<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements
Statements of Assets and Liabilities
June 30, 1997 (unaudited)
(In thousands)
Mutual
Capital Growth and High Income Money Discovery
Growth Income Income Securities Market Securities
Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Capital Growth Fund, 5,573 shares, cost $62,502 $69,435 - - - - -
Growth and Income Fund, 58,591 shares, cost $858,658 - 1,089,211 - - - -
High Income Fund, 29,539 shares, cost $389,352 - - 401,430 - - -
Income Securities Fund, 75,627 shares,
cost $1,140,275 - - - 1,265,232 - -
Money Market Fund, 361,961 shares, cost $361,961 - - - - 361,961 -
Mutual Discovery Securities Fund, 10,044 shares,
cost $107,090 - - - - - 113,695
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 69,435 1,089,211 401,430 1,265,232 361,961 113,695
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Accrued mortality and expense risk charges
- Valuemark II & III 14 126 46 152 71 18
Accrued mortality and expense risk charges - Valuemark IV 15 39 34 37 49 48
Accrued administrative charges - Valuemark II & III 2 16 5 19 8 2
Accrued administrative charges - Valuemark IV 2 4 4 4 5 5
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 33 185 89 212 133 73
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $69,402 1,089,026 401,341 1,265,020 361,828 113,622
===========================================================================================================================
Contract owners' equity:
Contracts in accumulation period
- Valuemark II and III (note 5) $61,450 1,069,521 383,785 1,242,615 341,018 87,855
Contracts in accumulation period - Valuemark IV (note 5) 7,410 17,196 16,813 18,345 19,929 24,729
Contracts in annuity payment period (note 2) 542 2,309 743 4,060 881 1,038
- ---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $69,402 1,089,026 401,341 1,265,020 361,828 113,622
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Assets and Liabilities (cont.)
June 30, 1997 (unaudited)
(In thousands)
Mutual Natural Real Templeton
Shares Resources Estate Rising Small Developing
Securities Securities Securities Dividends Cap Markets
Fund Fund Fund Fund Fund Equity Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Mutual Shares Securities Fund, 17,868 shares,
cost $189,478 $199,048 - - - - -
Natural Resources Securities Fund, 6,623 shares,
cost $96,080 - 85,302 - - - -
Real Estate Securities Fund, 15,850 shares,
cost $271,551 - - 361,701 - - -
Rising Dividends Fund, 36,624 shares, cost $426,93 9 - - - 630,294 - -
Small Cap Fund, 16,832 shares, cost $206,160 - - - - 233,129 -
Templeton Developing Markets Equity Fund, 27,296 shares,
cost $297,371 - - - - - 367,673
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 199,048 85,302 361,701 630,294 233,129 367,673
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Accrued mortality and expense risk charges
- Valuemark II & III 23 14 41 66 31 42
Accrued mortality and expense risk charges - Valuemark IV 81 3 26 20 30 31
Accrued administrative charges - Valuemark II & III 2 1 5 8 4 4
Accrued administrative charges - Valuemark IV 9 - 3 2 3 3
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 115 18 75 96 68 80
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $198,933 85,284 361,626 630,198 233,061 367,593
===========================================================================================================================
Contract owners' equity:
Contracts in accumulation period
- Valuemark II and III (note 5) $155,293 83,923 349,215 619,292 217,518 350,763
Contracts in accumulation period - Valuemark IV (note 5) 41,935 1,361 12,287 9,546 14,602 14,105
Contracts in annuity payment period (note 2) 1,705 - 124 1,360 941 2,725
- ---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $198,933 85,284 361,626 630,198 233,061 367,593
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Assets and Liabilities (cont.)
June 30, 1997 (unaudited)
(In thousands)
Templeton
Templeton Templeton Templeton International Templeton
Global Asset Global Global Income Templeton Smaller Pacific
Allocation Growth Securities International Companies Growth
Fund Fund Fund Equity Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Templeton Global Asset Allocation Fund, 5,796 shares,
cost $67,470 $77,836 - - - - -
Templeton Global Growth Fund, 44,886 shares,
cost $529,027 - 690,803 - - - -
Templeton Global Income Securities Fund, 14,491 shares,
cost $184,319 - - 184,033 - - -
Templeton International Equity Fund, 72,295 shares,
cost $953,108 - - - 1,187,807 - -
Templeton International Smaller Companies Fund,
2,339 shares, cost $25,485 - - - - 27,759 -
Templeton Pacific Growth Fund, 19,658 shares,
cost $271,655 - - - - - 293,298
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 77,836 690,803 184,033 1,187,807 27,759 293,298
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II & III 16 99 23 168 8 36
Accrued mortality and expense risk charges -
Valuemark IV 11 60 7 49 7 5
Accrued administrative charges - Valuemark II & III 2 12 3 19 1 5
Accrued administrative charges - Valuemark IV 1 7 1 6 1 1
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 30 178 34 242 17 47
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $77,806 690,625 183,999 1,187,565 27,742 293,251
===========================================================================================================================
Contract owners' equity:
Contracts in accumulation period -
Valuemark II and III (note 5) $70,682 657,083 180,948 1,163,147 24,041 289,837
Contracts in accumulation period -
Valuemark IV (note 5) 6,194 29,414 2,995 22,441 3,604 2,731
Contracts in annuity payment period (note 2) 930 4,128 56 1,977 97 683
- ---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $77,806 690,625 183,999 1,187,565 27,742 293,251
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Assets and Liabilities (cont.)
June 30, 1997 (unaudited)
(In thousands)
U.S.
