, forced displacement (i.e., a better
investment idea surfaces), or a permanent change in industry/company
fundamentals that alters the original investment thesis.
1999 Performance Review
Marsico began managing the Portfolio on November 1, 1999. The previous
manager -- Provident Investment Counsel -- was responsible for the Portfolio
during the remainder of the year.
U.S. stocks finished 1999 on a strong note, with many market indexes (e.g.,
NASDAQ Composite, Russell 1000 Growth, S&P 500, Russell 2000, Russell 2000
Growth) producing double-digit returns in the fourth quarter. Technology-related
stocks continued to post remarkable gains; the NASDAQ surged by 22 percent in
the month of December alone -- more than the S&P 500's gain for the entire year.
For 1999 as a whole, the NASDAQ rose nearly 87 percent. During the last 60
trading days of 1999, according to Hewitt Associates, the NASDAQ Composite rose
by a stunning 51.5 percent. The IPO market remained buoyant; over 150 IPOs were
priced in the U.S. during the fourth quarter; 62 finished the quarter up at
least 100 percent from their subscription prices.
Bonds, meanwhile, went in the other direction. The Federal Open Market
Committee ("FOMC") followed rate increases in the second and third quarters with
one further tightening move in November, unwinding the 0.75 percent "easing"
that took place in late-1998 subsequent to the Russian ruble devaluation.
Although the Federal Reserve did not raise rates or formally change its interest
rate policy at its December meeting, the FOMC's post-meeting press release
seemed to hint that tighter monetary policy would be a distinct possibility in
2000. Bond yields rose sharply during the fourth quarter. Fixed-income returns
in 1999 were the weakest since 1994.
During the fourth quarter, every sector in the S&P 500 Index produced a
positive return. However, six sectors -- including utilities, health care,
energy, and transportation -- had relatively weak returns (compared to the
overall Index) ranging from less than 1 percent to 5 percent. Technology (34
percent), business equipment (23 percent), retail (22 percent), and consumer
services
18
<PAGE> 19
(19 percent) were the strongest-performing areas during the quarter. Beginning
November 1999, the Portfolio was well-represented in the technology sector
through a diverse array of high quality companies such as QUALCOMM, Inc., EMC
Corporation, Cisco Systems, Inc., and Sun Microsystems., Inc., many of which
produced strong gains in the fourth quarter. However, there also were a variety
of positive contributors to performance outside the technology area for the
Portfolio during the quarter including Genentech, Inc., General Electric
Company, Tiffany & Company, and UAL Corporation.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
CAPITAL APPRECIATION S&P 500 BARRA/GROWTH LIPPER MULTI-CAP GROWTH
PORTFOLIO INDEX* INDEX*
-------------------- -------------------- -----------------------
<S> <C> <C> <C>
11/30/98 10000.00 10000.00 10000.00
1998 11140.00 10761.00 11101.60
1999 17300.00 13799.90 16247.60
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500/Barra Growth Index is an unmanaged capitalization
weighted index composed of stocks of the S&P 500 with high
price-to-book ratios relative to the S&P 500 as a whole. It assumes
the reinvestment of dividends and capital gains and does not
include any management fees or expenses. The Lipper Multi-Cap
Growth Index is an unmanaged index of the 30 largest funds, based
on total year-end net asset value, in the Lipper Multi-Cap Growth
Fund category. It assumes the reinvestment of dividends and capital
gains and does not include any management fees or expenses. One
cannot invest in an index.
Future Investment Strategy
Marsico's overall market outlook, which incorporates macroeconomic data,
sector/industry factors, and individual company analysis, on balance remains
positive. Several factors may help create an overall favorable backdrop for
equity investing. These include productivity gains associated with technological
advancements, a strong U.S. consumer, Federal budget surpluses, and expected
escalation of free trade. While interest rates have risen recently, Marsico
believes that the U.S. is in a secular lower interest rate environment. One key
aspect underlying Marsico's market outlook is that Marsico believes inflation
should remain low and that the "spread" between inflation and interest rates (as
measured by the 30-year Treasury bond) is well above the historical norm. That
is, real interest rates, in Marsico's opinion, appear relatively high. Assuming
inflation remains at or near its present level, Marsico expects interest rates
may decline over time, which may be a plus for growth-oriented stocks. In the
interim, Marsico anticipates that market volatility will continue. In 1999, 35
percent of the trading days resulted in a price change of 1 percent or more in
the S&P 500 Index, while 9 percent of the trading days had price changes of 2
percent or more in the Index.
Marsico has taken a variety of steps to ensure that the Portfolio is
prudently allocated both across and within a variety of economic sectors and
industries. Marsico believes that stock selection, which was important in 1999,
will be even more critical in 2000. It is important to emphasize that Marsico
will continue to focus on finding value in a number of areas in the stock market
including select technology, retail, health care and financial services
companies. While the Portfolio's aggregate position in technology is
significant, Marsico believes the individual holdings are well diversified
across a group of high quality, proven companies including telecommunications
equipment/services, networking, hardware, software, and data storage. In the
event that Marsico becomes concerned about specific valuations with the
companies owned in the Portfolio, Marsico would not hesitate to trim or sell the
positions outright.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
19
<PAGE> 20
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 85.50% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 1.14%
Omnicom Group Inc. 3,782 $ 378,200
BROADCASTING -- 2.18%
Clear Channel
Communications Inc. (a) 8,112 723,996
CABLE -- 0.95%
Mediaone Group Inc. (a) 4,102 315,085
CHEMICALS -- 0.75%
Du Pont (E. I.) de Nemours &
Company 3,762 247,822
COMMUNICATIONS -- 2.51%
3Com Corporation (a) 17,667 830,349
COMPUTER HARDWARE -- 14.95%
Cisco Systems Inc. (a) 18,580 1,990,382
Dell Computer Corporation (a) 27,821 1,418,871
EMC Corporation (a) 14,122 1,542,829
-----------
4,952,082
COMPUTER SERVICES -- 4.44%
America Online Inc. (a) 15,391 1,161,059
Sun Microsystems Inc. (a) 4,000 309,750
-----------
1,470,809
COMPUTER SOFTWARE -- 3.21%
Oracle Corporation (a) 1,826 204,626
Veritas Software Corporation (a) 6,000 858,750
-----------
1,063,376
ELECTRICAL EQUIPMENT -- 4.43%
General Electric Company 9,477 1,466,566
ELECTRONICS -- 0.66%
Sony Corp. (ADR) 766 218,118
FINANCE -- 2.34%
Morgan Stanley Dean Witter &
Company 5,428 774,847
HOTELS & RESTAURANTS -- 1.74%
Four Seasons Hotels Inc. 10,849 577,709
MISC. FINANCIAL SERVICES -- 5.42%
Citigroup Inc. 21,959 1,220,097
Federal National Mortgage
Association 9,196 574,175
-----------
1,794,272
PHARMACEUTICALS -- 5.07%
Genentech Inc. (a) 12,500 1,681,250
RETAIL -- 2.02%
Tiffany & Company 7,500 669,375
TECHNOLOGY -- 2.56%
Texas Instruments Inc. 8,774 849,981
TELECOMMUNICATIONS -- 24.61%
Ciena Corporation (a) 5,541 318,608
General Motors Corporation
(Class H) (a) 6,964 668,544
JDS Uniphase Corporation (a) 7,196 1,160,805
Lucent Technologies Inc. 10,427 780,070
MCI WorldCom Inc. (a) 24,491 1,299,527
McLeodUSA Inc. (a) 5,000 294,375
Nortel Networks Corporation 14,716 1,486,316
QUALCOMM Inc. (a) 12,172 2,143,793
-----------
8,152,038
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
TRANSPORTATION -- 3.17%
AMR Corporation (a) 4,348 $ 291,316
UAL Corporation (a) 9,805 760,500
-----------
1,051,816
TRAVEL/ENTERTAINMENT/LEISURE -- 0.07%
Royal Caribbean Cruises Ltd 442 21,796
WIRELESS COMMUNICATIONS -- 3.28%
Sprint PCS (a) 10,604 1,086,910
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $22,740,983) 28,326,397
- ---------------------------------------------------------------------
SHORT-TERM GOVERNMENT SECURITIES -- 11.17%
- ---------------------------------------------------------------------
Federal Home Loan Bank
Consolidated Discount Note,
1.35% due 01/03/00 $3,700,000 3,699,723
-----------
TOTAL SHORT-TERM GOVERNMENT
SECURITIES
(IDENTIFIED COST $3,699,722) 3,699,723
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.77%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury Note
$1,265,000, 6.25%, due
02/15/07
Value $1,304,351 1,249,000 1,249,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,249,000) 1,249,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $27,689,705) $33,275,120
OTHER ASSETS LESS LIABILITIES -- (0.44)% (146,285)
-----------
NET ASSETS -- 100% $33,128,835
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
20
<PAGE> 21
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
TCW INVESTMENT MANAGEMENT COMPANY
LOS ANGELES, CALIFORNIA
Investment Management
TCW Investment Management Company (previously known as TCW Portfolios
Management, Inc.) became Portfolio Manager to the Enterprise Equity Portfolio on
November 1, 1999. TCW manages approximately $57 billion for institutional
clients, and its normal investment minimum is $100 million.
Investment Objective
The objective of the Enterprise Equity Portfolio is long-term capital
appreciation.
Investment Strategies
Using a bottom-up investment approach, TCW invests in large and medium
capitalization companies that have a long record of successful operations in
their core business. Looking for companies with a dominant position in a niche
business (e.g. technology, production and distribution), TCW also considers the
financial quality of the company. Prime candidates have sound financial
fundamentals and management that is committed to shareholder interests.
1999 Performance Review
The U. S. stock market continued to advance strongly in 1999. The S&P 500
Index rose 21.0 percent, returning more than 20 percent for a record fifth
consecutive year. Even as the popular indexes kept hitting new highs, however,
the U. S. market was characterized by two contradictory trends: the rapid
escalation of technology stocks, especially those associated with the Internet
and e-commerce, and the only modest gains or even price declines for many stocks
in other industry sectors. More than half the stocks on the New York Stock
Exchange actually declined in price during the year. The Russell 1000 Value
Index, a widely followed large-cap value benchmark, rose a relatively modest 6.7
percent in 1999, even though many of the companies in the index continued to
generate strong earnings growth.
Performance disparities among industry sectors and types of stocks are
hardly new. Nonetheless, few such disparities have been as extreme as that which
occurred during 1999 between the high-flying tech stocks and the rest of the
market. The outperformance of technology stocks became most pronounced in the
fourth quarter, when the S&P 500 rose 14.9 percent while the tech-heavy NASDAQ
composite delivered a total return of 48.3 percent.
Much of the current fervor surrounding tech stocks stems from the explosive
growth potential of e-commerce and other tech-related businesses.
Internet-related stocks such as America Online, Yahoo!, Amazon.com and eBay
advanced more than 20 percent in December alone, even though most of these
companies have yet to earn any profit and are expected to remain unprofitable in
the near term. This lack of current earnings, and uncertainty over when earnings
will occur, makes these stocks risky and even undesirable for investors who are
not simply chasing the upward momentum of stocks that keep rising with little or
no direct relationship to fundamentals.
TCW has always been thoughtful in its value style to give consideration to
companies across the breadth of the market, including technology companies. And,
in fact, the Portfolio made money on several of the more established technology
stocks during the past year -- companies with strong market positions and
improving profitability. However, in the current ebullient market for tech
stocks, it has become increasingly difficult to find value in the sector. As a
result, the Portfolio's investment results trailed the S&P 500 and other major
market indexes due in part to the Portfolio's underweighting in the technology
sector.
Whether the current tech stock craze turns out to be a bubble that bursts
remains to be seen. Even if it does burst, however, the technology industry may
continue to grow and create enormous economic wealth. TCW's challenge as value
manager, therefore, is to identify solid companies that stand to benefit from
this growth. In recent months, TCW has intensified its research efforts aimed at
buying technology companies with staying power and where share prices bear some
reasonable relationship to underlying value.
21
<PAGE> 22
The Portfolio bought several such stocks and TCW will continue its efforts
to find additional technology issues that meet TCW's value criteria, while
maintaining TCW's broadly based research programs to uncover excellent
investment opportunities in all industry sectors.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LIPPER MULTI-CAP VALUE
EQUITY PORTFOLIO S & P 500* INDEX*
---------------- ---------- ----------------------
<S> <C> <C> <C>
12/31/89 10000.00 10000.00 10000.00
1990 9778.24 9689.00 9325.38
1991 12830.50 12641.20 11835.40
1992 15127.30 13604.50 13168.70
1993 16314.60 14975.80 14976.70
1994 16945.80 15173.50 14993.00
1995 23460.20 20875.70 19642.50
1996 29377.00 25668.80 23765.50
1997 36943.10 34231.90 30160.70
1998 40600.70 44012.00 32128.80
1999 46936.00 53267.70 34036.80
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lipper Multi-Cap Value Index is an unmanaged index of
the 30 largest funds, based on total year-end net asset value, in
the Lipper Multi-Cap Value Fund category. It assumes the
reinvestment of dividends and capital gains and does not include
any management fees or expenses. One cannot invest in an index.
Future Investment Strategy
Throughout the year, TCW has seen higher interest rates and significantly
higher energy prices. This may prove burdensome to certain sectors of the
economy. Thus far, due in part to the wealth effect of a strong stock market,
consumer confidence is high. As a result consumer spending has not slowed and
the broad economy continues to grow at a significant rate. However, if consumer
spending, which has grown recently at a rate in excess of incomes, does slow,
corporate earnings may be impacted. In the past year earnings shortfalls have
usually resulted in swift corrections to share prices. A consumer-led economic
slowdown may, however, lead to lower interest rates. But a slowdown in the
economy may result in earnings disappointments from companies that do not have
pricing power. Alternatively lower interest rates could result in improved
valuations for the leading companies the Portfolio owns.
In 2000, TCW will continue to focus on companies whose specific advantages
may enable them to deliver strong earnings and cash-flow growth. While it is not
hard to find stocks that trade at arguably low valuations, it is a challenge to
find companies that are truly valuable whose stock can be purchased at a
reasonable price. TCW believes the Portfolio is comprised of very valuable
companies. Given that these companies typically have stronger balance sheets,
are more profitable, grow more rapidly and have greater market share, they may
be better prepared to weather bad as well as good economic times. As the
Portfolio's holdings appreciate, it becomes necessary to find new ideas, which
meet TCW's stringent criteria, and in today's market that can be difficult.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
22
<PAGE> 23
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 98.71% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE -- 1.30%
Delphi Automotive Systems
Corporation 484,200 $ 7,626,150
BROADCASTING -- 2.85%
Time Warner Inc. 231,400 16,762,038
BUSINESS SERVICES -- 3.21%
Paychex Inc. 471,600 18,864,000
CABLE -- 2.76%
Cox Communications Inc. (Class
A) (a) 315,300 16,237,950
COMPUTER HARDWARE -- 17.51%
Cisco Systems Inc. (a) 331,500 35,511,938
Dell Computer Corporation (a) 778,700 39,713,700
Intel Corporation 335,700 27,632,306
------------
102,857,944
COMPUTER SERVICES -- 1.68%
Pixar Inc. (a) 278,900 9,866,088
COMPUTER SOFTWARE -- 11.25%
Microsoft Corporation (a) 229,300 26,770,775
Siebel Systems Inc. (a) 467,900 39,303,600
------------
66,074,375
CONSUMER PRODUCTS -- 4.04%
Gillette Company 292,800 12,059,700
Procter & Gamble Company 106,300 11,646,494
------------
23,706,194
ELECTRICAL EQUIPMENT -- 5.04%
Maxim Integrated Products Inc.
(a) 627,400 29,605,437
FINANCE -- 2.94%
Providian Financial Corporation 189,800 17,283,662
HEALTH CARE -- 1.91%
Medtronic Inc. 308,700 11,248,256
HOTELS & RESTAURANTS -- 0.95%
Mirage Resorts Inc. (a) 364,400 5,579,875
INSURANCE -- 3.59%
Progressive Corporation (Ohio) 288,500 21,096,562
MACHINERY -- 4.55%
Applied Materials Inc. (a) 210,800 26,705,725
MEDICAL SERVICES -- 4.21%
Biogen Inc. (a) 292,400 24,707,800
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
MISC. FINANCIAL SERVICES -- 4.13%
The Charles Schwab Corporation 632,000 $ 24,253,000
MULTI-LINE INSURANCE -- 2.34%
American International Group
Inc. 126,900 13,721,063
PHARMACEUTICALS -- 8.36%
Amgen Inc. (a) 309,000 18,559,312
Pfizer Inc. 616,800 20,007,450
Warner-Lambert Company 128,400 10,520,775
------------
49,087,537
RETAIL -- 6.97%
Home Depot Inc. 441,300 30,256,631
Safeway Inc. (a) 300,600 10,690,088
------------
40,946,719
TELECOMMUNICATIONS -- 2.66%
Lucent Technologies Inc. 208,800 15,620,850
TRANSPORTATION -- 6.46%
Kansas City Southern Industries
Inc. 508,200 37,924,425
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $506,907,712) 579,775,650
- ---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.32%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $7,980,000 5.50% due
02/28/03
Value $8,078,435 $7,771,000 7,771,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $7,771,000) 7,771,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $514,678,712) $587,546,650
OTHER ASSETS LESS LIABILITIES -- (0.03)% (223,013)
------------
NET ASSETS -- 100% $587,323,637
=====================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
23
<PAGE> 24
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
RETIREMENT SYSTEM INVESTORS INC.
NEW YORK, NEW YORK
Investment Management
Retirement System Investors Inc. ("RSI") has served as Portfolio Manager to
the Enterprise Growth and Income Portfolio since inception, December 1, 1998.
RSI manages approximately $974 million for all of its clients.
Investment Objective
The objective of the Enterprise Growth and Income Portfolio is a total
return through capital appreciation with income as a secondary consideration.
Investment Strategies
The Growth and Income Portfolio invests primarily in U.S. common stocks of
large capitalization companies. The Portfolio selects stocks that will
appreciate in value, seeking to take advantage of temporary stock price
inefficiencies, which may be caused by market participants focusing heavily on
short-term developments. In selecting stocks for the Portfolio, the Portfolio
Manager employs a "value-oriented" strategy. This means that the Portfolio
Manager attempts to identify stocks of companies that have greater value than is
recognized by the market. The Portfolio Manager considers a number of factors,
such as sales, growth and profitability prospects for the economic sector and
markets in which the company operates and sells its products and services, the
company's stock market price, earnings level and projected earnings growth rate.
The Portfolio Manager also considers current and projected dividend yields. The
Portfolio Manager compares this information to that of other companies in
determining relative value and dividend potential.
1999 Performance Review
1999 was a very good year for growth stock investing, particularly for
funds with exposure to technology stocks. The technology component of the S&P
500 was up over 80 percent while the S&P 500 gained 21.0 percent. Sectors
related to the so-called New Economy fared especially well. Companies helping to
build the new communications infrastructure, as well as Internet-related
companies, were bid up to unprecedented valuations by an investment community
willing to pay high prices for expected growth. By and large, non-Internet
technology companies did post good earnings growth in 1999, partly because they
were comparing results versus a 1998 plagued by weak emerging markets. And, by
and large, Internet stocks were bid up to very high levels on the promise that
at some point, they will make money, not keep losing it in copious amounts.
Elsewhere in the market, many solid performing companies were selling for
significantly lower valuations than the narrow list of stocks that investors
seemed to have on their must-own list. It seemed if a company was not on that
narrow list, its shares were likely to languish. Half of the S&P 500 stocks
finished down for the year. Presumably, with so much money going into
technology, there was less left for other investments.
In addition to favoring a very narrow list of companies, the market was
somewhat unusual in that it ignored rising interest rates, with most sectors
shrugging them off as less meaningful than in the past. The Federal Reserve
Board raised rates 0.75 percent, essentially reversing the cuts of 1998 that
accompanied the crisis of confidence sparked by Thailand, Russia and the hedge
fund Long Term Capital Management's problems. While inflation remained fairly
quiescent, it crept up a little and economic factors such as very high
employment caused the Fed to fret about future inflation.
Strong contributors to the Portfolio's 1999 performance were stellar
returns from Safeguard Scientific, Nortel Networks, Tiffany, Corning, EMC and
Alcoa, among the larger holdings. Laggards were Xerox, Philip Morris, Lockheed
Martin and Safeway.
24
<PAGE> 25
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LIPPER LARGE-CAP CORE
GROWTH & INCOME PORTFOLIO S&P 500 INDEX* INDEX*
------------------------- -------------- ---------------------
<S> <C> <C> <C>
11/30/98 10000 10000 10000
1998 10220 10576 10664
1999 12320 12800 12727
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lipper Large-Cap Core Index is an unmanaged index of
the 30 largest funds, based on total year-end net asset value, in
the Lipper Large-Cap Core Fund category. It assumes the
reinvestment of dividends and capital gains and does not include
any management fees or expenses. One cannot invest in an index.
