<PAGE> 1
- --------------------------------------------------------------------------------
S E M I - A N N U A L R E P O R T
J U N E 3 0 , 1 9 9 6
- --------------------------------------------------------------------------------
WRL SERIES FUND, INC.
AND
C.A.S.E. RESERVE VARIABLE ANNUITY
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
August 1996
ACC00008-S (8/96)
<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
WRL SERIES FUND, INC.
Financial Statements:
C.A.S.E. Growth Portfolio.................... 2
C.A.S.E. Growth & Income Portfolio........... 8
C.A.S.E. Quality Growth Portfolio............ 13
Notes to Financial Statements..................... 19
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
Financial Statements:
C.A.S.E. Growth Sub-Account.................. 24
C.A.S.E. Growth & Income Sub-Account......... 26
C.A.S.E. Quality Growth Sub-Account.......... 28
Notes to Financial Statements..................... 30
</TABLE>
<PAGE> 3
Fellow Contract Owners:
(PHOTO) Shown is John R. Kenney, Chairman of the Board
JOHN R. KENNEY
Chairman of the Board
It hardly seems possible, but the first half of 1996 has drawn to a close. And
believe it or not, the Dow Jones Industrial Average -- the now-100-year-old
bellwether for the stock market -- stands some 500 points higher than it did in
January. A spectacular pace to be sure -- faster than the market's historical
average of 10% a year.
But make no mistake, the financial markets have been buffeted by more volatility
this year than they -- and we -- have experienced in some time.
Indeed, the relatively measured rise in the stock market averages masks some
rather abrupt corrections in many issues, especially in some of the more
unseasoned sectors of the market. The bond market, too, has proven to be
noticeably rambunctious these first six months, with long rates, widely expected
as the year began to move towards 5%, nudging instead above 7%.
Not so surprisingly, all of this commotion is leaving many folks in and around
the financial markets a bit unnerved. Considering how far the markets have come,
in a way, it's only natural to fear they may be "running out of gas". But,
remember, it wasn't that long ago, just over two years in fact, when similar
anxieties surrounded the financial markets -- when fears of the "big correction"
so dominated investor psychology.
Of course, the so-called conventional wisdom of that time proved to be not so
wise, and the prophets of doom proved to be not so insightful. Nevertheless, it
wasn't easy to hold the course in such a volatile market. But investors who did
stick to their plans throughout it all have more than likely been rewarded for
it. Handsomely perhaps. Our hats are off to all of you.
We're pleased the C.A.S.E. Reserve Variable Annuity could play a part. We remain
proud of the manner in which the C.A.S.E. Management, Inc., portfolio managers
have guided and are positioning funds in these remarkable times. Please take a
few minutes and review the personal comments from these professionals regarding
the C.A.S.E. Reserve Portfolios and just how they've been investing for them. We
invite you to evaluate these reports and review the data, including major equity
positions and industry weightings. All of this information is intended to
provide an insight into what has been some of the industry's finest performance.
As for the rest of 1996, we're really not interested in making predictions on
what will or will not happen. After all, in the short term, the markets are
unpredictable. But long term, they're inevitable. The secret to wealth
accumulation in the market in the past has been long-term investing and not
worrying about the interim peaks and troughs. History has shown that investors
often saw better results the longer they held their investment. We're in it for
the long term -- we are investors.
If it's true that success solicits success, then we're justified in our
optimistic outlook for this year and for years after that. The Portfolios of the
C.A.S.E. Reserve Variable Annuity 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.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (0.01%)
AEROSPACE (0.01%)
Teledyne, Inc. - Series E................. 30 $ 454
----------
Total Convertible Preferred Stocks
(cost $ 401)........................................ 454
----------
COMMON STOCKS (69.53%)
AEROSPACE (2.76%)
Lockheed Martin Corporation............... 1,000 84,000
Rohr Industries, Inc.(a).................. 5,700 118,987
APPAREL PRODUCTS (3.11%)
Starter Corporation(a).................... 12,500 107,812
U.S. Industries, Inc.(a).................. 5,000 120,625
APPAREL & ACCESSORY STORES (1.87%)
The Gymboree Corporation(a)............... 4,500 137,250
COMMERCIAL BANKS (0.71%)
Provident Bankshares Corporation.......... 1,586 52,322
COMPUTER & DATA PROCESSING SERVICE (3.00%)
Cisco Systems, Inc.(a).................... 2,400 135,900
Sun Microsystems, Inc.(a)................. 1,440 84,780
COMPUTER & OFFICE EQUIPMENT (1.73%)
Seagate Technology, Inc.(a)............... 860 38,700
Xircom, Inc.(a)........................... 6,000 88,500
DEPARTMENT STORES (1.38%)
TJX Companies, Inc........................ 3,000 101,250
ELECTRIC SERVICES (4.10%)
Calenergy, Inc.(a)........................ 3,700 94,350
Duke Power Company........................ 1,650 84,562
Unicom Corporation........................ 4,400 122,650
ELECTRICAL GOODS (2.59%)
Carlisle Companies, Inc. ................. 2,400 127,500
Motorola, Inc............................. 1,000 62,875
ELECTRONIC COMPONENTS & ACCESSORIES (1.90%)
Sanmina Corporation(a).................... 2,600 70,200
Vitesse Semiconductor Corporation(a)...... 2,900 69,600
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.13%)