Government Utility Zero Zero Zero Total
Securities Equity Coupon Coupon Coupon All
Fund Fund Fund - 2000 Fund - 2005 Fund - 2010 Funds
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
U.S. Government Securities Fund, 51,950 shares,
cost $678,468 $686,257 - - - -
Utility Equity Fund, 57,709 shares, cost $916,536 - 993,756 - - -
Zero Coupon Fund - 2000, 6,725 shares, cost $94,443 - - 97,310 - -
Zero Coupon Fund - 2005, 4,375 shares, cost $64,759 - - - 68,420 -
Zero Coupon Fund - 2010, 4,589 shares, cost $70,176 - - - - 71,502
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 686,257 993,756 97,310 68,420 71,502 9,556,892
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Accrued mortality and expense risk charges -
Valuemark II & III 75 115 15 12 12 1,223
Accrued mortality and expense risk charges -
Valuemark IV 25 5 3 3 2 590
Accrued administrative charges - Valuemark II & III 8 14 2 3 3 148
Accrued administrative charges - Valuemark IV 3 1 - - - 65
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 111 135 20 18 17 2,026
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $686,146 993,621 97,290 68,402 71,485 9,554,866
===========================================================================================================================
Contract owners' equity:
Contracts in accumulation period -
Valuemark II and III (note 5) $676,119 990,139 96,111 66,934 70,229 9,247,518
Contracts in accumulation period -
Valuemark IV (note 5) 9,584 2,056 1,149 1,468 1,256 281,150
Contracts in annuity payment period (note 2) 443 1,426 30 - - 26,198
- ---------------------------------------------------------------------------------------------------------------------------
Total contract owners' equity $686,146 993,621 97,290 68,402 71,485 9,554,866
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Operations
For the period ended June 30, 1997 (unaudited)
(In thousands)
Mutual
Capital Growth and High Income Money Discovery
Growth Income Income Securities Market Securities
Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $ 102 35,369 33,513 92,343 9,624 47
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges - Valuemark II & III 316 6,331 2,435 7,710 2,338 342
Mortality and expense risk charges - Valuemark IV 15 39 34 37 49 48
Administrative charges - Valuemark II & III 38 760 292 925 281 41
Administrative charges - Valuemark IV 2 4 4 4 5 5
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 371 7,134 2,765 8,676 2,673 436
- ---------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net (269) 28,235 30,748 83,667 6,951 (389)
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds - 34,302 1,099 19,836 - -
Realized gains (losses) on sales of investments, net 438 9,863 7,315 12,660 - 9
- ---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 438 44,165 8,414 32,496 - 9
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on investments 5,121 46,657 (23,175) (44,523) - 6,405
- ---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 5,559 90,822 (14,761) (12,027) - 6,414
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $5,290 119,057 15,987 71,640 6,951 6,025
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Operations (cont.)
For the period ended June 30, 1997 (unaudited)
(In thousands)
Mutual Natural Templeton
Shares Resources Real Estate Rising Small Developing
Securities Securities Securities Dividends Cap Markets
Fund Fund Fund Fund Fund Equity Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $ 83 1,320 10,278 9,066 554 3,810
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges - Valuemark II & III 602 569 2,050 3,532 1,183 1,945
Mortality and expense risk charges - Valuemark IV 81 3 26 20 30 31
Administrative charges - Valuemark II & III 72 68 246 424 142 233
Administrative charges - Valuemark IV 9 - 3 2 3 3
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 764 640 2,325 3,978 1,358 2,212
- ---------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net (681) 680 7,953 5,088 (804) 1,598
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds - - 4,908 15,481 6,560 6,044
Realized gains (losses) on sales of investments, net - (1,716) 4,482 11,043 2,289 2,314
- ---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net - (1,716) 9,390 26,524 8,849 8,358
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on investments 8,966 (8,220) 5,190 51,433 10,309 42,860
- ---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 8,966 (9,936) 14,580 77,957 19,158 51,218
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $8,285 (9,256) 22,533 83,045 18,354 52,816
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Operations (cont.)
For the period ended June 30, 1997 (unaudited)
(In thousands)
Templeton
Templeton Templeton Templeton Templeton International Templeton
Global Asset Global Global Income International Smaller Pacific
Allocation Growth Securities Equity Companies Growth
Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $1,445 10,484 13,072 30,398 147 5,370
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges -
Valuemark II & III 392 3,727 1,157 6,705 126 1,846
Mortality and expense risk charges - Valuemark IV 11 60 7 49 7 5
Administrative charges - Valuemark II & III 47 447 139 805 15 222
Administrative charges - Valuemark IV 1 7 1 6 1 1
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 451 4,241 1,304 7,565 149 2,074
- ---------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net 994 6,243 11,768 22,833 (2) 3,296
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds 417 3,495 - 46,610 - -
Realized gains (losses) on sales of investments, net 79 944 915 15,057 92 3,322
- ---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 496 4,439 915 61,667 92 3,322
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on investments 4,148 66,281 (13,539) 51,491 1,142 (918)
- ---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net 4,644 70,720 (12,624) 113,158 1,234 2,404
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $5,638 76,963 (856) 135,991 1,232 5,700
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Operations (cont.)
For the period ended June 30, 1997 (unaudited)
(In thousands)
U.S.
Government Utility Zero Zero Zero Total
Securities Equity Coupon Coupon Coupon All
Fund Fund Fund - 2000 Fund - 2005 Fund - 2010 Funds
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares $37,725 49,569 6,559 4,439 4,451 359,768
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk charges - Valuemark II & III 4,359 6,324 611 430 441 55,471
Mortality and expense risk charges - Valuemark IV 25 5 3 3 2 590
Administrative charges - Valuemark II & III 523 759 73 52 53 6,657
Administrative charges - Valuemark IV 3 1 - - - 65
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 4,910 7,089 687 485 496 62,783
- ---------------------------------------------------------------------------------------------------------------------------
Investment income (loss), net 32,815 42,480 5,872 3,954 3,955 296,985
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds - 68,585 148 15 36 207,536
Realized gains (losses) on sales of investments, net 3,214 24,140 882 690 390 98,422
- ---------------------------------------------------------------------------------------------------------------------------
Realized gains (losses) on investments, net 3,214 92,725 1,030 705 426 305,958
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments (15,336) (71,753) (5,326) (3,700) (3,520) 109,993
- ---------------------------------------------------------------------------------------------------------------------------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net (12,122) 20,972 (4,296) (2,995) (3,094) 415,951
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 20,693 63,452 1,576 959 861 712,936
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets
For the period ended June 30, 1997 (unaudited) and the year ended December 31,
1996 (In thousands)
Adjustable U.S. Capital
Government Fund Growth Fund Growth and Income Fund High Income Fund