Future Investment Strategy
Generally, the backdrop for the stock market appears quite good on all
fronts except that of valuation and the challenge the Fed faces in finding a
level of interest rates providing a soft landing for the expansion. On the
positive side, the American economy is in excellent shape heading into 2000: Y2K
computer glitches were avoided; more people are employed than ever, inflation
has remained quiet; the U.S. remains the pre-eminent engine of world-wide growth
and technological progress; the rest of the world's economies, especially the
emerging countries, seem on a much more solid footing than last year; the world
in general is benefiting from a peace dividend, with fewer resources going to
defense products; the Internet and other technologies appear to be increasing
productivity and lowering the costs of doing business; and the baby boom
generation seems to be saving for its retirement, mostly by investing either
directly or via mutual funds, in the stock market.
On the more worrisome side, interest rates have come up, responding in part
to the Federal Reserve Board's three 0.25 percent increases in short term rates
in 1999, which reversed three similar downward moves in 1998. Because of high
GDP rates and full employment, many believe that the Fed will raise rates more
in early 2000, partly because it was forestalled in late 1999 due to a desire to
keep liquidity high in the face of Y2K concerns. OPEC proved itself resurgent in
1999, as the cartel was able to roughly double the price of oil by not cheating
as it has done in the recent past. While the cost of an important raw material
going up is not a good thing, the world, particularly the developed world, is
less energy intensive than it was formerly, and has absorbed this price rise
without much trouble.
Most worrisome are phenomena internal to the financial markets. There seems
to be clear signs of speculation in certain sectors of the market, particularly
in Initial Public Offerings ("IPOs") and the Internet stocks. It is less clear
that the very high valuations accorded to technology and communications
companies are overdone, as earnings growth generated by companies in this sector
has been dramatic. Most often, though, in the long history of the stock market,
sectors which shoot up like rockets come back down to earth, sometimes
painfully. In the first few trading days of 2000, with interest rates continuing
to drift up, the market sold off, possibly related to investors who waited for
the 2000 tax year to sell stocks with large embedded capital gains.
The market has also been quite narrow. While the averages have gone up, the
drivers to those returns have been a fairly narrow group of stocks. RSI expects
a moderation in the extreme discrepancy between favored and unfavored stocks in
the market. This can come about in two ways: either the market broadens out and
the lagging stocks catch up, or the leading stocks lose steam and their P/E
multiples contract, and their prices decline. The former would be the preferable
outcome, and one which RSI believes is most likely, given the positives the
economy and this market have going for them.
25
<PAGE> 26
RSI's response remains focused on seeking out attractive relative value in
both growth and value stocks, with more of the latter surfacing as attractive
currently. In the growth camp, RSI continues to embrace technology but is
concerned about excessive valuations and would be careful about new commitments
unless weakness develops. If a more inflationary environment develops and
worldwide economic expansion continues, RSI would expect that cyclical and basic
material companies may provide good relative performance. Reflecting this, the
Portfolio is overweighted in aluminum, papers, electrical equipment and capital
goods companies. Financial and other interest sensitive groups could become more
interesting once interest rates peak or the economy slows.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
26
<PAGE> 27
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 82.00% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 4.40%
Honeywell International Inc. 68,600 $ 3,957,363
BANKING -- 2.43%
Chase Manhattan Corporation 24,250 1,883,922
Wells Fargo & Company 7,500 303,281
-----------
2,187,203
BROADCASTING -- 1.33%
Time Warner Inc. 16,570 1,200,289
BUILDING & CONSTRUCTION -- 2.63%
Armstrong World Industries Inc. 1,200 40,050
Martin Marietta Materials Inc. 22,175 909,175
Southdown Inc. 27,375 1,413,234
-----------
2,362,459
COMMUNICATIONS -- 0.02%
3Com Corporation (a) 450 21,150
COMPUTER HARDWARE -- 5.50%
Cisco Systems Inc. (a) 360 38,565
Dallas Semiconductor Corporation 32,720 2,108,395
EMC Corporation (a) 4,500 491,625
Intel Corporation 100 8,231
International Business Machines
Corporation 15,360 1,658,880
Lexmark International Group Inc.
(Class A) (a) 2,000 181,000
Xerox Corporation 20,300 460,557
-----------
4,947,253
COMPUTER SERVICES -- 1.74%
Comverse Technology Inc. (a) 300 43,425
Internet Capital Group Inc. (a) 1,200 204,000
Safeguard Scientifics Inc. (a) 6,000 972,375
Sun Microsystems Inc. (a) 4,440 343,823
-----------
1,563,623
COMPUTER SOFTWARE -- 4.14%
BMC Software Inc. (a) 37,850 3,025,634
Cadence Design Systems Inc. (a) 10,700 256,800
Sterling Commerce Inc. (a) 12,765 434,808
-----------
3,717,242
CONSUMER PRODUCTS -- 2.56%
Kimberly-Clark Corporation 35,250 2,300,063
CONSUMER SERVICES -- 0.11%
United Parcel Service Inc. 1,500 103,500
CONTAINERS/PACKAGING -- 1.73%
Smurfit-Stone Container
Corporation (a) 63,500 1,555,750
CRUDE & PETROLEUM -- 8.03%
BP Amoco (ADR) 15,200 901,550
Exxon Mobil Corporation 30,932 2,491,959
Royal Dutch Petroleum Company
(ADR) 27,245 1,646,620
Texaco Inc. 40,075 2,176,573
-----------
7,216,702
ELECTRICAL EQUIPMENT -- 5.39%
Emerson Electric Company 84,490 4,847,614
ELECTRONICS -- 0.09%
Conexant Systems Inc. (a) 200 13,275
Gemstar International Group Ltd.
(a) 1,000 71,250
-----------
84,525
ENTERTAINMENT & LEISURE -- 0.05%
Carnival Corporation 900 43,031
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
FOOD & BEVERAGES & TOBACCO -- 2.23%
Anheuser Busch Companies Inc. 27,200 $ 1,927,800
Philip Morris Companies Inc. 3,340 77,446
-----------
2,005,246
MACHINERY -- 2.56%
Ingersoll Rand Company 40,750 2,243,797
Snap-On Inc. 2,050 54,453
-----------
2,298,250
MANUFACTURING -- 6.92%
Corning Inc. 34,950 4,506,366
Milacron Inc. 9,000 138,375
Tyco International Ltd. 40,600 1,578,325
-----------
6,223,066
METALS & MINING -- 2.07%
Alcoa Inc. 22,320 1,852,560
Potash Corporation Saskatchewan
Inc. 125 6,023
-----------
1,858,583
MISC. FINANCIAL SERVICES -- 2.76%
Citigroup Inc. 19,500 1,083,469
Federal National Mortgage
Association 22,350 1,395,478
-----------
2,478,947
MULTI-LINE INSURANCE -- 0.52%
American General Corporation 2,700 204,863
American International Group
Inc. 2,412 260,797
-----------
465,660
PAPER & FOREST PRODUCTS -- 0.08%
International Paper Company 1,200 67,725
PHARMACEUTICALS -- 6.49%
Bristol-Myers Squibb Company 16,360 1,050,107
Elan Corporation (ADR) (a) 44,250 1,305,375
Johnson & Johnson 27,615 2,571,647
Merck & Company Inc. 11,470 769,207
Pfizer Inc. 4,160 134,940
-----------
5,831,276
PRINTING & PUBLISHING -- 0.62%
McGraw-Hill Companies Inc. 9,000 554,625
PROPERTY-CASUALTY
INSURANCE -- 0.15%
Allstate Corporation 5,700 136,800
RETAIL -- 5.69%
CVS Corporation 42,550 1,699,341
Federated Department Stores Inc.
(a) 10,100 510,681
Safeway Inc. (a) 80,500 2,862,781
Tiffany & Company 500 44,625
-----------
5,117,428
SAVINGS AND LOAN -- 0.81%
Washington Mutual Inc. 27,950 726,700
TECHNOLOGY -- 0.19%
Texas Instruments Inc. 1,750 169,531
TELECOMMUNICATIONS -- 9.32%
Bell Atlantic Corporation 6,500 400,156
Lucent Technologies Inc. 18,280 1,367,573
Nortel Networks Corporation 37,940 3,831,940
SBC Communications Inc. 54,195 2,642,006
Tellabs Inc. (a) 2,100 134,794
-----------
8,376,469
TRANSPORTATION -- 1.44%
FDX Corporation (a) 31,550 1,291,578
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $67,710,230) 73,709,651
- ---------------------------------------------------------------------
</TABLE>
27
<PAGE> 28
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS -- 0.30%
- ---------------------------------------------------------------------
MISC. FINANCIAL SERVICES -- 0.30%
Kmart Financing (a) 6,200 $ 271,250
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $359,672) 271,250
- ---------------------------------------------------------------------
COMMERCIAL PAPER -- 17.78%
- ---------------------------------------------------------------------
Bestfoods 5.70% due 01/18/00 $3,000,000 2,991,925
Coca-Cola Enterprises Inc. 6.20%
due 01/06/00 3,500,000 3,496,986
Constellation Energy 6.70% due
01/10/00 4,000,000 3,993,300
General Mills Inc. 4.95% due
01/03/00 2,000,000 1,999,450
Midamerican Energy Company 6.65%
due 01/06/00 3,500,000 3,496,767
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $15,978,428) 15,978,428
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.15%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note, $1,045,000, 6.25% due
02/15/07
Value $1,077,507 $1,032,000 $ 1,032,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,032,000) 1,032,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $85,080,330) $90,991,329
OTHER ASSETS LESS LIABILITIES -- (1.23)% (1,103,853)
-----------
NET ASSETS -- 100% $89,887,476
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
28
<PAGE> 29
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
1740 ADVISERS, INC.
NEW YORK, NEW YORK
Investment Management
1740 Advisers has been Portfolio Manager to the Enterprise Equity Income
Portfolio since its inception. 1740 Advisers manages more than $2 billion for
institutional clients and its normal investment minimum is $20 million.
Investment Objective
The objective of the Enterprise Equity Income Portfolio is to seek a
combination of growth and income to achieve an above-average and consistent
total return.
Investment Strategies
The Equity Income Portfolio invests primarily in dividend-paying U.S.
common stocks. The goal is capital appreciation combined with a high level of
current income. Dividend yield relative to the S&P 500 average is used as a
discipline and measure of value in selecting stocks for the Portfolio. To
qualify for a purchase, a stock's yield must be greater than the S&P 500's
average dividend yield. The stock must be sold within two quarters after its
dividend yield falls below that of the S&P average. The effect of this
discipline is that a stock will be sold if increases in its annual dividends do
not keep pace with increases in its market price.
1999 Performance Review
Technology and telecom, including Internet-related stocks, were the major
focus for much of 1999. Basic materials and capital goods joined tech as the
only outperformers for the year. The Portfolio could not own most technology
stocks due to little or no dividend yield, but was overweight in the cyclicals.
The technology sector was the only game in town for much of the year. There
was good reason for this: investors viewed these companies as being able to grow
earnings without the need to raise prices in the no-pricing power environment
that many other companies found themselves. These are great companies with very
attractive future opportunities and markets, but as happens from time to time,
valuations can run ahead of reality. Many investors now believe that it is easy
to get rich: buy technology and the Internet. There is usually a problem
somewhere down the road when things seem so evident and easy.
The popular coverages are now heavily influenced by technology due to the
strong outperformance of these stocks. The average company had much more modest
returns in 1999. Many industries and stocks were flat or down for the year, and
many experienced bear market size declines. The market risk going forward may
not be in these areas, they will sell off some with the rest of the market, but
are not as extended as the technology-related names.
The market has had a tremendous unprecedented move -- five straight 20
percent plus years, and 1740 Advisers believes a correction is both needed and
healthy. Some broadening of the market away from the single-minded focus on
technology would also be very healthy. Many companies are selling at valuations
that are much more moderate and at a discount, not only from the leaders, but
also from the averages themselves.
29
<PAGE> 30
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
S&P 500 BARRA/VALUE LIPPER EQUITY INCOME
EQUITY INCOME PORTFOLIO INDEX* FUND INDEX*
----------------------- ------------------- --------------------
<S> <C> <C> <C>
11/30/98 10000 10000 10000
1998 10180 10351 10256
1999 10760 11668 10686
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500/Barra Value Index is an unmanaged capitalization
weighted index compromised of stocks of the S&P 500 with low
price-to-book ratios relative to the S&P 500 as a whole. It assumes
the reinvestment of dividends and capital gains and does not
include any management fees or expenses. The Lipper Equity Income
Fund Index is an unmanaged index of the 30 largest funds, based on
total year-end net asset value, in the Lipper Equity Income Fund
category. It assumes the reinvestment of dividends and capital
gains and does not include any management fees or expenses. One
cannot invest in an index.
Future Investment Strategy
The Equity Income Portfolio's strategy is emphasizing these neglected parts
of the market. Strong world growth may favor the energy and basic materials
sectors. Both may have above average earnings gains this year. The same is true
of the machinery and capital spending related industries. The drug stocks
underperformed in 1999 as growth investors moved toward the tech stocks. Drug
stocks and the telecommunication sectors may do better this year. These stocks
all have reasonable valuations of rising earnings, above average yields and they
have already experienced significant declines. They may also benefit from any
broadening of the market or increase in defensiveness by investors.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
30
<PAGE> 31
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 96.50% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 3.92%
Honeywell International Inc. 6,000 $ 346,125
Northrop Grumman Corporation 5,500 297,344
United Technologies Corporation 7,000 455,000
-----------
1,098,469
AUTOMOTIVE -- 2.54%
Ford Motor Company 6,500 347,344
General Motors Corporation 5,000 363,437
-----------
710,781
BANKING -- 6.66%
Bank of America Corporation 4,000 200,750
Bank of New York Company Inc. 8,500 340,000
Chase Manhattan Corporation 4,000 310,750
FleetBoston Financial
Corporation 7,500 261,094
J. P. Morgan & Company Inc. 1,000 126,625
Mellon Financial Corporation 9,500 323,594
Wells Fargo & Company 7,500 303,281
-----------
1,866,094
CHEMICALS -- 3.33%
Dow Chemical Company 3,000 400,875
Du Pont (E. I.) de Nemours &
Company 5,000 329,375
Rohm & Haas Company 5,000 203,437
-----------
933,687
COMPUTER HARDWARE -- 0.85%
Xerox Corporation 10,500 238,219
CONGLOMERATES -- 2.46%
Minnesota Mining & Manufacturing
Company 3,500 342,562
Textron Inc. 4,500 345,094
-----------
687,656
CONSUMER DURABLES -- 0.86%
Dana Corporation 8,000 239,500
CONSUMER NON-DURABLES -- 0.94%
Avon Products Inc. 8,000 264,000
CONSUMER PRODUCTS -- 3.62%
Colgate-Palmolive Company 6,500 422,500
Kimberly-Clark Corporation 4,000 261,000
Procter & Gamble Company 3,000 328,687
-----------
1,012,187
CRUDE & PETROLEUM -- 6.37%
BP Amoco (ADR) 5,500 326,219
Chevron Corporation 3,500 303,187
Exxon Mobil Corporation 8,300 668,669
Royal Dutch Petroleum Company
(ADR) 4,000 241,750
Texaco Inc. 4,500 244,406
-----------
1,784,231
ELECTRICAL EQUIPMENT -- 5.65%
Emerson Electric Company 6,000 344,250
General Electric Company 8,000 1,238,000
-----------
1,582,250
ENERGY -- 6.65%
Atlantic Richfield Company 3,000 259,500
Consolidated Natural Gas Company 4,000 259,750
Duke Energy Corporation 6,500 325,812
El Paso Energy Corporation 8,000 310,500
Enron Corporation 8,000 355,000
Williams Companies Inc. 11,500 351,469
-----------
1,862,031
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
FOOD & BEVERAGES & TOBACCO -- 0.21%
Philip Morris Companies Inc. 2,500 $ 57,969
INSURANCE -- 1.58%
Cigna Corporation 5,500 443,094
MACHINERY -- 3.63%
Caterpillar Inc. 6,500 305,906
Deere & Company 7,500 325,313
Pitney Bowes Inc. 8,000 386,500
-----------
1,017,719
MANUFACTURING -- 1.17%
Eaton Corporation 4,500 326,813
METALS & MINING -- 1.48%
Alcoa Inc. 5,000 415,000
MISC. FINANCIAL SERVICES -- 1.89%
Citigroup Inc. 9,500 527,844
MULTI-LINE INSURANCE -- 0.86%
Lincoln National Corporation 6,000 240,000
OIL SERVICES -- 4.77%
Baker Hughes Inc. 8,000 168,500
Diamond Offshore Drilling Inc. 6,500 198,656
Halliburton Company 5,500 221,375
Kerr-McGee Corporation 5,000 310,000
Schlumberger Ltd. 3,500 196,875
Tidewater Inc. 6,000 216,000
Transocean Sedco Forex Inc. 678 22,827
-----------
1,334,233
PAPER & FOREST PRODUCTS -- 5.61%
Bowater Inc. 6,000 325,875
Georgia-Pacific Group 8,500 431,375
International Paper Company 8,000 451,500
Temple-Inland Inc. 5,500 362,656
-----------
1,571,406
PHARMACEUTICALS -- 11.58%
Abbott Laboratories 7,500 272,344
American Home Products
Corporation 8,500 335,219
Baxter International Inc. 5,000 314,063
Bristol-Myers Squibb Company 5,500 353,031
Eli Lilly & Company 4,000 266,000
Johnson & Johnson 4,100 381,812
Merck & Company Inc. 5,500 368,844
Pharmacia & Upjohn Inc. 6,000 270,000
Smithkline Beecham (ADR) 5,500 354,406
Warner-Lambert Company 4,000 327,750
-----------
3,243,469
PRINTING & PUBLISHING -- 1.10%
McGraw-Hill Companies Inc. 5,000 308,125
PROPERTY-CASUALTY
INSURANCE -- 1.41%
Chubb Corporation 7,000 394,187
RAW MATERIALS -- 3.08%
Phelps Dodge Corporation 3,500 234,938
Reynolds Metals Company 3,500 268,187
Weyerhaeuser Company 5,000 359,062
-----------
862,187
REAL ESTATE -- 1.88%
Boston Properties Inc. 4,500 140,062
Crescent Real Estate Equities
Company 6,000 110,250
Equity Office Properties Trust 6,000 147,750
Equity Residential Properties
Trust 3,000 128,063
-----------
526,125
</TABLE>
31
<PAGE> 32
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TELECOMMUNICATIONS -- 10.56%
AT&T Corporation 9,500 $ 482,125
Bell Atlantic Corporation 7,500 461,719
BellSouth Corporation 8,500 397,906
GTE Corporation 5,500 388,094
SBC Communications Inc. 9,500 463,125
Sprint Corporation 6,000 403,875
U S West Inc. 5,000 360,000
-----------
2,956,844
UTILITIES -- 1.84%
CMS Energy Corporation 8,500 265,094
Edison International 9,500 248,781
-----------
513,875
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $27,267,997) 27,017,995
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.50%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury Note
$1,255,000 6.25%, due 01/31/02
Value $1,319,199 $1,260,000 $ 1,260,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,260,000) 1,260,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $28,527,997) $28,277,995
OTHER ASSETS LESS LIABILITIES -- (1.00)% (280,976)
-----------
NET ASSETS -- 100% $27,997,019
=====================================================================
</TABLE>
(ADR) American Depository Receipt.
See notes to financial statements.
32
<PAGE> 33
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
VONTOBEL USA INC.
NEW YORK, NY
Investment Management
Vontobel USA became portfolio manager on April 1, 1999. Vontobel manages
approximately $2 billion and its normal investment minimum is $10 million.
Investment Objective
The objective of the Enterprise International Growth Portfolio is to seek
capital appreciation.
Investment Strategies
The International Growth Portfolio invests primarily in non-U.S. equity
securities that the Portfolio Manager believes are undervalued. The Portfolio
Manager uses an approach that involves bottom-up stock selection. The Portfolio
Manager looks for companies that are good predictable businesses selling at
attractive prices relative to an estimate of intrinsic value. The Portfolio
Manager diversifies investments among European, Australian and Far East ("EAFE")
markets.
1999 Performance Review
Vontobel became the portfolio manager on April 1, 1999. The massive
sell-off of securities necessary to align the portfolio with Vontobel's
investment strategy had a negative impact on performance early in the second
quarter. Losses were sustained while selling many securities that did not meet
Vontobel's investment criterion, largely due to company fundamentals.