Lamson & Sessions Company(a).............. 7,000 83,125
ENGINEERING & MANAGEMENT SERVICES (0.91%)
Halliburton Company....................... 1,200 66,600
FABRICATED METAL PRODUCTS (1.52%)
Sturm, Ruger & Company, Inc. ............. 2,400 111,600
FINANCE (0.62%)
Imperial Credit Industries, Inc.(a)....... 1,500 45,375
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
FOOD STORES (1.78%)
Vons Companies, Inc.(a)................... 3,500 $ 130,812
FOOD & KINDRED PRODUCTS (1.55%)
Archer-Daniels-Midland Co................. 5,950 113,794
GAS PRODUCTION & DISTRIBUTION (2.69%)
NorAm Energy Corporation.................. 9,300 101,137
Williams Companies, Inc................... 1,950 96,525
HEALTH SERVICES (1.20%)
Chronimed, Inc.(a)........................ 4,800 88,200
HOTELS & OTHER LODGING PLACES (1.52%)
MGM Grand, Inc.(a)........................ 600 23,925
Prime Hospitality Corp(a)................. 5,300 87,450
INDUSTRIAL MACHINERY & EQUIPMENT (1.75%)
US Filter Corporation(a).................. 3,700 128,575
INSTRUMENTS & RELATED PRODUCTS (3.04%)
Eastman Kodak Company..................... 1,450 112,737
Perkin-Elmer Corporation.................. 2,300 110,975
MANAGEMENT SERVICES (1.77%)
Paychex, Inc. ............................ 2,700 129,938
MEDICAL INSTRUMENTS & SUPPLIES (1.64%)
Medtronic, Inc. .......................... 2,150 120,400
MISC. GENERAL MERCHANDISE STORES (1.36%)
Waban, Inc.(a)............................ 4,200 100,275
MOTION PICTURES (1.54%)
Carmike Cinemas, Inc.(a).................. 4,200 113,400
OIL & GAS EXTRACTION (4.99%)
ENSCO International, Inc.(a).............. 1,500 48,750
Global Natural Resources, Inc.(a)......... 6,700 109,713
Noble Drilling Corporation(a)............. 9,100 126,263
Oryx Energy Company(a).................... 5,000 81,250
PHARMACEUTICALS (1.21%)
Watson Pharmaceuticals, Inc.(a)........... 2,350 89,006
PRIMARY METAL INDUSTRIES (1.56%)
Reynolds Metals Company................... 2,200 114,675
PRINTING & PUBLISHING (1.77%)
Merrill Corporation....................... 5,200 130,000
RADIO, TELEVISION & COMPUTER STORES (0.91%)
Bell Microproducts, Inc.(a)............... 8,800 67,100
RESIDENTIAL BUILDING CONSTRUCTION (1.61%)
Southern Energy Homes, Inc.(a)............ 5,500 118,250
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
2
<PAGE> 5
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL TRADE (5.57%)
Borders Group, Inc.(a).................... 3,200 $ 103,200
OfficeMax, Inc.(a)........................ 4,100 97,888
Price/Costco, Inc.(a)..................... 5,200 112,450
The Sports Authority, Inc.(a)............. 2,900 94,975
SAVINGS INSTITUTIONS (0.50%)
First Indiana Corporation................. 1,536 36,864
TELECOMMUNICATIONS (1.35%)
United States Cellular
Corporation(a).......................... 3,200 99,200
WHOLESALE TRADE DURABLE GOODS (2.89%)
Fisher Scientific International........... 3,100 116,250
Wyle Electronics.......................... 2,900 96,063
----------
Total Common Stocks
(cost: $ 5,049,426)................................. 5,108,603
----------
Total Investment Securities
(cost: $ 5,049,827)............................... $ 5,109,057
==========
SUMMARY
Investments at value........................ 69.54% $ 5,109,057
Other Assets in
Excess of Liabilities..................... 30.46% 2,238,124
------ -----------
Net Assets..................................100.00% $ 7,347,181
====== ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
3
<PAGE> 6
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
PIE CHART
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Aerospace 2.76%
Apparel Products 3.11%
Apparel & Accessory Stores 1.87%
Computer & Data Processing Service 3.00%
Electric Services 4.10%
Electrical Goods 2.59%
Electronic Components & Accessories 1.90%
Gas Production & Distribution 2.69%
Instruments & Related Products 3.04%
Oil & Gas Extraction 4.99%
Retail Trade 5.57%
Wholesale Trade Durable Goods 2.89%
Other 61.49%
</TABLE>
The C.A.S.E. Growth Portfolio commenced operations on May 1, 1995, and has just
completed its first full year of operations. Its investment objective is
preservation and growth of capital. This is achieved through investments in
common stocks of small-to-medium-sized companies. For the six-month period ended
June 30, 1996, the Portfolio posted a total return of 6.77%. By comparison, the
Standard & Poor's Index of 500 Common Stocks returned 10.10% and the Dow Jones
Industrial Average returned 11.70% for the same period.
Generally, our strategy is to invest in stocks of companies with
well-above-average management, solid balance sheets, below market price to
earnings ratios (on both a leading and a lagging basis), above market insider
and institutional buying, and earnings estimates that are being revised upwards.
While generally employing a buy-and-hold posture until fundamentals dictate a
change, the Portfolio may use short-term strategies to take advantage of
changing market conditions.
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 leading factors governing price movement are earnings
related -- quarterly earnings surprise factors, projected earnings changes,
quarterly earnings per share growth, earnings projections, and insider activity
for 1996. As the economy continues to grow, our emphasis has switched to
companies more dependent on the domestic economy.
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, our studies reflect that companies dependent on the
domestic economy have performed well. The economic sectors of technology, energy
and consumer spending are leading the performance race. We expect these trends
to continue through the summer.
Stocks that 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.
