<PAGE> 1
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A N N U A L R E P O R T
D E C E M B E R 3 1 , 1 9 9 5
- --------------------------------------------------------------------------------
WRL SERIES FUND, INC.
C.A.S.E. RESERVE VARIABLE ANNUITY
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
February 1996
ACC00008-A (2/96)
<PAGE> 2
- --------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Chairman's letter..................................... 1
Reports of Independent Accountants.................... 2
WRL SERIES FUND, INC.
Financial Statements:
C.A.S.E. Growth Portfolio.................... 4
C.A.S.E. Growth & Income Portfolio........... 10
C.A.S.E. Quality Growth Portfolio............ 16
Notes to Financial Statements..................... 22
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
Financial Statements:
C.A.S.E. Growth Sub-Account.................. 26
C.A.S.E. Growth & Income Sub-Account......... 28
C.A.S.E. Quality Growth Sub-Account.......... 30
Notes to Financial Statements..................... 32
</TABLE>
<PAGE> 3
FELLOW CONTRACT OWNERS
(PHOTO)
JOHN R. KENNEY
Chairman of the Board
It's been a wonderful year. Pure
and simple.
We've been witness this year to a
great financial spectacle.
Throughout all of 1995, the
markets have seemingly moved in
just one direction: up. Stocks
thundered higher virtually all
year and the Dow Jones Industrial
Average surged 33%, its fourth
best annual gain in the post-World
War II era, while bond prices
recovered to their third-best
annual total return in 50 years.
While it's been fun to watch this
magnificent bull market in action,
it's been particularly satisfying
to have taken part. 1995 is a
pointed reminder that the greatest
risk in investing may very well
lie in not being invested at all
and missing out on the long-term
rewards that patience and
professional money management can
bring. It was that very thought
that led to the introduction of
the C.A.S.E. Reserve Variable
Annuity in May of this year.
Through the Annuity and its three
Portfolios -- C.A.S.E. Growth,
C.A.S.E. Growth & Income, and
C.A.S.E. Quality Growth, we have
gained access to one of the
industry's most distinctive money
managers, C.A.S.E. Management,
Inc.
The performance opportunity that
the C.A.S.E. management style
brings is the very essence of the
C.A.S.E. Reserve Variable Annuity.
On the following pages you will
find the personal comments of the
portfolio manager on each of the
three C.A.S.E. Portfolios. I
invite you to evaluate these
reports and review the data,
including major equity positions
and industry weightings. All of
this information should provide an
insight into one of the industry's
truly unique forms of research and
money management.
After such sensational advances,
it's almost a natural instinct for
investors to get a little spooked;
to fear the markets have "run out
of gas" if you will. For
ourselves, we aren't making any
short-term predictions on what the
markets will or won't do in 1996.
We're really not worried. We're in
it for the long-term; we're
investors. Experience has shown us
that investing for the long term
and not worrying too much about
the interim peaks and troughs is
the smarter bet. History has also
documented the benefits of
sticking with a disciplined
long-term program of investing.
If it's true that success solicits
success, then we're justified in
our optimistic outlook for next
year and for years after that. The
C.A.S.E. Portfolios of the WRL
Series Fund are managed not only
with long-term results in mind but
long-term relationships as well.
Our highest priority remains the
safety of the funds you've
entrusted to us. We respect your
personal task of financial
planning and appreciate the
opportunity to help.
Sincerely yours,
/s/ John R. Kenney
---------------------
John R. Kenney
Chairman of the Board
1
<PAGE> 4
WRL SERIES FUND, INC.
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of the WRL Series Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities,
including the schedules 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 C.A.S.E. Growth, C.A.S.E.
Growth & Income, and C.A.S.E. Quality Growth Portfolios (three of the portfolios
constituting the WRL Series Fund, Inc., hereafter referred to as the
"Portfolios") at December 31, 1995, and the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
period May 1, 1995 (commencement of operations) through December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Portfolios' management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1995 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 31, 1996
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2
<PAGE> 5
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and
Contract Owners
of the WRL Series Annuity Account -- C.A.S.E. Reserve Variable Annuity Contracts
In our opinion, the accompanying statements of assets, liabilities and
equity accounts and the related statements of operations and of changes in
equity accounts and the selected per unit data and ratios present fairly, in all
material respects, the financial position of the C.A.S.E. Growth, C.A.S.E.
Growth & Income and C.A.S.E. Quality Growth Sub-Accounts of the C.A.S.E. Reserve
Variable Annuity Contracts of the WRL Series Annuity Account (a separate account
of Western Reserve Life Assurance Co. of Ohio, hereafter referred to as the
"Annuity Account") at December 31, 1995, the results of each of their
operations, the changes in each of their equity accounts and the selected per
unit data and ratios for the period May 1, 1995 (commencement of operations)
through December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements and selected per unit data and ratios
(hereafter referred to as "financial statements") are the responsibility of the
Annuity Account's management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 31, 1996
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3
<PAGE> 6
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (95.07%)
AEROSPACE (2.13%)
Lockheed Martin Corporation.......... 280 $ 22,120
Rockwell International Corporation... 620 32,783
BANKING (10.28%)
Fifth Third Bancorp.................. 690 50,543
First Indiana Corporation ........... 1,280 32,960
Huntington Bancshares, Inc........... 2,100 50,400
Provident Bankshares Corporation..... 1,510 44,545
Union Bank........................... 660 35,805
U.S. Bancorp......................... 1,500 50,438
BEVERAGES (3.06%)
Adolph Coors Company -- Class B...... 3,570 78,987
BIO-TECHNOLOGY (1.62%)
Genzyme Corporation*................. 670 41,791
BUILDING (1.54%)
Vulcan Materials Company............. 690 39,761
CHEMICALS (4.56%)
Cabot Corporation.................... 515 27,745
Eastman Chemical Company............. 400 25,050
Lyondell Petrochemical Company....... 1,130 25,849
Norsk Hydro A.S. - ADR............... 930 38,944
COMMERCIAL SERVICES (2.23%)
Manpower, Inc........................ 450 12,656
Paychex, Inc......................... 900 44,887
COMPUTER TECHNOLOGY (7.68%)
Bay Networks*........................ 825 33,928
Cisco Systems, Inc.*................. 770 57,461
Seagate Technology, Inc.*............ 860 40,850
Sun Microsystems, Inc.*.............. 1,440 65,700
ELECTRIC UTILITIES (2.60%)
Unicom Corporation................... 2,050 67,137
ELECTRONICS (5.66%)
Applied Materials, Inc.*............. 1,270 50,006
Arrow Electronics, Inc.*............. 130 5,606
Micron Technology Incorporated....... 1,280 50,720
Stratacom, Inc.*..................... 540 39,690
FINANCE (6.00%)
American Express Company............. 550 22,756
Bear Stearns Companies, Inc.......... 3,210 63,798
John Nuveen & Company, Inc. -- Class
A.................................. 2,750 68,063
FOODS & FOOD SERVICE (3.75%)
Archer Daniels Midland Co............ 2,700 48,600
IBP, Inc............................. 950 47,975
FOREST PRODUCTS & PAPER (1.63%)
Consolidated Papers, Inc............. 590 33,114
Willamette Industries, Inc. ......... 160 9,000
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
INSURANCE (1.86%)
Selective Insurance Group............ 1,350 $ 47,925
MACHINERY (1.06%)
Lam Research Corporation*............ 600 27,450
MANUFACTURING (2.93%)
Teledyne, Inc........................ 2,950 75,593
MEDICAL (9.30%)
Biomet, Inc.*........................ 2,260 40,397
Coherent, Inc.*...................... 1,110 44,955
HealthCare COMPARE Corporation*...... 1,240 53,940
HEALTHSOUTH Corporation*............. 1,000 29,125
Sierra Health Services, Inc.*........ 2,250 71,438
METALS (3.20%)
Reynolds Metals Company.............. 690 39,071
Worthington Industries, Inc. ........ 2,085 43,394
OFFICE EQUIPMENT (1.47%)
American Business Products, Inc...... 1,330 37,905
OIL & GAS (5.46%)
Halliburton Company.................. 920 46,575
NorAm Energy Corporation............. 6,450 57,244
Sun Company, Inc..................... 1,350 36,956
PHARMACEUTICALS (2.85%)
Mylan Laboratories................... 1 12
Watson Pharmaceuticals, Inc.*........ 1,500 73,500
PHOTOGRAPHY (2.73%)
Eastman Kodak Company................ 1,050 70,350
RESTAURANTS (0.86%)
Outback Steakhouse, Inc.*............ 620 22,243
RETAIL & DEPARTMENT STORES (1.44%)
Staples, Inc.*....................... 1,520 37,050
TELECOMMUNICATIONS (6.09%)
Cincinnati Bell, Inc................. 1,270 44,133
Pacific Telesis Group................ 2,160 72,630
Picturetel Corporation*.............. 260 11,213
U.S. Robotics Corporation*........... 330 28,958
TRANSPORTATION (1.86%)
America West Airlines, Inc. -- Class
B*................................. 1,250 21,250
UAL Corporation*..................... 150 26,775
UTILITIES (1.22%)
California Energy Company, Inc.*..... 1,610 31,395
-----------
Total Common Stocks
(cost: $ 2,404,376)........................... 2,451,145
-----------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
4
<PAGE> 7
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATION (20.64%)
Morgan Stanley**
5.65%, Repurchase Agreement
dated 12/29/95 to be repurchased
at $ 532,388 on 01/02/96........ $532,054 $ 532,054
-----------
Total Short-Term Obligation
(cost: $ 532,054)............... 532,054
-----------
Total Investment Securities
(cost: $ 2,936,430)............. $ 2,983,199
-----------
-----------
SUMMARY
Investments at value.............. 115.71 % $ 2,983,199
Other Liabilities in
Excess of Assets................ (15.71)% (404,957)
--------- -----------
Net Assets........................ 100.00 % $ 2,578,242
--------- -----------
--------- -----------
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
* No income dividends were paid during the preceding twelve months.