Beginning with the third quarter, there was an underweight in Japan, which
had a modestly negative impact on absolute returns, as Japan outperformed Europe
in dollar terms. The Portfolio's underweight in the Japanese banking sector also
had a modestly negative impact on returns. Security selection in Japan made a
positive contribution to performance, with names like Murata Manufacturing
Company, Ltd., Rohm Company, Ltd., NTT Data Corporation, and Takeda Chemical
Industries posting significant upticks for the third quarter. The decision to
leave the yen position unhedged had a positive impact on returns, allowing
investors to participate in the growing international strength of the currency.
A European overweight in the Portfolio had a slight negative impact on
absolute returns. The Portfolio's European telecommunications stocks, following
an upward trend in this sector of the market, made a significant positive
contribution to performance. The Portfolio's holdings represent dominant
franchises and market leaders in the telecommunications industry and were
selected not on a sector basis but, in keeping with Vontobel's investment
discipline, because of the strength of the businesses and the historical track
records of consistent earnings growth. A partial hedge against the Euro
detracted from returns. This hedge was reduced substantially.
The highest gains in 1999 were realized by companies in emerging Asia.
Because Vontobel's style views emerging markets and international developed
markets as separate asset classes, the Portfolio does not generally have
emerging markets exposure. This lack of exposure to emerging Asia meant a lack
of additional returns above what the EAFE countries provided. Japan was the best
performing EAFE market and the Portfolio's exposure to Japan added to
performance, with many long-term core holdings, such as Murata Manufacturing
Company, Ltd., and Rohm Company, Ltd., providing returns up to 40 percent.
Stocks such as NTT Data Corporation and Hikari Tsushin, Inc., gave the Portfolio
lucrative exposure to the fast-growing mobile telecommunications market in
Japan, and they present excellent investment opportunities.
Stock picking in Europe had a positive impact on returns. Many European
holdings, such as Mannesmann and Vodafone AirTouch, provided performance well in
excess of 20 percent for the year. Telecomm stocks performed extraordinarily
well and many of the Portfolio's holdings exceeded expectations. The Portfolio's
weighting of over 10 percent in European telecomm paid off nicely in 1999.
Hedges against the Euro, which were placed at various points throughout the
year, had a net positive impact on returns. The Portfolio's overweight to Europe
versus Asia had been a liability in the third quarter. In the fourth quarter,
however, the Portfolio benefited from Europe's recovery, as the European
overweight had a net positive effect on fourth quarter performance.
33
<PAGE> 34
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH LIPPER INTERNATIONAL FUND
PORTFOLIO EAFE* INDEX*
-------------------- ----- -------------------------
<S> <C> <C> <C>
11/30/94 10000 10000 10000
1994 10041 10063 9867
1995 11510 11190 10855
1996 12967 11867 12422
1997 13648 12078 13322
1998 15672 14494 15009
1999 22273 18401 20687
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The Morgan Stanley Capital International Europe, Australia and Far
East Index (MSCI EAFE) is an unmanaged index composed of the stocks
of approximately 1,032 companies traded on 20 stock exchanges from
around the world, excluding the USA, Canada, and Latin America. It
assumes the reinvestment of dividends and capital gains and
excludes fees or expenses. The Lipper International Fund Index is
an unmanaged index of the 30 largest funds, based on total year-end
net asset value, in the Lipper International Fund category. It
assumes the reinvestment of dividends and capital gains and does
not include any management fees or expenses. One cannot invest in
an index.
Future Investment Strategy
Vontobel believes there is great value left in Europe. The primary focus in
European holdings is to invest in market leaders in their respective industries,
which remain attractive business and continue to exhibit attractive valuations
and good franchises. The earnings progression remains strong, suggesting a
potentially positive trend and growth close to 18 percent in the year 2000.
Market P/Es of 17x support the belief that there may be multiple economic
expansions.
After last year's initial euphoria, Vontobel expects the Euro to be trading
close to parity in the coming months. This is not a negative for Europe, either
in terms of future profits or for macro factors such as inflation. In fact, it
may provide a boost in the export markets for many firms.
In Asia, particularly Japan, there are a lot of good businesses that were
penalized with unsatisfactorily low returns. Currently, Asia is at a turning
point where Vontobel sees the ability to give higher returns on capital
employed. This along with other factors could lead investors to put more money
in Asia in the new year. The strong yen is probably a reflection of the strength
of the Japanese economy. Belief in real restructurings and a positive worldview
on the Japanese economy have most likely been major factors contributing to the
rise of the yen in 1999.
As with all international funds, the Enterprise International Growth
Portfolio carries additional risks associated with possibly less stable foreign
securities, currencies, lack of uniform accounting standards and political
instability.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
34
<PAGE> 35
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 93.61% PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AUSTRALIA -- 0.47%
Telstra Corporation Ltd. 117,000 $ 635,991
FINLAND -- 3.30%
Nokia Corporation (ADR) 16,500 3,135,000
Sonera Yhtyma 18,800 1,288,743
------------
4,423,743
FRANCE -- 8.59%
Altran Technologies 3,900 2,357,198
Axa 10,400 1,449,939
Cap Gemini 1,658 420,887
CGIP 19,200 1,257,172
Dassault Systemes 18,600 1,212,265
L'Oreal 1,300 1,043,060
Louis Vuitton Moet Hennessy 1,600 716,750
Scor 26,300 1,160,406
Total Fina (Class B) 10,000 1,334,738
Valeo 7,500 578,722
------------
11,531,137
GERMANY -- 4.12%
Allianz 2,800 940,663
Bayerische Motoren Werke 33,800 1,031,667
Mannesmann 10,000 2,412,602
Muenchener Rueckvers 4,500 1,141,428
------------
5,526,360
HONG KONG -- 1.83%
Dah Sing Financial Group 159,000 634,077
SmarTone Telecommunications
Holdings Ltd. 195,000 940,696
Sun Hung Kai Properties Ltd. 85,000 885,702
------------
2,460,475
IRELAND -- 1.66%
Allied Irish Banks 63,900 727,377
CRH 27,400 592,050
Elan Corporation (ADR) (a) 30,600 902,700
------------
2,222,127
ITALY -- 2.48%
ENI 125,000 687,516
Pirelli 180,000 494,105
Telecom Italia 73,100 1,030,921
TIM 100,000 1,117,151
------------
3,329,693
JAPAN -- 27.82%
Asatsu-DK Inc. 12,000 810,414
Fuji Photo Film Company 11,000 401,586
Hikari Tsushin Inc. 1,100 2,207,106
Honda Motor Company Ltd. 18,000 669,472
Hoya Corporation 11,000 866,693
Mikuni Coca-Cola Bottling
Company Ltd. 24,000 420,476
Murata Manufacturing Company
Ltd. 17,000 3,993,345
Nichiei Company Ltd. 17,500 380,249
Nintendo Company Ltd. 9,000 1,495,742
Nippon Telegraph & Telephone
Corporation 8 137,027
Nomura Securities Company Ltd. 24,000 433,395
NTT Data Corporation 100 2,300,088
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
NTT Mobile Communication
Network Inc. 105 $ 4,038,857
Rohm Company Ltd. 12,000 4,932,955
Ryohin Keikaku Company Ltd. 6,000 1,204,463
Secom Company Ltd. 9,000 990,995
Seven Eleven Japan 10,000 1,585,593
Shohkoh Fund 2,900 1,148,135
Sony Corporation 11,000 3,262,210
Takeda Chemical Industries 40,000 1,977,097
Tokyo Broadcasting System Inc. 42,000 1,422,335
Tokyo Electron Ltd. 15,000 2,055,398
Yasuda Fire & Marine Insurance
Company Ltd. 109,000 616,639
------------
37,350,270
MALAYSIA -- 0.02%
Malayan Banking Berhad 9,000 31,974
NETHERLANDS -- 8.90%
Aegon 19,516 1,885,340
Aegon (ADR) 16,096 1,537,168
ASM Lithography Holdings (a) 20,000 2,222,213
Getronics 21,900 1,747,228
Heineken 20,100 980,395
Kempen & Company 16,600 660,519
Philips Electronics 8,984 1,221,754
Vendex KBB 35,900 954,725
Wolters Kluwer 22,000 744,633
------------
11,953,975
NORWAY -- 0.45%
Tomra Systems 35,400 601,236
SINGAPORE -- 1.56%
Datacraft Asia Ltd. 67,000 556,100
Singapore Press Holdings Ltd. 70,788 1,534,342
------------
2,090,442
SPAIN -- 0.63%
Telefonica 34,000 849,397
SWEDEN -- 7.16%
A Com (a) 31,400 715,901
Assa Abloy (Class B) 155,440 2,182,992
Connecta (a) 9,200 313,550
Ericsson LM (Class B) 23,500 1,510,695
Framtidsfabriken (Class A) (a) 4,100 742,038
Hennes & Mauritz (Class B) 57,400 1,922,553
Modern Time Group (Class B) (a) 16,400 813,351
Securitas (Class B) 46,600 843,389
Svenska Handelsbanken Series A 45,400 570,901
------------
9,615,370
SWITZERLAND -- 7.54%
Credit Suisse Group 13,200 2,623,752
Nestle 600 1,099,165
Pharma Vision 2000 (a) 600 425,799
Roche Holdings 72 1,175,658
Roche Holdings Genusschein 300 3,560,887
Schweizerische
Rueckversicherungs-
Gesellschaft 600 1,232,556
------------
10,117,817
</TABLE>
35
<PAGE> 36
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
UNITED KINGDOM -- 17.08%
Amvescap 110,000 $ 1,279,318
BP Amoco (ADR) 18,600 1,103,213
British Telecom 53,000 1,284,164
Capita Group 64,300 1,168,468
CGU 32,000 516,379
Compass Group 150,000 2,059,508
Diageo 46,000 367,061
Dixons Group 58,000 1,395,942
Hays 72,700 1,160,231
HSBC Holdings 121,800 1,688,060
Invensys 157,000 830,065
Lloyds TSB Group 75,600 939,077
Misys 116,400 1,806,881
Next 64,000 614,072
Provident Financial 49,100 545,661
Rentokil Initial 264,800 962,396
Schroders 36,000 724,559
Securicor 48,700 124,291
Smithkline Beecham 58,000 735,446
Vodafone AirTouch 290,230 1,446,696
WPP Group 139,200 2,181,043
------------
22,932,531
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $88,464,507) 125,672,538
- ---------------------------------------------------------------------
PREFERRED STOCK -- 1.15%
- ---------------------------------------------------------------------
GERMANY -- 1.15%
SAP 2,575 1,551,167
------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $815,349) 1,551,167
- ---------------------------------------------------------------------
CONVERTIBLE SECURITY -- 0.37%
- ---------------------------------------------------------------------
UNITED STATES -- 0.37%
Salomon Smith Barney Holdings
Inc. "QUANTO", convertible on
05/09/00 (a) 500,000 500,136
------------
TOTAL CONVERTIBLE SECURITY
(IDENTIFIED COST $500,000) 500,136
- ---------------------------------------------------------------------
WARRANTS -- 0.32%
- ---------------------------------------------------------------------
SWITZERLAND -- 0.32%
Zuercher Kantonalbank Call
Warrant Expires 09/15/00 (e) $ 550,000 $ 428,311
------------
TOTAL WARRANTS
(IDENTIFIED COST $352,888) 428,311
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 3.70%
- ---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $5,025,000, 6.25% due
02/15/17, Value $5,181,314 4,963,000 $ 4,963,000
------------
TOTAL REPURCHASE AGREEMENTS
(IDENTIFIED COST $4,963,000) 4,963,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS+
(IDENTIFIED COST $95,095,744) $133,115,152
OTHER ASSETS LESS LIABILITIES -- 0.85% 1,139,904
------------
NET ASSETS -- 100% $134,255,056
=====================================================================
</TABLE>
(a) Non-income producing security.
(e) The warrants entitle the Portfolio to purchase 1 share of Credit Suisse
Group for every 40 warrants held and 290 CHF until September 15, 2000.
(ADR) American Depository Receipt.
+ Industry classifications for the portfolio as a percentage of total market
value at December 31, 1999 are as follows: (unaudited)
<TABLE>
<CAPTION>
Industry
--------
<S> <C>
Aerospace & Military Technology 1.75%
Appliances & Household Durables 3.34%
Automobiles 1.27%
Banking 6.53%
Beverages & Tobacco 1.85%
Broadcasting & Publishing 3.36%
Building Materials & Components 2.06%
Business & Public Service 13.46%
Data Processing & Reproduction 2.68%
Electrical & Electronics 1.12%
Electronic Components, Instruments 11.19%
Energy Sources 2.33%
Financial Services 3.70%
Food & Household Products 2.00%
Health & Personal Care 6.99%
Industrial Components 0.80%
Insurance 7.79%
Machinery & Engineering 0.45%
Merchandising 3.64%
Multi-Industry 0.93%
Real Estate 0.66%
Recreation, Other Consumer Goods 1.40%
Telecommunications 15.28%
Textiles & Apparel 0.90%
Cash/Other 4.52%
------
Total 100.00%
======
</TABLE>
See notes to financial statements.
36
<PAGE> 37
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
OPCAP ADVISORS, INC.
NEW YORK, NEW YORK
SANFORD C. BERNSTEIN & CO., INC.
NEW YORK, NEW YORK
Investment Management
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, manages
approximately $52 billion for institutional clients, and its normal investment
minimum is $20 million.
Sanford C. Bernstein & Co., Inc., which has approximately $88 billion in
assets under management, became co-portfolio manager of the Portfolio on
November 1, 1999. Bernstein's normal investment minimum is $5 million.
Investment Objective
The objective of the Enterprise Managed Portfolio is to seek growth of
capital over time.
Investment Strategies
The Managed Portfolio invests in a diversified portfolio of common stocks,
bonds and cash equivalents. The allocation of the Portfolio's assets among the
different types of permitted investments will vary from time to time based upon
economic and market trends and the relative values available from such types of
securities at any given time. There is neither a minimum nor a maximum
percentage of the Portfolio's assets that may, at any given time, be invested in
any specific types of investments. However, the Portfolio invests primarily in
equity securities at times when the Portfolio Managers believe that the best
investment values are available in the equity markets. The Portfolio may invest
almost all of its assets in high-quality short-term money market and cash
equivalents to preserve capital. Consequently, while the Portfolio will earn
income to the extent it is invested in bonds or cash equivalents, the Portfolio
does not have any specific income objective. The bonds in which the Portfolio
may invest will normally be investment grade intermediate to long-term U.S.
Government and corporate debt.
1999 Performance Review -- OpCap Advisors
In 1999 the U.S. stock market continued to advance strongly. The S&P 500
Index rose 21.0 percent, returning more than 20 percent for a record fifth
consecutive year. Even as the popular indexes kept hitting new highs, however,
the U.S. market was characterized by two contradictory trends: the rapid
escalation of technology stocks, especially those associated with the Internet
and e-commerce, and the only modest gains or even price declines for many stocks
in other industry sectors.
More than half the stocks on the New York Stock Exchange actually declined
in price during the year, and the Russell 1000 Value Index, a widely followed
large cap value benchmark, rose a relatively modest 6.7 percent in 1999 even
though many of the companies in the index continued to generate strong earnings
growth. Performance disparities among industry sectors and types of stocks are
hardly new. Nonetheless, few such disparities have been as extreme as that which
occurred during 1999 between the high-flying tech stocks and the rest of the
market. The outperformance of technology stocks became most pronounced in the
fourth quarter, when the S&P 500 rose 14.9 percent while the tech-heavy NASDAQ
composite delivered a total return of 48.3 percent.
Much of the current fervor surrounding tech stocks stems from the explosive
growth potential of e-commerce and other tech-related businesses.
Internet-related stocks such as America Online, Yahoo!, Amazon and eBay advanced
more than 20 percent in December alone, even though many of these companies have
yet to earn any profit and are expected to remain unprofitable in the near term.
This lack of current earnings, and uncertainty over when earnings will occur,
makes these stocks risky and even undesirable for investors who are not simply
chasing the upward momentum of stocks that keep rising with little or no direct
relationship to fundamentals.
OpCap has always been thoughtful in its value style to consider companies
across the breadth of the market, including technology companies. And, in fact,
the Portfolio made money on several of the more established technology stocks
during the past year -- companies with strong market Positions and improving
profitability. However, in the current ebullient market for tech
37
<PAGE> 38
stocks, it has become increasingly difficult to find value in the sector. As a
result, the Portfolio's investment results trailed the S&P 500 and other major
market indexes due in part to an underweighting in the technology sector.
Whether the current tech stock craze turns out to be a bubble that bursts
remains to be seen. Even if it does burst, however, the technology industry will
continue to grow and create enormous economic wealth. OpCap's challenge as value
investors, therefore, is to identify solid companies that stand to benefit from
this growth. In recent months, OpCap has intensified research efforts aimed at
buying technology companies with staying power and where share prices bear some
reasonable relationship to underlying value. OpCap bought several such stocks
and will continue efforts to find additional technology issues that meet its
value criteria, while maintaining OpCap's broadly based research programs to
uncover excellent investment opportunities in all industry sectors.
1999 Performance Review -- Sanford C. Bernstein
Bernstein became co-manager of the Enterprise Managed Portfolio in
November. Bernstein's portion of the Portfolio not completely restructured until
late in the month. December was the first full month of performance.
Stock selection hurt performance in December. Most significantly, the
Portfolio was overweight electric utilities versus telecom in the utilities
sector and the Portfolio's telecom holdings were in traditional, rather than
extremely high-priced cellular companies. Stock selection within consumer growth
also hurt, as several leading pharmaceutical companies traded down. Partly
offsetting this, however, was strong stock selection within the financial,
credit non-financial, industrial resources and technology sectors.
The five largest contributors to performance in the month were Amgen,
Bausch & Lomb, Georgia Pacific, Lehman Brothers Holdings and Motorola. The five
largest detractors from performance were an underweight in QUALCOMM and
overweight positions of Goodyear Tire & Rubber, Inc., Bristol Myers Squibb, and
Johnson & Johnson.
Sector weights contributed 0.37 percent to performance. Most important were
underweight positions in the consumer growth and consumer staples sectors.
Overweights of the utilities and energy sectors, however, detracted from
performance.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LIPPER FLEXIBLE PORTFOLIO
MANAGED PORTFOLIO S&P 500* INDEX**
----------------- -------- -------------------------
<S> <C> <C> <C>
12/31/89 10000 10000 10000
1990 9639 9689 10093
1991 14071 12641 12814
1992 16694 13605 13539
1993 18429 14976 15263
1994 18901 15174 14855
1995 27763 20876 18360
1996 34279 25669 20949
1997 42677 34232 24771
1998 46066 44012 28862
1999 50312 53268 31689
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lipper Flexible Portfolio Fund Index is an unmanaged
index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Flexible Portfolio Fund category. It assumes
the reinvestment of dividends and capital gains and does not
include any management fees or expenses. One cannot invest in an
index.
38
<PAGE> 39
Future Investment Strategy -- OpCap Advisors
OpCap remains optimistic about the outlook for its style of value investing
and believes the Portfolio is positioned to perform well in the months ahead.
The companies the Portfolio owns have strong competitive positions, and on
average their share prices trade at discounts to the S&P 500. OpCap believes the
market will ultimately shift back to an emphasis on company fundamentals,
benefiting the value approach.
Nonetheless, the Portfolio has a larger-than-normal cash position,
reflecting OpCap's caution in adding to equity holdings at a time when
technology stocks keep rising and many other stocks have languished. OpCap
thinks there are many opportunities in today's market to buy quality businesses
with solid fundamentals inexpensively and that many of these companies will
improve their earnings as the economies of Asia and Europe strengthen. OpCap
believes also, however, that the Portfolio has the luxury of being opportunistic
about waiting for attractive prices and building positions over time given the
current malaise of many non-tech issues.
Future Investment Strategy -- Sanford C. Bernstein
The cheapest 100 stocks in the S&P 500 are now trading at their lowest
valuations relative to the market as a whole in 25 years, but with far less
risk. While a small fraction of the Portfolio's overweight value holdings is
invested in companies suffering serious short-term earnings reverses, most are
in companies meeting or exceeding short-term earnings expectations. In fact,
consensus earnings forecasts for many of the Portfolio's holdings have turned up
sharply. While some of these companies' share prices have recently recovered
some of their lost ground, they remain cheap not only in Bernstein's eyes, but
in managements'. Stock buyback activity has been unusually high for many of the
Portfolio's holdings.
Producers of industrial commodities are among the investments in the
Portfolio that are showing the strongest fundamental improvement, with commodity
prices rising strongly on improved demand and corporate restructuring efforts
bearing fruit. The turnaround in paper was particularly rapid. Global capacity
utilization for pulp, uncoated free sheet and linerboard has been rising and
steadily pushing up pricing. In every case, however, current pricing is still
quite a bit below the peaks of the last cycle, so there is still room for
further improvement.