C.A.S.E. LOGO /s/ WILLIAM E. LANGE
----------------------------------
William E. Lange
C.A.S.E. Growth Portfolio Manager
- --------------------------------------------------------------------------------
4
<PAGE> 7
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 5,049,827)............................. $ 5,109,057
Short-term securities, at amortized cost......... 0
Cash............................................. 2,233,625
Receivables:
Fund shares sold............................... 0
Securities sold................................ 0
Interest....................................... 5,052
Dividends...................................... 4,471
Other.......................................... 0
-------------
Total assets................................. 7,352,205
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 0
Accounts payable and accrued liabilities:
Investment advisory fees....................... 4,019
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 0
Other fees..................................... 1,005
-------------
Total liabilities............................ 5,024
-------------
Total net assets........................... $ 7,347,181
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)........ $ 5,903
Additional paid-in capital....................... 7,116,472
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 16,944
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 148,632
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 59,230
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 7,347,181
==============
Shares outstanding at June 30, 1996.............. 590,290
==============
Net asset value per share........................ $ 12.45
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest................................... $ 12,669
Dividends (net of foreign tax of $ 371).... 23,789
-----------------
Total investment income.............. 36,458
-----------------
EXPENSES:
Investment advisory fees................... 15,882
Printing and shareholder reports........... 133
Custody fees............................... 17,237
Legal fees................................. 4
Auditing and accounting fees............... 1,515
Directors fees............................. 3
Registration fees.......................... 43
Other fees................................. 4
-----------------
Total expenses....................... 34,821
Less:
Advisory fee waiver and expense
reimbursement.......................... 14,969
Fees paid indirectly..................... 0
-----------------
Net expenses......................... 19,852
-----------------
Net investment income (loss)............... 16,606
-----------------
Net realized gain (loss) on:
Investment securities.................... 143,631
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 12,461
-----------------
Net gain (loss) on investments............. 156,092
-----------------
Net increase (decrease) in net assets
resulting from operations................ $ 172,698
===================
</TABLE>
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
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1996 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 16,606 $ 11,328
Net realized gain (loss) on investments................................................. 143,631 81,032
Change in unrealized appreciation (depreciation) on investments......................... 12,461 46,769
------------ -----------
Net increase (decrease) in net assets resulting from operations....................... 172,698 139,129
------------ -----------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... 0 (10,990)
Net realized gains...................................................................... 0 (76,031)
------------ -----------
Total distributions................................................................... 0 (87,021)
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 4,763,315 2,442,347
Dividends and distributions reinvested.................................................. 0 87,021
Cost of shares repurchased.............................................................. (167,074) (3,234)
------------ -----------
Increase (decrease) in net assets from capital shares transactions.................... 4,596,241 2,526,134
------------ -----------
Net increase (decrease) in net assets................................................. 4,768,939 2,578,242
NET ASSETS:
Beginning of period..................................................................... 2,578,242 0
------------ -----------
End of period........................................................................... $ 7,347,181 $ 2,578,242
============ ===========
Undistributed net investment income................................................... $ 16,944 $ 338
============ ===========
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 221,168 0
------------ -----------
Shares issued........................................................................... 382,499 213,996
Shares issued - reinvestment of dividends and distributions............................. 0 7,465
Shares redeemed......................................................................... (13,377) (293)
------------ -----------
Increase (decrease) in shares outstanding............................................... 369,122 221,168
------------ -----------
Shares outstanding - end of period...................................................... 590,290 221,168
============ ===========
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
6
<PAGE> 9
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
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
CHART
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
Six Months Ended 6/30/96 $12,882 $13,131
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Net asset value, beginning of period......... $11.66 $ 10.00
Income from operations:
Net investment income (loss)............. .05 .12
Net realized and unrealized
gain (loss) on investments............. .74 2.49
------- -------
Total income (loss) from operations.... .79 2.61
------- -------
Distributions:
Dividends from net investment income..... .00 (.12)
Distributions from net realized gains
on investments......................... .00 (.83)
------- -------
Total distributions.................... .00 (.95)
------- -------
Net asset value, end of period............... $12.45 $ 11.66
======= =======
Total return................................. 6.77 % 20.65%
Ratios and supplemental data:
Net assets at end of period
(in thousands)............................ $7,347 $ 2,578
Ratio of expenses to average net assets.... 1.00 % 1.00%
Ratio of net investment income (loss)
to average net assets.................... .79 % 1.02%
Ratio of commission paid to number of
shares................................... 6.03 % N/A
Portfolio turnover rate.................... 90.07 % 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.
- --------------------------------------------------------------------------------
7
<PAGE> 10
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (0.01%)
AEROSPACE (0.01%)
Teledyne, Inc. - Series E............... 13 $ 192
-----------
Total Convertible Preferred Stocks
(cost: $ 170).................................... 192
-----------
COMMON STOCKS (82.35%)
AEROSPACE (2.38%)
Lockheed Martin Corporation............. 500 42,000
COMMERCIAL BANKS (5.73%)
BankAmerica Corporation................. 550 41,662
First Chicago NBD Corporation........... 805 31,513
NationsBank Corporation................. 340 28,093
COMMUNICATION (0.38%)
360 Communications Company(a)........... 283 6,792
COMPUTER & OFFICE EQUIPMENT (2.65%)
Hewlett-Packard Company................. 470 46,824
CONSTRUCTION (1.94%)
Centex Corporation...................... 1,100 34,238
DEPARTMENT STORES (9.61%)
Dayton Hudson Corporation............... 500 51,562
Mercantile Stores Company, Inc.......... 750 43,969
Sears, Roebuck and Company.............. 830 40,359
TJX Companies, Inc...................... 1,000 33,750
ELECTRIC SERVICES (4.46%)
Duke Power Company...................... 950 48,687
Unicom Corporation...................... 1,080 30,105
ELECTRICAL GOODS (1.42%)
Motorola, Inc........................... 400 25,150
ELECTRONIC COMPONENTS & ACCESSORIES (2.34%)
Varian Associates, Inc. ................ 800 41,400
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.42%)
General Electric Company................ 495 42,818
ENGINEERING & MANAGEMENT SERVICES (0.94%)
Haliburton Company...................... 300 16,650
FOOD & KINDRED PRODUCTS (2.13%)
H.J. Heinz Company...................... 1,250 37,665
GAS PRODUCTION & DISTRIBUTION (6.67%)
NorAm Energy Corp....................... 3,300 35,887
Western Gas Resources, Inc. ............ 2,300 37,375
Williams Companies, Inc. ............... 900 44,550
INDUSTRIAL MACHINERY & EQUIPMENT (3.93%)
Deere & Company......................... 900 36,000
Harris Corporation...................... 550 33,550
INSTRUMENTS & RELATED PRODUCTS (4.48%)
Eastman Kodak Company................... 585 45,484
Perkin-Elmer Corporation................ 700 33,775
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
INSURANCE (1.35%)
Aetna Life and Casualty Company......... 335 $ 23,953
LIFE INSURANCE (2.01%)
Travelers Group, Inc.................... 780 35,588
MEDICAL INSTRUMENTS & SUPPLIES (2.31%)
Medtronic, Inc.......................... 730 40,880
PERSONAL CREDIT INSTITUTIONS (2.15%)
Household International, Inc............ 500 38,000
PETROLEUM REFINING (2.67%)
Chevron Corporation..................... 800 47,200
PETROLEUM & PETROLEUM PRODUCTS (1.31%)
Pennzoil Company........................ 500 23,125
PRIMARY METAL INDUSTRIES (3.09%)
Reynolds Metals Company................. 700 36,487
Tredegar Industries, Inc................ 600 18,150
PRINTING & PUBLISHING (1.97%)
Times Mirror Company.................... 800 34,800
SECURITY & COMMODITY BROKERS (4.45%)
Merrill Lynch & Company, Inc. .......... 600 39,075
Salomon, Inc............................ 900 39,600
TELECOMMUNICATIONS (3.93%)
Ameritech Corporation................... 600 35,625
BellSouth Corporation................... 800 33,900
WHOLESALE TRADE DURABLE GOODS (5.63%)
Fisher Scientific International......... 900 33,750
Johnson & Johnson....................... 680 32,670
Wyle Electronics........................ 1,000 33,125
-----------
Total Common Stocks
(cost: $ 1,353,090).............................. 1,455,786
-----------
Total Investment Securities
(cost: $ 1,353,260)............................ $ 1,455,978
===========
SUMMARY
Investments at value...................... 82.36% $ 1,455,978
Other Assets in
Excess of Liabilities.................. 17.64% 311,879
------- -----------
Net Assets............................... 100.00% $ 1,767,857
======= ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
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 & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
PIE CHART
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Commercial Banks 5.73%
Computer & Office Equipment 2.65%
Department Stores 9.61%
Electric Services 4.46%
Gas Production & Distribution 6.67%
Industrial Machinery & Equipment 3.93%
Instruments & Related Products 4.48%
Petroleum Refining 2.67%
Primary Metal Industries 3.09%
Security & Commodity Brokers 4.45%
Telecommunications 3.93%
Wholesale Trade Durable Goods 5.63%
Other 42.70%
</TABLE>
The C.A.S.E. Growth & Income Portfolio commenced operations on May 1, 1995, and
has just completed its first full year of operations. Its objective is to seek
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 pay dividends, have measurable growth rates, and have
demonstrated capital appreciation that exceeds the rate of inflation. For the
six-month period ended June 30, 1996, the Portfolio returned 8.07%. The Standard
& Poor's Index of 500 Common Stocks returned 10.10% for the same period.