** Collateralized by $480,487 U.S. Treasury Notes, 7.25% due 08/15/04; market
value and accrued interest aggregated $545,830 for this collateral at
December 31, 1995.
ADR American Depository Receipt
GDR Global Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
5
<PAGE> 8
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
PERIOD ENDED DECEMBER 31, 1995
INVESTMENTS BY INDUSTRY
AT DECEMBER 31, 1995
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
[GRAPH] Banking 10.28%
Beverages 3.06%
Chemicals 4.56%
Computer Technology 7.68%
Electronics 5.66%
Finance 6.00%
Foods & Food Service 3.75%
Manufacturing 2.93%
Medical 9.30%
Metals 3.20%
Oil & Gas 5.46%
Pharmaceuticals 2.85%
Telecommunications 6.09%
Short-Term Obligation 20.64%
Other 8.54%
The C.A.S.E. Growth Portfolio was funded May 1, 1995, with the investment
objective of capital growth through investments in common stocks of
small-to-medium-sized companies. The C.A.S.E. Growth Portfolio, during this
startup period, returned 20.65% from its inception through December 31, 1995.
The Standard & Poor's Index of 500 Common Stocks gained 21.86% for the same
period.
Generally, our strategy is to invest in companies with above market growth
characteristics in sales, earnings, rates of return and institutional buying.
The portfolio will also invest in securities that appear to be undervalued but
demonstrate the characteristics necessary for future growth.
Although it is the policy of the Portfolio to purchase and hold securities for
long term capital growth, changes in the Portfolio will generally be made
whenever the Sub-Advisor believes they are advisable, typically either as a
result of securities having reached price objective or by reasons of
developments not foreseen at the time of investment.
The stock market continues to be dominated by earnings as it reaches new highs.
In fact, of the two dozen fundamental methodologies used professionally to
evaluate investments, the four leading factors governing price movement are all
earnings related -- changes in analyst projections, quarterly earnings surprise
factors, 5-year growth rates, and return on equity. In "earnings" terms, the
market appears reasonably priced at 16 times current year projections. In the
past, market tops have occurred at between 19 and 21 times current year
projections.
With 1700 funds reporting, less than ten percent have beaten the 37.58% leap in
the S&P 500 this year. Our approach assumes a softer, slower paced market. In
place of a broad-based movement, certain areas of the economic structure appear
better situated than others. For example, the financial sector continues to be
attractive wherever a stock's fundamentals have kept pace with its price. Other
areas of interest include utilities and consumer stable demand industries like
healthcare.
Stocks which exhibit fundamentals of exceptional strength will ordinarily do
better than the market in good, as well as bad, times. The broad reach and
economic scope of our study disciplines lend themselves to investing in
selective economic periods, when volatility and uncertainty are present.
Therefore, our approach seems well-suited to the period ahead.
<TABLE>
<C> <S>
[LOGO] /s/ William E. Lange
-------------------------------------
William E. Lange
C.A.S.E. Growth Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
6
<PAGE> 9
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments in securities, at market value
(cost $ 2,404,376)........................ $ 2,451,145
Short-term securities, at amortized cost.... 532,054
Cash........................................ 0
Receivables:
Fund shares sold.......................... 0
Securities sold........................... 0
Interest.................................. 84
Dividends................................. 3,757
Other..................................... 0
-----------------
Total assets............................ 2,987,040
-----------------
LIABILITIES:
Fund shares purchased....................... 0
Securities purchased........................ 407,032
Accounts payable and accrued liabilities:
Custody fees.............................. 0
Investment advisory fees.................. 1,412
Dividends to shareholders................. 0
Other fees................................ 354
-----------------
Total liabilities....................... 408,798
-----------------
Total net assets...................... $ 2,578,242
===================
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)... $ 2,212
Additional paid-in capital.................. 2,523,922
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)........................... 338
Accumulated undistributed net realized
gain (loss) on:
Investment transactions................. 5,001
Net unrealized appreciation (depreciation) on:
Investment securities..................... 46,769
-----------------
Net assets applicable to outstanding
shares of capital......................... $ 2,578,242
===================
Shares outstanding at December 31, 1995..... 221,168
===================
Net asset value per share................... $ 11.66
===================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Interest.................................. $ 9,296
Dividends................................. 8,931
------------------
Total investment income............. 18,227
------------------
EXPENSES:
Investment advisory fees.................. 5,519
Printing and shareholder reports.......... 28
Custodian fees............................ 17,921
Legal fees................................ 5
Auditing and accounting fees.............. 5,000
Directors fees............................ 3
Other fees................................ 2,301
------------------
Total expenses...................... 30,777
Less:
Advisory fee waiver and expense
reimbursement......................... 23,832
Fees paid indirectly.................... 46
------------------
Net expenses........................ 6,899
------------------
Net investment income (loss).............. 11,328
------------------
Net realized gain (loss) on:
Investment securities................... 81,032
Change in unrealized appreciation
(depreciation) on:
Investment securities................... 46,769
------------------
Net gain (loss) on investments............ 127,801
------------------
Net increase (decrease) in net assets
resulting from operations............... $ 139,129
====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
7
<PAGE> 10
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 11,328
Net realized gain (loss) on investments.................................................................... 81,032
Change in unrealized appreciation (depreciation) on investments............................................ 46,769
------------------
Net increase (decrease) in net assets resulting from operations.......................................... 139,129
------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income...................................................................................... (10,990)
Net realized gains......................................................................................... (76,031)
------------------
Total distributions...................................................................................... (87,021)
------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.......................................................................... 2,442,347
Dividends and distributions reinvested..................................................................... 87,021
Cost of shares repurchased................................................................................. (3,234)
------------------
Increase (decrease) in net assets from capital shares transactions....................................... 2,526,134
------------------
Net increase (decrease) in net assets.................................................................... 2,578,242
NET ASSETS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 2,578,242
====================
Undistributed net investment income...................................................................... $ 338
====================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................................... 0
------------------
Shares issued.............................................................................................. 213,996
Shares issued - reinvestment of dividends and distributions................................................ 7,465
Shares redeemed............................................................................................ (293)
------------------
Increase (decrease) in shares outstanding.................................................................. 221,168
------------------
Shares outstanding - end of period......................................................................... 221,168
====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
8
<PAGE> 11
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
[COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. C.A.S.E. GROWTH PORTFOLIO AND THE WILSHIRE 5000 INDEX]
[GRAPH]
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Net asset value, beginning of period.............. $ 10.00
Income from operations:
Net investment income (loss).................. .12
Net realized and unrealized
gain (loss) on investments.................. 2.49
-----------
Total income (loss) from operations......... 2.61
-----------
Distributions:
Dividends from net investment income.......... (.12)
Distributions from net realized gains
on investments.............................. (.83)
-----------
Total distributions......................... (.95)
-----------
Net asset value, end of period.................... $ 11.66
=============
Total return...................................... 20.65%
Ratios and supplemental data:
Net assets at end of period
(in thousands)................................. $ 2,578
Ratio of expenses to average net assets......... 1.00%
Ratio of net investment income (loss)
to average net assets......................... 1.02%
Portfolio turnover rate......................... 121.62%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 5.