Over the last few years, department stores have been designated the
dinosaurs of retailing, with specialty stores such as The Gap and discounters
such as Wal-Mart purportedly drawing the crowds of shoppers and Internet
retailers supposedly changing the rules of the game. In Bernstein's view, this
has created many attractive opportunities. For example, Federated Department
Stores, one of the Portfolio's holdings, is flourishing. Its sales-per-store
rose at a healthy clip in 1999, with more shoppers spending more money at
Bloomingdale's and Macy's than ever. Federated is also tackling the Internet.
About a year ago, it purchased Fingerhut, a catalog retailer with a highly
regarded Internet whiz at its helm. When Wal-Mart and e-Toys hired a firm to
distribute their goods to Internet customers, they chose Fingerhut. May
Department Stores, meanwhile, is the class act of its industry. Operator of Lord
& Taylor's, Robinsons-May, Hecht's, Foley's and Kaufmann's, May has one of the
most consistent track records in this cyclical industry. Bernstein finds May,
like Federated, a very compelling value.
The electric utility industry has lagged the market since late 1993, except
for a brief period of outperformance during the market downturn in 1998.
Recently, these stocks have fallen even further behind as their unexciting
growth prospects failed to capture the imagination of investors preoccupied with
the Internet. Concerns about deregulation and rising interest rates have also
contributed to electric utilities' underperformance and set up a compelling
opportunity. Valuations are now at record lows relative to the market. The
particular utilities the Portfolio is buying may remain competitive even through
deregulation because they enjoy low-cost positions or a favorable regulatory
environment or both. American Electric Power (AEP), for example, has the
lowest-cost fossil-fuel generating assets in the country because most of its
generating plants sit on top of coalmines and do not have to pay for
transportation. Central and South West, with which AEP is about to merge, is
also a low-cost provider. AEP and Central and South West are not the only
attractive utilities Bernstein sees. The Portfolio is also buying Ameren,
FirstEnergy and New Century Energies. If electric utilities continue to
underperform, they could become a larger theme in the Portfolio.
Bernstein continues to see potentially large opportunities in the value
realm. The Portfolio has continued to be attractively priced relative to the S&P
500, with price-to-earnings and price-to-book ratios lower than the index's, and
a higher dividend yield. It maintains a weighted-average capitalization
comparable to the S&P 500.
The views expressed in this report reflect those of the Portfolio Managers
only through the end of the period of the report as stated on the cover. The
managers' views are subject to change at any time based on market and other
conditions.
39
<PAGE> 40
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 85.61% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 2.60%
Boeing Company 1,310,600 $ 54,471,812
Honeywell International Inc. 70,100 4,043,894
Northrop Grumman Corporation 21,400 1,156,938
--------------
59,672,644
AUTOMOTIVE -- 1.26%
Cummins Engine Company Inc. 80,000 3,865,000
Delphi Automotive Systems
Corporation 421,400 6,637,050
Ford Motor Company 116,900 6,246,844
General Motors Corporation 23,400 1,700,887
Genuine Parts Company 234,900 5,828,456
Goodyear Tire & Rubber Company 113,600 3,202,100
Paccar Inc. 15,600 691,275
TRW Inc. 15,700 815,419
--------------
28,987,031
BANKING -- 6.34%
Bank of America Corporation 271,500 13,625,906
Bank One Corporation 162,100 5,197,331
Chase Manhattan Corporation 125,200 9,726,475
First Union Corporation 102,300 3,356,719
FleetBoston Financial
Corporation 247,500 8,616,094
J. P. Morgan & Company Inc. 59,200 7,496,200
M & T Bank Corporation 58,500 24,233,625
National City Corporation 37,300 883,544
PNC Bank Corporation 95,300 4,240,850
Republic New York Corporation 58,100 4,183,200
Summit Bancorp 33,000 1,010,625
Wells Fargo & Company 1,551,000 62,718,562
--------------
145,289,131
BROADCASTING -- 1.37%
AMFM Inc. (a) 80,000 6,260,000
News Corporation Ltd. (ADR) 540,000 18,056,250
Time Warner Inc. 27,900 2,021,006
Viacom Inc. (a) 82,500 4,986,094
--------------
31,323,350
BROKERS -- 0.49%
Bear Stearns Companies Inc. 120,800 5,164,200
Lehman Brothers Holdings Inc. 72,200 6,114,438
--------------
11,278,638
BUILDING & CONSTRUCTION -- 0.03%
Lowes Companies Inc. 13,300 794,675
CABLE -- 0.05%
Mediaone Group Inc. (a) 13,500 1,036,969
CAPITAL GOODS &
SERVICES -- 0.10%
Cooper Industries Inc. 58,600 2,369,638
CHEMICALS -- 3.47%
Ashland Inc. 93,100 3,066,481
Du Pont (E. I.) de Nemours &
Company 831,700 54,788,238
Monsanto Company 400,000 14,250,000
Union Carbide Corporation 110,700 7,389,225
--------------
79,493,944
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
COMPUTER HARDWARE -- 6.55%
Apple Computer Inc. 31,100 $ 3,197,469
Cisco Systems Inc. (a) 355,900 38,125,787
Compaq Computer Corporation 742,500 20,093,906
Dell Computer Corporation (a) 200,500 10,225,500
EMC Corporation (a) 115,200 12,585,600
Hewlett-Packard Company 159,800 18,207,213
Intel Corporation 335,400 27,607,613
International Business
Machines Corporation 171,800 18,554,400
Seagate Technology Inc. (a) 31,700 1,476,031
--------------
150,073,519
COMPUTER SERVICES -- 1.91%
America Online Inc. (a) 224,800 16,958,350
Electronic Data Systems
Corporation 91,000 6,091,312
LSI Logic Corporation (a) 29,800 2,011,500
Solectron Corporation (a) 9,500 903,688
Sun Microsystems Inc. (a) 185,000 14,325,937
Yahoo! Inc. (a) 8,000 3,461,500
--------------
43,752,287
COMPUTER SOFTWARE -- 5.37%
Computer Associates
International Inc. 741,800 51,879,638
Microsoft Corporation (a) 478,100 55,818,175
Oracle Corporation (a) 136,500 15,296,531
--------------
122,994,344
CONGLOMERATES -- 1.96%
Minnesota Mining &
Manufacturing Company 264,400 25,878,150
Textron Inc. 250,000 19,171,875
--------------
45,050,025
CONSUMER PRODUCTS -- 1.01%
Black & Decker Corporation 33,600 1,755,600
Briggs & Stratton Corporation 20,700 1,110,038
Nike Inc. (Class B) 24,800 1,229,150
Procter & Gamble Company 120,300 13,180,369
Whirlpool Corporation 90,600 5,894,662
--------------
23,169,819
CONSUMER SERVICES -- 0.25%
First Data Corporation 116,400 5,739,975
CRUDE & PETROLEUM -- 2.82%
Anadarko Petroleum Corporation 77,800 2,654,925
Chevron Corporation 119,700 10,369,013
Exxon Mobil Corporation 375,500 30,251,219
Royal Dutch Petroleum Company
(ADR) 315,500 19,068,031
Texaco Inc. 43,300 2,351,731
--------------
64,694,919
ELECTRICAL EQUIPMENT -- 2.49%
Emerson Electric Company 120,000 6,885,000
General Electric Company 302,300 46,780,925
Teradyne Inc. (a) 51,400 3,392,400
--------------
57,058,325
ELECTRONICS -- 0.11%
Rockwell International
Corporation 50,800 2,432,050
</TABLE>
40
<PAGE> 41
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
ENERGY -- 1.09%
AES Corporation (a) 30,800 $ 2,302,300
Atlantic Richfield Company 64,100 5,544,650
Cinergy Corporation 154,300 3,722,487
El Paso Energy Corporation 28,800 1,117,800
Enron Corporation 6,000 266,250
FirstEnergy Corporation 273,200 6,198,225
New Century Energies Inc. 190,000 5,771,250
--------------
24,922,962
ENTERTAINMENT & LEISURE -- 0.20%
Walt Disney Company 85,000 2,486,250
Harrahs Entertainment Inc. (a) 83,400 2,204,888
--------------
4,691,138
FINANCE -- 1.77%
Dun & Bradstreet Corporation 114,800 3,386,600
Household International Inc. 574,900 21,415,025
Merrill Lynch & Company Inc. 31,600 2,638,600
MGIC Investment Corporation 77,000 4,634,437
Morgan Stanley Dean Witter &
Company 58,800 8,393,700
--------------
40,468,362
FOOD & BEVERAGES & TOBACCO -- 2.65%
Anheuser Busch Companies Inc. 101,800 7,215,075
Coca-Cola Company 151,800 8,842,350
Conagra Inc. 108,800 2,454,800
Diageo (ADR) 709,900 22,716,800
Fortune Brands Inc. 74,000 2,446,625
General Mills Inc. 65,400 2,338,050
Great Atlantic & Pacific Tea
Company 81,300 2,266,237
Philip Morris Companies Inc. 474,000 10,990,875
Unilever N V 7,000 381,063
Wendys International Inc. 47,900 987,937
--------------
60,639,812
HEALTH CARE -- 0.28%
Bausch & Lomb Inc. 67,900 4,646,906
United Healthcare Corporation 33,300 1,769,063
--------------
6,415,969
HOTELS & RESTAURANTS -- 2.89%
McDonald's Corporation 1,645,900 66,350,344
INSURANCE -- 1.74%
ACE Ltd. 200,000 3,337,500
Aon Corporation 23,700 948,000
XL Capital Ltd. (Class A) 685,961 35,584,227
--------------
39,869,727
MACHINERY -- 1.37%
Applied Materials Inc. (a) 85,400 10,819,112
Caterpillar Inc. 437,850 20,606,316
--------------
31,425,428
MANUFACTURING -- 1.92%
FMC Corporation (a) 87,000 4,986,187
ITT Industries Inc. 1,000,000 33,437,500
Tyco International Ltd. 145,600 5,660,200
--------------
44,083,887
MEDICAL INSTRUMENTS -- 0.12%
PE Corporation 23,700 2,851,406
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
METALS & MINING -- 0.34%
Alcoa Inc. 17,600 $ 1,460,800
INCO Ltd. (a) 90,600 2,129,100
Nucor Corporation 46,300 2,537,819
Worthington Industries Inc. 101,700 1,684,406
--------------
7,812,125
MISC. FINANCIAL
SERVICES -- 6.30%
American Express Company 62,300 10,357,375
Citigroup Inc. 1,244,300 69,136,419
Federal National Mortgage
Association 116,800 7,292,700
Freddie Mac 1,225,600 57,679,800
--------------
144,466,294
MULTI-LINE INSURANCE -- 0.77%
American General Corporation 73,000 5,538,875
American International Group
Inc. 93,900 10,152,937
Lincoln National Corporation 48,900 1,956,000
--------------
17,647,812
OIL SERVICES -- 0.72%
Kerr-McGee Corporation 15,900 985,800
Occidental Petroleum
Corporation 286,700 6,199,887
Phillips Petroleum Company 147,000 6,909,000
Rowan Companies Inc. 113,300 2,457,194
--------------
16,551,881
PAPER & FOREST PRODUCTS -- 1.92%
Champion International
Corporation 407,400 25,233,337
Fort James Corporation 4,400 120,450
Georgia-Pacific Group 160,400 8,140,300
International Paper Company 150,200 8,476,912
Temple-Inland Inc. 30,200 1,991,313
--------------
43,962,312
PAPER PRODUCTS -- 0.29%
Boise Cascade Corporation 31,000 1,255,500
Westvaco Corporation 99,700 3,252,712
Willamette Industries Inc. 45,300 2,103,619
--------------
6,611,831
PHARMACEUTICALS -- 4.99%
Abbott Laboratories 62,100 2,255,006
American Home Products
Corporation 778,200 30,690,262
Amgen Inc. (a) 126,200 7,579,888
Baxter International Inc. 102,700 6,450,844
Bristol-Myers Squibb Company 259,400 16,650,237
Eli Lilly & Company 40,200 2,673,300
Johnson & Johnson 201,700 18,783,312
Merck & Company Inc. 229,400 15,384,138
Pfizer Inc. 258,200 8,375,363
Pharmacia & Upjohn Inc. 31,900 1,435,500
Schering-Plough Corporation 56,400 2,379,375
Warner-Lambert Company 22,000 1,802,625
--------------
114,459,850
PRINTING & PUBLISHING -- 0.45%
Donnelley (R. R.) & Sons
Company 419,500 10,408,844
PROPERTY-CASUALTY INSURANCE -- 0.10%
St. Paul Companies Inc. 68,500 2,307,594
PUBLISHING -- 0.04%
New York Times Company 16,800 825,300
RAW MATERIALS -- 0.17%
Weyerhaeuser Company 54,800 3,935,325
</TABLE>
41
<PAGE> 42
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
RETAIL -- 3.99%
Dayton Hudson Corporation 77,100 $ 5,662,031
Federated Department Stores
Inc. (a) 153,100 7,741,119
Gap Inc. 65,700 3,022,200
Home Depot Inc. 226,500 15,529,406
K-Mart Corporation (a) 144,000 1,449,000
Limited Inc. 117,400 5,084,887
May Department Stores Company 198,800 6,411,300
The Kroger Company 650,000 12,268,750
TJX Companies Inc. 144,100 2,945,044
Wal-Mart Stores Inc. 452,400 31,272,150
--------------
91,385,887
SAVINGS AND LOAN -- 0.24%
Golden West Financial
Corporation 96,300 3,226,050
Washington Mutual Inc. 86,700 2,254,200
--------------
5,480,250
TECHNOLOGY -- 0.67%
Micron Technology Inc. (a) 51,600 4,011,900
Texas Instruments Inc. 116,300 11,266,563
--------------
15,278,463
TELECOMMUNICATIONS -- 8.45%
Alltel Corporation 84,900 7,020,169
AT&T Corporation 423,300 21,482,475
Bell Atlantic Corporation 597,700 36,795,906
BellSouth Corporation 49,300 2,307,856
GTE Corporation 128,400 9,060,225
Lucent Technologies Inc. 282,400 21,127,050
MCI WorldCom Inc. (a) 338,250 17,948,391
Nortel Networks Corporation 158,800 16,038,800
QUALCOMM Inc. (a) 47,600 8,383,550
SBC Communications Inc. 209,800 10,227,750
Sprint Corporation 614,000 41,329,875
Tellabs Inc. (a) 22,400 1,437,800
U.S. West Inc. 7,600 547,200
--------------
193,707,047
TRANSPORTATION -- 1.18%
Burlington Northern Santa Fe
Corporation 8,800 213,400
CSX Corporation 91,900 2,883,363
UAL Corporation (a) 245,000 19,002,812
Union Pacific Corporation 112,800 4,920,900
--------------
27,020,475
UTILITIES -- 1.08%
Ameren Corporation 167,200 5,475,800
American Electric Power Inc. 185,700 5,965,612
GPU Inc. 183,500 5,493,531
KLA Tencor Corporation (a) 30,500 3,396,938
Texas Utilities Company 124,600 4,431,088
--------------
24,762,969
WASTE MANAGEMENT -- 0.90%
Waste Management Inc. 1,200,000 20,625,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
WIRELESS COMMUNICATIONS -- 0.80%
Motorola Inc. 124,700 $ 18,362,075
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,704,554,825) 1,962,541,652
- ----------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.69%
- ----------------------------------------------------------------------
Federal National Mortgage
Association, 6.50% due
08/15/04 $105,000,000 103,718,633
--------------
Federal National Mortgage
Association Discount Notes,
5.65% due 01/31/00 50,000,000 49,764,583
--------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION
(IDENTIFIED COST $153,661,596) 153,483,216
- ----------------------------------------------------------------------
U.S. TREASURY NOTES -- 0.09%
- ----------------------------------------------------------------------
U.S. Treasury Note 7.875% due
08/15/01 1,976,500 2,025,263
--------------
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $1,985,722) 2,025,263
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 3.70%
- ----------------------------------------------------------------------
American Express Credit
Corporation, 6.25% due
01/14/00 35,000,000 34,921,007
Ford Motor Credit Company
6.06% due 01/12/00 50,000,000 49,907,417
--------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $84,828,424) 84,828,424
- ----------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.00%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $16,050,000, 5.75% due
08/15/03, Value $16,112,781
U.S. Treasury Note
$30,685,000, 5.75% due
08/15/03, Value $30,808,750 45,868,000 45,868,000
--------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $45,868,000) 45,868,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $1,990,898,567) $2,248,746,555
OTHER ASSETS LESS LIABILITIES -- 1.91% 43,720,651
--------------
NET ASSETS -- 100% $2,292,467,206
======================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
42
<PAGE> 43
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO
MONTAG & CALDWELL
ATLANTA, GEORGIA
Investment Management
Montag & Caldwell, which has approximately $35 billion in assets under
management, became manager of the Portfolio on July 15, 1999, the Portfolio's
inception date. Montag's normal investment minimum for a separate account is $40
million.
Investment Objective
The Portfolio seeks long-term total return.
Investment Strategies
Generally, between 55 percent and 75 percent of the Balanced Portfolio's
total assets will be invested in equity securities, and at least 25 percent of
the Balanced Portfolio's total assets will be invested in fixed income
securities. The portfolio allocation will vary based upon the Portfolio
Manager's assessment of the return potential of each asset class. For equity
investments, the Portfolio Manager uses a bottom-up approach to stock selection,
focusing on high quality, well-established companies that have a strong history
of earnings growth; attractive prices relative to the company's potential for
above average; long-term earnings and revenue growth; strong balance sheets; a
sustainable competitive advantage; the potential to become (or currently are)
industry leaders; and the potential to outperform the market during downturns.
When selecting fixed income securities, the Portfolio Manager will seek to
maintain the Portfolio's weighted average duration within 20 percent of the
duration of the Lehman Brothers Government Corporate Index. Emphasis is also
placed on diversification and credit analysis. The Portfolio will only invest in
fixed income securities with an "A" or better rating. Fixed income investments
will include: U.S. Government securities; corporate bonds; mortgage/asset-backed
securities; and money market securities and repurchase agreements.
1999 Performance Review
Due to the strength in the Portfolio's equities, the Portfolio is off to a
good start since its inception date of July 1, 1999. While the S&P 500 and other
market-weighted indices made considerable progress in 1999, many stocks showed
little change or actually declined in price. The year's stock market advance was
extremely narrow, dominated almost exclusively by the technology sector.
Montag thinks the weakness in the broader market is related to the increase
in both short and long-term interest rates. Higher interest rates increase the
costs of borrowing for consumers and businesses and reduce the attractiveness of
stocks versus higher yielding bonds.
43
<PAGE> 44
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
BALANCED PORTFOLIO 60% S&P 500/40% LIPPER BALANCED INDEX*
------------------ LEHMAN BROTHERS ----------------------
GOV'T/CORP INDEX*
-----------------
<S> <C> <C> <C>
7/31/99 10,000.00 10,000.00 10,000.00
1999 10,766.00 10,685.00 10,460.00
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* Return calculated as of July 31, 1999 to correspond with the
indices indicated. Actual return since inception of July 15, 1999
was 4.00%.
** The S&P 500 is an unmanaged index that includes the common stocks
of 500 companies that tend to be leaders in important industries
within the U.S. economy. It assumes the reinvestment of dividends
and distributions and does not include any management fees or
expenses. The Lehman Brothers Intermediate Government/Bond Index
is an unmanaged index of all investment grade bonds in the Lehman
Brothers Bond Index and Government Bond Index that have at least
one year to maturity. It includes reinvested interest and excludes
any transaction or holding charges. The Lipper Balanced Index is
an unmanaged index of the 30 largest funds, based on total
year-end net assets, in the Lipper Balanced Fund category. It
assumes the reinvestment of dividends and capital gains and does
not include any management fees or expenses. One cannot invest in
an index.
Future Investment Strategy
While many technology stocks are now richly valued, Montag believes there
are still selective opportunities in technology. Global industry conditions
remain robust, and the build-out of the Internet is increasing the demand for
technology goods and services.
As it becomes more evident to investors that the Federal Reserve will be
successful at engineering a soft landing for the U.S. economy, the broader
market may begin to improve. Bond yields may then stabilize and drift somewhat
lower as the economy slows; and investors may become increasingly confident that
corporate profits can keep growing since a recession-induced decline in profits
may not be needed to keep inflation in check. Because the Federal Reserve is
operating in a preemptive fashion, Montag believes the Fed will be successful in
achieving sustained economic growth with low inflation and, as a result, the
stock market will begin to broaden out while it continues toward higher levels.
In addition to selective technology issues, Montag continues to view the
shares of global, consumer growth companies as quite attractive. With the
triumph of capitalism, the longer-term opportunities for these high quality
companies may be enormous. Now that consumers overseas are benefiting from the
pickup in world trade, the intermediate term outlook is also quite good. Montag
expects research-driven pharmaceutical and medical device companies to perform
better in 2000 because their shares represent excellent value and offer strong
double-digit earnings growth prospects. Well-positioned consumer-oriented
companies with a global opportunity, but more dependent on the U.S. economy, may
also do well as it becomes more evident that a soft economic landing has been
achieved.