Our research disciplines look for companies with strong balance sheets,
dependable cash flows, high profitability, favorable valuations, and a strong,
upward trend in earnings and dividend growth. By maintaining the value
discipline and investing in companies with growth potential, we believe this
offers an excellent core investment strategy for investors that desire to take a
defensive position. This strategy is intended to keep pace with the S&P 500, but
be less volatile. Its primary focus of growth is balanced with value and
preservation of capital.
By design, the C.A.S.E. Growth & Income Portfolio invests in companies with
price/earnings ratios that are nearly 25% less than the markets, on a 12-month
leading and 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 65% of the S&P 500. With its stocks displaying strong
fundamental underpinnings, and earnings growth rates double the market's, the
Portfolio appears well suited for the current investment climate and its stated
objective.
C.A.S.E. LOGO /s/ WILLIAM E. LANGE
----------------------------------
William E. Lange
C.A.S.E. Growth & Income Portfolio
Manager
- --------------------------------------------------------------------------------
9
<PAGE> 12
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 1,353,260)............................. $ 1,455,978
Short-term securities, at amortized cost......... 0
Cash............................................. 309,435
Receivables:
Fund shares sold............................... 0
Securities sold................................ 0
Interest....................................... 873
Dividends...................................... 3,603
Other.......................................... 0
-------------
Total assets................................. 1,769,889
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 0
Accounts payable and accrued liabilities:
Investment advisory fees....................... 1,084
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 0
Other fees..................................... 948
-------------
Total liabilities............................ 2,032
-------------
Total net assets........................... $ 1,767,857
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)........ $ 1,450
Additional paid-in capital....................... 1,582,843
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 12,301
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 68,545
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 102,718
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 1,767,857
==============
Shares outstanding at June 30, 1996.............. 145,023
==============
Net asset value per share........................ $ 12.19
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 3,635
Dividends.................................... 17,370
----------------
Total investment income................ 21,005
----------------
EXPENSES:
Investment advisory fees..................... 5,863
Printing and shareholder reports............. 33
Custody fees................................. 16,787
Legal fees................................... 2
Auditing and accounting fees................. 1,515
Directors fees............................... 2
Registration fees............................ 42
Other fees................................... 1
----------------
Total expenses......................... 24,245
Less:
Advisory fee waiver and expense
reimbursement............................ 15,516
Fees paid indirectly....................... 0
----------------
Net expenses........................... 8,729
----------------
Net investment income (loss)................. 12,276
----------------
Net realized gain (loss) on:
Investment securities...................... 68,145
Change in unrealized appreciation
(depreciation) on:
Investment securities...................... 26,771
----------------
Net gain (loss) on investments............... 94,916
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 107,192
==================
</TABLE>
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
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 12,276 $ 12,927
Net realized gain (loss) on investments................................................. 68,145 6,401
Change in unrealized appreciation (depreciation) on investments......................... 26,771 75,947
---------------- ------------------
Net increase (decrease) in net assets resulting from operations........................ 107,192 95,275
---------------- ------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... 0 (12,902)
Net realized gains...................................................................... 0 (6,001)
---------------- ------------------
Total distributions.................................................................... 0 (18,903)
---------------- ------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 609,351 991,742
Dividends and distributions reinvested.................................................. 0 18,903
Cost of shares repurchased.............................................................. (32,148) (3,555)
---------------- ------------------
Increase (decrease) in net assets from capital shares transactions..................... 577,203 1,007,090
---------------- ------------------
Net increase (decrease) in net assets.................................................. 684,395 1,083,462
NET ASSETS:
Beginning of period..................................................................... 1,083,462 0
---------------- ------------------
End of period........................................................................... $ 1,767,857 $ 1,083,462
================== ====================
Undistributed net investment income.................................................... $ 12,301 $ 25
================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 96,056 0
---------------- ------------------
Shares issued........................................................................... 51,608 94,718
Shares issued -- reinvestment of dividends and distributions............................ 0 1,676
Shares redeemed......................................................................... (2,641) (338)
---------------- ------------------
Increase (decrease) in shares outstanding............................................... 48,967 96,056
---------------- ------------------
Shares outstanding - end of period...................................................... 145,023 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.
- --------------------------------------------------------------------------------
11
<PAGE> 14
WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
C.A.S.E. GROWTH & INCOME PORTFOLIO
AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS.
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 $11,480 $12,186
Six Months Ended 6/30/96 $12,407 $13,417
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Net asset value, beginning of period......... $11.28 $ 10.00
Income from operations:
Net investment income (loss)............. .10 .21
Net realized and unrealized
gain (loss) on investments............. .81 1.38
------- -----------
Total income (loss) from operations.... .91 1.59
------- -----------
Distributions:
Dividends from net investment income..... .00 (.21)
Distributions from net realized gains
on investments......................... .00 (.10)
------- -----------
Total distributions.................... .00 (.31)
------- -----------
Net asset value, end of period............... $12.19 $ 11.28
======== =============
Total return................................. 8.07 % 14.80%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................... $1,768 $ 1,083
Ratio of expenses to average net assets.... 1.33 % 1.00%
Ratio of net investment income (loss)
to average net assets.................... 1.66 % 1.94%
Ratio of commission paid to number of
shares................................... 6.05 % N/A
Portfolio turnover rate.................... 93.24 % 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.