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $- 10,420 (269) (187) 28,235 7,630 30,748 23,047
Realized gains (losses) on investments, net - (5,967) 438 24 44,165 86,540 8,414 9,464
Net change in unrealized appreciation
(depreciation) on investments - 1,206 5,121 1,811 46,657 13,214 (23,175) 8,973
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations - 5,659 5,290 1,648 119,057 107,384 15,987 41,484
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments - 26,642 9,387 13,726 38,486 134,960 19,609 51,687
Transfers between funds - (185,683) 7,784 28,227 7,056 35,764 (23,626) 30,106
Surrenders and terminations - (20,600) (2,015) (1,326) (68,336)(111,266) (29,077)(43,860)
Rescissions - (559) (135) (185) (678) (2,911) (522) (691)
Other transactions (note 2) - 34 (21) 20 (50) 447 106 73
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions -
Valuemark II & III - (180,166) 15,000 40,462 (23,522) 56,994 (33,510) 37,315
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions- Valuemark IV (note 5):
Purchase payments - - 6,544 - 15,770 - 15,977 -
Transfers between funds - - 501 - 714 - 919 -
Surrenders and terminations - - (14) - (33) - (39) -
Rescissions - - (65) - (111) - (388) -
Other transactions (note 2) - - 36 - 41 - 16 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions -
Valuemark IV - - 7,002 - 16,381 - 16,485 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets - (174,507) 27,292 42,110 111,916 164,378 (1,038) 78,799
Net assets at beginning of period - 174,507 42,110 - 977,110 812,732 402,379 323,580
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $- - 69,402 42,110 1,089,026 977,110 401,341 402,379
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
Investment Grade
Intermediate Mutual Discovery
Income Securities Fund Bond Fund Money Market Fund Securities Fund
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ 83,667 44,974 - 6,095 6,951 14,651 (389) (18)
Realized gains (losses) on
investments, net 32,496 22,468 - 5,263 - - 9 -
Net change in unrealized appreciation
(depreciation) on investments (44,523) 45,516 - (8,886) - - 6,405 200
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations 71,640 112,958 - 2,472 6,951 14,651 6,025 182
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments 40,244 152,823 - 11,116 58,836 175,341 21,848 3,317
Transfers between funds (34,159) (37,286) -(149,196) (14,691) (91,126) 49,086 12,081
Surrenders and terminations (81,544) (149,073) - (14,036) (83,115)(120,353) (1,799) (506)
Rescissions (1,010) (3,237) - (275) (1,814) (2,971) (433) -
Other transactions (note 2) 197 516 - 37 233 152 (15) -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark II & III (76,272) (36,257) -(152,354) (40,551) (38,957) 68,687 14,892
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
IV (note 5):
Purchase payments 17,457 - - - 30,945 - 22,247 -
Transfers between funds 871 - - - (10,870) - 1,694 -
Surrenders and terminations (56) - - - (7) - (12) -
Rescissions (464) - - - (128) - (98) -
Other transactions (note 2) - - - - (141) - 5 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark IV 17,808 - - - 19,799 - 23,836 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 13,176 76,701 -(149,882) (13,801) (24,306) 98,548 15,074
Net assets at beginning of period 1,251,844 1,175,143 - 149,882 375,629 399,935 15,074 -
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $1,265,020 1,251,844 - - 361,828 375,629 113,622 15,074
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
Mutual Shares Natural Resources Real Estate Rising
Securities Fund Securities Fund Securities Fund Dividends Fund
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ (681) (34) 680 (162) 7,953 5,882 5,088 2,950
Realized gains (losses) on
investments, net - - (1,716) 5,476 9,390 2,738 26,524 9,161
Net change in unrealized appreciation
(depreciation) on investments 8,966 604 (8,220) (5,135) 5,190 58,128 51,433 84,727
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations 8,285 570 (9,256) 179 22,533 66,748 83,045 96,838
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments 44,624 8,157 2,893 20,879 21,276 30,999 17,415 51,514
Transfers between funds 81,611 18,952 (6,448) (5,980) 20,433 27,778 11,713 24,084
Surrenders and terminations (2,914) (537) (4,557)(11,177) (16,064)(22,133) (35,733)(49,247)
Rescissions (442) - (58) (321) (261) (204) (355) (1,165)
Other transactions (note 2) (10) (1) 39 38 11 13 49 111
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark II & III 122,869 26,571 (8,131) 3,439 25,395 36,453 (6,911) 25,297
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
IV (note 5):
Purchase payments 38,845 - 1,294 - 11,170 - 8,690 -
Transfers between funds 2,199 - 125 - 612 - 333 -
Surrenders and terminations (34) - - - (13) - (14) -
Rescissions (400) - - - (52) - (79) -
Other transactions (note 2) 28 - 4 - 7 - 7 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark IV 40,638 - 1,423 - 11,724 - 8,937 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 171,792 27,141 (15,964) 3,618 59,652 103,201 85,071 122,135
Net assets at beginning of period 27,141 - 101,248 97,630 301,974 198,773 545,127 422,992
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $198,933 27,141 85,284 101,248 361,626 301,974 630,198 545,127
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
Templeton
Templeton Developing Global Asset Templeton
Small Cap Fund Markets Equity Fund Allocation Fund Global Growth Fund
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ (804) (1,323) 1,598 (1,013) 994 (431) 6,243 843
Realized gains (losses) on
investments, net 8,849 806 8,358 5,139 496 168 4,439 8,526
Net change in unrealized appreciation
(depreciation) on investments 10,309 16,477 42,860 30,681 4,148 5,895 66,281 68,710
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations 18,354 15,960 52,816 34,807 5,638 5,632 76,963 78,079
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments 22,741 51,827 22,780 54,987 9,280 19,536 46,295 139,155
Transfers between funds 23,202 93,997 30,500 36,529 7,126 14,964 12,582 46,194
Surrenders and terminations (9,795) (9,173) (10,918) (16,917) (2,239)(2,138) (22,047)(33,945)
Rescissions (486) (459) (226) (568) (71) (139) (916) (1,728)
Other transactions (note 2) 64 166 (39) 27 4 28 (22) 27
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark II & III 35,726 136,358 42,097 74,058 14,100 32,251 35,892 149,703
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
IV (note 5):
Purchase payments 12,564 - 12,531 - 5,427 - 26,979 -
Transfers between funds 937 - 856 - 564 - 916 -
Surrenders and terminations (20) - (6) - (4) - (31) -
Rescissions (96) - (55) - (36) - (168) -
Other transactions (note 2) 18 - 8 - - - 8 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transaction
- Valuemark IV 13,403 - 13,334 - 5,951 - 27,704 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 67,483 152,318 108,247 108,865 25,689 37,883 140,559 227,782
Net assets at beginning of period 165,578 13,260 259,346 150,481 52,117 14,234 550,066 322,284
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $233,061 165,578 367,593 259,346 77,806 52,117 690,625 550,066
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
Templeton Templeton
Templeton Global International International Smaller Templeton
Income Securities Fund Equity Fund Companies Fund Pacific Growth Fund
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ 11,768 12,436 22,833 10,789 (2) (95) 3,296 5,289
Realized gains (losses) on
investments, net 915 1,570 61,667 36,562 92 60 3,322 16,017
Net change in unrealized appreciation
(depreciation) on investments (13,539) 1,397 51,491 129,022 1,142 1,131 (918) 8,976
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations (856) 15,403 135,991 176,373 1,232 1,096 5,700 30,282
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments 3,957 11,615 37,097 106,669 5,184 5,995 5,297 32,634
Transfers between funds (7,855)(19,697) 14,758 50,892 3,211 9,255 (29,982) (1,902)
Surrenders and terminations (13,073)(28,371) (57,377) (90,832) (844) (763) (20,571)(37,424)