Although Montag's long-term outlook for bonds is positive, Montag
anticipates that short-term anxiety over further Federal Reserve action and
concern about the strength of holiday retail spending may cause interest rates
to increase temporarily. With real GDP continuing to increase at a strong rate,
many market participants expect the Fed to increase short-term interest rates at
their February meeting. Inflation continues to be contained despite tight labor
markets and strength in global economies. Montag expects that the combination of
preemptive actions by the Fed and continued tame inflation will lead to a soft
landing that may allow interest rates to drift lower over the long term.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
44
<PAGE> 45
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 65.78% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
BANKING -- 1.51%
Wells Fargo & Company 3,700 $ 149,619
BUSINESS SERVICES -- 1.93%
Interpublic Group of Companies
Inc. 3,300 190,369
COMPUTER HARDWARE -- 6.59%
Dell Computer Corporation (a) 2,100 107,100
EMC Corporation (a) 1,300 142,025
Hewlett-Packard Company 2,300 262,056
Intel Corporation 1,700 139,931
--------------
651,112
COMPUTER SERVICES -- 3.27%
Electronic Data Systems
Corporation 3,400 227,587
Solectron Corporation (a) 1,000 95,125
--------------
322,712
COMPUTER SOFTWARE -- 7.25%
Electronic Arts Inc. (a) 2,000 168,000
Microsoft Corporation (a) 2,300 268,525
Oracle Corporation (a) 2,500 280,156
--------------
716,681
CONSUMER PRODUCTS -- 6.38%
Gillette Company 6,300 259,481
Newell Rubbermaid Inc. 4,500 130,500
Procter & Gamble Company 2,200 241,038
--------------
631,019
ELECTRICAL EQUIPMENT -- 1.41%
General Electric Company 900 139,275
ENTERTAINMENT & LEISURE -- 1.11%
Carnival Corporation 2,300 109,969
FOOD & BEVERAGES & TOBACCO -- 5.28%
Bestfoods 3,400 178,712
Coca-Cola Company 4,500 262,125
PepsiCo Inc. 2,300 81,075
--------------
521,912
HEALTH CARE -- 1.48%
Medtronic Inc. 4,000 145,750
HOTELS & RESTAURANTS -- 4.44%
Marriott International Inc.
(Class A) 5,100 160,969
McDonald's Corporation 6,900 278,156
--------------
439,125
MEDICAL INSTRUMENTS -- 1.77%
Boston Scientific Corporation
(a) 8,000 175,000
MISC. FINANCIAL
SERVICES -- 1.51%
American Express Company 900 149,625
MULTI-LINE INSURANCE -- 2.19%
American International Group
Inc. 2,000 216,250
PHARMACEUTICALS -- 7.69%
Bristol-Myers Squibb Company 2,600 166,888
Johnson & Johnson 2,000 186,250
Pfizer Inc. 8,000 259,500
Schering-Plough Corporation 3,500 147,656
--------------
760,294
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
RETAIL -- 7.32%
Circuit City Stores Inc. 2,200 $ 99,138
Costco Wholesale Corporation
(a) 1,500 136,875
Gap Inc. 3,900 179,400
Home Depot Inc. 4,500 308,531
--------------
723,944
TELECOMMUNICATIONS -- 4.65%
MCI WorldCom Inc. (a) 4,800 254,700
Tellabs Inc. (a) 3,200 205,400
--------------
460,100
TOTAL COMMON STOCKS
(IDENTIFIED COST $6,046,433) 6,502,756
- ----------------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 7.01%
- ----------------------------------------------------------------------
ENERGY -- 0.94%
Peco Energy Transport Trust
6.05% due 03/01/09 $ 100,000 92,423
FINANCE -- 2.66%
Citicorp Medium Term
Subordinated Notes, 7.00%
due 07/01/07 100,000 96,205
Ford Motor Credit Company
7.00% due 09/25/01 100,000 100,065
National Rural Utilities
Cooperative Finance, 5.75%
due 11/01/08 75,000 66,844
--------------
263,114
OIL SERVICES -- 1.20%
Conoco Inc. 5.90% due 04/15/04 125,000 119,043
PHARMACEUTICALS -- 1.22%
Warner Lambert Company 5.75%
due 01/15/03 125,000 120,898
RETAIL -- 0.99%
Wal-Mart Stores Inc., 6.875%
due 08/10/09 100,000 97,362
TOTAL CORPORATE BONDS AND NOTES
(IDENTIFIED COST $704,603) 692,840
- ----------------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS -- 21.76%
- ----------------------------------------------------------------------
FEDERAL HOME LOAN BANKS -- 2.77%
Federal Home Loan Bank 5.125%
due 04/17/01 100,000 98,388
Federal Home Loan Mortgage
Corporation, 5.125% due
10/15/08 200,000 175,442
--------------
273,830
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.98%
Federal National Mortgage
Association, 5.75% due
04/15/03 100,000 97,172
</TABLE>
45
<PAGE> 46
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
U. S. TREASURY NOTES -- 10.96%
U.S. Treasury Note 6.625% due
04/30/02 $ 225,000 $ 226,629
U.S. Treasury Note 5.75% due
08/15/03 325,000 318,248
U.S. Treasury Note 7.875% due
11/15/04 300,000 317,130
U.S. Treasury Note 6.25% due
02/15/07 225,000 221,422
--------------
1,083,429
U. S. TREASURY BONDS -- 7.05%
U.S. Treasury Bond 7.25% due
05/15/16 125,000 130,662
U.S. Treasury Bond 8.125% due
08/15/19 175,000 199,369
U.S. Treasury Bond 8.00% due
11/15/21 130,000 147,526
U.S. Treasury Bond 6.25% due
08/15/23 125,000 117,862
U.S. Treasury Bond 6.875% due
08/15/25 100,000 101,809
--------------
697,228
TOTAL U. S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $2,193,403) 2,151,659
- ----------------------------------------------------------------------
REPURCHASE AGREEMENT -- 13.64%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury
Note $1,375,000, 4.50% due
01/31/01, Value $1,402,612 1,348,000 1,348,000
--------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,348,000) 1,348,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $10,292,439) $ 10,695,255
OTHER ASSETS LESS LIABILITIES -- (8.19)% (809,246)
--------------
NET ASSETS -- 100% $ 9,886,009
======================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
46
<PAGE> 47
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
CAYWOOD-SCHOLL CAPITAL MANAGEMENT
SAN DIEGO, CALIFORNIA
Investment Management
Caywood-Scholl has been Portfolio Manager to the Enterprise High-Yield Bond
Portfolio since its inception on November 18, 1994. Caywood-Scholl manages
approximately $1.4 billion for institutional clients, and its normal investment
minimum is $1 million.
Investment Objective
The objective of the Enterprise High-Yield Bond Portfolio is to seek
maximum current income.
Investment Strategies
The High-Yield Bond Portfolio invests primarily in high-yield,
income-producing U.S. corporate bonds rated B3 to Ba1 by Moody's Investors
Service, Inc. ("Moody's") or B- to BB+ by Standard & Poor's corporation ("S&P"),
which are commonly known as "junk bonds." The Portfolio's investments are
selected by the Portfolio Manager after examination of the economic outlook to
determine those industries that appear favorable for investment. Industries
going through a perceived decline generally are not candidates for selection.
After the industries are selected, the Portfolio Manager identifies bonds of
issuers within those industries based on their creditworthiness, their yields in
relation to their credit and the relative value in relation to the high-yield
market. Companies near or in bankruptcy are not considered for investment. The
Portfolio does not purchase bonds which are rated Ca or lower by Moody's or CC
or lower by S&P or which, if unrated, in the judgment of the Portfolio Manager
have characteristics of such lower-grade bonds. Should an investment be
subsequently downgraded to Ca or lower or CC or lower, the Portfolio Manager has
discretion to hold or liquidate the security. Subject to the restrictions
described above, under normal circumstances, up to 20 percent of the Portfolio's
assets may include: (1) bonds rated Caa by Moody's or CCC by S&P; (2) unrated
debt securities which, in the judgment of the Portfolio Manager, have
characteristics similar to those described above; (3) convertible debt
securities; (4) puts, calls and futures as hedging devices; (5) foreign issuer
debt securities; and (6) short-term money market instruments, including
certificates of deposit, commercial paper, U.S. Government securities and other
income producing cash equivalents.
1999 Performance Review
After nine months of lackluster performance, the high yield market turned
in a pretty good fourth quarter. There were several trends that contributed to
the market's rally, including the strong performance of equities, the recovery
of the emerging market debt prices and a balancing of the market technicals
largely due to a strong demand from structured buyers. As was the case for much
of the year demand was concentrated on larger, more liquid issuers, especially
those of higher credit quality.
The fundamentals of the high yield market at year-end 1999 are good. Strong
growth and healthy levels of profitability have allowed many companies to report
record or near record levels of cash flow and profitability. Clearly, the macro
economic foundation to the market is solid. With three interest rate hikes in,
the Fed is out to change current market conditions. Uncertainty is rarely a
investor's friend; therefore, this fundamental is negative for the market.
Equity capital is readily available to companies within favored sectors, namely
telecommunications and media, a notable credit positive for many issuers within
these industries. However, for the remainder of the market's issuers, which tend
to fall into the small capitalization category, access to equity capital was
inconsistent and was generally viewed as unsupportive to credit conditions.
Meanwhile, access to bank financing appears to be quite healthy. Capital access
is moderately favorable for high yield. The threat of deflation is largely
behind us, leaving the old nemesis inflation. However, for the high yield market
inflation is a relatively neutral fundamental. Most high yield issuers have
learned to manage their businesses without the benefit of pricing power. The
default rate of the market has accelerated all year, ending at a 7.78 percent
domestic default rate (per Moody's trailing-twelve-months). Most market
participants believe that the default rate may have peaked or is very close to
making a plateau. Caywood-Scholl believes the current level of defaults is a
negative for the market, but may be largely priced in. From a historical
perspective the high yield market is cheap. Although it may stay this way for
sometime, the compounding of this yield may be attractive to most fixed income
investors.
47
<PAGE> 48
From a technical perspective, the most widely watched barometer of demand
is mutual fund flow. In 1999, high yield mutual fund inflow was $6 billion
compared to $19 billion in 1998. The slackening in demand by mutual fund
investors is believed to have mirrored the general appetite for high yield
bonds. The one notable exception was the structured debt buy or CBO buyer. CBO's
purchased $53 billion in high yield loans and securities in 1999. For much of
the year they were the driving forces behind demand. In 1999, the total supply
of high yield bonds was $100 billion versus $151 billion in 1998. This was the
lowest level of issuance since 1996.
GROWTH OF A $10,000 INVESTMENT
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
LEHMAN HIGH-YIELD BB LIPPER HIGH-YIELD BOND
HIGH-YIELD BOND PORTFOLIO BOND INDEX* FUND INDEX*
------------------------- -------------------- ----------------------
<S> <C> <C> <C>
11/30/94 10000 10000 10000
1994 10111 10079 10025
1995 11788 12280 11767
1996 13314 13376 13296
1997 15096 15066 15047
1998 15639 15955 15035
1999 16243 16254 15753
</TABLE>
Enterprise performance numbers do not include variable account
expenses. Remember that historic performance does not predict
future performance. The investment returns and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* The Lehman Brothers High Yield BB Index is an unmanaged index of
fixed rate, public non-convertible securities that are rated Ba1 or
lower by Moody's Investor Services, or BB+ or lower by Standard &
Poors if a Moody's rating is not equitable. It assumes the
reinvestment of dividends and capital gains and excludes management
fees and expenses. The Lipper High Current Yield Bond Fund Index is
an unmanaged index of the 30 largest funds, based on total year-end
net assets, in the Lipper High Current Yield Fund category. It
assumes the reinvestment of dividends and capital gains and does
not include any management fees or expenses. One cannot invest in
an index.
Future Investment Strategy
The technical picture in the high yield market has been somewhat weak for
nearly the past one and a half years. Caywood-Scholl does not expect this to
dramatically change with the Federal Reserve in the process of slowing economic
growth by raising interest rates. Still, for the long-term investor who is
willing to wait for the fundamentals to rise over the current technical
environment, the market is historically attractive and at worst, no more than
fairly valued. Another defensive characteristic that the high yield market has
historically demonstrated is its low correlation of monthly returns with other
asset classes such as common stock and U.S. treasuries. For those investors
desiring less volatility and high current cash flow, the high yield sector may
be of interest.
The views expressed in this report reflect those of the Portfolio Manager
only through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
48
<PAGE> 49
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
CORPORATE BONDS, CONVERTIBLE
SECURITIES, COMMON & NUMBER OF SHARES OR
PREFERRED STOCKS -- 88.39% PRINCIPAL AMOUNT VALUE
- -------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 0.74%
BE Aerospace Inc.
9.50% due 11/01/08 $ 250,000 $ 234,375
Coltec Industries Inc.
7.50% due 04/15/08 (b) 600,000 574,500
------------
808,875
APPAREL & TEXTILES -- 0.42%
Fruit of the Loom Inc. (b)
8.875% due 04/15/06 700,000 31,500
Levi Strauss & Company
6.80% due 11/01/03 250,000 205,098
Levi Strauss & Company
7.00% due 11/01/06 300,000 219,567
------------
456,165
AUTOMOTIVE -- 1.94%
Avis Rent a Car Inc.
11.00% due 05/01/09 550,000 580,250
Budget Group Inc.
9.125% due 04/01/06 850,000 788,375
Lear Corporation
7.96% due 05/15/05 350,000 335,562
Sonic Automotive Inc. (Series
B)
11.00% due 08/01/08 450,000 430,875
------------
2,135,062
BANKING -- 0.87%
Bay View Capital Corporation
9.125% due 08/15/07 550,000 468,875
Western Financial Savings
Bank Orange California,
8.50% due 07/01/03 550,000 485,375
------------
954,250
BROADCASTING -- 7.35%
Allbritton Communications
Company (Series B),
8.875% due 02/01/08 450,000 435,375
Chancellor Media Corporation
9.00% due 10/01/08 550,000 572,000
Chancellor Media Corporation
(Series B),
8.125% due 12/15/07 750,000 750,000
Echostar DBS Corporation
9.375% due 02/01/09 1,000,000 1,002,500
Fox Family Worldwide Inc.
0/10.25% due 11/01/07 (c) 2,050,000 1,690,937
Fox/Liberty Networks LLC
0/9.75% due 08/15/07 (c) 2,700,000 2,163,375
Rogers Communications Inc.
9.125% due 01/15/06 200,000 200,500
Rogers Communications Inc.
8.875% due 07/15/07 500,000 506,875
Sinclair Broadcast Group Inc.
8.75% due 12/15/07 800,000 750,000
------------
8,071,562
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
BUILDING &
CONSTRUCTION -- 4.82%
American Standard Inc.
7.375% due 02/01/08 $1,400,000 $ 1,295,000
Building Materials
Corporation America (Series
B),
7.75% due 07/15/05 550,000 506,000
Building Materials
Corporation America (Series
B),
8.00% due 10/15/07 400,000 371,000
Group Maintenance America
Corporation,
9.75% due 01/15/09 850,000 843,625
Integrated Electrical
Services
9.375% due 02/01/09 800,000 792,000
Nortek Inc.
8.875% due 08/01/08 400,000 380,000
Nortek Inc. (Series B)
9.125% due 09/01/07 900,000 870,750
Republic Group Inc.
9.50% due 07/15/08 250,000 236,562
------------
5,294,937
BUSINESS SERVICES -- 0.88%
United Rentals Inc. (Series
B)
8.80% due 08/15/08 1,025,000 971,187
CABLE -- 5.91%
Adelphia Communications
Corporation,
7.875% due 05/01/09 250,000 225,000
Adelphia Communications
Corporation,
9.375% due 11/15/09 350,000 344,750
Adelphia Communications
Corporation (Series B),
9.25% due 10/01/02 100,000 100,250
Adelphia Communications
Corporation (Series B),
10.50% due 07/15/04 850,000 887,187
Century Communications
Corporation,
9.50% due 03/01/05 400,000 403,000
Century Communications
Corporation (Series B),
Zero Coupon/8.84% due
01/15/08 (c) 850,000 377,188
Charter Communication
Holdings
8.25% due 04/01/07 1,875,000 1,734,375
Mediacom LLC/Mediacom Capital
Corporation (Series B),
8.50% due 04/15/08 550,000 515,625
Telewest Communications
0/9.25% due 04/15/09 (c) 1,750,000 1,111,250
Williams Communications
Corporation,
10.70% due 10/01/07 750,000 789,375
------------
6,488,000
</TABLE>
49
<PAGE> 50
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
CHEMICALS -- 1.29%
Huntsman Polymers Corporation
11.75% due 12/01/04 $ 250,000 $ 262,500
Lyondell Chemical Company
9.625% due 05/01/07 550,000 565,125
PCI Chemicals Canada Inc.
9.25% due 10/15/07 300,000 231,000
Pioneer Americas Acquisition
Corporation (Series B),
9.25% due 06/15/07 450,000 355,500
------------
1,414,125
COMMUNICATIONS -- 4.13%
Globalstar LP/Globalstar
Capital
11.375% due 02/15/04 1,000,000 677,500
Globalstar LP/Globalstar
Capital
10.75% due 11/01/04 150,000 97,875
Globalstar LP/Globalstar
Capital
11.50% due 06/01/05 $ 250,000 165,625
Globalstar Telecommunications
(Wts) (a) 450 98,871
Level 3 Communications Inc.
9.125% due 05/01/08 $1,025,000 966,063
Level 3 Communications Inc.
0/10.50% due 12/01/08 (c) 700,000 422,625
Loral Space & Communications
Ltd.,
9.50% due 01/15/06 200,000 180,000
Loral Space & Communication
Ltd.
0/12.50% due 01/15/07 (c) $1,100,000 507,375
Loral Space & Communication
Ltd.
(Wts) (a) 600 6,915
Metromedia Fiber Network Inc.
10.00% due 11/15/08 500,000 512,500
Metromedia Fiber Network Inc.
10.00% due 12/15/09 500,000 513,750
Qwest Communications
International Inc. (Series
B),
0/8.29% due 02/01/08 (c) 500,000 381,875
------------
4,530,974
COMPUTER SOFTWARE -- 0.46%
PSINet Inc.
10.50% due 12/01/06 500,000 506,250
CONSUMER PRODUCTS -- 3.22%
Chattem Inc. (Series B)
8.875% due 04/01/08 1,000,000 940,000
Corning Consumer Products
Company (Series B),
9.625% due 05/01/08 350,000 276,063
French Fragrances Inc.
(Series B),
10.375% due 05/15/07 350,000 338,625
French Fragrances Inc.
(Series D),
10.375% due 05/15/07 200,000 193,500
Scotts Company
8.625% due 01/15/09 1,000,000 977,500
Sealy Mattress Company
(Series B),
0/10.875% due 12/15/07 (c) 1,150,000 809,312
------------
3,535,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
CONTAINERS/PACKAGING -- 2.35%
Huntsman Packaging
Corporation
9.125% due 10/01/07 $ 600,000 $ 580,500
Owens Illinois Inc.
8.10% due 05/15/07 550,000 525,702
Owens Illinois Inc.
7.35% due 05/15/08 1,000,000 905,634
United States Can Corporation
(Series B),
10.125% due 10/15/06 550,000 570,625
------------
2,582,461
CRUDE & PETROLEUM -- 0.46%
Clark Refining & Marketing
Inc.
8.875% due 11/15/07 250,000 150,625
Trizec Hahn Corporation
(Series B),
10.875% due 12/01/05 800,000 358,000
------------
508,625
DRUGS & MEDICAL PRODUCTS -- 2.02%
Biovail Corporation
International,
10.875% due 11/15/05 1,100,000 1,152,250
King Pharmaceuticals Inc.
10.75% due 02/15/09 1,000,000 1,065,000
------------
2,217,250
ELECTRONICS -- 0.10%
Axiohm Transaction Solutions
9.75% due 10/01/07 (b) 500,000 113,750
ENERGY -- 1.61%
Calpine Corporation
7.75% due 04/15/09 900,000 852,750
CMS Energy Corporation
7.50% due 01/15/09 250,000 225,376
Cogentrix Energy Inc
8.75% due 10/15/08 150,000 150,938
Ocean Energy Inc. (Series B)
8.375% due 07/01/08 550,000 539,000
------------
1,768,064
FINANCE -- 1.61%
PDVSA Finance Ltd.
9.375% due 11/15/07 400,000 378,884
RBF Finance Company
11.00% due 03/15/06 1,300,000 1,391,000
------------
1,769,884
FOOD & BEVERAGES & TOBACCO -- 3.06%
Canandaigua Brands Inc.
8.625% due 08/01/06 1,000,000 995,000
Canandaigua Brands Inc.