- --------------------------------------------------------------------------------
12
<PAGE> 15
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (0.02%)
AEROSPACE (0.02%)
Teledyne, Inc. - Series E............. 19 $ 284
-----------
Total Convertible Preferred Stocks
(cost: $ 253).................................. 284
-----------
COMMON STOCKS (89.78%)
APPAREL PRODUCTS (4.05%)
U.S. Industries, Inc.(a).............. 2,600 62,725
APPAREL & ACCESSORY STORES (1.77%)
The Gymboree Corporation(a)........... 900 27,450
BEVERAGES (2.53%)
Coca-Cola Company..................... 800 39,100
COMMERCIAL BANKS (1.97%)
First Chicago NBD Corporation......... 779 30,467
COMPUTER & DATA PROCESSING SERVICE (5.08%)
Cisco Systems, Inc.(a)................ 650 36,806
Sun Microsystems, Inc.(a)............. 710 41,801
COMPUTER & OFFICE EQUIPMENT (3.03%)
Pitney Bowes, Inc..................... 500 23,875
Seagate Technology, Inc.(a)........... 510 22,950
CONSTRUCTION (2.01%)
Centex Corporation.................... 1,000 31,125
DEPARTMENT STORES (3.53%)
Dayton-Hudson Corporation............. 300 30,937
TJX Companies, Inc.................... 700 23,625
ELECTRIC SERVICES (2.34%)
Unicom Corporation.................... 1,300 36,238
ELECTRICAL GOODS (0.22%)
Arrow Electronics, Inc.(a)............ 80 3,450
ELECTRONIC COMPONENTS & ACCESSORIES (1.70%)
Altron, Inc.(a)....................... 1,300 26,325
ENGINEERING & MANAGEMENT SERVICES (3.12%)
Halliburton Company................... 870 48,285
FOOD & KINDRED PRODUCTS (5.13%)
Archer-Daniels-Midland Company........ 2,100 40,162
H.J. Heinz Company.................... 1,290 39,184
GAS PRODUCTION & DISTRIBUTION (6.96%)
NorAm Energy Corporation.............. 3,500 38,063
Western Gas Resources, Inc............ 2,000 32,500
Williams Companies, Inc............... 750 37,125
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH SERVICES (1.78%)
Chronimed, Inc.(a).................... 1,500 $ 27,562
HOTELS & OTHER LODGING PLACES (3.53%)
MGM Grand, Inc.(a).................... 500 19,938
Prime Hospitality Corp.(a)............ 2,100 34,650
INDUSTRIAL MACHINERY & EQUIPMENT (2.33%)
Deere & Company....................... 900 36,000
INSTRUMENTS & RELATED PRODUCTS (4.57%)
Eastman Kodak Company................. 600 46,650
Perkin-Elmer Corporation.............. 500 24,125
INSURANCE (1.99%)
Aetna Life and Casualty Company....... 430 30,745
LIFE INSURANCE (1.46%)
Sunamerica, Inc. ..................... 400 22,600
OIL & GAS EXTRACTION (1.99%)
Oryx Energy Company(a)................ 1,900 30,875
PETROLEUM REFINING (1.91%)
Chevron Corporation................... 500 29,500
PETROLEUM & PETROLEUM PRODUCTS (2.24%)
Pennzoil Company...................... 750 34,688
PRIMARY METAL INDUSTRIES (3.69%)
Aluminum Company of America........... 450 25,819
Reynolds Metals Company............... 600 31,275
PRINTING & PUBLISHING (1.97%)
Times Mirror Company - Class A........ 700 30,450
REAL ESTATE (0.11%)
Castle & Cooke, Inc.(a)............... 110 1,760
RETAIL TRADE (5.99%)
OfficeMax, Inc.(a).................... 1,200 28,650
Price/Costco, Inc.(a)................. 1,600 34,600
The Sports Authority, Inc.(a)......... 900 29,475
SECURITY & COMMODITY BROKERS (4.38%)
Merrill Lynch & Company, Inc.......... 500 32,563
Salomon, Inc.......................... 800 35,200
TELECOMMUNICATIONS (5.84%)
Ameritech Corporation................. 500 29,687
BellSouth Corporation................. 700 29,662
United States Cellular
Corporation(a)...................... 1,000 31,000
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
13
<PAGE> 16
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
WHOLESALE TRADE DURABLE GOODS (2.56%)
Johnson & Johnson....................... 800 $ 39,600
-----------
Total Common Stocks
(cost: $ 1,323,059).............................. 1,389,267
-----------
Total Investment Securities
(cost: $ 1,323,312)............................ $ 1,389,551
===========
SUMMARY
Investments at value.................. 89.80% $ 1,389,551
Other Assets in
Excess of Liabilities............... 10.20% 157,769
------- -----------
Net Assets............................ 100.00% $ 1,547,320
======= ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
14
<PAGE> 17
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
GRAPH
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Apparel Products 4.05%
Beverages 2.53%
Computer & Data Processing Service 5.08%
Computer & Office Equipment 3.03%
Department Stores 3.53%
Electric Services 2.34%
Engineering & Management Services 3.12%
Food & Kindred Products 5.13%
Gas Production & Distribution 6.96%
Hotels & Other Lodging Places 3.53%
Industrial Machinery & Equipment 2.33%
Instruments & Related Products 4.57%
Primary Metal Industries 3.69%
Retail Trade 5.99%
Security & Commodity Brokers 4.38%
Telecommunications 5.84%
Wholesale Trade Durable Goods 2.56%
Other 31.34%
</TABLE>
The C.A.S.E. Quality Growth Portfolio commenced operations on May 1, 1995, with
an objective to seek 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. For the six-month period ended June
30, 1996, the Portfolio gained 4.94%. The Standard & Poor's Index of 500 Common
Stocks advanced 10.10% for the same period.
This Portfolio is well suited for those investors who are interested in
preservation of capital and maintaining a low-risk growth position in the
current market. Equities in general have rallied to a point where any bad news,
especially disappointing earnings, would be difficult to ignore. The current
economy, however, seems to be growing faster than most forecasters predicted
earlier this year. This has resulted in mixed performance within the market and
within most sectors. The C.A.S.E. Quality Growth Portfolio stresses quality of
earnings and companies exhibiting stability and solid growth potential.