+ The inception date of this portfolio was May 1, 1995. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current
prospectus.
- --------------------------------------------------------------------------------
9
<PAGE> 12
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCKS (98.70%)
AEROSPACE (1.81%)
Rockwell International Corporation...... 370 $ 19,564
BANKING (10.90%)
BankAmerica Corporation................. 245 15,864
Barnett Banks, Inc...................... 245 14,455
First Chicago NBD Corporation........... 805 31,814
Fleet Financial Group, Inc.............. 420 17,115
MBNA Corporation........................ 600 22,125
NationsBank Corporation................. 240 16,710
CHEMICALS (4.12%)
Dow Chemical Company.................... 325 22,872
Union Carbide Corporation............... 580 21,750
COMPUTER TECHNOLOGY (5.22%)
Hewlett-Packard Company................. 330 27,638
International Business Machines
Corporation........................... 315 28,901
ELECTRIC UTILITIES (7.22%)
Allegheny Power System, Inc............. 490 14,026
Duke Power Company...................... 250 11,844
Northeast Utilities..................... 520 12,675
Unicom Corporation...................... 790 25,872
Wisconsin Energy Corporation............ 450 13,781
ELECTRONICS (6.06%)
General Electric Company................ 495 35,640
Harris Corporation...................... 550 30,044
ENVIRONMENTAL SERVICES (2.38%)
Browning-Ferris Industries, Inc......... 875 25,813
FINANCE (3.56%)
Bank of New York Company, Inc........... 310 15,113
Federal National Mortgage Association... 135 16,757
John Nuveen & Company, Inc.
-- Class A............................ 270 6,683
FOODS & FOOD SERVICE (2.67%)
Philip Morris Companies, Inc............ 320 28,960
INSURANCE (6.74%)
Aetna Life and Casualty Company......... 285 19,736
Allstate Corporation.................... 500 20,563
Travelers Group, Inc.................... 520 32,694
MACHINERY (4.99%)
Black & Decker Corporation.............. 600 21,150
Caterpillar, Inc........................ 560 32,900
MANUFACTURING (2.96%)
Teledyne, Inc........................... 1,250 32,031
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
MEDICAL (4.94%)
Medtronic, Inc.......................... 400 $ 22,350
US Healthcare, Inc...................... 670 31,155
OFFICE EQUIPMENT (1.89%)
American Business Products, Inc......... 720 20,520
OIL & GAS (9.87%)
Amoco Corporation....................... 300 21,563
Atlantic Richfield Company.............. 270 29,903
Chevron Corporation..................... 600 31,500
Exxon Corporation....................... 300 24,038
PHARMACEUTICALS (8.59%)
Bristol-Myers Squibb Company............ 360 30,915
Johnson & Johnson....................... 330 28,256
Merck & Company, Inc.................... 515 33,861
PHOTOGRAPHY (2.69%)
Eastman Kodak Company................... 435 29,144
RAILROADS (1.64%)
Union Pacific Corporation............... 270 17,820
RETAIL & DEPARTMENT STORES (2.99%)
Sears Roebuck and Company............... 830 32,370
TELECOMMUNICATIONS (7.46%)
Ameritech Corporation................... 445 26,255
Pacific Telesis Group................... 820 27,573
SBC Communications, Inc................. 470 27,025
---------
Total Common Stocks
(cost: $ 993,391)....................... 1,069,338
---------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATION (14.71%)
Morgan Stanley**
5.65%, due 01/02/96 dated
12/29/95 to be repurchased at
$159,527 on 01/02/96............. $ 159,428 $ 159,428
-----------
Total Short-Term Obligation
(cost: $ 159,428).................. 159,428
-----------
Total Investment Securities
(cost: $ 1,152,819).............. $ 1,228,766
===========
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
10
<PAGE> 13
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
SUMMARY
Investments at value................ 113.41 % $ 1,228,766
Liabilities in Excess
of Other Assets................... (13.41)% (145,304)
-------- -----------
Net Assets.......................... 100.00 % $ 1,083,462
-------- -----------
-------- -----------
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
** Collateralized by $143,976 U.S. Treasury Notes 7.25% due 08/15/04; market
value and accrued interest aggregated $163,556 for this collateral at
December 31, 1995.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
11
<PAGE> 14
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
PERIOD ENDED DECEMBER 31, 1995
INVESTMENTS BY INDUSTRY
AT DECEMBER 31, 1995
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
[GRAPH] Banking 10.90%
Chemicals 4.12%
Computer Technology 5.22%
Electric Utilities 7.22%
Electronics 6.06%
Insurance 6.74%
Machinery 4.99%
Medical 4.94%
Oil & Gas 9.87%
Pharmaceuticals 8.59%
Telecommunications 7.46%
Short-Term Obligation 14.71%
Other 9.18%
The C.A.S.E. Growth & Income Portfolio was funded May 1, 1995, with an objective
of high current income and moderate growth through investments in well-priced,
well-managed, large, stable and growing companies. The Portfolio invests in
stocks of companies that make a policy of paying above market dividends, have
positive internal growth rates, and have demonstrated capital appreciation over
time that exceeds the rate of inflation during the period measured. From its
inception through December 31, 1995, the Portfolio gained 14.80%. The Standard &
Poor's Index of 500 Common Stocks advanced 21.86% for the same period.
The stock market ordinarily serves as a barometer that anticipates economic
events occurring twelve to eighteen months into the future. Right now, though,
the market seems to have shortened its focus, becoming concerned over near-term
fluctuations in economic data, the inability of the President and Congress to
reach a federal budget agreement, and the upcoming presidential election. If
indeed the economy slips into a recession, lower taxes could lift it back from
its doldrums.
Our research disciplines for the Growth & Income Portfolio look for companies
with strong balance sheets, dependable cash flows, high profitability, favorable
valuations, and a strong, upward trend in earnings and dividend growth. If the
economy slows we should see a slower pace of growth for 1996. If that occurs,
the variety of rate-sensitive equities the Portfolio seeks should advance at a
pace greater than the overall market.
By design, the Growth & Income Portfolio invests in companies with
price/earnings ratios which are nearly 25% less than the market's, on both a
12-month leading and a 12-month lagging basis. These same companies exhibit
year-over-year earnings advancements above 10%. On a conservative value basis,
their 10-year comparatives are only 75% of the S&P 500. With its stocks
displaying strong fundamental underpinnings, an average dividend yield nearly
50% greater than the general market's, and earnings growth rates double the
market's, the Growth & Income Portfolio appears well-suited for the current
investment climate and its stated objectives.