8.50% due 03/01/09 400,000 381,000
NBTY Inc. (Series B)
8.625% due 09/15/07 800,000 736,000
Stater Brothers Holdings Inc.
10.75% due 08/15/06 975,000 977,437
Twin Laboratories Inc.
10.25% due 05/15/06 260,000 273,325
------------
3,362,762
</TABLE>
50
<PAGE> 51
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
GAMING -- 2.85%
Boyd Gaming Corporation
9.50% due 07/15/07 $ 750,000 $ 744,375
Circus Circus Enterprises
Inc.
9.25% due 12/01/05 750,000 761,250
Empress Entertainment Inc.
8.125% due 07/01/06 800,000 793,000
Mirage Resorts Inc.
6.75% due 08/01/07 200,000 176,054
Trump Atlantic City
Associates
11.25% due 05/01/06 800,000 657,000
------------
3,131,679
HEALTH CARE -- 2.88%
Columbia/HCA Healthcare
Corporation,
7.15% due 03/30/04 300,000 278,603
Columbia/HCA Healthcare
Corporation,
7.00% due 07/01/07 500,000 442,363
Columbia/HCA Healthcare
Corporation,
7.25% due 05/20/08 250,000 221,696
Dade International Inc.
(Series B),
11.125% due 05/01/06 350,000 342,125
Fisher Scientific
International Inc.,
9.00% due 02/01/08 $ 850,000 816,000
Fresenius Medical Care
Capital Trust (Preferred
Stock) 150 144,375
Quest Diagnostics Inc.
10.75% due 12/15/06 $ 600,000 631,500
Tenet Healthcare Corporation
8.125% due 12/01/08 300,000 280,123
------------
3,156,785
HOTELS & RESTAURANTS -- 1.91%
Foodmaker Corporation (Series
B)
9.75% due 11/01/03 250,000 255,352
Foodmaker Inc.
8.375% due 04/15/08 950,000 885,875
Hammon (John Q.) Hotels
8.875% due 02/15/04 250,000 225,938
Host Marriot LP
8.375% due 02/15/06 500,000 471,875
Sbarro Inc.
11.00% due 09/15/09 250,000 256,875
------------
2,095,915
MACHINERY -- 1.28%
Applied Power Inc.
8.75% due 04/01/09 1,000,000 977,500
Columbus McKinnon Corporation
8.50% due 04/01/08 500,000 431,250
------------
1,408,750
MEDICAL INSTRUMENTS -- 0.54%
Charles River Labs
13.50% due 10/01/09 250,000 260,000
Fisher Scientific
International Inc.,
9.00% due 02/01/08 350,000 336,000
------------
596,000
MEDICAL SERVICES -- 0.85%
Triad Hospitals Holdings Inc.
11.00% due 05/15/09 900,000 936,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
METALS & MINING -- 1.88%
AK Steel Corporation
7.875% due 02/15/09 $1,200,000 $ 1,140,000
LTV Corporation
11.75% due 11/15/09 200,000 208,500
WCI Steel Inc. (Series B)
10.00% due 12/01/04 700,000 712,250
------------
2,060,750
OIL SERVICES -- 0.86%
Gulf Canada Resources Ltd.
8.375% due 11/15/05 700,000 698,250
Nuevo Energy Company
9.50% due 06/01/08 250,000 249,688
------------
947,938
PAPER & FOREST
PRODUCTS -- 0.82%
Buckeye Cellulose Corporation
8.50% due 12/15/05 550,000 537,625
SD Warren Company (Series B)
12.00% due 12/15/04 350,000 366,188
------------
903,813
PRINTING & PUBLISHING -- 1.73%
Nebraska Book Company Inc.
8.75% due 02/15/08 750,000 645,000
TV Guide Inc.
8.125% due 03/01/09 1,250,000 1,250,000
------------
1,895,000
RETAIL -- 2.28%
Boyds Collection Limited
9.00% due 05/15/08 478,000 452,905
Buhrmann U.S. Inc.
12.25% due 11/01/09 875,000 907,813
Cole National Group Inc.
8.625% due 08/15/07 850,000 643,875
K Mart Corporation
8.375% due 12/01/04 500,000 494,452
------------
2,499,045
TELECOMMUNICATIONS -- 18.47%
21st Century Telecom Group
Inc.
0/12.25% due 02/15/08 (c) 850,000 568,437
AT & T Canada Inc 342 13,766
Bresnan Communications Group
8.00% due 02/01/09 600,000 478,000
CCPR Services Inc.
10.00% due 02/01/07 650,000 693,062
CINC Bell Inc.
9.00% due 04/15/08 500,000 505,000
Crown Castle International
Corporation,
0/10.625% due 11/15/07 (c) 1,100,000 826,375
Crown Castle International
Corporation,
9.00% due 05/15/11 $ 400,000 392,000
E. Spire Communications Inc.
(Wts) (a) 300 1,594
Firstworld Communications
Inc.
0/13.00% due 04/15/08 (c) $ 300,000 163,125
Firstworld Communications
Inc.
(Wts) (a) (d) 300 0
Flag Ltd.
8.25% due 01/30/08 $1,250,000 1,146,875
Global Crossings Holdings
Ltd.
9.625% due 05/15/08 400,000 398,000
ICG Holdings Inc.
0/12.50% due 05/01/06 (c) 700,000 531,125
</TABLE>
51
<PAGE> 52
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
ICG Services Inc.
0/10.00% due 02/15/08 (c) $ 250,000 $ 124,688
Intermedia Communications
Inc. (Series B),
0/11.25% due 07/15/07 (c) 250,000 187,187
Intermedia Communications
Inc. (Series B),
8.50% due 01/15/08 575,000 529,000
McLeodUSA Inc.
0/10.50%
due 03/01/07 (c) 1,000,000 811,250
McLeodUSA Inc.
8.125% due 02/15/09 700,000 652,750
Metronet Communications
Corporation,
0/10.75% due 11/01/07 (c) 500,000 412,500
Nextel Communications
9.75% due 08/15/04 350,000 361,375
Nextel Communications
0/10.65% due 09/15/07 (c) 1,000,000 751,250
Nextel Communications
0/9.75% due 10/31/07 (c) 1,050,000 752,062
Nextel Communications
0/9.95% due 02/15/08 (c) 700,000 494,375
Nextel Communications
9.375% due 11/15/09 750,000 736,875
Nextlink Communications
0/9.45% due 04/15/08 (c) 1,300,000 807,625
Nextlink Communications
10.75% due 11/15/08 750,000 778,125
Omnipoint Corporation
11.50% due 09/15/09 500,000 545,000
Omnipoint Corporation (Series
A)
11.625% due 08/15/06 200,000 213,000
Orange
8.00% due 08/01/08 $ 550,000 558,250
Pagemart Nationwide Inc.
(Wts.) (a) 875 13,563
Panamsat Corporation
6.375% due 01/15/08 $1,000,000 855,804
Pathnet Inc.
12.25% due 04/15/08 250,000 160,000
Pathnet Inc. (Wts.) (a) (d) 250 0
RCN Corporation
0/11.125% due 10/15/07 (c) $ 850,000 678,500
RCN Corporation (Series B)
0/9.80% due 02/15/08 (c) 650,000 428,188
Rogers Cantel Inc.
8.80% due 10/01/07 850,000 864,875
Sprint Spectrum LP
0/12.50% due 08/15/06 (c) 450,000 414,563
Teligent Inc.
11.50% due 12/01/07 250,000 243,125
Voicestream Wire Company
10.375% due 11/15/09 650,000 667,875
Winstar Communications Inc.
10.00% due 03/15/08 850,000 813,875
Winstar Equipment Corporation
12.50% due 03/15/04 650,000 706,875
------------
20,279,914
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
TEXTILES -- 3.77%
Phillips Van Heusen
Corporation
9.50% due 05/01/08 $ 900,000 $ 839,250
Polymer Group Inc. (Series B)
9.00% due 07/01/07 525,000 513,187
Polymer Group Inc. (Series B)
8.75% due 03/01/08 250,000 241,875
Westpoint Stevens Inc.
7.875% due 06/15/08 2,350,000 2,109,125
William Carter Company
(Series A),
10.375% due 12/01/06 500,000 436,875
------------
4,140,312
TRANSPORTATION -- 1.34%
Eletson Holdings Inc.
9.25% due 11/15/03 350,000 315,000
Northwest Airlines Inc.
8.52% due 04/07/04 1,000,000 943,987
TBS Shipping International
Ltd.
10.00% due 05/01/05 (b) 550,000 217,250
------------
1,476,237
TRAVEL/ENTERTAINMENT/LEISURE -- 0.22%
International Game Technology
7.875% due 05/15/04 250,000 243,125
UTILITIES -- 0.73%
AES Corporation
9.50% due 06/01/09 400,000 403,000
Ferrellgas Partners LP
(Series B),
9.375% due 06/15/06 300,000 297,750
Midland Funding Corporation
(Series C-94),
10.33% due 07/23/02 91,695 96,051
------------
796,801
WASTE MANAGEMENT -- 1.62%
Allied Waste North America
Inc.
7.625% due 01/01/06 600,000 544,500
Allied Waste North America
Inc.
7.875% due 01/01/09 450,000 398,250
Waste Management Inc.
6.875% due 05/15/09 1,000,000 832,570
------------
1,775,320
WIRELESS COMMUNICATIONS -- 1.12%
Clearnet Communications Inc.
0/10.125% due 05/01/09 (c) 1,000,000 598,750
Telecorp PCS Inc.
0/11.625% due 04/15/09 (c) 1,000,000 631,250
------------
1,230,000
TOTAL CORPORATE BONDS, CONVERTIBLE SECURITIES, COMMON & PREFERRED
STOCKS
(IDENTIFIED COST $103,433,303) 97,062,567
- -------------------------------------------------------------------
FOREIGN BONDS -- 6.82%
- -------------------------------------------------------------------
APPAREL & TEXTILES -- 0.22%
Reliance Industries Ltd.
8.25% due 01/15/27 250,000 237,267
BASIC INDUSTRIES -- 1.28%
Cemex 12.75% due 07/15/06 900,000 1,014,750
Cemex International Capital
Inc. 9.66% due 11/29/49 400,000 397,000
------------
1,411,750
</TABLE>
52
<PAGE> 53
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
BROADCASTING--1.26%
Grupo Televisa
11.875% due 05/15/06 $ 350,000 $ 373,625
Grupo Televisa (Series A)
11.375% due 05/15/03 450,000 479,706
Satelites Mexicanos
10.125% due 11/01/04 650,000 442,000
TV Azteca
10.50% due 02/15/07 100,000 88,500
------------
1,383,831
CONTAINERS/PACKAGING -- 0.84%
Vicap
11.375% due 05/15/07 1,000,000 927,500
ENERGY -- 0.69%
Petroleos Mexicanos
8.85% due 09/15/07 250,000 240,000
YPF Sociedad Anonima
9.125% due 02/24/09 500,000 515,993
------------
755,993
GOVERNMENT BOND -- 1.80%
Republic of Argentina
12.125% due 02/25/19 $ 250,000 271,250
Republic of Argentina (Wts)
(a) 250 3,375
Republic of Argentina Global
(Series BGL4),
11.00% due 10/09/06 $ 750,000 777,250
Republic of Turkey
10.00% due 09/19/07 200,000 193,500
United Mexican States
8.625% due 03/12/08 450,000 439,875
United Mexican States
10.375% due 02/17/09 $ 250,000 266,250
United Mexican States (Wts)
(a) 250 23,125
------------
1,974,625
PAPER & FOREST
PRODUCTS -- 0.37%
Indah Kiat Finance Mauritius
Ltd., 10.00% due 07/01/07 $ 250,000 185,000
Pindo Deli Finance Mauritius
Ltd., 10.75% due 10/01/07 300,000 218,250
------------
403,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
TELECOMMUNICATIONS -- 0.23%
Nuevo Grupo Isuacell
14.25% due 12/01/06 $ 250,000 $ 258,750
TRANSPORTATION -- 0.13%
TFM
10.25% due 06/15/07 150,000 138,375
------------
TOTAL FOREIGN BONDS
(IDENTIFIED COST $7,744,746 ) 7,491,341
- -------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.82%
- -------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
2.50% due 01/03/00
Collateral: U.S. Treasury
Note $3,140,000 6.25% due
02/15/07 Value $3,237,677 $3,099,000 3,099,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $3,099,000 ) 3,099,000
- -------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $114,277,049 ) $107,652,908
OTHER ASSETS LESS LIABILITIES -- 1.97% 2,163,485
------------
NET ASSETS -- 100% $109,816,393
===================================================================
</TABLE>
(a) Non-income producing security.
(b) In bankruptcy. Portfolio has ceased accrual of interest.
(c) Zero-Coupon or Step Bond. The interest rate on a step bond represents the
rate of interest that will commence its accrual on a predetermined date. The
rate shown for zero coupon bonds is the current effective yield.
(d) Security is fair valued at December 31, 1999.
(Wts) Warrants. Warrants entitle the Portfolio to purchase a predetermined
number of shares of stock and are non-income producing. The purchase price and
number of shares are subject to adjustment under certain conditions until the
expiration date.
See notes to financial statements.
53
<PAGE> 54
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MULTI-CAP SMALL COMPANY SMALL COMPANY
GROWTH GROWTH VALUE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value.......................... $49,190,542 $23,558,335 $450,857,807 $235,361,269
Foreign currency at value
(cost -- $788,557).......................... -- -- -- --
Receivable for fund shares sold............... 720,739 192,194 493,198 743,083
Receivable for investments sold............... -- 399,315 4,640,525 --
Dividends and interest receivable............. 930 528 258,415 68,393
Due from investment adviser................... -- -- -- --
Forward currency contracts (net) receivable... -- -- -- --
Cash and other assets......................... 367 572 3,401 2,289,120
----------- ----------- ------------ ------------
Total assets........................ 49,912,578 24,150,944 456,253,346 238,461,865
----------- ----------- ------------ ------------
LIABILITIES:
Payable for fund shares redeemed.............. 50,899 22,981 270,000 70,681
Payable for investments purchased............. 1,848,584 664,395 -- 7,475,447
Investment advisory fees payable.............. 31,058 16,961 299,597 138,356
Accrued expenses and other liabilities........ 22,093 17,337 121,050 57,852
----------- ----------- ------------ ------------
Total liabilities................... 1,952,634 721,674 690,647 7,742,336
----------- ----------- ------------ ------------
NET ASSETS..................... $47,959,944 $23,429,270 $455,562,699 $230,719,529
=========== =========== ============ ============
NET ASSETS:
Paid-in capital............................... 37,831,964 17,789,339 296,938,276 203,866,267
Undistributed (accumulated) net investment
income (loss)............................... -- -- 534,436 310,591
Undistributed (accumulated) net realized gain
(loss) on investments and foreign currency
transactions................................ 72,414 566,766 66,009,103 2,663,890
Unrealized appreciation (depreciation) on
investments and foreign currency denominated
amounts..................................... 10,055,566 5,073,165 92,080,884 23,878,781
----------- ----------- ------------ ------------
NET ASSETS..................... $47,959,944 $23,429,270 $455,562,699 $230,719,529
=========== =========== ============ ============
Fund shares outstanding....................... 3,277,528 2,755,401 14,486,318 35,196,128
----------- ----------- ------------ ------------
Net asset value per share..................... $14.63 $8.50 $31.45 $6.56
=========== =========== ============ ============
INVESTMENTS AT COST........................... $39,134,976 $18,485,170 $358,776,923 $211,482,488
=========== =========== ============ ============
</TABLE>
See notes to financial statements.
54
<PAGE> 55
<TABLE>
<CAPTION>
CAPITAL GROWTH AND INTERNATIONAL HIGH-YIELD
APPRECIATION EQUITY INCOME EQUITY INCOME GROWTH MANAGED BALANCED BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ----------- ------------- ------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$33,275,120 $587,546,650 $90,991,329 $28,277,995 $133,115,152 $2,248,746,555 $10,695,255 $107,652,908
-- -- -- -- 788,509 -- -- --
88,839 645,084 364,071 39,619 275,896 783,548 111,957 47,258
-- -- -- -- 286,930 41,972,061 -- --
5,496 56,070 20,582 37,642 127,388 4,714,044 53,566 2,327,326
-- -- -- -- -- -- 2,524 --
-- -- -- -- 350 -- -- --
858 3,195 405 699 -- 19,588 654 1,276
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
33,370,313 588,250,999 91,376,387 28,355,955 134,594,225 2,296,235,796 10,863,956 110,028,768
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
5,701 -- 7,447 8,965 187,999 1,643,808 -- 70,861
195,615 375,237 1,398,830 311,740 -- -- 958,856 --
18,394 379,619 51,371 17,023 89,280 1,428,742 5,494 55,751
21,768 172,506 31,263 21,208 61,890 696,040 13,597 85,763
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
241,478 927,362 1,488,911 358,936 339,169 3,768,590 977,947 212,375
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
$33,128,835 $587,323,637 $89,887,476 $27,997,019 $134,255,056 $2,292,467,206 $ 9,886,009 $109,816,393
=========== ============ =========== =========== ============ ============== =========== ============
23,787,383 371,276,086 83,570,123 28,300,925 85,804,228 1,520,207,516 9,380,352 119,868,650
-- 3,871,262 412,768 135,119 218,949 32,016,149 38,491 (273)
3,756,037 139,308,351 (6,414) (189,023) 10,215,887 482,395,553 64,350 (3,427,843)
5,585,415 72,867,938 5,910,999 (250,002) 38,015,992 257,847,988 402,816 (6,624,141)
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
$33,128,835 $587,323,637 $89,887,476 $27,997,019 $134,255,056 $2,292,467,206 $ 9,886,009 $109,816,393
=========== ============ =========== =========== ============ ============== =========== ============
3,830,982 15,205,807 14,585,789 5,214,551 14,444,266 63,155,702 1,902,794 21,718,023
----------- ------------ ----------- ----------- ------------ -------------- ----------- ------------
$8.65 $38.62 $6.16 $5.37 $9.29 $36.30 $5.20 $5.06
====== ====== ===== ====== ====== ====== ===== ====
$27,689,705 $514,678,712 $85,080,330 $28,527,997 $ 95,095,744 $1,990,898,567 $10,292,439 $114,277,049
=========== ============ =========== =========== ============ ============== =========== ============
</TABLE>
See notes to financial statements.
55
<PAGE> 56
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
MULTI-CAP SMALL COMPANY SMALL COMPANY
GROWTH GROWTH VALUE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------- ------------- -----------
07/15/99-(2)
12/31/99
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............................. $ 5,417 $ 14,121 $ 3,462,809(1) $ 669,472
Interest............................... 69,609 27,489 726,563 540,124
----------- ---------- ----------- -----------
Total investment income........... 75,026 41,610 4,189,372 1,209,596
----------- ---------- ----------- -----------
EXPENSES:
Investment advisory fees............... 62,958 70,898 3,455,816 803,715
Custodian and fund accounting fees..... 16,459 18,917 89,261 33,234
Reports and notices to shareholders.... 5,897 3,898 64,974 41,808
Trustees' fees and expenses............ 2,143 4,316 2,065 4,317
Audit and legal fees................... 7,449 11,330 30,120 14,607
Miscellaneous.......................... 484 237 12,590 1,325
----------- ---------- ----------- -----------
Total expenses.................... 95,390 109,596 3,654,826 899,006
----------- ---------- ----------- -----------
Less: Expense reimbursement.......... (7,249) (10,339) -- --
----------- ---------- ----------- -----------
Total expenses, net of
reimbursement..................... 88,141 99,257 3,654,826 899,006
----------- ---------- ----------- -----------
NET INVESTMENT INCOME (LOSS).... (13,115) (57,647) 534,546 310,590
----------- ---------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS -- NET:
Net realized gain (loss) on security
and foreign currency transactions.... 85,528 625,266 68,889,038 2,663,989
Net change in unrealized gain (loss) on
investments and foreign currency
related transactions................. 10,055,566 5,039,914 23,666,090 23,830,607
----------- ---------- ----------- -----------
Net realized and unrealized gain
(loss) on investments........... 10,141,094 5,665,180 92,555,128 26,494,596
----------- ---------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS...................... $10,127,979 $5,607,533 $93,089,674 $26,805,186
=========== ========== =========== ===========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
(1) Net of foreign taxes withheld of $112 for Small Company Value, $66 for
Capital Appreciation, $36,487 for Equity, $1,382 for Growth and Income, $640
for Equity Income, $170,646 for International Growth and $339,386 for
Managed.
(2) Commencement of operations.
(3) Net of losses on foreign currency transactions of $2,749,616.