Rescissions (90) (174) (615) (1,605) (80) (46) (134) (382)
Other transactions (note 2) (8) 49 28 416 7 (10) 147 108
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark II & III (17,069)(36,578) (6,109) 65,540 7,478 14,431 (45,243) (6,966)
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
IV (note 5):
Purchase payments 2,992 - 19,757 - 3,403 - 2,197 -
Transfers between funds 122 - 1,453 - 121 - 468 -
Surrenders and terminations (7) - (15) - (5) - (3) -
Rescissions (166) - (103) - (17) - (27) -
Other transactions (note 2) 15 - 8 - 3 - - -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark IV 2,956 - 21,100 - 3,505 - 2,635 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (14,969)(21,175) 150,982 241,913 12,215 15,527 (36,908) 23,316
Net assets at beginning of period 198,968 220,143 1,036,583 794,670 15,527 - 330,159 306,843
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $183,999 198,968 1,187,5651,036,583 27,742 15,527 293,251 330,159
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
U.S. Government Zero Coupon Zero Coupon
Securities Fund Utility Equity Fund Fund - 2000 Fund - 2005
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ 32,815 28,207 42,480 43,207 5,872 4,403 3,954 2,728
Realized gains (losses) on
investments, net 3,214 3,616 92,725 33,442 1,030 1,564 705 807
Net change in unrealized appreciation
(depreciation) on investments (15,336) (18,709) (71,753) (17,145) (5,326) (4,982) (3,700)(4,814)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations 20,693 13,114 63,452 59,504 1,576 985 959 (1,279)
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
II & III (note 5):
Purchase payments 18,016 42,193 9,811 56,194 1,025 12,076 1,387 10,095
Transfers between funds (46,415) 211,454 (90,759) (148,616) (3,097) (5,558) (5,002)(2,776)
Surrenders and terminations (58,510) (82,684) (88,406) (174,285) (7,432)(14,126) (3,829)(5,726)
Rescissions (341) (717) (407) (734) (43) (214) (1) (158)
Other transactions (note 2) 322 379 113 315 (2) (3) 14 (14)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
- Valuemark II & III (86,928) 170,625 (169,648) (267,126) (9,549) (7,825) (7,431) 1,421
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark
IV (note 5):
Purchase payments 10,071 - 1,924 - 1,130 - 1,496 -
Transfers between funds (512) - 52 - 9 - 7 -
Surrenders and terminations (8) - (2) - (1) - - -
Rescissions (207) - (30) - - - (63) -
Other transactions (note 2) 64 - - - - - - -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from contract transactions
Valuemark IV 9,408 - 1,944 - 1,138 - 1,440 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (56,827) 183,739 (104,252) (207,622) (6,835) (6,840) (5,032) 142
Net assets at beginning of period 742,973 559,234 1,097,873 1,305,495 104,125 110,965 73,434 73,292
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $686,146 742,973 993,621 1,097,873 97,290 104,125 68,402 73,434
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Financial Statements (continued)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1997 (unaudited) and the year ended December 31, 1996
(In thousands)
Zero Coupon
Fund - 2010 Total All Funds
- ---------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net $ 3,955 2,690 296,985 222,978
Realized gains (losses) on investments, net 426 3,429 305,958 246,873
Net change in unrealized appreciation (depreciation) on investments (3,520) (9,041) 109,993 407,956
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 861 (2,922) 712,936 877,807
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark II & III (note 5):
Purchase payments 3,048 12,642 460,536 1,236,779
Transfers between funds (1,147) (8,596) 5,881 (16,139)
Surrenders and terminations (3,461) (7,034) (623,656) (1,047,532)
Rescissions (17) (244) (9,135) (19,687)
Other transactions (note 2) 3 (13) 1,170 2,915
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
contract transactions - Valuemark II & III (1,574) (3,245) (165,204) 156,336
- ---------------------------------------------------------------------------------------------------------------------------
Contract transactions - Valuemark IV (note 5):
Purchase payments 1,151 - 270,561 -
Transfers between funds 87 - 2,178 -
Surrenders and terminations (3) - (327) -
Rescissions (6) - (2,759) -
Other transactions (note 2) - - 127 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
contract transactions - Valuemark IV 1,229 - 269,780 -
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 516 (6,167) 817,512 1,034,143
Net assets at beginning of period 70,969 77,136 8,737,354 7,703,211
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $71,485 70,969 9,554,866 8,737,354
===========================================================================================================================
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements
June 30, 1997 (unaudited)
1. Organization
Allianz Life Variable Account B (Variable Account) is a segregated investment
account of Allianz Life Insurance Company of North America (Allianz Life) and is
registered with the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act of 1940 (as
amended). The Variable Account was established on May 31, 1985 and commenced
operations January 24, 1989. Accordingly, it is an accounting entity wherein all
segregated account transactions are reflected.
The Variable Account's assets are the property of Allianz Life and are held for
the benefit of the owners and other persons entitled to payments under variable
annuity contracts issued through the Variable Account and underwritten by
Allianz Life. The assets of the Variable Account, equal to the reserves and
other liabilities of the Variable Account, are not chargeable with liabilities
that arise from any other business which Allianz Life may conduct.
The Variable Account's sub-accounts may invest, at net asset values, in one or
more of the funds of the Franklin Valuemark Funds (FVF), managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates, in accordance with the
selection made by the contract owner. Not all funds are available as investment
options for the products which comprise the Variable Account.
Certain officers and trustees of the FVF are also officers and/or directors of
Franklin Advisers, Inc. and/or Allianz Life.
2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent 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.
Investments
Investments of the Variable Account are valued daily at market value using net
asset values provided by Franklin Advisers, Inc.
Realized investment gains include realized gain distributions received from the
respective funds and gains on the sale of fund shares as determined by the
average cost method. Realized gain distributions are reinvested in the
respective funds. Dividend distributions received from the FVF are reinvested in
additional shares of the FVF and are recorded as income to the Variable Account
on the ex-dividend date.
Two Fixed Account investment options are available to deferred annuity contract
owners. A Flexible Fixed Option is available to all deferred annuity contract
owners and a Dollar Cost Averaging Option is available to Valuemark IV deferred
annuity contract owners. These accounts are comprised of equity and fixed income
investments which are part of the general assets of Allianz Life. The
liabilities of the Fixed Accounts are part of the general obligations of Allianz
Life and are not included in the Variable Account. The guaranteed minimum rate
of return on the Fixed Accounts is 3%.
The Capital Growth Fund and Templeton International Smaller Companies Fund were
added as available investment options on May 1, 1996. The Mutual Discovery
Securities Fund and Mutual Shares Securities Fund were added as available
investment options on November 8, 1996. The Investment Grade Intermediate Bond
Fund and Adjustable U.S. Government Fund were closed on October 25, 1996 when
shares of the U.S. Government Securities Fund were substituted for all shares of
both funds.