<TABLE>
<C> <S>
/s/ William E. Lange
----------------------------------------------
William E. Lange
[LOGO] C.A.S.E. Growth & Income Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
12
<PAGE> 15
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments in securities, at market value
(cost $ 993,391).......................... $ 1,069,338
Short-term securities, at amortized cost.... 159,428
Cash........................................ 0
Receivables:
Fund shares sold.......................... 0
Securities sold........................... 0
Interest.................................. 25
Dividends................................. 3,321
Other..................................... 0
-----------------
Total assets............................ 1,232,112
-----------------
LIABILITIES:
Fund shares purchased....................... 0
Securities purchased........................ 147,869
Accounts payable and accrued liabilities:
Custody fees.............................. 0
Investment advisory fees.................. 624
Dividends to shareholders................. 0
Other fees................................ 157
-----------------
Total liabilities....................... 148,650
-----------------
Total net assets...................... $ 1,083,462
===================
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)... $ 961
Additional paid-in capital.................. 1,006,129
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)........................... 25
Accumulated undistributed net realized
gain (loss) on:
Investment transactions................. 400
Net unrealized appreciation (depreciation) on:
Investment securities..................... 75,947
-----------------
Net assets applicable to outstanding
shares of capital......................... $ 1,083,462
===================
Shares outstanding at December 31, 1995..... 96,056
===================
Net asset value per share................... $ 11.28
===================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Interest.................................. $ 5,746
Dividends................................. 11,497
----------
Total investment income............. 17,243
----------
EXPENSES:
Investment advisory fees.................. 3,453
Printing and shareholder reports.......... 6
Custodian fees............................ 16,782
Legal fees................................ 2
Auditing and accounting fees.............. 5,000
Directors fees............................ 1
Other fees................................ 2,262
----------
Total expenses...................... 27,506
Less:
Advisory fee waiver and expense
reimbursement......................... 23,049
Fees paid indirectly.................... 141
----------
Net expenses........................ 4,316
----------
Net investment income (loss).............. 12,927
----------
Net realized gain (loss) on:
Investment securities................... 6,401
Change in unrealized appreciation
(depreciation) on:
Investment securities................... 75,947
----------
Net gain (loss) on investments............ 82,348
----------
Net increase (decrease) in net assets
resulting from operations............... $ 95,275
====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
13
<PAGE> 16
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 12,927
Net realized gain (loss) on investments.................................................................... 6,401
Change in unrealized appreciation (depreciation) on investments............................................ 75,947
------------------
Net increase (decrease) in net assets resulting from operations........................................... 95,275
------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income...................................................................................... (12,902)
Net realized gains......................................................................................... (6,001)
------------------
Total distributions....................................................................................... (18,903)
------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.......................................................................... 991,742
Dividends and distributions reinvested..................................................................... 18,903
Cost of shares repurchased................................................................................. (3,555)
------------------
Increase (decrease) in net assets from capital shares transactions........................................ 1,007,090
------------------
Net increase (decrease) in net assets..................................................................... 1,083,462
NET ASSETS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 1,083,462
====================
Undistributed net investment income....................................................................... $ 25
====================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................................... 0
------------------
Shares issued.............................................................................................. 94,718
Shares issued -- reinvestment of dividends and distributions............................................... 1,676
Shares redeemed............................................................................................ (338)
------------------
Increase (decrease) in shares outstanding.................................................................. 96,056
------------------
Shares outstanding - end of period......................................................................... 96,056
====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
14
<PAGE> 17
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
- --------------------------------------------------------------------------------
[COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. C.A.S.E. GROWTH AND INCOME PORTFOLIO AND THE STANDARD & POOR'S INDEX
OF 500 COMMON STOCKS]
[GRAPH]
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Net asset value, beginning of period.............. $ 10.00
Income from operations:
Net investment income (loss).................. .21
Net realized and unrealized
gain (loss) on investments.................. 1.38
-----------
Total income (loss) from operations......... 1.59
-----------
Distributions:
Dividends from net investment income.......... (.21)
Distributions from net realized gains
on investments.............................. (.10)
-----------
Total distributions......................... (.31)
-----------
Net asset value, end of period.................... $ 11.28
=============
Total return...................................... 14.80%
Ratios and supplemental data:
Net assets at end of period
(in thousands)................................ $ 1,083
Ratio of expenses to average net assets......... 1.00%
Ratio of net investment income (loss)
to average net assets......................... 1.94%
Portfolio turnover rate......................... 72.73%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 5.
+ The inception of this portfolio was May 1, 1995. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
15
<PAGE> 18
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (***)
MANUFACTURING (***)
Teledyne, Inc. -- Series E.......... 3 $ 45
-----------
Total Convertible Preferred Stocks
(cost: $43)......................... 45
-----------
COMMON STOCKS (98.99%)
AEROSPACE (2.57%)
Rockwell International
Corporation....................... 560 29,610
APPAREL & TEXTILES (1.30%)
Springs Industries, Inc. -- Class
A................................. 360 14,895
BANKING (10.84%)
Barnett Banks, Inc.................. 330 19,470
Fifth Third Bancorp................. 270 19,777
First Bank System, Inc.............. 370 18,361
First Chicago NBD Corporation....... 489 19,304
Fleet Financial Group, Inc.......... 520 21,190
Huntington Bancshares, Inc.......... 1,100 26,400
BUILDING (0.16%)
Castle & Cooke, Inc.*............... 110 1,843
CHEMICALS (3.20%)
Morton International, Inc........... 1,025 36,772
COMPUTER TECHNOLOGY (10.96%)
Bay Networks, Inc.*................. 405 16,656
Ceridian Corporation*............... 100 4,125
Cisco Systems, Inc.*................ 230 17,164
Digital Equipment Corporation*...... 490 31,421
Seagate Technology, Inc.*........... 510 24,225
Sun Microsystems, Inc.*............. 710 32,394
ELECTRIC UTILITIES (5.25%)
FPL Group, Inc...................... 340 15,767
Illinova Corporation................ 570 17,100
Unicom Corporation.................. 840 27,510
ELECTRONICS (5.16%)
Applied Materials, Inc.*............ 510 20,081
Arrow Electronics, Inc.*............ 80 3,450
Intel Corporation................... 270 15,323
Micron Technology Incorporated...... 50 1,981
Teradyne, Inc.*..................... 390 9,750
Texas Instruments, Inc.............. 170 8,798
ENVIRONMENTAL SERVICES (2.82%)
Browning-Ferris Industries, Inc..... 1,100 32,450
FINANCE (5.47%)
American Express Company............ 240 9,930
Bank of New York Company, Inc....... 320 15,600
Bear Stearns Companies, Inc......... 910 18,086
John Nuveen & Company, Inc. -- Class
A................................. 780 19,305
FOODS & FOOD SERVICE (5.85%)
Archer Daniels Midland Co........... 1,775 31,950
Dole Food Company................... 330 11,550
IBP, Inc............................ 470 23,735
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCK -- (CONTINUED)
FOREST PRODUCTS & PAPER (3.97%)
Champion International
Corporation....................... 190 $ 7,980
Consolidated Papers, Inc............ 340 19,083
Willamette Industries, Inc.......... 330 18,563
INSURANCE (3.16%)
Aetna Life and Casualty Company..... 300 20,775
Equitable Companies, Inc............ 650 15,600
MANUFACTURING (3.45%)
Teledyne, Inc....................... 1,550 39,719
MEDICAL (7.38%)
Foundation Health Corporation*...... 300 12,900
Humana, Inc.*....................... 805 22,037
Sierra Health Services, Inc.*....... 850 26,988
United Healthcare Corporation....... 350 22,925
METALS (2.95%)
Reynolds Metals Company............. 600 33,975
OFFICE EQUIPMENT (2.43%)
American Business Products, Inc..... 650 18,525
Pitney-Bowes, Inc................... 200 9,400
OIL & GAS (9.50%)
Amoco Corporation................... 370 26,594
Chevron Corporation................. 500 26,250
Halliburton Company................. 580 29,362
NorAm Energy Corporation............ 3,050 27,068
PHOTOGRAPHY (1.89%)
Eastman Kodak Company............... 325 21,775
RAILROADS (0.95%)
Burlington Northern Santa Fe........ 140 10,920
RETAIL & DEPARTMENT STORES (1.67%)
Staples, Inc.*...................... 790 19,256
TELECOMMUNICATIONS (6.90%)
AT & T Corporation.................. 170 11,007
Ameritech Corporation............... 330 19,470
Pacific Telesis Group............... 890 29,926
SBC Communications, Inc............. 330 18,975
TRANSPORTATION (1.16%)
Delta Air Lines, Inc................ 180 13,297
-----------
Total Common Stocks
(cost: $ 1,112,616)................. 1,138,343
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATION (11.21%)
Morgan Stanley**
5.65%, Repurchase Agreement dated
12/29/95 to be repurchased at
$128,941 on 01/02/96................. $ 128,860 $ 128,860
-----------
Total Short-Term Obligation..........
(cost: $128,860)..................... 128,860
-----------
Total Investment Securities
(cost: $1,241,519)................. $ 1,267,248
===========
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
16
<PAGE> 19
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
SUMMARY
Investments at value................. 110.20 % $ 1,267,248
Liabilities in Excess
of Other Assets.................... (10.20)% (117,277)
-------- -----------
Net Assets........................... 100.00 % $ 1,149,971
-------- -----------
-------- -----------
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
* No income dividends were paid during the preceding twelve months.