As opposed to a broad-based movement, certain areas of the economic structure
appear more favorable than others. 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. The portfolio composition stresses the markets'
strongest economic sectors in down markets, like manufacturing, consumer
products, finance and utilities, and offers better preservation of capital than
other strategies.
In terms of the strategic alignment, our price/earnings ratio (on both a
12-month leading and 12-month lagging basis) is more conservative than the
average Standard & Poor's 500 ratio. 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 that exhibit "above the market" fundamentals
ordinarily perform better than the general market.
The companies that were selected are broadly diversified, well managed, and
reflect balance sheets that 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 and below market risk comparatives, we will
achieve reasonable returns in both good and bad market environments.
C.A.S.E. LOGO /s/ William E. Lange
C.A.S.E. Quality Growth Portfolio
Manager
- --------------------------------------------------------------------------------
15
<PAGE> 18
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 1,323,312)............................ $ 1,389,551
Short-term securities, at amortized cost........ 0
Cash............................................ 156,560
Receivables:
Fund shares sold.............................. 0
Securities sold............................... 0
Interest...................................... 482
Dividends..................................... 2,500
Other......................................... 0
--------------
Total assets................................ 1,549,093
--------------
LIABILITIES:
Fund shares purchased........................... 0
Securities purchased............................ 0
Accounts payable and accrued liabilities:
Investment advisory fees...................... 946
Custody fees.................................. 0
Auditing and accounting fees.................. 0
Dividends to shareholders..................... 0
Deposits for securities on loan............... 0
Other fees.................................... 827
--------------
Total liabilities........................... 1,773
--------------
Total net assets.......................... $ 1,547,320
===============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)....... $ 1,360
Additional paid-in capital...................... 1,447,274
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)............................... 7,102
Accumulated undistributed net realized
gain (loss) on:
Investment transactions..................... 25,345
Net unrealized appreciation (depreciation) on:
Investment securities......................... 66,239
--------------
Net assets applicable to outstanding
shares of capital............................. $ 1,547,320
===============
Shares outstanding at June 30, 1996............. 136,010
===============
Net asset value per share....................... $ 11.38
===============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 2,190
Dividends.................................... 13,278
----------------
Total investment income................ 15,468
----------------
EXPENSES:
Investment advisory fees..................... 5,719
Printing and shareholder reports............. 37
Custody fees................................. 16,761
Legal fees................................... 2
Auditing and accounting fees................. 1,515
Directors fees............................... 2
Registration fees............................ 42
Other fees................................... 2
----------------
Total expenses......................... 24,080
Less:
Advisory fee waiver and expense
reimbursement............................ 15,693
Fees paid indirectly....................... 0
----------------
Net expenses........................... 8,387
----------------
Net investment income (loss)................. 7,081
----------------
Net realized gain (loss) on:
Investment securities...................... 22,345
Change in unrealized appreciation
(depreciation) on:
Investment securities...................... 40,510
----------------
Net gain (loss) on investments............... 62,855
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 69,936
==================
</TABLE>
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
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ 7,081 $ 9,295
Net realized gain (loss) on investments................................................ 22,345 46,323
Change in unrealized appreciation (depreciation) on investments........................ 40,510 25,729
----------------- ------------------
Net increase (decrease) in net assets resulting from operations...................... 69,936 81,347
----------------- ------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.................................................................. 0 (9,274)
Net realized gains..................................................................... 0 (43,323)
----------------- ------------------
Total distributions.................................................................. 0 (52,597)
----------------- ------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares...................................................... 430,924 1,072,213
Dividends and distributions reinvested................................................. 0 52,597
Cost of shares repurchased............................................................. (103,511) (3,589)
----------------- ------------------
Increase (decrease) in net assets from capital shares transactions................... 327,413 1,121,221
----------------- ------------------
Net increase (decrease) in net assets................................................ 397,349 1,149,971
NET ASSETS:
Beginning of period.................................................................... 1,149,971 0
----------------- ------------------
End of period.......................................................................... $ 1,547,320 $ 1,149,971
=================== ====================
Undistributed net investment income.................................................. $ 7,102 $ 21
=================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period............................................... 106,076 0
----------------- ------------------
Shares issued.......................................................................... 39,146 101,557
Shares issued - reinvestment of dividends and distributions............................ 0 4,852
Shares redeemed........................................................................ (9,212) (333)
----------------- ------------------
Increase (decrease) in shares outstanding.............................................. 29,934 106,076
----------------- ------------------
Shares outstanding - end of period..................................................... 136,010 106,076
=================== ====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
17
<PAGE> 20
WRL SERIES FUND, INC.
C.A.S.E. QUALITY GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
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
CHART
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
Six Months Ended 6/30/96 $11,922 $13,417
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Net asset value, beginning of period......... $10.84 $ 10.00
Income from operations:
Net investment income (loss)............. .05 .14
Net realized and unrealized
gain (loss) on investments............. .49 1.50
------- -----------
Total income (loss) from operations.... .54 1.64
------- -----------
Distributions:
Dividends from net investment income..... .00 (.14)
Distributions from net realized gains
on investments......................... .00 (.66)
------- -----------
Total distributions.................... .00 (.80)
------- -----------
Net asset value, end of period............... $11.38 $ 10.84
======== =============
Total return................................. 4.94% 13.61%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................... $1,547 $ 1,150
Ratio of expenses to average net assets.... 1.33% 1.00%
Ratio of net investment income (loss)
to average net assets.................... .99% 1.28%
Ratio of commission paid to number of
shares................................... 6.05% N/A
Portfolio turnover rate.................... 106.15% 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.
- --------------------------------------------------------------------------------
18
<PAGE> 21
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1996
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.
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 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.
- --------------------------------------------------------------------------------
19
<PAGE> 22
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
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 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.
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 1.50%
C.A.S.E. Quality Growth 1.50%
</TABLE>
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.
- --------------------------------------------------------------------------------
20
<PAGE> 23
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
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 six months ended June 30, 1996:
Purchases of securities:
Long-term excluding U.S. Government............ $ 5,691,483 $ 1,503,655 $ 1,609,005
U.S. Government securities..................... 0 12,884 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government............ 3,189,262 1,208,368 1,420,488
U.S. Government securities..................... 0 16,276 0
</TABLE>
NOTE 4 - FEDERAL INCOME TAX MATTERS
The income, expenses, gains and losses on security 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,
if applicable, are treated as ordinary income for federal income tax purposes
pursuant to Section 988 of the Internal Revenue Code.