On May 1, 1996, the Global Income Fund name was changed to Templeton Global
Income Securities Fund. The Precious Metals Fund name was changed to Natural
Resources Securities Fund on May 1, 1997.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
2. Significant Accounting Policies (cont.)
Contracts in Annuity Payment Period
Annuity reserves are computed for currently payable contracts according to the
1983 Individual Annuity Mortality Table, using an assumed investment return
(AIR) equal to the AIR of the specific contracts, either 3% or 5%. Charges to
annuity reserves for mortality and risk expense are reimbursed to Allianz Life
if the reserves required are less than originally estimated. If additional
reserves are required, Allianz Life reimburses the account.
Expenses
Asset Based Expenses
A mortality and expense risk charge is deducted from the Variable Account on a
daily basis. The charge is equal, on an annual basis, to 1.25% of the daily net
assets of Valuemark II, Valuemark III, and Valuemark Income Plus and 1.34% of
the daily net assets of Valuemark IV.
An administrative charge is deducted from the Variable Account on a daily basis
equal, on an annual basis, to 0.15% of the daily net assets of all products
which comprise the Variable Account.
Contract Based Expenses
A contract maintenance charge is paid by the contract owner annually from each
deferred annuity contract by liquidating contract units at the end of the
contract year and at the time of full surrender. The amount of the charge is $30
each year. Contract maintenance charges paid by the contract owners during the
period ended June 30, 1997 (unaudited) and the year ended December 31, 1996 were
$2,370,119 and $4,491,487, respectively. These contract charges are reflected in
the Statements of Changes in Net Assets as other transactions.
A contingent deferred sales charge is deducted from the contract value at the
time of a surrender. This charge applies only to a surrender of purchase
payments received within five years of the date of surrender for Valuemark II
and Valuemark III contracts and within seven years of the date of surrender for
Valuemark IV contracts. For this purpose, purchase payments are allocated on a
first-in, first-out basis. The amount of the contingent deferred sales charge is
calculated by: (a) allocating purchase payments to the amount surrendered; and
(b) multiplying each allocated purchase payment that has been held under the
contract for the period shown below by the charge shown below:
Contingent Deferred Sales Charge
Years Since -----------------------------------------------
Payment Valuemark II Valuemark III Valuemark IV
- ---------------------------------------------------------------------
0-1 5% 6% 6%
1-2 5% 5% 6%
2-3 4% 4% 6%
3-4 3% 3% 5%
4-5 1.5% 1.5% 4%
5-6 0% 0% 3%
6-7 0% 0% 2%
7+ 0% 0% 0%
and (c) adding the products of each multiplication in (b) above.
A Valuemark II or Valuemark III deferred annuity contract owner may, not more
frequently than once annually on a cumulative basis, make a surrender each
contract year of fifteen percent (15%) of purchase payments paid, less any prior
surrenders, without incurring a contingent deferred sales charge. A Valuemark IV
deferred annuity contract owner may make multiple surrenders, each year after
the first contract year, up to fifteen percent (15%) of the contract value
without incurring a contingent deferred sales charge. For a partial surrender,
the contingent deferred sales charge will be deducted from the remaining
contract value, if sufficient; otherwise it will be deducted from the amount
surrendered. Total contingent deferred sales charges paid by the contract owners
for the period ended June 30, 1997 (unaudited) and the year ended December 31,
1996 were $4,688,856 and $10,529,337, respectively.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
2. Significant Accounting Policies (cont.)
Contract Based Expenses (cont.)
Currently, twelve transfers are permitted each contract year. Thereafter, the
fee is $25 per transfer, or 2% of the amount transferred, if less. Currently,
transfers associated with the dollar cost averaging program are not counted.
Total transfer charges paid by the contract owners for the period ended June 30,
1997 (unaudited) and the year ended December 31, 1996 were $53,071 and $93,255,
respectively. Transfer charges are reflected in the Statements of Changes in Net
Assets as other transactions. Net transfers from the Fixed Accounts for the
period ended June 30, 1997 (unaudited) were $8,058,767. Net transfers to the
Fixed Accounts were $16,138,672 during the year ended December 31, 1996.
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the contract values. Allianz Life may, in its sole
discretion, pay taxes when due and deduct that amount from the contract value at
a later date. Payment at an earlier date does not waive any right Allianz Life
may have to deduct such amounts at a later date.
On Valuemark II and Valuemark III deferred annuity contracts, a systematic
withdrawal plan is available which allows an owner to withdraw up to nine
percent (9%) of purchase payments less prior surrenders annually, paid monthly
or quarterly, without incurring a contingent deferred sales charge. The
systematic withdrawal plan available to Valuemark IV deferred annuity contract
owners allows up to fifteen percent (15%) of the contract value withdrawn
annually, paid monthly or quarterly, without incurring a contingent deferred
sales charge. The exercise of the systematic withdrawal plan in any contract
year replaces the 15% penalty free privilege for that year for all deferred
annuity contracts.
A rescission is defined as a contract that is returned to the Company by the
Contract Owner and canceled within the free-look period, generally within 10
days.
3. Capitalization
Allianz Life provides capital for the establishment of new funds as investment
options of the Variable Account. There were no capitalization transactions
during the period ended June 30, 1997 (unaudited). The capitalization
transactions were as follows during the year ended December 31, 1996:
Capitalization Date of Market Value Date of
Fund Amount Capitalization at Withdrawal Withdrawal
- --------------------------------------------------------------------------------
Small Cap Fund $250,000 9/18/95 $313,250 5/29/96
Capital Growth Fund $250,000 4/30/96 $281,250 11/7/96
Templeton International
Smaller Companies Fund $250,000 4/30/96 $269,250 11/7/96
Mutual Discovery
Securities Fund $250,000 11/8/96 $252,250 12/23/96
Mutual Shares
Securities Fund $250,000 11/8/96 $255,750 12/23/96
4. Federal Income Taxes
Operations of the Variable Account form a part of, and are taxed with,
operations of Allianz Life, which is taxed as a life insurance company under the
Internal Revenue Code.