** Collateralized by $116,371 U.S. Treasury Notes, 7.25% due 08/15/04; market
value and accrued interest aggregated $132,197 for this collateral at
December 31, 1995.
*** Percentage is less than .01%.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
17
<PAGE> 20
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
PERIOD ENDED DECEMBER 31, 1995
INVESTMENTS BY INDUSTRY
AT DECEMBER 31, 1995
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
[GRAPH]
Banking 10.84%
Chemicals 3.20%
Computer Technology 10.96%
Electric Utilities 5.25%
Electronics 5.16%
Finance 5.47%
Foods & Food Service 5.85%
Forest Products & Paper 3.97%
Manufacturing 3.45%
Medical 7.38%
Oil & Gas 9.50%
Telecommunications 6.90%
Short-Term Obligation 11.21%
Other 10.86%
The C.A.S.E. Quality Growth Portfolio was funded May 1, 1995, with the objective
of preservation and growth of capital. The Portfolio invests primarily in common
stocks of large, well-managed, well-priced companies with defined markets and
financial strategies. In the short period from its inception through December
31, 1995, the Portfolio gained 13.61%. The Standard & Poor's Index of 500 Common
Stocks advanced 21.86% for the same period.
In terms of current investment circumstances, the overall bullish tone of the
market is well supported by its current determinants -- earnings and interest
rates. Presently, fine-quality S&P 500 stocks carry a price/earnings ratio of 16
times current year projections. In terms of their historical range (13-21
times), quality stocks are mid-priced and below their 19-plus speculative
ratings of past bull markets.
Equities in general have rallied to a point where any bad news, especially
disappointing earnings, would be difficult to ignore. The current economic
slowdown should lead to some lowering of earnings expectations and a lessening
of corporate momentum.
As opposed to a broad-based movement, certain areas of the economic structure
appear more favorable than others. Interest-sensitive issues provide the
market's current leadership. In the interest-sensitive areas, we continue to be
impressed by the finance sector and utilities, as long as they are supported by
corresponding growth in their underlying fundamentals. The recent lowering of
interest rates may be giving new life to the cyclicals, including capital goods
and basic industries. As a matter of policy, we resist any temptation to time
markets. Our sector and industry weightings reflect our best judgment of the
near and long-term direction of our economy as a whole and the stock market in
particular.
In terms of the strategic alignments of the C.A.S.E. Quality Growth Portfolio,
our price/earnings ratio, on both a 12-month leading and 12-month lagging basis,
is more conservative than that of the average of the Standard & Poor's 500. Our
average stock is also revising its earnings estimates upward and the
year-over-year growth of sales and earnings average is above 15%. Stocks which
exhibit such "above the market" fundamentals ordinarily perform better than the
general market.
The companies which were selected are broadly diversified, well-managed, and
reflect balance sheets which provide a basis for future confidence. We monitor
two dozen of the industry's most advanced and reliable study disciplines. We
believe that if we hold fast to our discipline for uncovering companies with
above-average characteristics, we will achieve above-average returns in both
good and bad market environments.
<TABLE>
<C> <S>
/s/ William E. Lange
---------------------------------------------
William E. Lange
[LOGO] C.A.S.E. Quality Growth Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
18
<PAGE> 21
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments in securities, at market value
(cost $ 1,112,659)...................... $ 1,138,388
Short-term securities, at amortized
cost.................................... 128,860
Cash...................................... 0
Receivables:
Fund shares sold........................ 0
Securities sold......................... 0
Interest................................ 20
Dividends............................... 2,497
Other................................... 0
-----------------
Total assets.......................... 1,269,765
-----------------
LIABILITIES:
Fund shares purchased..................... 0
Securities purchased...................... 118,921
Accounts payable and accrued liabilities:
Custody fees............................ 0
Investment advisory fees................ 699
Dividends to shareholders............... 0
Other fees.............................. 174
-----------------
Total liabilities..................... 119,794
-----------------
Total net assets.................... $ 1,149,971
=====================
NET ASSETS:
Capital stock
($ .01 par value 75,000,000
authorized)............................. $ 1,061
Additional paid-in capital................ 1,120,160
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)......................... 21
Accumulated undistributed net realized
gain (loss) on:
Investment transactions............... 3,000
Net unrealized appreciation (depreciation) on:
Investment securities................... 25,729
-----------------
Net assets applicable to outstanding
shares of capital....................... $ 1,149,971
=====================
Shares outstanding at December 31, 1995... 106,076
=====================
Net asset value per share................. $ 10.84
=====================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Interest................................ $ 5,195
Dividends............................... 8,836
------------------
Total investment income........... 14,031
------------------
EXPENSES:
Investment advisory fees................ 3,871
Printing and shareholder reports........ 16
Custodian fees.......................... 17,717
Legal fees.............................. 2
Auditing and accounting fees............ 5,000
Directors fees.......................... 1
Other fees.............................. 2,135
------------------
Total expenses.................... 28,742
Less:
Advisory fee waiver and expense
reimbursement....................... 23,966
Fees paid indirectly.................. 40
------------------
Net expenses...................... 4,736
------------------
Net investment income (loss)............ 9,295
------------------
Net realized gain (loss) on:
Investment securities................. 46,323
Change in unrealized appreciation
(depreciation) on:
Investment securities................. 25,729
------------------
Net gain (loss) on investments.......... 72,052
------------------
Net increase (decrease) in net assets
resulting from operations............. $ 81,347
======================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
19
<PAGE> 22
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 9,295
Net realized gain (loss) on investments.................................................................... 46,323
Change in unrealized appreciation (depreciation) on investments............................................ 25,729
------------------
Net increase (decrease) in net assets resulting from operations.......................................... 81,347
------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income...................................................................................... (9,274)
Net realized gains......................................................................................... (43,323)
------------------
Total distributions...................................................................................... (52,597)
------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.......................................................................... 1,072,213
Dividends and distributions reinvested..................................................................... 52,597
Cost of shares repurchased................................................................................. (3,589)
------------------
Increase (decrease) in net assets from capital shares transactions....................................... 1,121,221
------------------
Net increase (decrease) in net assets.................................................................... 1,149,971
NET ASSETS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 1,149,971
====================
Undistributed net investment income...................................................................... $ 21
====================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................................... 0
------------------
Shares issued.............................................................................................. 101,557
Shares issued - reinvestment of dividends and distributions................................................ 4,852
Shares redeemed............................................................................................ (333)
------------------
Increase (decrease) in shares outstanding.................................................................. 106,076
------------------
Shares outstanding - end of period......................................................................... 106,076
====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
20
<PAGE> 23
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. C.A.S.E. QUALITY GROWTH PORTFOLIO AND THE STANDARD & POOR'S INDEX
OF 500 COMMON STOCKS
[GRAPH]
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Net asset value, beginning of period.............. $ 10.00
Income from operations:
Net investment income (loss).................. .14
Net realized and unrealized
gain (loss) on investments.................. 1.50
-----------
Total income (loss) from operations......... 1.64
-----------
Distributions:
Dividends from net investment income.......... (.14)
Distributions from net realized gains
on investments.............................. (.66)
-----------
Total distributions......................... (.80)
-----------
Net asset value, end of period.................... $ 10.84
=============
Total return...................................... 13.61%
Ratios and supplemental data:
Net assets at end of period
(in thousands)................................ $ 1,150
Ratio of expenses to average net assets......... 1.00%
Ratio of net investment income (loss)
to average net assets......................... 1.28%
Portfolio turnover rate......................... 119.63%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 5.
+ The inception of this portfolio was May 1, 1995. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
21
<PAGE> 24
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Fund, Inc. (the "Fund") is a diversified, open-end,
investment management company registered under the Investment Company Act of
1940, as amended. The Fund was incorporated on August 21, 1985 as a Maryland
Corporation and commenced operations on October 2, 1986.
The Fund consists of a series of investment portfolios, including the
C.A.S.E. Growth Portfolio, the C.A.S.E. Growth & Income Portfolio, and the
C.A.S.E. Quality Growth Portfolio (the "Portfolios"). Shares of the Portfolios
are sold to the WRL Series Annuity Account (the "Annuity Account") of Western
Reserve Life Assurance Co. of Ohio ("WRL"), to fund benefits under the C.A.S.E.