Each Portfolio has and will continue to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies, and
accordingly, has made or intends to make sufficient distributions of net
investment income and net realized gains, if any, to relieve it from all federal
and state income taxes and federal excise taxes.
The net capital loss carryforwards noted below as of December 31, 1995, if
applicable, are available to offset future realized capital gains through the
periods listed. Each Portfolio will elect to treat the net capital losses
incurred in the two month period ended December 31, 1995, (Post-October Losses),
if applicable, as having been incurred in the following fiscal year. The
aggregate cost of investments and composition of unrealized appreciation and
depreciation for federal income tax purposes as of June 30, 1996 are as follows:
<TABLE>
<CAPTION>
PRIOR YEAR DECEMBER 31, 1995 NET CAPITAL LOSS
POST-OCTOBER NET CAPITAL LOSS CARRYFORWARD
PORTFOLIO LOSSES RECOGNIZED CARRYFORWARD AVAILABLE THROUGH
- ------------------------------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
C.A.S.E. Growth............................ $ 0 $ 0 N/A
C.A.S.E. Growth & Income................... 0 0 N/A
C.A.S.E. Quality Growth.................... 3,081 0 N/A
</TABLE>
<TABLE>
<CAPTION>
NET UNREALIZED
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST BASIS APPRECIATION DEPRECIATION (DEPRECIATION)
- -------------------------------------------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
C.A.S.E. Growth............................. $5,049,827 $ 300,946 $ 241,716 $ 59,230
C.A.S.E. Growth & Income.................... 1,353,260 129,920 27,202 102,718
C.A.S.E. Quality Growth..................... 1,323,313 103,715 37,477 66,238
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE> 24
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
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 June 30, 1996 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>
JUNE 30 DECEMBER 31
PORTFOLIO 1996 1995*
------------------------------------------------------------------------------ --------- ------------
<S> <C> <C>
C.A.S.E. Growth............................................................... 1.65% 4.15%
C.A.S.E. Growth & Income...................................................... 3.28% 6.17%
C.A.S.E. Quality Growth....................................................... 3.37% 5.91%
</TABLE>
* The inception date of these portfolios was May 1, 1995. The December 31, 1995
ratio is annualized.
- --------------------------------------------------------------------------------
22
<PAGE> 25
This page is intentionally left blank.
23
<PAGE> 26
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth Portfolio
(337,573.270 shares;
cost $ 3,950,244)........................... $ 4,201,681
Accrued transfers from (to) depositor - net..... 111,595
-----------
Total assets................................ 4,313,276
-----------
LIABILITIES:...................................... 0
-----------
Total net assets............................ $ 4,313,276
===========
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Growth sub-account
(289,747.652732 units;
$ 12.695527 unit value)....................... $ 3,678,499
Depositors' equity:
C.A.S.E. Growth sub-account
(50,000.000000 units;
$ 12.695527 unit value)....................... 634,777
-----------
Total equity................................ $ 4,313,276
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Dividend income........................... $ 0
Capital gain distributions................ 0
----------
0
EXPENSES:
Mortality and expense risk charges........ 21,476
----------
Net investment income (loss)............ (21,476)
----------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from securities
transactions............................ 15,322
Change in unrealized appreciation
(depreciation).......................... 199,638
----------
Net gain (loss) on investments.......... 214,960
----------
Net increase (decrease) in equity
accounts resulting from
operations.......................... $ 193,484
==========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ (21,476) $ 78,129
Net gain (loss) on investments.......................................................... 214,960 52,108
------------ ------------
Net increase (decrease) in equity accounts
resulting from operations............................................................. 193,484 130,237
------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)..................................................... 1,554,448 1,948,178
------------ ------------
Less cost of units redeemed:
Administrative charges................................................................ 25 0
Policy loans.......................................................................... 0 0
Surrender benefits.................................................................... 12,876 170
Death benefits........................................................................ 0 0
------------ ------------
12,901 170
------------ ------------
Increase (decrease) in equity accounts from
capital unit transactions........................................................... 1,541,547 1,948,008
------------ ------------
Net increase (decrease) in equity accounts............................................ 1,735,031 2,078,245
Depositors' equity contribution (redemption)............................................ 0 500,000
EQUITY ACCOUNTS:
Beginning of period..................................................................... 2,578,245 0
------------ ------------
End of period........................................................................... $ 4,313,276 $ 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.
- --------------------------------------------------------------------------------
24
<PAGE> 27
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period.... $11.96 $ 10.00
Income from operations:
Net investment income (loss)................ (.08) .85
Net realized and unrealized
gain (loss) on investments................ .82 1.11
------ -------
Total income (loss) from operations....... .74 1.96
------ -------
Accumulation unit value, end of period.......... $12.70 $ 11.96
====== =======
Total return.................................... 6.12% 19.64%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $4,313 $ 2,578
Ratio of net investment income (loss)
to average net assets**..................... (1.23)% 7.42%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
** This ratio is annualized for the period ended June 30, 1996.
+ The inception date of this sub-account was May 1, 1995. The total return is
not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
25
<PAGE> 28
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH & INCOME SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth & Income Portfolio
(145,022.610 shares;
cost $ 1,590,220)........................... $ 1,767,857
Accrued transfers from (to) depositor - net..... 20,933
-------------
Total assets................................ 1,788,790
-------------
LIABILITIES:...................................... 0
-------------
Total net assets............................ $ 1,788,790
==============
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Growth & Income sub-account
(96,291.437260 units;
$ 12.227575 unit value)....................... $ 1,177,411
Depositors' equity:
C.A.S.E. Growth & Income sub-account
(50,000.000000 units;
$ 12.227575 unit value)....................... 611,379
-------------
Total equity................................ $ 1,788,790
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Dividend income........................... $ 0
Capital gain distributions................ 0
----------------
0
EXPENSES:
Mortality and expense risk charges........ 9,134
----------------
Net investment income (loss)............ (9,134)
----------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from securities
transactions............................ 5,742
Change in unrealized appreciation
(depreciation).......................... 101,449
----------------
Net gain (loss) on investments.......... 107,191
----------------
Net increase (decrease) in equity
accounts resulting from
operations.......................... $ 98,057
==================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ (9,134) $ 13,400
Net gain (loss) on investments......................................................... 107,191 76,373
---------------- -------------------
Net increase (decrease) in equity accounts
resulting from operations............................................................ 98,057 89,773
---------------- -------------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).................................................... 614,332 494,100
---------------- -------------------
Less cost of units redeemed:
Administrative charges............................................................... 7 0
Policy loans......................................................................... 0 0
Surrender benefits................................................................... 7,055 410
Death benefits....................................................................... 0 0
---------------- -------------------
7,062 410
---------------- -------------------
Increase (decrease) in equity accounts from
capital unit transactions.......................................................... 607,270 493,690
---------------- -------------------
Net increase (decrease) in equity accounts........................................... 705,327 583,463
Depositors' equity contribution (redemption)........................................... 0 500,000
EQUITY ACCOUNTS:
Beginning of period.................................................................... 1,083,463 0
---------------- -------------------
End of period.......................................................................... $ 1,788,790 $ 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.