Allianz Life does not expect to incur any federal income taxes in the operation
of the Variable Account. If, in the future, Allianz Life determines that the
Variable Account may incur federal income taxes, it may then assess a charge
against the Variable Account for such taxes.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
5. Contract Transactions- Accumulation Unit Activity (In thousands)
Transactions in units for each fund for the period ended June 30, 1997
(unaudited) and the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Adjustable Growth Investment Mutual Mutual
U.S. Capital and High Income Grade Money Discovery Shares
Government Growth Income Income Securities Intermediate Market Securities Securities
VALUEMARK II & III Fund Fund Fund Fund Fund Bond Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1995 14,600 - 46,893 18,756 59,309 9,692 31,040 - -
Contract transactions:
Purchase payments 2,202 1,261 7,454 2,862 7,457 719 13,261 327 797
Transfers between funds (15,066) 2,597 1,961 1,598 (1,819) (9,490) (6,879) 1,194 1,869
Surrenders and terminations (1,693) (121) (6,143)(2,446) (7,308) (905) (9,147) (50) (53)
Rescissions (46) (17) (163) (38) (159) (18) (226) - -
Other transactions 3 2 25 4 24 2 11 - -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions (14,600) 3,722 3,134 1,980 (1,805) (9,692) (2,980) 1,471 2,613
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1996 - 3,722 50,027 20,736 57,504 - 28,060 1,471 2,613
===========================================================================================================================
Contract transactions (unaudited):
Purchase payments - 805 1,880 1,002 1,784 - 4,344 2,004 4,127
Transfers between funds - 666 342 (1,200) (1,528) - (1,058) 4,559 7,630
Surrenders and terminations - (174) (3,325)(1,490) (3,671) - (6,160) (165) (269)
Rescissions - (12) (33) (27) (46) - (134) (41) (42)
Other transactions - (2) (2) 5 9 - 17 (1) (1)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions - 1,283 (1,138)(1,710) (3,452) - (2,991) 6,356 11,445
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding
at June 30, 1997 (unaudited) - 5,005 48,889 19,026 54,052 - 25,069 7,827 14,058
===========================================================================================================================
VALUEMARK IV
Accumulation units outstanding at
December 31, 1996 - - - - - - - - -
Contract transactions (unaudited):
Purchase payments - 564 763 815 788 - 2,305 2,058 3,634
Transfers between funds - 44 34 46 39 - (809) 156 203
Surrenders and terminations - (1) (2) (2) (3) - (1) (1) (3)
Rescissions - (6) (5) (20) (21) - (10) (9) (38)
Other transactions - 3 2 1 - - (10) - 3
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions - 604 792 840 803 - 1,475 2,204 3,799
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
June 30, 1997 (unaudited) - 604 792 840 803 - 1,475 2,204 3,799
===========================================================================================================================
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
5. Contract Transactions- Accumulation Unit Activity (In thousands) (cont.)
<TABLE>
<CAPTION>
Templeton
Natural Real Templeton Templeton Templeton Global
Resources Estate Rising Small Developing Global Asset Global Income Templeton
Securities Securities Dividends Cap Markets Allocation Growth Securities International
VALUEMARK II & III Fund Fund Fund Fund Equity Fund Fund Fund Fund Equity Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1995 6,919 10,998 33,789 1,302 15,618 1,338 28,309 14,181 59,883
Contract transactions:
Purchase payments 1,298 1,562 3,849 4,358 5,057 1,657 11,183 740 7,288
Transfers between funds (484) 1,332 1,653 7,933 3,367 1,303 3,694 (1,254) 3,483
Surrenders and terminations (717) (1,125) (3,644) (786) (1,569) (184) (2,720) (1,802) (6,198)
Rescissions (20) (11) (87) (38) (53) (12) (141) (11) (110)
Other transactions 2 1 9 15 3 2 2 3 29
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions 79 1,759 1,780 11,482 6,805 2,766 12,018 (2,324) 4,492
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
December 31, 1996 6,998 12,757 35,569 12,784 22,423 4,104 40,327 11,857 64,375
===========================================================================================================================
Contract transactions (unaudited):
Purchase payments 206 887 1,074 1,793 1,782 710 3,255 239 2,213
Transfers between funds (487) 845 607 1,918 2,421 563 880 (475) 853
Surrenders and terminations (329) (669) (2,201) (764) (874) (171) (1,542) (795) (3,425)
Rescissions (4) (11) (22) (39) (18) (6) (65) (5) (36)
Other transactions 3 - 3 5 (3) - (1) - 1
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions (611) 1,052 (539) 2,913 3,308 1,096 2,527 (1,036) (394)
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
June 30, 1997 (unaudited) 6,387 13,809 35,030 15,697 25,731 5,200 42,854 10,821 63,981
===========================================================================================================================
VALUEMARK IV
Accumulation units outstanding at
December 31, 1996 - - - - - - - - -
Contract transactions (unaudited):
Purchase payments 95 467 528 990 975 416 1,874 183 1,163
Transfers between funds 9 26 20 73 67 43 64 7 84
Surrenders and terminations - (1) (1) (2) - - (2) - (1)
Rescissions - (2) (5) (8) (4) (3) (12) (10) (6)
Other transactions - - - 1 1 - 1 1 -
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
accumulation units resulting
from contract transactions 104 490 542 1,054 1,039 456 1,925 181 1,240
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
June 30, 1997 (unaudited) 104 490 542 1,054 1,039 456 1,925 181 1,240
===========================================================================================================================