56
<PAGE> 57
<TABLE>
<CAPTION>
CAPITAL GROWTH INTERNATIONAL HIGH-YIELD
APPRECIATION EQUITY AND INCOME EQUITY INCOME GROWTH MANAGED BALANCED BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ---------- ------------- ------------- ------------- ------------ -----------
07/15/99-(2)
12/31/99
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 19,333(1) $ 6,879,178(1) $ 272,371(1) $ 272,730(1) $ 1,321,109(1) $ 31,411,844(1) $ 8,103 $ 15,750
73,577 2,032,247 458,042 29,630 109,733 20,332,546 49,296 11,114,397
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
92,910 8,911,425 730,413 302,360 1,430,842 51,744,390 57,399 11,130,147
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
93,033 4,795,026 254,121 100,472 854,890 18,815,456 14,927 706,221
28,076 92,583 31,281 39,036 124,273 348,357 11,630 60,587
6,817 90,761 15,672 5,150 18,354 340,602 1,385 13,418
4,316 2,060 4,316 4,317 2,060 2,060 2,249 2,137
11,389 38,673 11,820 11,406 13,884 140,066 7,423 13,723
470 20,972 435 304 3,673 81,504 59 18,681
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
144,101 5,040,075 317,645 160,685 1,017,134 19,728,045 37,673 814,767
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
-- -- -- (20,025) -- -- (18,765) --
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
144,101 5,040,075 317,645 140,660 1,017,134 19,728,045 18,908 814,767
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
(51,191) 3,871,350 412,768 161,700 413,708 32,016,345 38,491 10,315,380
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
3,807,457 139,308,962 (6,360) (189,025) 11,104,371(3) 484,245,074 64,350 (3,387,693)
5,547,247 (60,507,104) 5,899,630 (256,374) 28,158,387 (297,418,787) 402,816 (3,044,001)
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
9,354,704 78,801,858 5,893,270 (445,399) 39,262,758 186,826,287 467,166 (6,431,694)
---------- ------------ ---------- --------- ----------- ------------- -------- -----------
$9,303,513 $ 82,673,208 $6,306,038 $(283,699) $39,676,466 $ 218,842,632 $505,657 $ 3,883,686
========== ============ ========== ========= =========== ============= ======== ===========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
57
<PAGE> 58
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MULTI-CAP
GROWTH PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
----------------- --------------------------------
FOR THE PERIOD FOR THE PERIOD
JULY 15, 1999 YEAR ENDED DECEMBER 1, 1998
THROUGH DECEMBER 31, THROUGH
DECEMBER 31, 1999 1999 DECEMBER 31, 1998
----------------- ------------ -----------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).............................. $ (13,115) $ (57,647) $ (327)
Net realized gain (loss) on investments and foreign
currency transactions.................................. 85,528 625,266 (853)
Net change in unrealized gain (loss) on investments....... 10,055,566 5,039,914 33,251
----------- ----------- --------
Increase (decrease) in net assets resulting from
operations............................................. 10,127,979 5,607,533 32,071
----------- ----------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... -- -- --
Net realized gains on investments......................... -- -- --
----------- ----------- --------
Total distributions to shareholders -- -- --
FROM CAPITAL SHARE TRANSACTIONS:
Shares sold............................................... 39,685,311 19,675,530 436,953
Reinvestment of distributions............................. -- -- --
Shares redeemed........................................... (1,853,346) (2,322,677) (140)
----------- ----------- --------
Total increase (decrease) in net assets resulting
from capital share transactions................... 37,831,965 17,352,853 436,813
----------- ----------- --------
Total increase (decrease) in net assets.............. 47,959,944 22,960,386 468,884
NET ASSETS:
Beginning of period....................................... -- 468,884 --
----------- ----------- --------
End of period............................................. $47,959,944 $23,429,270 $468,884
=========== =========== ========
SHARES ISSUED AND REDEEMED:
Issued.................................................... 3,431,636 3,026,700 85,890
Issued in reinvestment of distributions................... -- -- --
Redeemed.................................................. (154,108) (357,162) (27)
----------- ----------- --------
Net increase (decrease)........................... 3,277,528 2,669,538 85,863
=========== =========== ========
</TABLE>
See notes to financial statements.
58
<PAGE> 59
<TABLE>
<CAPTION>
SMALL COMPANY VALUE PORTFOLIO GROWTH PORTFOLIO CAPITAL APPRECIATION PORTFOLIO
----------------------------- -------------------------------- --------------------------------
FOR THE PERIOD FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 1, 1998 YEAR ENDED DECEMBER 1, 1998
DECEMBER 31, DECEMBER 31, DECEMBER 31, THROUGH DECEMBER 31, THROUGH
1998 1998 1999 DECEMBER 31, 1998 1999 DECEMBER 31, 1998
------------- ------------- ------------ ----------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
$ 534,546 $ 2,269,126 $ 310,590 $ (159) $ (51,191) $ (234)
68,889,038 25,594,861 2,663,989 (98) 3,807,457 (227)
23,666,090 1,607,587 23,830,607 48,174 5,547,247 38,168
------------- ------------- ------------ ---------- ----------- -----------
93,089,674 29,471,574 26,805,186 47,917 9,303,513 37,707
------------- ------------- ------------ ---------- ----------- -----------
(2,269,175) (1,050,835) -- -- -- --
(29,327,391) (24,299,778) -- -- -- --
------------- ------------- ------------ ---------- ----------- -----------
(31,596,566) (25,350,613) -- -- -- --
155,831,563 176,919,909 242,128,508 1,906,210 28,770,433 473,649
31,596,566 25,350,613 -- -- -- --
(200,159,657) (164,856,185) (40,157,620) (10,672) (5,456,367) (100)
------------- ------------- ------------ ---------- ----------- -----------
(12,731,528) 37,414,337 201,970,888 1,895,538 23,314,066 473,549
------------- ------------- ------------ ---------- ----------- -----------
48,761,580 41,535,298 228,776,074 1,943,455 32,617,579 511,256
406,801,119 365,265,821 1,943,455 -- 511,256 --
------------- ------------- ------------ ---------- ----------- -----------
$ 455,562,699 $ 406,801,119 $230,719,529 $1,943,455 $33,128,835 $ 511,256
============= ============= ============ ========== =========== ===========
5,271,481 6,367,246 41,663,218 371,167 4,595,979 91,765
1,122,436 967,950 -- -- -- --
(6,775,773) (6,146,963) (6,836,158) (2,099) (856,744) (18)
------------- ------------- ------------ ---------- ----------- -----------
(381,856) 1,188,233 3,739,235 369,068 91,747 34,827,060
============= ============= ============ ========== =========== ===========
<CAPTION>
EQUITY PORTFOLIO
-----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
------------- -------------
<S> <C> <C>
$ 3,871,350 $ 8,195,694
139,308,962 43,607,008
(60,507,104) (4,143,581)
------------- -------------
82,673,208 47,659,121
------------- -------------
(8,195,687) (5,906,264)
(43,606,530) (21,596,997)
------------- -------------
(51,802,217) (27,503,261)
158,667,880 259,368,662
51,802,217 27,503,261
(275,355,107) (203,493,446)
------------- -------------
(64,885,010) 83,378,477
------------- -------------
(34,014,019) 103,534,337
621,337,656 517,803,319
------------- -------------
$ 587,323,637 $ 621,337,656
============= =============
4,288,512 7,038,795
1,606,768 749,816
(7,565,617) (5,670,766)
------------- -------------
(1,670,337) 2,117,845
============= =============
</TABLE>
See notes to financial statements.
59
<PAGE> 60
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO EQUITY INCOME PORTFOLIO
--------------------------------- ---------------------------------
FOR THE PERIOD FOR THE PERIOD
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 1, 1998
DECEMBER 31, THROUGH DECEMBER 31, THROUGH
1999 DECEMBER 31, 1998 1999 DECEMBER 31, 1998
------------ ----------------- ------------ -----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)............... $ 412,768 $ (116) $ 161,700 $ 127
Net realized gain (loss) on investments and
foreign currency transactions........... (6,360) 338 (189,025) --
Net change in unrealized gain (loss) on
investments............................. 5,899,630 11,369 (256,374) 6,372
------------ -------- ----------- --------
Increase (decrease) in net assets resulting
from operations......................... 6,306,038 11,591 (283,699) 6,499
------------ -------- ----------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................... -- -- (26,705) --
Net realized gains on investments.......... (276) -- -- --
------------ -------- ----------- --------
Total distributions to
shareholders..................... (276) -- (26,705) --
FROM CAPITAL SHARE TRANSACTIONS:
Shares sold................................ 94,533,104 525,993 32,536,554 458,517
Reinvestment of distributions.............. 276 -- 26,168 --
Shares redeemed............................ (11,489,154) (96) (4,720,253) (62)
------------ -------- ----------- --------
Total increase (decrease) in net
assets resulting from capital
share transactions............... 83,044,226 525,897 27,842,469 458,455
------------ -------- ----------- --------
Total increase (decrease) in net
assets........................... 89,349,988 537,488 27,532,065 464,954
NET ASSETS:
Beginning of period........................ 537,488 -- 464,954 --
------------ -------- ----------- --------
End of period.............................. $ 89,887,476 $537,488 $27,997,019 $464,954
============ ======== =========== ========
SHARES ISSUED AND REDEEMED:
Issued..................................... 16,461,849 105,232 5,994,635 91,309
Issued in reinvestment of distributions.... 48 -- 4,633 --
Redeemed................................... (1,981,321) (19) (876,014) (12)
------------ -------- ----------- --------
Net increase (decrease)............ 14,480,576 105,213 5,123,254 91,297
============ ======== =========== ========
</TABLE>
See notes to financial statements.
60
<PAGE> 61
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH PORTFOLIO MANAGED PORTFOLIO BALANCED PORTFOLIO HIGH-YIELD BOND PORTFOLIO
------------------------------- ------------------------------------- ------------------ ---------------------------
FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JULY 15, 1999 YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, THROUGH DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998 DECEMBER 31, 1999 1999 1998
-------------- -------------- ----------------- ----------------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 413,708 $ 895,906 $ 32,016,345 $ 46,304,587 $ 38,491 $ 10,315,380 $ 7,113,860
11,104,371 862,244 484,245,074 393,346,265 64,350 (3,387,693) 1,083,292
28,158,387 8,976,597 (297,418,787) (253,453,784) 402,816 (3,044,001) (5,550,240)
------------ ----------- --------------- -------------- ----------- ------------ ------------
39,676,466 10,734,747 218,842,632 186,197,068 505,657 3,883,686 2,646,912
------------ ----------- --------------- -------------- ----------- ------------ ------------
(1,637,592) (956,997) (46,304,751) (26,677,507) -- (10,315,380) (7,113,860)
(1,398,278) (3,458,658) (388,872,093) (189,572,424) -- (1,111,733) (1,380,937)
------------ ----------- --------------- -------------- ----------- ------------ ------------
(3,035,870) (4,415,655) (435,176,844) (216,249,931) -- (11,427,113) (8,494,797)
62,031,146 33,682,098 431,708,695 828,656,136 10,046,970 58,015,509 53,781,245
3,035,870 4,415,655 435,176,844 216,249,931 -- 11,427,113 8,494,797
(59,246,772) (30,770,132) (1,097,389,029) (948,480,342) (666,618) (53,947,756) (22,927,376)
------------ ----------- --------------- -------------- ----------- ------------ ------------
5,820,244 7,327,621 (230,503,490) 96,425,725 9,380,352 15,494,866 39,348,666
------------ ----------- --------------- -------------- ----------- ------------ ------------
42,460,840 13,646,713 (446,837,702) 66,372,862 9,886,009 7,951,439 33,500,781
91,794,216 78,147,503 2,739,304,908 2,672,932,046 -- 101,864,954 68,364,173
------------ ----------- --------------- -------------- ----------- ------------ ------------
$134,255,056 $91,794,216 $ 2,292,467,206 $2,739,304,908 $ 9,886,009 $109,816,393 $101,864,954
============ =========== =============== ============== =========== ============ ============
8,546,170 5,053,178 10,626,022 19,612,770 2,038,389 10,943,279 9,618,868
431,845 680,379 12,951,692 5,331,607 -- 2,201,254 1,543,662
(8,153,941) (4,760,079) 27,951,027 (22,958,015) (135,595) (10,392,700) (4,163,250)
------------ ----------- --------------- -------------- ----------- ------------ ------------
824,074 973,478 (4,373,313) 1,986,362 1,902,794 2,751,832 6,999,280
============ =========== =============== ============== =========== ============ ============
</TABLE>
See notes to financial statements.
61
<PAGE> 62
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MULTI-CAP GROWTH PORTFOLIO
--------------------------
FOR THE PERIOD
7/15/99 THROUGH
12/31/99
- ----------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period........................ $ 5.00
-------
Income from investment operations:
Net investment income (loss)................................ (0.01)(C)
Net realized and unrealized gain (loss) on investments...... 9.64
-------
Total from investment operations............................ 9.63
-------
Less dividends and distributions:
Dividends from net investment income........................ --
Distributions from capital gains............................ --
-------
Total distributions......................................... --
-------
Net asset value, end of period.............................. $ 14.63
=======
Total return................................................ 192.60%(B)
Net assets end of period (000).............................. $47,960
Ratio of expenses to average net assets..................... 1.40%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.52%(A)
Ratio of net investment income (loss) to average net
assets.................................................... (0.21)(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. (0.32)(A)
Portfolio turnover.......................................... 21%
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH PORTFOLIO
------------------------------------
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 12/01/98 THROUGH
1999 12/31/98
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.46 $ 5.00
------- -------
Income from investment operations:
Net investment income (loss)................................ (0.05)(C) --
Net realized and unrealized gain (loss) on investments...... 3.09 0.46
------- -------
Total from investment operations............................ 3.04 0.46
------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ -- --
------- -------
Total distributions......................................... -- --
------- -------
Net asset value, end of period.............................. $ 8.50 $ 5.46
======= =======
Total return................................................ 55.68% 9.20%(B)
Net assets end of period (000).............................. $23,429 $ 469
Ratio of expenses to average net assets..................... 1.40% 1.40%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.55% 60.67%(A)
Ratio of net investment income (loss) to average net
assets.................................................... (0.81)% (1.26)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. (0.96)% (60.54)%(A)
Portfolio turnover.......................................... 37% 4%
</TABLE>
See notes to financial statements.
62
<PAGE> 63
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE PORTFOLIO
--------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 27.36 $ 26.70 $ 20.22 $ 18.48 $ 17.56
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss)................................ 0.04(C) 0.16 0.05 0.25 0.32
Net realized and unrealized gain (loss) on investments...... 6.27 2.33 8.91 1.82 1.75
-------- -------- -------- -------- --------
Total from investment operations............................ 6.31 2.49 8.96 2.07 2.07
-------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income........................ (0.16) (0.08) (0.15) (0.12) (0.40)
Distributions from capital gains............................ (2.06) (1.75) (2.33) (0.21) (0.75)
-------- -------- -------- -------- --------
Total distributions......................................... (2.22) (1.83) (2.48) (0.33) (1.15)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 31.45 $ 27.36 $ 26.70 $ 20.22 $ 18.48
======== ======== ======== ======== ========
Total return................................................ 24.02% 9.61% 44.32% 11.21% 12.28%
Net assets end of period (000).............................. $455,563 $406,801 $365,266 $192,704 $166,061
Ratio of expenses to average net assets..................... 0.84% 0.85% 0.86% 0.84% 0.69%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.84% 0.85% 0.86% 0.84% 0.72%
Ratio of net investment income (loss) to average net
assets.................................................... 0.12% 0.56% 0.21% 1.35% 1.86%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.12% 0.56% 0.21% 1.35% 1.83%
Portfolio turnover.......................................... 23% 37% 58% 137% 70%
</TABLE>
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
--------------------------------
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 12/01/98 THROUGH
1999 12/31/98
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.27 $ 5.00
-------- -------
Income from investment operations:
Net investment income (loss)................................ 0.02(C) 0.00
Net realized and unrealized gain (loss) on investments...... 1.27 0.27
-------- -------
Total from investment operations............................ 1.29 0.27
-------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ -- --
-------- -------
Total distributions......................................... -- --
-------- -------
Net asset value, end of period.............................. $ 6.56 $ 5.27
======== =======
Total return................................................ 24.48% 5.40%(B)
Net assets end of period (000).............................. $230,720 $ 1,943
Ratio of expenses to average net assets..................... 0.84% 1.15%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.84% 25.33%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 0.29% (0.25)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.29% (24.43)%(A)
Portfolio turnover.......................................... 30% 1%
</TABLE>
See notes to financial statements.
63
<PAGE> 64
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
--------------------------------
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 12/01/98 THROUGH
1999 12/31/1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.57 $ 5.00
------- -------
Income from investment operations:
Net investment income (loss)................................ (0.03)(C) --
Net realized and unrealized gain (loss) on investments...... 3.11 0.57
------- -------
Total from investment operations............................ 3.08 0.57
------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ -- --
------- -------
Total distributions......................................... -- --
------- -------
Net asset value, end of period.............................. $ 8.65 $ 5.57
======= =======
Total return................................................ 55.30% 11.40%(B)
Net assets end of period (000).............................. $33,129 $ 511
Ratio of expenses to average net assets..................... 1.16% 1.30%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.16% 63.71%(A)
Ratio of net investment income (loss) to average net
assets.................................................... (0.41)% (0.95)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. (0.41)% (63.36)%(A)
Portfolio turnover.......................................... 247% 1%
</TABLE>
<TABLE>
<CAPTION>
EQUITY PORTFOLIO
--------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 36.82 $ 35.09 $ 28.86 $ 23.35 $ 18.14
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss)................................ 0.23(C) 0.46 0.30 0.37 0.33
Net realized and unrealized gain (loss) on investments...... 4.86 3.00 7.13 5.52 6.38
-------- -------- -------- -------- --------
Total from investment operations............................ 5.09 3.46 7.43 5.89 6.71
-------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income........................ (0.52) (0.37) (0.32) (0.09) (0.49)
Distributions from capital gains............................ (2.77) (1.36) (0.88) (0.29) (1.01)
-------- -------- -------- -------- --------
Total distributions......................................... (3.29) (1.73) (1.20) (0.38) (1.50)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 38.62 $ 36.82 $ 35.09 $ 28.86 $ 23.35
======== ======== ======== ======== ========
Total return................................................ 15.61% 9.90% 25.76% 25.22% 38.44%
Net assets end of period (000).............................. $587,324 $621,338 $517,803 $314,907 $167,963
Ratio of expenses to average net assets..................... 0.82% 0.83% 0.84% 0.81% 0.69%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.82% 0.83% 0.84% 0.81% 0.72%
Ratio of net investment income (loss) to average net
assets.................................................... 0.63% 1.42% 1.42% 1.94% 1.94%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.63% 1.42% 1.42% 1.94% 1.91%
Portfolio turnover.......................................... 155% 30% 17% 30% 29%
</TABLE>
See notes to financial statements.
64
<PAGE> 65
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
--------------------------------
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 12/01/98 THROUGH
1999 12/31/98
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.11 $ 5.00
------- ------
Income from investment operations:
Net investment income (loss)................................ 0.07(C) 0.00
Net realized and unrealized gain (loss) on investments...... 0.98 0.11
------- ------
Total from investment operations............................ 1.05 0.11
------- ------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ 0.00(D) --
------- ------
Total distributions......................................... -- --
------- ------
Net asset value, end of period.............................. $ 6.16 $ 5.11
======= ======
Total return................................................ 20.55% 2.20%
Net assets end of period (000).............................. $89,887 $ 537
Ratio of expenses to average net assets..................... 0.94% 1.05%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.94% 60.68%
Ratio of net investment income (loss) to average net
assets.................................................... 1.22% (0.45)%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 1.22% 60.08%
Portfolio turnover.......................................... 1% 9%
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME PORTFOLIO
---------------------------------
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 12/01/98 THROUGH
1999 12/31/98
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.09 $ 5.00
------- -------
Income from investment operations:
Net investment income (loss)................................ 0.06(C) --
Net realized and unrealized gain (loss) on investments...... 0.23 0.09
------- -------
Total from investment operations............................ 0.29 0.09
------- -------
Less dividends and distributions:
Dividends from net investment income........................ (0.01) --
Distributions from capital gains............................ -- --
------- -------
Total distributions......................................... (0.01) --
------- -------
Net asset value, end of period.............................. $ 5.37 $ 5.09
======= =======
Total return................................................ 5.70% 1.80%(B)
Net assets end of period (000).............................. $27,997 $ 465
Ratio of expenses to average net assets..................... 1.05% 1.05%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.20% 66.67%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 1.21% 0.54%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 1.06% (65.07)%(A)
Portfolio turnover.......................................... 18% 0%
</TABLE>
See notes to financial statements.