Reserve Variable Annuity Contracts. The Separate Account contains three
investment options referred to as sub-accounts, each of which upon instructions
received from contract owners of C.A.S.E. Reserve Variable Annuity Contracts,
invests in a corresponding C.A.S.E. Portfolio.
On May 1, 1995, WRL made an initial contribution of $500,000 to each of the
Portfolios.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates.
A. VALUATION OF INVESTMENTS
Securities held by the Portfolios are valued at market value, except for
short-term debt securities. Short-term debt securities maturing in 60 days
or less are valued on the amortized cost basis, which approximates market
value. Stocks are valued at the latest sale price on the last business day
of the fiscal period as reported by the principal securities exchange on
which the issue is traded or, if no sale is reported for a stock, the latest
bid price is used. Bonds are valued using prices quoted by a major dealer in
bonds which offers a pricing service. Certain pricing methodologies, such as
matrix pricing of bonds, may involve the use of estimates and actual sales
prices may differ. Securities for which quotations may not be readily
available are valued as determined in good faith in accordance with
procedures established by and under the general supervision of the Fund's
Board of Directors.
The value of foreign securities are translated into U.S. dollars using spot
foreign exchange rates.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Security gains and
losses are calculated on the first-in, first-out basis for both tax and
financial reporting purposes. Dividend income is recorded on the ex-dividend
date, and interest income, including amortization of bond premium and
accretion of discount, is accrued daily. Dividend income on foreign
securities is recorded net of foreign tax withholdings.
The accounting records of the Fund are maintained in U.S. dollars. For
transactions denominated in a currency other than the U.S. dollar, purchases
and sales of securities, income received, and expenses paid are translated
into U.S. dollars at the foreign exchange spot rate on the date the
transaction is recorded. Currency gain and loss is also calculated on
payables and receivables that are denominated in foreign currencies. The
payables and receivables are generally related to security transactions and
income.
The unrealized gain or loss on forward foreign currency contracts is due to
the difference between the foreign exchange contract rate and the foreign
exchange forward rate applicable to that contract at the end of the period.
This gain or loss becomes realized when the contract is closed or settled.
Futures contracts and options are valued based upon daily settlement prices
with the fluctuations in value recorded as unrealized gains and losses.
These gains and losses become realized when the position is closed. The
risks associated with the use of options and futures contracts involve the
possibilities of an illiquid market and an imperfect correlation between the
value of the instrument and the underlying security.
C. FEDERAL INCOME TAXES
It is the Fund's policy to distribute substantially all of its taxable
income and capital gains to its shareholders and otherwise qualify as a
regulated investment company under the Internal Revenue Code. Pursuant to
Code Section 4982(f), regulated investment
- --------------------------------------------------------------------------------
22
<PAGE> 25
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
companies serving as funding vehicles for life insurance company
separate accounts are not subject to excise tax distribution
requirements. Accordingly, no provision for Federal income taxes has
been made.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for such items as wash sales, foreign currency
transactions, net operating losses and capital loss carryforwards.
D. DIVIDENDS AND DISTRIBUTIONS
Dividends of the Portfolios are declared and reinvested semi-annually, while
capital gain distributions are declared and reinvested annually. Dividends
and distributions of the Fund are generally paid to and reinvested by the
Separate Account on the next business day after declaration.
E. ORGANIZATION COSTS
All costs incurred in connection with the formation of the Fund and its
portfolios were paid by WRL.
NOTE 2 - INVESTMENT ADVISORY AND
TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY
The Fund has entered into an annually renewable investment advisory
agreement for the Portfolios with WRL as investment adviser. The Fund pays
to WRL, and charges to each respective Portfolio, advisory fees each month
at the following annual rate expressed as a percentage of the average daily
net assets of the respective Portfolio:
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
----------------------------- -----------------
<S> <C>
C.A.S.E. Growth .80%
C.A.S.E. Growth & Income .80%
C.A.S.E. Quality Growth .80%
</TABLE>
WRL currently voluntarily waives its advisory fees to the extent a
portfolio's normal operating expenses exceed the percentage of net assets of
the portfolio as listed below:
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
----------------------------- -----------------
<S> <C>
C.A.S.E. Growth 1.00%
C.A.S.E. Growth & Income 1.00%
C.A.S.E. Quality Growth 1.00%
</TABLE>
WRL has entered into a sub-advisory agreement with C.A.S.E. Management, Inc.
Pursuant to the agreement, fifty percent of the advisory fee paid to WRL is
due to C.A.S.E. Management, Inc.
The Portfolios are charged for expenses that specifically relate to their
individual operations. All other operating expenses of the Fund that are not
attributable to a specific portfolio are allocated based upon the
proportionate number of policy and contract owners of the underlying
sub-accounts. WRL directly incurs and pays these operating expenses relating
to the Fund, which subsequently reimburses WRL. All normal operating
expenses that exceed the established expense limit set forth above will be
borne by WRL.
B. AFFILIATES
WRL is an indirect wholly-owned subsidiary of AEGON USA, Inc., which is an
indirect wholly-owned subsidiary of AEGON nv, a Netherlands corporation.
- --------------------------------------------------------------------------------
23
<PAGE> 26
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3 - SECURITY TRANSACTIONS
Securities transactions are summarized as follows:
<TABLE>
<CAPTION>
C.A.S.E. GROWTH C.A.S.E. QUALITY
C.A.S.E. GROWTH & INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ----------------
<S> <C> <C> <C>
For the period ended December 31, 1995:
Purchases of securities:
Long-term excluding U.S. Government............ $ 3,451,300 $ 1,420,331 $ 1,836,732
U.S. Government securities..................... 0 0 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government............ 1,127,956 433,342 770,397
U.S. Government securities..................... 0 0 0
</TABLE>
NOTE 4 - FEDERAL INCOME TAX MATTERS
The income, expenses, gains and losses on securities transactions
attributed to each Portfolio for accounting purposes, are also attributed to
that Portfolio for Federal income tax purposes. Gains and losses on forward
currency contracts are treated as ordinary income for Federal income tax
purposes.
Net capital gains noted below are the excess of the long-term capital gains
over short-term capital losses. The net capital loss carryforwards are available
to offset future capital gains through the periods listed below. The Fund will
elect to treat the net capital losses incurred in the two month period ended
December 31, 1995 (Post-October Losses Deferred) as having been incurred in the
following fiscal year. The cost of investments for Federal income tax purposes
and the composition of unrealized appreciation and depreciation on investment
securities for Federal income tax purposes are as follows at December 31, 1995:
<TABLE>
<CAPTION>
C.A.S.E. GROWTH C.A.S.E. QUALITY
C.A.S.E. GROWTH & INCOME GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ----------------
<S> <C> <C> <C>
Net Capital Gains................................... $ 81,031 $ 6,401 $ 49,556
Post-October Losses Deferred........................ 0 0 3,081
Prior Year Net Capital Loss Carryforward Utilized... 0 0 0
Net Capital Loss Carryforward....................... 0 0 0
Available Through................................. N/A N/A N/A
Federal Tax Cost Basis.............................. 2,936,430 1,152,819 1,241,671
Unrealized Appreciation............................. 115,326 84,794 59,585
Unrealized Depreciation............................. 68,557 8,847 34,008
Net Unrealized Appreciation (Depreciation).......... 46,769 75,947 25,577
</TABLE>
- --------------------------------------------------------------------------------
24
<PAGE> 27
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 5 - FINANCIAL HIGHLIGHTS
The Financial Highlights for each Portfolio contains a chart (the
"comparison chart") setting forth Average Annual Total Return ("total return")
and a comparison of the change in value of a $10,000 investment in that
Portfolio to one or more broad based market indices. In the comparison chart and
the total return set forth in "Financial Highlights", the total return and the
change in value of the Portfolio reflect the advisory fee and all other
Portfolio expenses and include reinvestment of dividends and capital gains; they
do not reflect the charges against the corresponding sub-accounts or the charges
and deductions under the applicable annuity contracts. Where a portfolio's
period from inception is less than one year, the total return shown is not
annualized. The indices referred to in the comparison charts are unmanaged and
are used as a general measure of market performance; with the exception of the
Wilshire 5000 Index, they assume reinvestment of dividends and capital gains and
all indices do not include any management or investment expenses.