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
5. Contract Transactions- Accumulation Unit Activity (In thousands) (cont.)
<TABLE>
<CAPTION>
Templeton
International Templeton U.S. Zero Zero Zero
Smaller Pacific Government Utility Coupon Coupon Coupon Total
Companies Growth Securities Equity Fund - Fund - Fund - All
VALUEMARK II & III Fund Fund Fund Fund 2000 2005 2010 Funds
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at December 31, 1995 - 22,483 34,313 66,669 6,066 3,504 3,437 489,099
Contract transactions:
Purchase payments 568 2,196 2,609 2,847 672 513 618 83,355
Transfers between funds 897 (62) 12,819 (7,585) (308) (139) (403) 2,211
Surrenders and terminations (72) (2,537) (5,122)(8,824) (782) (290) (342) (64,580)
Rescissions (4) (26) (44) (37) (12) (8) (12) (1,293)
Other transactions (1) 7 23 16 - (1) (1) 180
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation units
resulting from contract transactions 1,388 (422) 10,285(13,583) (430) 75 (140) 19,873
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at December 31, 1996 1,388 22,061 44,598 53,086 5,636 3,579 3,297 508,972
===========================================================================================================================
Contract transactions (unaudited):
Purchase payments 457 361 1,075 469 56 68 144 30,735
Transfers between funds 283 (2,039) (2,769)(4,349) (169) (245) (52) 7,196
Surrenders and terminations (74) (1,403) (3,485)(4,233) (403) (188) (164) (35,974)
Rescissions (7) (9) (20) (20) (2) - (1) (600)
Other transactions 1 10 19 5 - 1 - 69
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation units
resulting from contract transactions 660 (3,080) (5,180)(8,128) (518) (364) (73) 1,426
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
June 30, 1997 (unaudited) 2,048 18,981 39,418 44,958 5,118 3,215 3,224 510,398
===========================================================================================================================
VALUEMARK IV
Accumulation units outstanding at December 31, 1996 - - - - - - - -
Contract transactions (unaudited):
Purchase payments 298 150 603 93 61 74 54 18,951
Transfers between funds 11 32 (30) 2 - - 4 125
Surrenders and terminations - - - - - - - (20)
Rescissions (2) (2) (12) (1) - (3) - (179)
Other transactions - - 4 - - - - 7
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in accumulation units
resulting from contract transactions 307 180 565 94 61 71 58 18,884
- ---------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding at
June 30, 1997 (unaudited) 307 180 565 94 61 71 58 18,884
===========================================================================================================================
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
6. Unit Values
A summary of accumulation unit values and accumulation units outstanding for
variable annuity contracts and the expense ratios, including expenses of the
underlying funds, for the six-month period ended June 30, 1997 (unaudited) and
each of the five years in the period ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Valuemark II & III Valuemark IV
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Accumulation Net Ratio of Expenses Accumulation Accumulation Net Ratio of Expenses
Units Outstanding Unit Assets to Average Units Outstanding Unit Assets to Average
(in thousands) Value (in thousands) Net Assets* (in thousands) Value (in thousands) Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADJUSTABLE U.S. GOVERNMENT FUND
December 31,
19961 10,926 $12.389 $ 135,355 1.99%+ - $ - $ - -%
1995 14,600 11.951 174,507 1.99 - - - -
1994 19,865 11.077 220,042 1.97 - - - -
1993 24,975 11.254 281,061 1.98 - - - -
1992 21,858 11.020 240,875 2.00 - - - -
CAPITAL GROWTH FUND
June 30, 1997
(unaudited) 5,005 12.277 61,450 2.16 604 12.264 7,410 2.25
December 31
19962 3,722 11.254 42,110 2.17+ - - - -
GROWTH AND INCOME FUND
June 30, 1997
(unaudited) 48,889 21.877 1,069,521 1.88 792 21.711 17,196 1.97
December 31,
1996 50,027 19.490 977,110 1.90 - - - -
1995 46,893 17.310 812,732 1.92 - - - -
1994 35,695 13.215 471,773 1.94 - - - -
1993 24,719 13.677 338,082 1.98 - - - -
1992 17,144 12.574 215,559 2.02 - - - -
HIGH INCOME FUND
June 30, 1997
(unaudited) 19,026 20.171 383,785 1.92 840 20.019 16,813 2.01
December 31,
1996 20,736 19.375 402,379 1.94 - - - -
1995 18,756 17.252 323,580 1.96 - - - -
1994 15,679 14.608 229,026 2.00 - - - -
1993 11,787 15.155 178,627 2.04 - - - -
1992 4,780 13.278 63,462 2.08 - - - -
INCOME SECURITIES FUND
June 30, 1997
(unaudited) 54,052 22.989 1,242,615 1.90 803 22.815 18,345 1.99
December 31,
1996 57,504 21.708 1,251,844 1.90 - - - -
1995 59,309 19.785 1,175,143 1.91 - - - -
1994 56,569 16.392 927,343 1.94 - - - -
1993 38,967 17.734 691,056 1.96 - - - -
1992 11,397 15.163 172,807 2.07 - - - -
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
6. Unit Values (cont.)
<TABLE>
<CAPTION>
Valuemark II & III Valuemark IV
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Accumulation Net Ratio of Expenses Accumulation Accumulation Net Ratio of Expenses
Units Outstanding Unit Assets to Average Units Outstanding Unit Assets to Average
(in thousands) Value (in thousands) Net Assets* (in thousands) Value (in thousands) Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT GRADE INTERMEDIATE BOND FUND