65
<PAGE> 66
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH PORTFOLIO
----------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 6.74 $ 6.18 $ 6.05 $ 5.39 $ 4.96
-------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss)................................ 0.03(C) 0.06 0.06 0.05 0.04
Net realized and unrealized gain (loss) on investments...... 2.74 0.84 0.26 0.63 0.67
-------- ------- ------- ------- -------
Total from investment operations............................ 2.77 0.90 0.32 0.68 0.71
-------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income........................ (0.12) (0.07) (0.04) -- (0.04)
Distributions from capital gains............................ (0.10) (0.27) (0.15) (0.02) (0.24)
-------- ------- ------- ------- -------
Total distributions......................................... (0.22) (0.34) (0.19) (0.02) (0.28)
-------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 9.29 $ 6.74 $ 6.18 $ 6.05 $ 5.39
======== ======= ======= ======= =======
Total return................................................ 42.12% 14.83% 5.26% 12.65% 14.64%
Net assets end of period (000).............................. $134,255 $91,794 $78,148 $52,768 $18,598
Ratio of expenses to average net assets..................... 1.01% 1.22% 1.19% 1.38% 1.55%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.01% 1.22% 1.19% 1.38% 2.21%
Ratio of net investment income (loss) to average net
assets.................................................... 0.41% 1.04% 1.34% 1.32% 1.17%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.41% 1.04% 1.34% 1.32% 0.51%
Portfolio turnover.......................................... 129% 55% 28% 21% 27%
</TABLE>
<TABLE>
<CAPTION>
MANAGED PORTFOLIO
------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 40.56 $ 40.78 $ 34.31 $ 28.06 $ 20.82
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss)................................ 0.50(C) 0.71 0.35 0.59 0.40
Net realized and unrealized gain (loss) on investments...... 2.65 2.53 8.06 5.99 8.97
---------- ---------- ---------- ---------- ----------
Total from investment operations............................ 3.15 3.24 8.41 6.58 9.37
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Dividends from net investment income........................ (0.79) (0.43) (0.55) (0.06) (0.75)
Distributions from capital gains............................ (6.62) (3.03) (1.39) (0.27) (1.38)
---------- ---------- ---------- ---------- ----------
Total distributions......................................... (7.41) (3.46) (1.94) (0.33) (2.13)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.............................. $ 36.30 $ 40.56 $ 40.78 $ 34.31 $ 28.06
========== ========== ========== ========== ==========
Total return................................................ 9.22% 7.95% 24.50% 23.47% 46.89%
Net assets end of period (000).............................. $2,292,467 $2,739,305 $2,672,932 $1,935,343 $1,264,718
Ratio of expenses to average net assets..................... 0.76% 0.76% 0.76% 0.74% 0.67%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.76% 0.76% 0.76% 0.74% 0.67%
Ratio of net investment income (loss) to average net
assets.................................................... 1.23% 1.66% 1.14% 2.16% 1.80%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 1.23% 1.66% 1.14% 2.16% 1.80%
Portfolio turnover.......................................... 90% 46% 32% 29% 31%
</TABLE>
See notes to financial statements.
66
<PAGE> 67
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
------------------
FOR THE PERIOD
7/15/99 THROUGH
12/31/99
- --------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period........................ $ 5.00
------
Income from investment operations:
Net investment income (loss)................................ 0.04(C)
Net realized and unrealized gain (loss) on investments...... 0.16
------
Total from investment operations............................ 0.20
------
Less dividends and distributions:
Dividends from net investment income........................ --
Distributions from capital gains............................ --
------
Total distributions......................................... --
------
Net asset value, end of period.............................. $ 5.20
======
Total return................................................ 4.00%(B)
Net assets end of period (000).............................. $9,886
Ratio of expenses to average net assets..................... 0.95%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.89%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 1.93%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.99%(A)
Portfolio turnover.......................................... 13%
</TABLE>
<TABLE>
<CAPTION>
HIGH-YIELD BOND PORTFOLIO
-----------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 5.37 $ 5.71 $ 5.51 $ 5.31 $ 4.98
-------- -------- ------- ------- -------
Income from investment operations:
Net investment income (loss)................................ 0.46(C) 0.46 0.51 0.45 0.45
Net realized and unrealized gain (loss) on investments...... (0.26) (0.26) 0.20 0.21 0.35
-------- -------- ------- ------- -------
Total from investment operations............................ 0.20 0.20 0.71 0.66 0.80
-------- -------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income........................ (0.46) (0.46) (0.51) (0.45) (0.45)
Distributions from capital gains............................ (0.05) (0.08) -- (0.01) (0.02)
-------- -------- ------- ------- -------
Total distributions......................................... (0.51) (0.54) (0.51) (0.46) (0.47)
-------- -------- ------- ------- -------
Net asset value, end of period.............................. $ 5.06 $ 5.37 $ 5.71 $ 5.51 $ 5.31
======== ======== ======= ======= =======
Total return................................................ 3.86% 3.60% 13.38% 12.95% 16.59%
Net assets end of period (000).............................. $109,816 $101,865 $68,364 $34,411 $15,223
Ratio of expenses to average net assets..................... 0.69% 0.72% 0.77% 0.85% 0.85%
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.69% 0.72% 0.77% 0.94% 1.59%
Ratio of net investment income (loss) to average net
assets.................................................... 8.76% 8.19% 8.47% 8.57% 8.51%
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 8.76% 8.19% 8.47% 8.48% 7.77%
Portfolio turnover.......................................... 97% 109% 175% 175% 115%
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
A Annualized.
B Not annualized.
C Based on average shares outstanding.
D Less than $.01 per share.
67
<PAGE> 68
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION
Enterprise Accumulation Trust (the "Trust") was organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Trust is
authorized to issue an unlimited number of shares of beneficial interest at $.01
par value for the following portfolios: Multi-Cap Growth, Small Company Growth,
Small Company Value, Growth, Capital Appreciation, Equity, Growth and Income,
Equity Income, International Growth, Managed, Balanced and High-Yield Bond.
The Trust is currently offered only to separate accounts of certain
insurance companies as an investment medium for both variable annuity contracts
and variable life insurance policies. The following is a summary of significant
accounting policies consistently followed by the Trust in the preparation of its
financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments -- Investment securities, other than debt
securities, listed on either a national or foreign securities exchange or traded
in the over-the-counter National Market System are valued each business day at
the last reported sale price on the exchange on which the security is primarily
traded. If there are no current day sales, the securities are valued at their
last quoted bid price. Other securities traded over-the-counter and not part of
the National Market System are valued at their last quoted bid price. Debt
securities (other than certain short-term obligations) are valued each business
day by an independent pricing service approved by the Board of Trustees.
Short-term debt securities with 61 days or more to maturity at time of purchase
are valued at market value through the 61st day prior to maturity, based on
quotations received from market makers or other appropriate sources; thereafter,
any unrealized appreciation or depreciation existing on the 61st day is
amortized on a straight-line basis over the remaining number of days to
maturity. Short-term securities with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market value. Any
securities for which market quotations are not readily available are valued at
their fair value as determined in good faith by the Board of Trustees.
Special Valuation Risk -- The high-yield securities in which the High-Yield
Bond Portfolio may invest may be considered speculative in regard to the
issuer's continuing ability to meet principal and interest payments. The value
of the lower rated securities in which the High-Yield Bond Portfolio may invest
will be affected by the credit worthiness of individual issuers, general
economic and specific industry conditions, and will fluctuate inversely with
changes in interest rates. In addition, the secondary trading market for lower
quality bonds may be less active and less liquid than the trading market for
higher quality bonds. Foreign denominated assets held by the International
Growth Portfolio may involve risks not typically associated with domestic
transactions including but not limited to, unanticipated movements in exchange
rates, the degree of government supervision and regulation of security markets
and the possibility of political or economic instability.
Repurchase Agreements -- Each Portfolio may acquire securities subject to
repurchase agreements. Under a typical repurchase agreement, a Portfolio would
acquire a debt security for a relatively short period (usually for one day and
not for more than one week) subject to an obligation of the seller to repurchase
and of the Portfolio to resell the debt security at an agreed-upon higher price,
thereby establishing a fixed investment return during the Portfolio's holding
period. Under each repurchase agreement, the Portfolio receives, as collateral,
securities whose market value (including interest) is at least equal to the
repurchase price.
Futures Contracts -- Upon entering into such a contract, a Portfolio is
required to deposit with the broker an amount of cash or securities equal to the
minimum "initial margin" requirements of the exchange. Pursuant to the contract,
the Portfolio agrees to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in the value of the contract. Such receipts or
payments, known as "variation margin," are recorded by the Portfolio as
unrealized appreciation or depreciation. When the contract is closed the
Portfolio records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and value at the time it was
closed. There were no open futures contracts held in any of the Portfolios at
December 31, 1999.
Foreign Currency Translation -- Securities, other assets and liabilities of
the International Growth Portfolio whose values are initially expressed in
foreign currencies are translated to U.S. dollars at the bid price of such
currency against U.S. dollars last quoted by a major bank on the valuation date.
Dividend and interest income and certain expenses denominated in foreign
currencies are translated to U.S. dollars based on the exchange rates in effect
on the date the income is earned and the expense is incurred; and
68
<PAGE> 69
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
exchange gains and losses are realized upon ultimate receipt or disbursement.
The International Growth Portfolio does not isolate that portion of its realized
and unrealized gains on investments from changes in foreign exchange rates from
the fluctuations arising due to changes in the market prices of the investments.
Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date. Realized gains and losses from security
transactions are determined on the basis of identified cost and realized gains
and losses from currency transactions are determined on the basis of average
cost. Dividend income received and distributions to shareholders are recognized
on the ex-dividend date, and interest income is recognized on the accrual basis.
Discounts or premiums on debt securities purchased are accreted or amortized to
interest income over the lives of the respective securities.
Expenses -- Each portfolio bears expenses incurred specifically on its
behalf such as advisory and custodian fees as well as a portion of the common
expenses of the Trust which are generally allocated based on average net assets.
Federal Income Taxes -- No provision for Federal income or excise taxes is
required because the Trust intends to continue to qualify as a regulated
investment company and distribute all of its taxable income to shareholders.
Use of Estimates in Preparation of Financial Statements -- Preparation of
financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that
may affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Dividends and Distributions -- Except with respect to the High-Yield Bond
Portfolio, dividends and distributions to shareholders from net investment
income and net realized capital gains, if any, are declared and paid at least
annually. For the High-Yield Bond Portfolio, dividends from net investment
income are declared daily and paid monthly. Distributions from net realized
capital gains, if any, are declared and paid at least annually.
Financial Instruments -- As part of its investment program, the
International Growth Portfolio utilizes forward currency exchange contracts to
manage exposure to currency fluctuations and hedge against adverse changes in
connection with purchases and sales of securities. The Portfolio enters into
forward contracts only for hedging purposes. Risks arise from the possible
inability of counterparties to meet the terms of their contracts and from
movements in currency values.
As part of its investment program, the High-Yield Bond Portfolio may enter
into futures contracts to hedge against anticipated future price and interest
rate changes. Risks of entering into futures contracts include: (1) the risk
that the price of the futures contracts may not move in the same direction as
the price of the securities in the various markets; (2) the risk that there will
be no liquid secondary market when the Portfolio attempts to enter into a
closing position; (3) the risk that the Portfolio will lose an amount in excess
of the initial margin deposit; and (4) the fact that the success or failure of
these transactions for the Portfolio depends on the ability of the Portfolio
Manager to predict movements in stock, bond, and currency prices and interest
rates.
3. TRANSACTIONS WITH AFFILIATES
An investment advisory fee is payable monthly to Enterprise Capital
Management, Inc. ("Enterprise Capital"), a wholly-owned subsidiary of MONY Life
Insurance Company, and is computed as a percentage of each Portfolio's average
daily net assets as of the close of business each day at the following annual
rates: for Equity, Small Company Value, and Managed, 0.80% for the first $400
million, 0.75% for the next $400 million, and 0.70% for average daily net assets
over $800 million, 1.00% for both Small Company Growth and Multi-Cap Growth,
0.85% for International Growth, 0.75% for Growth, Capital Appreciation, Growth
and Income, Equity Income and Balanced, and 0.60% for High-Yield Bond.
Enterprise Capital has contractually agreed to limit the portfolios'
expenses through May 1, 2000, to the following expense ratios: Multi-Cap Growth
1.40%, Small Company Growth -- 1.40%, Small Company Value -- 1.30%,
Growth -- 1.15%, Capital Appreciation -- 1.30%, Equity -- 1.15%, Growth and
Income -- 1.05%, Equity Income -- 1.05%, International Growth -- 1.55%,
Managed -- 1.30%, Balanced -- 0.95% and High-Yield Bond -- 0.85%.
Enterprise Capital is a wholly-owned subsidiary of MONY Life Insurance
Company, which is wholly-owned by MONY Group Inc. MONY Group Inc. and its
subsidiaries and affiliates had the following investments in the Trust as of
December 31,
69
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ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
1999: Small Company Growth -- $425,000, Multi-Cap Growth $731,500, Capital
Appreciation -- $432,500, Growth -- $328,000, Growth and Income -- $308,000,
Equity Income -- $268,500 and Balanced $260,000.
Enterprise Capital has entered into sub-advisory agreements with various
investment advisers as Portfolio Managers for the Trust. A portion of the
management fee received by Enterprise Capital is paid to the respective
Portfolio Manager. 1740 Advisers, Inc., a wholly-owned subsidiary of MONY Group
Inc., is the Portfolio Manager for the Equity Income Portfolio. For the year
ended December 31, 1999, Enterprise Capital incurred subadvisory fees payable to
1740 Advisers, Inc. related to the Equity Income Portfolio of $40,189 with a
related payable balance of $6,809 as of December 31, 1999.
For the year ended December 31, 1999, the Portfolios paid brokerage
commissions to affiliates as follows:
<TABLE>
<S> <C>
Multi-Cap Growth............................................ $ 14,317
Small Company Value......................................... 267,327
Growth...................................................... 4,795
Capital Appreciation........................................ 500
Equity...................................................... 29,540
Equity Income............................................... 944
Managed..................................................... 874,562
</TABLE>
4. INVESTMENT TRANSACTIONS
Purchases and Sales of Investment Securities -- For the year ended December
31, 1999, purchases and sales proceeds of investment securities, other than
short-term securities, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT OBLIGATIONS STOCKS AND BONDS
--------------------------- -------------------------------
PORTFOLIO PURCHASES SALES PURCHASES SALES
--------- ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
Multi-Cap Growth................................. -- -- $ 34,420,785 $ 2,950,525
Small Company Growth............................. -- -- 18,467,405 3,118,038
Small Company Value.............................. -- -- 97,917,458 141,294,762
Growth........................................... -- -- 225,792,551 29,798,588
Capital Appreciation............................. -- -- 46,116,187 27,453,971
Equity........................................... -- -- 874,340,384 909,575,382
Growth and Income................................ -- -- 67,914,779 177,842
Equity Income.................................... -- -- 29,364,519 2,271,380
International Growth............................. -- -- 126,761,630 126,432,482
Managed.......................................... $294,159,731 $292,969,593 1,788,043,418 2,294,168,704
Balanced......................................... 2,194,360 -- 7,243,897 557,451
High-Yield Bond.................................. 15,325,508 17,192,633 105,873,969 92,537,184
</TABLE>
Outstanding forward foreign exchange contracts in the International Growth
Portfolio at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
SALES NET UNREALIZED
SETTLEMENT ---------------------------- APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
---------- ------------ ------------ --------------
<S> <C> <C> <C>
1/03/00 USD 287,457 EUR 284,949 $350
----
$350
====
</TABLE>
70
<PAGE> 71
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
5. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At December 31, 1999, the cost of securities for Federal income tax
purposes, the aggregate gross unrealized gain for all securities for which there
was an excess of value over tax cost and the aggregate gross unrealized loss for
all securities for which there was an excess of tax cost over value were as
follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
PORTFOLIO TAX COST GAIN LOSS GAIN (LOSS)
- --------- -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Multi-Cap Growth................................ $ 39,134,976 $ 10,468,342 $ (412,776) $ 10,055,566
Small Company Growth............................ 18,485,170 5,383,290 (310,125) 5,073,165
Small Company Value............................. 361,364,079 136,547,800 (47,054,072) 89,493,728
Growth.......................................... 211,482,586 32,535,195 (8,656,512) 23,878,683
Capital Appreciation............................ 27,689,705 5,818,441 (233,026) 5,585,415
Equity.......................................... 514,847,046 86,850,286 (14,150,682) 72,699,604
Growth and Income............................... 85,091,640 9,430,033 (3,530,344) 5,899,689
Equity Income................................... 28,528,013 1,579,314 (1,829,332) (250,018)
International Growth............................ 95,320,530 41,000,882 (3,206,308) 37,794,574
Managed......................................... 2,004,805,482 334,360,968 (90,419,895) 243,941,073
Balanced........................................ 10,292,439 613,137 (210,321) 402,816
High-Yield Bond................................. 114,303,388 1,206,127 (7,856,607) (6,650,480)
</TABLE>
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from accounting principles generally
accepted in the United States. These differences are primarily due to differing
treatments for futures and options transactions, paydowns, market discounts,
losses deferred due to wash sales, foreign currency transactions and investments
in passive foreign investment companies.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital. These
reclassifications have no effect on net assets or net asset values per share.
Any taxable gain remaining at fiscal year end is distributed in the following
year.
At December 31, 1999 the following Portfolios had net capital loss
carryforwards for federal tax purposes of:
<TABLE>
<CAPTION>
BALANCE EXPIRES
------- -------
<S> <C> <C>
Equity Income............................................... $ 189,023 December 31, 2007
High-Yield Bond............................................. 3,401,504 December 31, 2007
</TABLE>
6. BORROWINGS
In August 1999, the Trust, and another affiliated mutual fund entered into
a $50 million redemption line of credit with State Street Bank and Trust Co.
whereby each Portfolio may borrow up to its prospectus defined limitation. At
December 31, 1999, there were no loans outstanding. Listed below are the
Portfolios which had outstanding balances at any time during the year ended
December 31, 1999:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE DAILY WEIGHTED
AMOUNT OUTSTANDING AVERAGE
PORTFOLIO BORROWED BALANCE INTEREST RATE
- --------- ---------- ------------- -------------
<S> <C> <C> <C>
Equity...................................................... $3,939,000 $48,449 6.17%
International Growth........................................ 1,421,000 19,466 5.79%
Managed..................................................... 4,541,000 61,123 6.01%
</TABLE>
71
<PAGE> 72
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
7. RESTRICTED SECURITIES
Certain of the Small Company Value Portfolio's investments are restricted
as to resale. The table below shows the number of units held, the acquisition
dates, aggregate cost, per unit value and the percentage of net assets which
these securities comprise.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF ACQUISITION VALUE NET
SECURITY UNITS DATES COST PER UNIT ASSETS
-------- --------- ----------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Noel Group Units.......................................... 135,000 04/13/99 $ 65,880 $0.40 0.01%
Noel Group Liquidating Trust Units........................ 135,000 10/08/99 $109,688 $0.70 0.02%
</TABLE>
The Portfolio may incur certain costs in connection with disposition of the
above securities.
72
<PAGE> 73
ENTERPRISE ACCUMULATION TRUST
DECEMBER 31, 1999
FEDERAL TAX INFORMATION (UNAUDITED):
The capital gains distributions paid to shareholders from each Portfolio
were as follows:
<TABLE>
<S> <C>
Multi-Cap Growth............................................ $ --
Small Company Growth........................................ --
Small Company Value......................................... 26,568,441
Growth...................................................... --
Capital Appreciation........................................ --
Equity...................................................... 43,606,530
Growth and Income........................................... --
Equity Income............................................... --
International Growth........................................ 1,065,322
Managed..................................................... 388,872,093
Balanced.................................................... --
High Yield Bond............................................. 287,715
</TABLE>
73
<PAGE> 74
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Enterprise Accumulation Trust:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Multi-Cap
Growth, Small Company Growth, Small Company Value, Growth, Capital Appreciation,
Equity, Growth and Income, Equity Income, International Growth, Managed,
Balanced and High-Yield Bond Portfolios of Enterprise Accumulation Trust
(collectively the "Trust") at December 31, 1999, the results of each of their
operations, the changes in each of their net assets and the financial highlights
for each of the periods indicated in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, 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 securities at December
31, 1999, by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 16, 2000
74
<PAGE> 75
TRUSTEES AND PRINCIPAL OFFICERS
<TABLE>
<S> <C>
Victor Ugolyn Trustee, Chairman, President and
Chief Executive Officer
Arthur T. Dietz Trustee
Samuel J. Foti Trustee
Arthur Howell Trustee
William A. Mitchell, Jr. Trustee
Lonnie H. Pope Trustee
Michael I. Roth Trustee
Phillip G. Goff Vice President
Catherine R. McClellan Secretary
Herbert M. Williamson Treasurer
</TABLE>
INVESTMENT ADVISER
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, Georgia 30326
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
P. O. Box 1713
Boston, Massachusetts 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
This report is authorized for distribution only to shareholders and to
others who have received a copy of this Trust's prospectus.
75