The ratio of expenses to average net assets in the financial highlights is
net of advisory fee waiver (see Note 2). The December 31, 1995 ratio is
annualized, along with the ratio of net investment income to average net assets.
Without the advisory fee waived by WRL, the ratio would be as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
PORTFOLIO 1995
--------------------------------------------------------------------------------------- ------------
<S> <C>
C.A.S.E. Growth........................................................................ 4.15%
C.A.S.E. Growth & Income............................................................... 6.17%
C.A.S.E. Quality Growth................................................................ 5.91%
</TABLE>
- --------------------------------------------------------------------------------
25
<PAGE> 28
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth Portfolio
(221,168.064 shares;
cost $ 2,526,443)...................... $ 2,578,242
Accrued transfers from (to)
depositor - net.......................... 3
-----------------
Total assets........................... 2,578,245
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 2,578,245
===================
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Growth sub-account
(165,502.197467 units;
$ 11.963890 unit value).................. $ 1,980,050
-----------------
Depositors' equity:
C.A.S.E. Growth sub-account
(50,000.000000 units;
$ 11.963890 unit value).................. 598,195
-----------------
Total equity........................... $ 2,578,245
===================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Dividend income......................... $ 10,990
Capital gain distributions.............. 76,031
------------------
87,021
EXPENSES:
Mortality and expense risk charges...... 8,892
------------------
Net investment income (loss).......... 78,129
------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from securities
transactions.......................... 310
Change in unrealized appreciation
(depreciation)........................ 51,798
------------------
Net gain (loss) on investments........ 52,108
------------------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 130,237
====================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 78,129
Net gain (loss) on investments............................................................................. 52,108
------------------
Net increase (decrease) in equity accounts
resulting from operations................................................................................ 130,237
------------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................................................................ 1,948,178
------------------
Less cost of units redeemed:
Administrative charges................................................................................... 0
Policy loans............................................................................................. 0
Surrender benefits....................................................................................... 170
Death benefits........................................................................................... 0
------------------
170
------------------
Increase (decrease) in equity accounts from
capital unit transactions.............................................................................. 1,948,008
------------------
Net increase (decrease) in equity accounts............................................................... 2,078,245
Depositor's equity contribution (redemption)............................................................... 500,000
EQUITY ACCOUNTS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 2,578,245
====================
</TABLE>
* The inception of this sub-account was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
26
<PAGE> 29
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Accumulation unit value, beginning of period.... $ 10.00
Income from operations:
Net investment income (loss)................ .85
Net realized and unrealized
gain (loss) on investments................ 1.11
-----------
Total income (loss) from operations....... 1.96
-----------
Accumulation unit value, end of period.......... $ 11.96
==============
Total return.................................... 19.64%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 2,578
Ratio of net investment income (loss)
to average net assets....................... 7.42%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
+ The inception date of this sub-account was May 1, 1995. The total return and
ratio of net investment income to average net assets are not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
27
<PAGE> 30
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH & INCOME SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth & Income Portfolio
(96,056.397 shares;
cost $ 1,007,275)...................... $ 1,083,463
Accrued transfers from (to)
depositor - net.......................... 0
-----------------
Total assets........................... 1,083,463
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 1,083,463
===================
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Growth & Income sub-account
(45,174.886934 units;
$ 11.383912 unit value).................. $ 514,267
Depositors' equity:
C.A.S.E. Growth & Income sub-account
(50,000.000000 units;
$ 11.383912 unit value).................. 569,196
-----------------
Total equity........................... $ 1,083,463
===================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Dividend income......................... $ 12,902
Capital gain distributions.............. 6,001
----------
18,903
EXPENSES:
Mortality and expense risk charges...... 5,503
----------
Net investment income (loss).......... 13,400
----------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from securities
transactions.......................... 185
Change in unrealized appreciation
(depreciation)........................ 76,188
----------
Net gain (loss) on investments........ 76,373
----------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 89,773
====================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 13,400
Net gain (loss) on investments............................................................................. 76,373
------------------
Net increase (decrease) in equity accounts
resulting from operations................................................................................ 89,773
------------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................................................................ 494,100
------------------
Less cost of units redeemed:
Administrative charges................................................................................... 0
Policy loans............................................................................................. 0
Surrender benefits....................................................................................... 410
Death benefits........................................................................................... 0
------------------
410
------------------
Increase (decrease) in equity accounts from
capital unit transactions.............................................................................. 493,690
------------------
Net increase (decrease) in equity accounts............................................................... 583,463
Depositor's equity contribution (redemption)............................................................... 500,000
EQUITY ACCOUNTS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 1,083,463
====================
</TABLE>
* The inception of this sub-account was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
28
<PAGE> 31
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH & INCOME SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Accumulation unit value, beginning of
period...................................... $ 10.00
Income from operations:
Net investment income (loss).............. .22
Net realized and unrealized
gain (loss) on investments.............. 1.16
-----------
Total income (loss) from operations..... 1.38
-----------
Accumulation unit value, end of period........ $ 11.38
=============
Total return.................................. 13.84%
Ratios and supplemental data:
Net assets at end of period (in
thousands)................................ $ 1,083
Ratio of net investment income (loss)
to average net assets..................... 2.05%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
+ The inception date of this sub-account was May 1, 1995. The total return and
ratio of net investment income to average net assets are not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
29
<PAGE> 32
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. QUALITY GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Quality Growth Portfolio
(106,075.803 shares;
cost $ 1,121,480)..................... $ 1,149,971
Accrued transfers from (to)
depositor - net......................... 0
-----------------
Total assets.......................... 1,149,971
-----------------
LIABILITIES:................................ 0
-----------------
Total net assets...................... $ 1,149,971
====================
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Quality Growth sub-account
(52,076.322330 units;
$ 11.265797 unit value)................. $ 586,681
Depositor's equity:
C.A.S.E. Quality Growth sub-account
(50,000.000000 units;
$ 11.265797 unit value)................. 563,290
-----------------
Total equity.......................... $ 1,149,971
====================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Dividend income....................... $ 9,274
Capital gain distributions............ 43,323
------------------
52,597
EXPENSES:
Mortality and expense risk charges.... 6,041
------------------
Net investment income (loss)........ 46,556
------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from
securities transactions............. 259
Change in unrealized appreciation
(depreciation)...................... 28,491
------------------
Net gain (loss) on investments...... 28,750
------------------
Net increase (decrease) in equity
accounts resulting from
operations...................... $ 75,306
======================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)............................................................................... $ 46,556
Net gain (loss) on investments............................................................................. 28,750
------------------
Net increase (decrease) in equity accounts
resulting from operations................................................................................ 75,306
------------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................................................................ 574,835
------------------
Less cost of units redeemed:
Administrative charges................................................................................... 0
Policy loans............................................................................................. 0
Surrender benefits....................................................................................... 170
Death benefits........................................................................................... 0
------------------
170
------------------
Increase (decrease) in equity accounts from
capital unit transactions.............................................................................. 574,665
------------------
Net increase (decrease) in equity accounts............................................................... 649,971
Depositor's equity contribution (redemption)............................................................... 500,000
EQUITY ACCOUNTS:
Beginning of period........................................................................................ 0
------------------
End of period.............................................................................................. $ 1,149,971
===================
</TABLE>
* The inception of this sub-account was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
30
<PAGE> 33
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. QUALITY GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1995+
-----------
<S> <C>
Accumulation unit value, beginning of period.... $ 10.00
Income from operations:
Net investment income (loss)................ .70
Net realized and unrealized
gain (loss) on investments................ .57
-----------
Total income (loss) from operations....... 1.27
-----------
Accumulation unit value, end of period.......... $ 11.27
=============
Total return.................................... 12.66%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 1,150
Ratio of net investment income (loss)
to average net assets....................... 6.48%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
+ The inception date of this sub-account was May 1, 1995. The total return and
ratio of net investment income to average net assets are not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
31
<PAGE> 34
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Annuity Account (the "Annuity Account") was established as a
variable accumulation deferred annuity separate account of Western Reserve Life
Assurance Co. of Ohio ("WRL") and is registered as a unit investment trust
("Trust") under the Investment Company Act of 1940, as amended.