- --------------------------------------------------------------------------------
26
<PAGE> 29
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. GROWTH & INCOME SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period.......... $11.38 $ 10.00
Income from operations:
Net investment income (loss)...................... (.08) .22
Net realized and unrealized
gain (loss) on investments...................... .93 1.16
------- -----------
Total income (loss) from operations............. .85 1.38
------- -----------
Accumulation unit value, end of period................ $12.23 $ 11.38
======== =============
Total return.......................................... 7.41% 13.84%
Ratios and supplemental data:
Net assets at end of period (in thousands).......... $1,789 $ 1,083
Ratio of net investment income (loss)
to average net assets**........................... (1.23)% 2.05%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
** This ratio is annualized for the period ended June 30, 1996.
+ The inception date of this sub-account was May 1, 1995. The total return is
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. QUALITY GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Quality Growth Portfolio
(136,009.845 shares;
cost $ 1,460,288)........................... $ 1,547,320
Accrued transfers from (to) depositor - net..... 19,990
-----------
Total assets................................ 1,567,310
-----------
LIABILITIES:...................................... 0
-----------
Total net assets............................ $ 1,567,310
===========
EQUITY ACCOUNTS:
Contract Owners' equity:
C.A.S.E. Quality Growth sub-account
(83,391.987616 units;
$ 11.749657 unit value)....................... $ 979,827
Depositors' equity:
C.A.S.E. Quality Growth sub-account
(50,000.000000 units;
$ 11.749657 unit value)....................... 587,483
-----------
Total equity................................ $ 1,567,310
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Dividend income........................... $ 0
Capital gain distributions................ 0
--------
0
EXPENSES:
Mortality and expense risk charges........ 8,891
--------
Net investment income (loss)............ (8,891)
--------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) from securities
transactions............................ 11,396
Change in unrealized appreciation
(depreciation).......................... 58,540
--------
Net gain (loss) on investments.......... 69,936
--------
Net increase (decrease) in equity
accounts resulting from
operations.......................... $ 61,045
========
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ (8,891) $ 46,556
Net gain (loss) on investments.......................................................... 69,936 28,750
------------ ------------
Net increase (decrease) in equity accounts
resulting from operations............................................................. 61,045 75,306
------------ ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)..................................................... 365,903 574,835
------------ ------------
Less cost of units redeemed:
Administrative charges................................................................ 9 0
Policy loans.......................................................................... 0 0
Surrender benefits.................................................................... 9,600 170
Death benefits........................................................................ 0 0
------------ ------------
9,609 170
------------ ------------
Increase (decrease) in equity accounts from
capital unit transactions........................................................... 356,294 574,665
------------ ------------
Net increase (decrease) in equity accounts............................................ 417,339 649,971
Depositors' equity contribution (redemption)............................................ 0 500,000
EQUITY ACCOUNTS:
Beginning of period..................................................................... 1,149,971 0
------------ ------------
End of period........................................................................... $ 1,567,310 $ 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.
- --------------------------------------------------------------------------------
28
<PAGE> 31
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
C.A.S.E. QUALITY GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1996 1995+
------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period.... $11.27 $ 10.00
Income from operations:
Net investment income (loss)................ (.07) .70
Net realized and unrealized
gain (loss) on investments................ .55 .57
------- -----------
Total income (loss) from operations....... .48 1.27
------- -----------
Accumulation unit value, end of period.......... $11.75 $ 11.27
======== =============
Total return.................................... 4.29% 12.66%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $1,567 $ 1,150
Ratio of net investment income (loss)
to average net assets**..................... (1.23)% 6.48%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
** This ratio is annualized for the period ended June 30, 1996.
+ The inception date of this sub-account was May 1, 1995. The total return is
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
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1996
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.
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 June 30, 1996.
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.
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.
- --------------------------------------------------------------------------------
30
<PAGE> 33
WRL SERIES ANNUITY ACCOUNT
C.A.S.E. RESERVE VARIABLE ANNUITY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 4 - OTHER MATTERS
As of June 30, 1996 the equity accounts include net unrealized appreciation
(depreciation) on investments as follows:
<TABLE>
<S> <C>
SUB-ACCOUNT
C.A.S.E. Growth........................ $251,437
C.A.S.E. Growth & Income............... 177,637
C.A.S.E. Quality Growth................ 87,032
</TABLE>
- --------------------------------------------------------------------------------
31
<PAGE> 34
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<PAGE> 35
- --------------------------------------------------------------------------------
WRL SERIES FUND, INC.
- --------------------------------------------------------------------------------
WRL SERIES ANNUITY ACCOUNT
---------------------------------------------
OFFICE OF THE WRL SERIES FUND, INC.
WRL SERIES ANNUITY ACCOUNT
201 Highland Avenue
Largo, FL 33770-2597
1-800-851-9777
Ext. 6510
---------------------------------------------
DISTRIBUTOR:
InterSecurities, Inc.
201 Highland Avenue
Largo, FL 33770-2597
---------------------------------------------
FUND CUSTODIAN:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
---------------------------------------------
INVESTMENT ADVISER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 33770-2597
---------------------------------------------
SUB-ADVISER:
C.A.S.E. Management, Inc.
2255 Glades Road
Suite 221-A
Boca Raton, FL 33431
---------------------------------------------
INSURER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 33770-2597
---------------------------------------------
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
<PAGE> 36
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. THIS MATERIAL MUST BE
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
C.A.S.E. Logo
- --------------------------------------------------------------------------------
Western Reserve Life Assurance Co. of Ohio
Distributor: InterSecurities, Inc.
201 Highland Avenue - Largo, FL 33770-2597
August 1996
ACC00008-S (8/96)