December 31,
19961 8,323 $15.740 $ 131,012 2.00%+ - $ - $ - -%
1995 9,692 15.463 149,882 2.01 - - - -
1994 9,772 14.257 139,325 2.03 - - - -
1993 7,677 14.389 110,466 2.06 - - - -
1992 3,333 13.442 44,807 2.08 - - - -
MONEY MARKET FUND
June 30, 1997
(unaudited) 25,069 13.603 341,018 1.84 1,475 13.502 19,929 1.93
December 31,
1996 28,060 13.359 375,629 1.83 - - - -
1995 31,040 12.883 399,935 1.80 - - - -
1994 39,437 12.354 487,239 1.86 - - - -
1993 10,247 12.066 123,639 2.06 - - - -
1992 6,951 11.932 82,944 2.09 - - - -
MUTUAL DISCOVERY SECURITIES FUND
June 30, 1997
(unaudited) 7,827 11.225 87,855 2.52 2,204 11.219 24,729 2.61
December 31,
19963 1,471 10.180 15,074 2.77+ - - - -
MUTUAL SHARES SECURITIES FUND
June 30, 1997
(unaudited) 14,058 11.047 155,293 2.23 3,799 11.040 41,935 2.32
December 31,
19963 2,613 10.330 27,141 2.40+ - - - -
NATURAL RESOURCES SECURITIES FUND
June 30, 1997
(unaudited) 6,387 13.141 83,923 2.06 104 13.041 1,361 2.15
December 31,
1996 6,998 14.467 101,248 2.05 - - - -
1995 6,919 14.109 97,630 2.06 - - - -
1994 8,285 13.979 115,828 2.08 - - - -
1993 4,685 14.464 67,770 2.08 - - - -
1992 1,419 9.424 13,374 2.09 - - - -
REAL ESTATE SECURITIES FUND
June 30, 1997
(unaudited) 13,809 25.288 349,215 1.93 490 25.097 12,287 2.02
December 31,
1996 12,757 23.668 301,974 1.97 - - - -
1995 10,998 18.073 198,773 1.99 - - - -
1994 11,645 15.594 181,599 2.02 - - - -
1993 5,589 15.369 85,896 2.07 - - - -
1992 1,052 13.095 13,782 2.09 - - - -
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
6. Unit Values (cont.)
<TABLE>
<CAPTION>
Valuemark II & III Valuemark IV
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Accumulation Net Ratio of Expenses Accumulation Accumulation Net Ratio of Expenses
Units Outstanding Unit Assets to Average Units Outstanding Unit Assets to Average
(in thousands) Value (in thousands) Net Assets* (in thousands) Value (in thousands) Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RISING DIVIDENDS FUND
June 30, 1997
(unaudited) 35,030 $17.679 $ 619,292 2.14% 542 $17.593 $ 9,546 2.23%
December 31,
1996 35,569 15.303 545,127 2.16 - - - -
1995 33,789 12.498 422,992 2.18 - - - -
1994 28,778 9.769 281,145 2.20 - - - -
1993 26,256 10.327 271,147 2.19 - - - -
19924 8,388 10.848 90,995 2.07+ - - - -
SMALL CAP FUND
June 30, 1997
(unaudited) 15,697 13.857 217,518 2.17 1,054 13.836 14,602 2.26
December 31,
1996 12,784 12.913 165,578 2.17 - - - -
19955 1,302 10.146 13,260 2.30+ - - - -
TEMPLETON DEVELOPING MARKETS EQUITY FUND
June 30, 1997
(unaudited) 25,731 13.631 350,763 2.82 1,039 13.591 14,105 2.91
December 31,
1996 22,423 11.487 259,346 2.89 - - - -
1995 15,618 9.582 150,481 2.81 - - - -
19946 9,774 9.454 92,469 2.93+ - - - -
TEMPLETON GLOBAL ASSET ALLOCATION FUND
June 30, 1997
(unaudited) 5,200 13.590 70,682 2.27 456 13.563 6,194 2.36
December 31,
1996 4,104 12.514 52,117 2.26 - - - -
19957 1,338 10.591 14,234 2.30+ - - - -
TEMPLETON GLOBAL GROWTH FUND
June 30, 1997
(unaudited) 42,854 15.334 657,083 2.29 1,925 15.288 29,414 2.38
December 31,
1996 40,327 13.560 550,066 2.33 - - - -
1995 28,309 11.339 322,284 2.37 - - - -
19946 14,637 10.201 149,393 2.54+ - - - -
TEMPLETON GLOBAL INCOME SECURITIES FUND
June 30, 1997
(unaudited) 10,821 16.721 180,948 2.01 181 16.595 2,995 2.10
December 31,
1996 11,857 16.781 198,968 2.01 - - - -
1995 14,181 15.522 220,143 2.04 - - - -
1994 16,855 13.726 231,368 2.11 - - - -
1993 13,054 14.650 191,246 2.13 - - - -
1992 5,487 12.733 69,860 2.07 - - - -
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
6. Unit Values (cont.)
<TABLE>
<CAPTION>
Valuemark II & III Valuemark IV
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Accumulation Net Ratio of Expenses Accumulation Accumulation Net Ratio of Expenses
Units Outstanding Unit Assets to Average Units Outstanding Unit Assets to Average
(in thousands) Value (in thousands) Net Assets* (in thousands) Value (in thousands) Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TEMPLETON INTERNATIONAL EQUITY FUND
June 30, 1997
(unaudited) 63,981 $18.180 $1,163,147 2.29% 1,240 $18.091 $22,441 2.38%
December 31,
1996 64,375 16.081 1,036,583 2.29 - - - -
1995 59,883 13.263 794,670 2.32 - - - -
1994 60,464 12.161 735,339 2.39 - - - -
1993 24,026 12.226 293,740 2.52 - - - -
19924 1,329 9.642 12,812 3.17+ - - - -
TEMPLETON INTERNATIONAL SMALLER COMPANIES FUND
June 30, 1997
(unaudited) 2,048 11.743 24,041 2.48 307 11.730 3,604 2.57
December 31,
19962 1,388 11.145 15,527 2.18+ - - - -
TEMPLETON PACIFIC GROWTH FUND
June 30, 1997
(unaudited) 18,981 15.270 289,837 2.40 180 15.196 2,731 2.49
December 31,
1996 22,061 14.932 330,159 2.39 - - - -
1995 22,483 13.630 306,843 2.41 - - - -
1994 27,231 12.802 348,655 2.47 - - - -
1993 14,240 14.233 202,676 2.54 - - - -
19924 534 9.761 5,209 2.71+ - - - -
U.S. GOVERNMENT SECURITIES FUND
June 30, 1997
(unaudited) 39,418 17.152 676,119 1.90 565 17.024 9,584 1.99
December 31,
1996 44,598 16.650 742,973 1.91 - - - -
1995 34,313 16.298 559,234 1.92 - - - -
1994 36,490 13.835 504,837 1.93 - - - -
1993 40,402 14.698 593,842 1.94 - - - -
1992 25,054 13.586 340,391 1.99 - - - -
UTILITY EQUITY FUND
June 30, 1997
(unaudited) 44,958 22.024 990,139 1.90 94 21.878 2,056 1.99
December 31,
1996 53,086 20.654 1,097,873 1.90 - - - -
1995 66,669 19.565 1,305,495 1.90 - - - -
1994 70,082 15.104 1,058,531 1.92 - - - -
1993 84,217 17.319 1,458,533 1.91 - - - -
1992 39,387 15.889 625,803 1.95 - - - -
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Notes to Financial Statements (continued)
June 30, 1997 (unaudited)
6. Unit Values (cont.)
<TABLE>
<CAPTION>
Valuemark II & III Valuemark IV
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulation Accumulation Net Ratio of Expenses Accumulation Accumulation Net Ratio of Expenses
Units Outstanding Unit Assets to Average Units Outstanding Unit Assets to Average
(in thousands) Value (in thousands) Net Assets* (in thousands) Value (in thousands) Net Assets*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ZERO COUPON FUND - 2000
June 30, 1997
(unaudited) 5,118 $18.781 $ 96,111 1.80% 61 $18.641 $ 1,149 1.89%
December 31,
1996 5,636 18.475 104,125 1.80 - - - -
1995 6,066 18.294 110,965 1.80 - - - -
1994 4,953 15.373 76,140 1.80 - - - -
1993 3,787 16.717 63,301 1.77 - - - -
1992 2,886 14.595 42,124 1.65 - - - -
ZERO COUPON FUND - 2005
June 30, 1997
(unaudited) 3,215 20.815 66,934 1.80 71 20.662 1,468 1.89
December 31,
1996 3,579 20.517 73,434 1.80 - - - -
1995 3,504 20.914 73,292 1.80 - - - -
1994 2,780 16.096 44,756 1.80 - - - -
1993 2,020 18.050 36,469 1.77 - - - -
1992 1,090 14.975 16,321 1.65 - - - -
ZERO COUPON FUND - 2010
June 30, 1997
(unaudited) 3,224 21.771 70,229 1.80 58 21.608 1,256 1.89
December 31,
1996 3,297 21.522 70,969 1.80 - - - -
1995 3,437 22.431 77,136 1.80 - - - -
1994 2,589 15.930 41,255 1.80 - - - -
1993 1,405 18.144 25,489 1.65 - - - -
1992 849 14.670 12,456 1.65 - - - -
<FN>
* For the period ended June 30, 1997 (unaudited) or the year ended December 31,
including the effect of the expenses of the underlying funds.
+ Annualized.
1 Period from January 1, 1996 to October 25, 1996 (fund closure).
2 Period from May 1, 1996 (fund commencement) to December 31, 1996.
3 Period from November 8, 1996 (fund commencement) to December 31, 1996.
4 Period from January 27, 1992 (fund commencement) to December 31, 1992.
5 Period from November 1, 1995 (fund commencement) to December 31, 1995.
6 Period from March 15, 1994 (fund commencement) to December 31, 1994.
7 Period from May 1, 1995 (fund commencement) to December 31, 1995.
</FN>
</TABLE>