The Annuity Account holds assets that support the benefits under flexible
payment variable accumulation deferred annuity contracts (the "Contracts")
issued by WRL, including the C.A.S.E. Reserve Variable Annuity. The Annuity
Account equity transactions are accounted for using the appropriate effective
date at the corresponding accumulation unit value.
The C.A.S.E. Reserve Variable Annuity investment options, referred to as
sub-accounts, are the C.A.S.E. Growth Sub-Account, the C.A.S.E. Growth & Income
Sub-Account, and the C.A.S.E. Quality Growth Sub-Account. Each sub-account
invests in the corresponding portfolio of the WRL Series Fund, Inc. (the
"Fund"), a registered management investment company under the Investment Company
Act of 1940, as amended. The investment manager for these three portfolios is
C.A.S.E. Management, Inc.
On May 1, 1995, WRL made an initial contribution of $500,000 to each of the
C.A.S.E. Sub-Accounts. The amount of the contribution and the units received
from the corresponding sub-accounts are as follows:
<TABLE>
<CAPTION>
SUB-ACCOUNT CONTRIBUTION UNITS
- ------------------------------------- --------------
<S> <C> <C>
C.A.S.E. Growth $ 500,000 50,000.000000
C.A.S.E. Growth & Income 500,000 50,000.000000
C.A.S.E. Quality Growth 500,000 50,000.000000
</TABLE>
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates.
The following significant accounting policies, which are in conformity with
generally accepted accounting principles for unit investment trusts, have been
consistently used in preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS
The investments in the Fund's shares are stated at the closing net asset
value ("NAV") per share as determined by the Fund on December 31, 1995.
Investment transactions are accounted for on the trade date, using the Fund
NAV next determined after receipt of sale or redemption order without sales
charges. Dividend income and capital gain distributions are recorded on the
ex-dividend date. The cost of investments sold is determined on a first-in,
first-out basis.
B. FEDERAL INCOME TAXES
The operations of the Annuity Account are a part of and are taxed with the
total operations of WRL, which is taxed as a life insurance company under
the Internal Revenue Code. Under current law, the investment income of the
Annuity Account, including realized and unrealized capital gains, is not
taxable to WRL. Accordingly, no provision for Federal income taxes has been
made.
NOTE 2 - CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with issuance and administration
of the Contracts.
A. CONTRACT CHARGES
No deduction for sales expenses are made from the purchase payments. A
contingent deferred sales charge may, however, be assessed against contract
values when withdrawn or surrendered.
On each anniversary through maturity date, WRL will deduct an annual
contract charge as partial compensation for providing administrative
services under the Contracts.
B. SUB-ACCOUNT CHARGES
A daily charge equal to an annual rate of 1.25% of average daily net assets
is assessed to compensate WRL for assumption of mortality and expense risks
and administrative services in connection with issuance and administration
of the Contracts. This charge (not assessed at the individual contract
level) effectively reduces the value of a unit outstanding during the year.
- --------------------------------------------------------------------------------
32
<PAGE> 35
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3 - DIVIDENDS AND DISTRIBUTIONS
Dividends of the Portfolios are declared and reinvested semiannually, while
capital gain distributions are declared and reinvested annually. Dividends and
distributions of the Fund are generally paid to and reinvested by the Annuity
Account the next business day after declaration.
NOTE 4 - OTHER MATTERS
As of December 31, 1995 the equity accounts include net unrealized
appreciation (depreciation) on investments as follows:
<TABLE>
<S> <C>
SUB-ACCOUNT
C.A.S.E. Growth........................ $ 51,799
C.A.S.E. Growth & Income............... 76,188
C.A.S.E. Quality Growth................ 28,491
</TABLE>
- --------------------------------------------------------------------------------
33
<PAGE> 36
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W R L S E R I E S F U N D , I N C .
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WRL SERIES ANNUITY ACCOUNT
---------------------------------------------
OFFICE OF THE WRL SERIES FUND, INC.
WRL SERIES ANNUITY ACCOUNT
201 Highland Avenue
Largo, FL 34640
1-800-851-9777
Ext. 6510
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DISTRIBUTOR:
InterSecurities, Inc.
201 Highland Avenue
Largo, FL 34640
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FUND CUSTODIAN:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
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INVESTMENT ADVISER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 34640
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SUB-ADVISER:
C.A.S.E. Management, Inc.
2255 Glades Road
Suite 221-A
Boca Raton, FL 33431
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INSURER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 34640
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INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
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THIS MATERIAL IS FOR CONTRACT HOLDER'S
REPORTING PURPOSES ONLY AND SHALL NOT
BE USED IN CONNECTION WITH A SOLICITATION,
OFFER OR ANY PROPOSED SALE OR PURCHASE
OF SECURITIES UNLESS PRECEDED OR
ACCOMPANIED BY A PROSPECTUS.
[LOGO]
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Western Reserve Life Assurance Co. of Ohio
Distributor: InterSecurities, Inc.
P.O. Box 5068 - Clearwater, FL 34618-5068
February 1996
ACC00008-A (2/96)
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Appendix to Electronic Format Page 1 of 2
WRL Series Fund, Inc.
C.A.S.E. Reserve Variable Annuity
Page 1 (photo) Shown is John R. Kenney, Chairman of the Board
Page 6 (graph) Pie chart depicting industry investments as a percentage of
total portfolio net assets.
<TABLE>
<S> <C>
Banking 10.28%
Beverages 3.06%
Chemicals 4.56%
Computer Technology 7.68%
Electronics 5.66%
Finance 6.00%
Foods & Food Service 3.75%
Manufacturing 2.93%
Medical 9.30%
Metals 3.20%
Oil & Gas 5.46%
Pharmaceuticals 2.85%
Telecommunications 6.09%
Short-Term Obligation 20.64%
Other 8.54%
</TABLE>
Page 9 (graph) Mountain graph depicting the change in value of a $10,000
investment in the portfolio since inception versus the
Wilshire 5000 Index (Wilshire) over the same time frame.
<TABLE>
<CAPTION>
Portfolio Wilshire Index
<S> <C> <C>
Inception 5/1/95 $10,000 $10,000
Period Ended 12/31/95 $12,065 $12,028
</TABLE>
Page 12 (graph) Pie chart depicting industry investments as a percentage of
total portfolio net assets.
<TABLE>
<S> <C>
Banking 10.90%
Chemicals 4.12%
Computer Technology 5.22%
Electric Utilities 7.22%
Electronics 6.06%
Insurance 6.74%
Machinery 4.99%
Medical 4.94%
Oil & Gas 9.87%
Pharmaceuticals 8.59%
Telecommunications 7.46%
Short-Term Obligation 14.71%
Other 9.18%
</TABLE>
Page 15 (graph) Mountain graph depicting the change in value of a $10,000
investment in the portfolio since inception versus the
Standard & Poor's Index of 500 Common Stocks (S&P) over the
same time frame.
<TABLE>
<CAPTION>
Portfolio Wilshire Index
<S> <C> <C>
Inception 5/1/95 $10,000 $10,000
Period Ended 12/31/95 $11,480 $12,186
</TABLE>
<PAGE> 42
Appendix to Electronic Format Page 2 of 2
WRL Series Fund, Inc.
C.A.S.E. Reserve Variable Annuity
Page 18 (graph) Pie chart depicting industry investments as a percentage
of total portfolio net assets.
<TABLE>
<S> <C>
Banking 10.84%
Chemicals 3.20%
Computer Technology 10.96%
Electric Utilities 5.25%
Electronics 5.16%
Finance 5.47%
Foods & Food Service 5.85%
Forest Products & Paper 3.97%
Manufacturing 3.45%
Medical 7.38%
Oil & Gas 9.50%
Telecommunications 6.90%
Short-Term Obligation 11.21%
Other 10.86%
</TABLE>
Page 21 (graph) Mountain graph depicting the change in value of a $10,000
investment in the portfolio since inception versus the
Standard & Poor's Index of 500 Common Stocks (S&P) over
the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index
<S> <C> <C>
Inception 5/1/95 $10,000 $10,000
Period Ended 12/31/95 $11,361 $12,186
</TABLE>
